Relevant GRI Indicators

Group total


Market demand for the late-cycle businesses in the mining and oil & gas industries remained stable at a high level. However, customer activity softened significantly in the early-cycle businesses during the second half of the year, primarily related to the automotive and general engineering segments. Consequently, Sandvik’s order intake decreased by –2 percent (9) whilst revenues for continuing operations remained stable at 0 percent (11) at fixed rates for comparable units, as backlog was delivered.

Earnings and return

Sandvik’s order intake amounted to 104,147 million SEK in 2019 (102,510), and revenue totaled 103,533 million SEK (100,924). The operating profit was 13,182 million SEK (18,103), corresponding to 12.7 percent (17.9) of revenues. While the adjusted operating profit improved to 19,219 million SEK (18,590), the adjusted operating margin remained on par with the previous year at 18.6 percent (18.6). Movements in metal prices for Sandvik Materials Technology made a positive contribution to the operating profit of 274 million SEK (255). Changes in foreign exchange rates affected earnings favorably by 1,879 million SEK (774) compared with the preceding year. Net financial items amounted to –1,238 million SEK (–788). The result after financial income and expenses for the Group was 11,945 million SEK (17,315), and 12,150 million SEK (17,860) for continuing operations. Income tax had a total impact of –3,421 million SEK (–4,646) on earnings, corresponding to 29 percent (27) of profit before taxes. Profit for the year attributable to equity holders of the Parent Company was 8,539 million SEK (12,679). Earnings per share for the Group amounted to 6.81 SEK (10.11) and 6.97 SEK (10.54) for continuing operations. Return on capital employed was 15 percent (22) and return on equity was 14 percent (23).

Earnings and return




Operating profit, MSEK



as a % of revenue



Adjusted operating profit, MSEK



as a % of revenue



Profit after financial income and expenses, MSEK



as a % of revenue



Return on capital employed, %



Return on total equity, %



Basic earnings per share, SEK



Diluted earnings per share, SEK



Whereof continuing operations



Operating profit, MSEK



as a % of revenue



Adjusted operating profit



as a % of revenue



Profit after financial income and expenses, MSEK



as a % of revenue



Basic earnings per share, SEK



Working capital

Relative net working capital for the year was 25 percent (24) of revenues. In absolute terms net working capital amounted to 25,027 million SEK (23,447) at the end of the year. In terms of volume, net working capital increased by 447 million SEK (3,198) compared with the preceding year. Changed currency rates increased net working capital by 869 million SEK (1,088) compared with the preceding year. The structural effect from acquisitions and divestments increased working capital by 264 million SEK (–1,565).

Capital expenditure, Group total




Investments in non-current assets, MSEK



as a % of revenue



as a % of scheduled depreciation



Cash flow and financing

Cash flow from operating activities increased to 17,654 million SEK (14,914). Net cash flow after investing activities was 12,171 million SEK (10,631). At the end of the year, cash and cash equivalents amounted to 16,987 million SEK (18,089). Interest-bearing liabilities including net pension liabilities, less cash and cash equivalents, yielded a net debt of 11,131 million SEK (11,557). The net debt to equity ratio was 0.18 (0.20).

Sandvik’s revolving credit facility of 9,000 million SEK was unutilized at year-end. Under the Swedish bond program, totaling 15,000 million SEK, bonds corresponding to a nominal amount of 5,650 million SEK were outstanding at year-end. Under the European bond program, totaling 3,000 million EUR, a nominal amount of 1,103 million EUR was outstanding at year-end. The remaining maturity of bonds averaged 1.3 years for Swedish bonds, 6.5 years for European. At year-end, the international credit rating agency Standard & Poor’s had a rating of A– for Sandvik’s long-term borrowings, and A–2 for short-term. During the second quarter Sandvik made an early redemption of US private placement notes and a bilateral loan totaling 5.1 billion SEK.

Financial position




Cash flow from operating activities, MSEK



Cash flow after investing activities, MSEK



Cash and cash equivalents and short-term investments as of 31 December, MSEK



Net debt as of 31 December, MSEK



Net financial items, MSEK



Equity ratio, %



Net debt/equity ratio, times



Equity as of 31 December, MSEK



Equity per share as of 31 December, SEK




Equity at year-end amounted to 61,858 million SEK (58,163), or 49.3 SEK per share (46.3). The equity ratio was 51 percent (49).


Investments in tangible and intangible assets for the full year 2019 amounted to 4,136 million SEK (3,920) corresponding to 99 percent of scheduled depreciation for continuing operations. Proceeds from sale of companies and shares, net of cash, amounted to 95 million SEK (4,052). Acquisition of companies and shares, net of cash, amounted to 1,870 million SEK (4,631). Investments in internally generated intangible assets were 533 million SEK (484).

