Sandvik as an investment
We have continued to thrive on our offering of productivity and sustainability based on more than 150 years of leading materials and applications know-how.
To remain relevant in the future, we are increasingly combining our core competencies with new digital technologies, enabling us to broaden our customer offering. Our strong balance sheet supports acquisitive growth. Our world is cyclical, but we believe that our decentralized business model is increasing agility and speed in our operational decision making, helping us to reduce earnings volatility and increase predictability. We target higher margins, resulting in improved through-cycle performance going forward.
Global No.1 or 2
- The no. 1 or 2 supplier in most of our businesses
- High barriers to entry, resulting from leading technology position, capital intensity and materials know-how
- About 4 percent of annual revenues spent on R&D to ensure a leading product offering
- Productivity offering supports value-based pricing
- Strategic and long-term relationships with our customers enable our understanding of their current and future needs
- Provide customers with products and services that boost their sustainability, for example by improving safety and reducing environmental impact, while increasing performance
Relevant through change
- Building on and expanding our core competences within metal cutting, mining equipment and advanced materials
- Grow our customer offering through acquisitions and partnerships to create new digital and technology solutions to become relevant to customers on a broader spectrum and meet future commercial trends
Strong financial performance
Significant improvement in profitability and returns since 2016. Our decentralized business model drives accountability and speed in operating decisions close to customers. The improved performance review system contributes to increased transparency. Combined this will help us achieve improved through-cycle performance.
Active portfolio management
We continuously review our business portfolio to maximize shareholder value. Each unit is expected to deliver continuous improvements and to be or become no. 1 or 2 in its industry.
- Target of 50 percent dividend pay-out ratio through an economic cycle
- 10-year average:
- 68 percent dividend ratio
- 3 percent yield
- The long-term principle is for capital to be relatively evenly split between dividend, mergers and acquisitions and debt reduction
- Well invested – capex to remain at about 4 billion SEK annually