Development in business areas

Sandvik’s operations consist of three business areas: Sandvik Machining Solutions, Sandvik Mining and Rock Technology and Sandvik Materials Technology.

Sandvik Machining Solutions

Sandvik Machining Solutions is a market-leading manufacturer of tools and tooling systems for advanced industrial metal cutting, expanding into digital and additive manufacturing. Order intake for the business area amounted to 41,163 million SEK (41,094), a decrease of –6 percent at fixed exchange rates for comparable units. Revenue totaled 41,123 million SEK (40,757), down –6 percent at fixed exchange rates for comparable units. The operating margin was 20.4 percent (24.3) of revenues and the adjusted operating margin was 22.6 percent (25.4) of revenues. The items affecting comparability of –930 SEK million was related to efficiency measures to mitigate a slower demand environment and to ensure optimized efficiency.

Sandvik Mining and Rock Technology

Sandvik Mining and Rock Technology is a leading supplier of equipment and tools, service and technical solutions for the mining industry and rock excavation within the construction industry. Order intake for the business area amounted to 44,379 million SEK (41,842), an increase of 1 percent at fixed exchange rates for comparable units. Revenue totaled 44,777 million SEK (41,058), up 4 percent at fixed exchange rates for comparable units. The operating margin was 19.2 percent (18.2) of revenues and the adjusted operating margin was 19.9 percent (18.4) of revenues. The items affecting comparability of –309 SEK million were predominantly related to efficiency measures to ensure cost efficiency.

Sandvik Mining and Rock Technology, total

Sandvik Mining and Rock Technology, continuing operations

Sandvik Materials Technology

Sandvik Materials Technology is a world-leading developer and manufacturer of high value-added products in advanced stainless steels, powder-based alloys and special alloys for the most demanding industries, as well as products for industrial heating. Order intake for the business area amounted to 16,475 million SEK (15,898), an increase of 2 percent at fixed exchange rates for comparable units. Revenue totaled 15,279 million SEK (14,697), up 3 percent at fixed exchange rates for comparable units. The operating margin was 9.4 percent (8.9) of revenues and the adjusted operating margin was 11.7 percent (9.1) of revenues. The items affecting comparability of –343 SEK million was related to efficiency measures to mitigate a slower demand environment as well as separation costs.

Other Operations

In 2019 Other Operations consisted of Sandvik Drilling and Completions (Varel). Varel is a global supplier of drilling solutions focusing on drill bits and downhole products for well construction and well completion. In 2018 Other Operations comprised of Varel and Sandvik Hyperion, Sandvik Hyperion was divested in July 2018. Order intake for Other Operations amounted to 2,059 million SEK (3,605), an increase of 4 percent at fixed exchange rates for comparable units. Revenue totaled 2,059 million SEK (3,560), up 4 percent at fixed exchange rates for comparable units. The operating margin was –207.0 percent (18.5) of revenues and the adjusted operating margin was –6.8 percent (1.1) of revenues. In 2019 Sandvik signed an agreement to divest the majority of Varel. It resulted in a reclassification as “assets held for sale” in the financial statements, which triggered an impairment of –3,966 million SEK on net profit, comprising an effect on operation profit of –4,233 million SEK and an impairment of deferred tax of +267 million SEK.