Acquisitions and divestments

On 9 January, Sandvik announced the completion of the acquisition of the company Wetmore Tool & Engineering. Wetmore Tool & Engineering is a manufacturer of round tools for the aerospace industry. Revenues for Wetmore Tool & Engineering amounted to 160 million SEK in 2017.

On 11 February, Sandvik closed the acquisition of US-based Artisan Vehicle Systems, a manufacturer of battery powered underground mining equipment. In 2017, the company’s revenues were approximately 12 million USD.

On 10 April, Sandvik closed the acquisition of China-based OSK, a leading supplier of solid carbide round tools. Revenues for OSK amounted to 120 million SEK in 2017.

On 17 June, Sandvik closed the acquisition of privately owned Newtrax, a supplier of leading technology in wireless connectivity based in Canada. In 2018, Newtrax revenues amounted to 26 million CAD.

On 12 July, Sandvik announced the completion of the acquisition of a 30 percent stake in privately owned Italian company Beam IT, a leading provider of metal additive manufacturing services and advanced end-use components. Beam IT generated revenues of 70 million SEK in 2018 .

On 28 October, Sandvik announced the signing of an agreement to divest the majority of Sandvik Drilling and Completions (Varel), the operations relating to the oil and gas industry, to privately owned equity firm Blue Water Energy and its co-investor, privately owned Nixon Energy Investments. Sandvik will remain a minority owner with a 30 percent stake in the company and keep a board position. The reclassification of Varel as “assets held for sale” in the financial statements triggered an impairment of –3,966 million SEK on net profit, comprising an effect on operating profit of –4,233 million SEK and an impairment of deferred tax of +267 million SEK.

On 22 December, Sandvik announced an agreement to acquire the US-based privately owned Summerill Tube Corporation. The acquisition was completed in January 2020. Summerill Tube Corporation is a manufacturer of high precision tubes for industries such as aerospace, transportation and petrochemical. In 2018 it generated revenues of about 100 million SEK.

On 31 December, Sandvik closed the acquisition of privately owned US-based Melin Tool Company, a manufacturer of solid carbide tools. In the 12-month period ending September 2019, Melin Tool Company generated revenues of 22 million USD.

On 31 December, Sandvik closed the acquisition of the privately owned company Thermaltek Inc., a manufacturer of high temperature furnace systems and metallic heating elements based in the US. In the 12-month period ending in September 2019 Thermaltek generated 13 million USD.

Quarterly trend of revenue and profit after financial items




Profit after financial items

Net margin, %









































Parent company1)

The Parent Company’s revenues for 2019 amounted to 21,038 million SEK (20,141) and the operating result was 4,224 million SEK (2,566). Income from shares in Group companies consists primarily of dividends and Group contributions from these and amounted to 11,989 million SEK (4,364). Interest-bearing liabilities, minus cash and cash equivalents and interest-bearing assets, amounted to 15,601 million SEK (15,059). The Parent Company’s total assets increased by 12,868 million SEK, from 63,929 million SEK to 76,797 million SEK. Investments in non-current assets amounted to 976 million SEK (799).

The number of employees in the Parent Company and the subsidiaries operating on commission for Sandvik AB as of 31 December 2019 was 6,627 (6,793).

1) The Parent Company includes subsidiaries operating on commission for Sandvik AB. These are presented in Note 14.


The President and the Board of Directors propose a dividend of 4.50 SEK (4.25) per share to the 2020 Annual General Meeting, corresponding to approximately 5.6 billion SEK (5.3).

Dividend, 4.50 SEK per share


x number of shares




Profit carried forward


Total, SEK



The average number of employees amounted to 41,120 (42,540), of which 19 percent (19) were women. The employee turnover rate was 10 percent (8). Wages, salaries and other remunerations for the year totaled 21,795 million SEK (21,425).

Events after the close of the period

In October 2019, Sandvik’s Board of Directors appointed Stefan Widing as new President and CEO of Sandvik, succeeding Björn Rosengren. Stefan Widing took on the position as of 1 February 2020.

The divestment of the majority of Sandvik Drilling and Completion (Varel) is expected to be finalized early March 2020.

Proposal regarding guidelines for the remuneration of senior executives

The Board of Directors proposes that the Annual General Meeting resolve to adopt the following guidelines for the remuneration of senior executives. Compared to the guidelines adopted by the Annual General Meeting in 2019 these guidelines have been updated to comply with new regulations on remuneration.

Scope of the guidelines

These guidelines encompass the President and other members of the Group Executive Management. The guidelines do not apply to any remuneration decided on or approved by the General Meeting.

The guidelines’ promotion of the Company’s business strategy, long-term interests and sustainability

A prerequisite for the successful implementation of the Company’s business strategy and safeguarding of its long-term interests, including its sustainability, is that the Company is able to recruit and retain qualified personnel. To this end, it is necessary that the Company offers competitive remuneration. These guidelines enable the Company to offer senior executives a competitive total remuneration. For more information regarding the Company’s business and sustainability strategy, please see the Company’s website:

Types of remuneration

The total remuneration package should be based on market terms, be competitive and reflect the individual’s performance and responsibilities as well as the Group’s earnings trend. The remuneration may consist of fixed salary, variable remuneration, pension benefits and other benefits.

Fixed salary

The purpose of the fixed salary is to attract and retain senior executives with the right competence for the respective positions. The salary level should be determined by comparing the salary to similarly complex positions within a defined peer group.

Variable remuneration
– Variable share related remuneration

The Company may offer long-term share related or share price related remuneration. Such programs are adopted by the General Meeting and are therefore not covered by these guidelines. There are currently ongoing long-term share related incentive programs for senior executives and key employees in the Group. For more information on these programs, see the Company’s website:

– Variable cash remuneration

The Company may offer short or long-term variable cash remuneration. The fulfillment of objectives for awarding such remuneration shall be measured over a period of one to three years. Such remuneration may amount to not more than 75 percent of the fixed annual salary per year.

Variable cash remuneration shall be conditional upon the fulfillment of defined and measurable criteria. These criteria shall aim at promoting the Company’s business strategy and performance as well as its long-term interests, including its sustainability. At the beginning of each year the Board of Directors and the Remuneration Committee shall establish the criteria, including key performance indicators (KPIs) and the target ranges, deemed relevant for the upcoming measurement period. The criteria may be financial, with at least three KPIs, and non-financial, and shall always be related to business performance. At least 80 percent of the variable cash remuneration shall be linked to the financial criteria. The President and Group Function heads shall be measured on Group level KPIs and the Business Area Presidents shall be measured on both Group level and Business Area level KPIs. The established KPIs shall be presented on the Company’s website: The extent to which the criteria for awarding variable cash remuneration have been fulfilled shall be determined when the measurement period has ended and will be published in the Report on Evaluation of Remuneration the following year. For financial criteria, the evaluation shall be based on the latest financial information made public by the Company.

– Special arrangements

In specific cases, the Company may offer one-off remuneration provided that such remuneration is only made on an individual basis, for the purpose of recruiting or retaining senior executives, does not exceed an amount corresponding to 100 percent of the individual’s fixed annual salary and maximum variable cash remuneration, and is not paid more than once per year and individual.

– Right to withhold or reclaim remuneration

Terms and conditions for variable remuneration shall be designed so that the Board of Directors (i) has the right to limit or refrain from payment of variable remuneration if exceptional economic circumstances prevail and such a measure is considered reasonable, and (ii) has the right to withhold or reclaim variable remuneration paid to an executive based on results that afterwards were found to have been misstated because of wrongdoing or malpractice (so called malus and clawback).

Pension benefits

For the President, the pension benefit shall be defined contribution and the pension premiums shall amount to not more than 37.5 percent of the fixed annual salary. For the other senior executives, pension benefits shall be defined contribution and amount to not more than 55 percent of the fixed annual salary, in accordance with the Swedish ITP1 pension scheme. Exceptions to this main rule may be decided on for senior executives with existing defined benefit schemes provided that the cost of such schemes does not exceed the above mentioned cap.

Other benefits

Other benefits may include, for example, life insurance, medical insurance and company car benefit. Such benefits may amount to not more than 5 percent of the fixed annual salary. For senior executives in need of double accommodation, paid accommodation, etc may be added in line with Sandvik’s regulations and such benefits may amount to not more than 20 percent of the fixed annual salary.

Termination of employment

Severance pay may be paid when employment is terminated by Sandvik. The President and the other senior executives may have a period of notice of not more than 12 months, in combination with severance pay corresponding to 6–12 months fixed salary. When employment is terminated by the senior executive, the notice period may not exceed six months and no severance pay shall be paid.

In case a senior executive is not entitled to severance pay, but is covered by a non-compete undertaking, the senior executive may instead be compensated for such a non-compete undertaking. Any remuneration paid as compensation for a non-compete undertaking shall not exceed 60 percent of the fixed salary at the time of notice of termination of the employment and shall not be paid for a longer period than 18 months. Fixed salary during the notice period together with any compensation for the non-compete undertaking shall not exceed an amount equivalent to the senior executive´s fixed salary for 24 months.

Consideration of remuneration to the Company’s employees

When preparing the proposal for these guidelines, the employment conditions applied within the Company as a whole have been used as a benchmark, following the principle that the remuneration packages of all Sandvik employees should be based on the complexity of the position, performance and market practice. In general, the same combination of remuneration components such as fixed salary, variable remuneration, pension and other benefits are offered within Sandvik.

The decision-making process to determine, review and implement the guidelines

The Board of Directors has established a Remuneration Committee. The Committee’s tasks include preparing the Board of Directors’ decision to propose guidelines for senior executive remuneration. The Board of Directors shall prepare a proposal for guidelines at least every fourth year and submit it to the General Meeting. The guidelines shall be in force until new guidelines are adopted by the General Meeting. The Remuneration Committee shall also monitor and evaluate programs for variable remuneration for the executive management, the application of the guidelines for senior executive remuneration as well as the current remuneration structures and compensation levels in the Company. The members of the Remuneration Committee are independent of the Company and its executive management. The President and the other senior executives do not participate in the Board of Directors’ processing of and resolutions regarding remuneration related matters to the extent that they are affected by such matters.

Decisions on remuneration to the President are taken by the Board of Directors, based on proposals from the Remuneration Committee, and decisions on remuneration to the other senior executives are taken by the Remuneration Committee.

Adjustments to local rules

Remuneration under employments subject to other rules than Swedish may be duly adjusted to comply with mandatory rules or established local practice, taking into account, to the extent possible, the overall purpose of these guidelines.

Derogation from the guidelines

The Board of Directors may temporarily resolve to derogate from the guidelines, in whole or in part, if in a specific case there is special cause for the derogation and a derogation is necessary to serve the Company’s long-term interests, including its sustainability, or to ensure the Company’s financial viability. As set out above, the Remuneration Committee’s tasks include preparing the Board of Directors’ resolutions in remuneration-related matters. This includes any resolutions to derogate from the guidelines.

For information concerning the current remuneration of senior executives, including ongoing long-term incentive programs, refer to Note 3.5.

The guidelines adopted by the 2019 Annual General Meeting are presented in Note 3.5.

Research and development (R&D)

Each business area is responsible for its own R&D activities. Focus areas are machining materials and process development, additive manufacturing, alloys, powder metallurgy, electrification and digital solutions.

Sandvik has a portfolio of approximately 6,060 (5,900) active patents. In 2019, 964 (700) new patents were granted. Investments in R&D were 3,872 million SEK (3,727), corresponding to 3.7 percent (3.7) of Group revenues. The number of employees in R&D, including Quality Assurance, was 2,740 (2,554).


Sandvik is a multinational group with many intercompany transactions. The OECD has issued guidelines for transfer pricing of cross-border transactions in multinational groups. Sandvik adheres to these guidelines and also to the local legislation of each country to ensure that a correct pricing model is deployed and that a correct amount of tax is paid in each country. Sandvik monitors the OECD’s tax reform work and the EU initiatives on tax transparency carefully and observes these standards as and when enacted. Sandvik strives to have good relations with our stakeholders, such as tax authorities, non-governmental organizations and investors.

Sandvik has initiated cooperation with tax authorities in several countries. We are convinced that an open discussion and cooperation with tax authorities around the globe will help us to reduce uncertainty about the taxes we are obliged to pay. We contribute to the local communities and countries in which we operate in the form of, for example, taxes and employment opportunities. In 2019, the Group paid 3,598 million SEK (2,978) in income taxes globally. Income tax comprises just a portion of all taxes paid by Sandvik worldwide. In addition, we pay social security contributions, environmental and energy taxes, property taxes, etc. Furthermore, Sandvik collects and pays taxes at the request of governments and authorities, including indirect taxes and withholding taxes.


In Sweden, Sandvik conducts licensed operations at eight plants and notifiable operations in one location. All of them hold a requisite environmental permit. During the year, there was a potential breach related to exceeding maximum allowed water withdrawal within a 24-hour period. It was found to be of minimal impact and the case was closed. A number of guideline values were exceeded for noise and emissions to air and water. Actions are taken to comply with the target values. No environmental permit needs renewal in 2020.

Investigations and remediation activities have been performed at production sites with ground pollution. These activities are always performed in close cooperation with environmental authorities.

Statutory sustainability report

Sandvik has, in accordance with the Annual Accounts Act, prepared the statutory sustainability report as a separate report which was approved for issue by the Board of Directors and the President and CEO. The Statutory Sustainability report and Sustainable Business Report comprise pages Value-creating offerings, Sustainable business at heart, Sustainability goals 2030, Risk management, Sustainability governance and Non-financial notes.