Relevant GRI Indicators

Strategy and technology

Strategic focus areas

Our long-term focus is to continue being a leading materials technology innovator, providing customers with solutions that help make them safer, more energy efficient and productive. Last year we stated a short-term goal to reach a 10 percent EBIT (Earnings Before Interest and Tax) margin through portfolio optimization, improving our footprint within the Tube division, price-mix optimization and strengthen our culture of commitment and execution. By the end of 2019, we had achieved this short-term goal.

Focus on core

In 2019 we continued our focus on more advanced products, such as nickel-based and super alloys. One addition to our portfolio is Sanicro® 35, a new austenitic stainless steel grade that combines extreme pitting corrosion resistance and mechanical properties in a single alloy. This pioneering innovation was awarded with the internal Sandvik Innovation prize in 2019. We strengthened our position in tubular products and will continue to focus on super alloys and high nickel alloys. We are also expanding the heating solution service offering and strengthening our position within heating systems as the market transforms from gas to electric solutions.

Technology leadership and innovation

Sandvik Materials Technology is recognized for its pioneering efforts in research and development and we continued to capture new ground. During 2019, a first commercial order was secured for Sentusys™, an intelligent tube system used for in-process, online monitoring, providing continuous information about temperature, strain and vibration. The medical segment with our Exera® range of precision fine wires and wire-based components are used in a wide range of medical applications, from the treatment of cardiovascular disorders to solutions for glucose monitoring, deep brain stimulation and hearing implants. We are also increasing our digital services and our new online shop for the Tube division is an industry first. It provides customers with a personalized dashboard overview of, among other things, stock levels, prices, orders and documentation.

With our highly innovative product offering we are in an excellent position to match market requirements for materials that are strong yet light, durable, recyclable and have anti-corrosive properties. We recently patented a hyper duplex strip steel that matches all of these requirements. Sandvik Materials Technology frequently collaborates with partners and customers to bring solutions to the market that capture material science opportunities within many different segments.

Automated solutions

Sandvik Materials Technology: automation and teleoperation systems. (graphic)

Sandvik offers the industry’s most advanced automation and teleoperation systems. These solutions significantly improve productivity and safety, while lowering the total cost of ownership. The software systems also help customers to monitor their machines, giving them a full overview of their fleet and enabling them to control and optimize their operations.

Overview

Mining

Construction

Product portfolio

Equipment for drilling, cutting, breaking, crushing, loading and hauling. Drilling consumables (rock tools), service, spare and wear parts.

Market characteristics

Mining

Consolidated customer base of some 200 global major and junior miners. Remote locations, decreasing ore grades as well as safety requirements drive volume output and need for semi- to fully automated solutions. Significant aftermarket business.

Construction

Sandvik is active in the niche areas of rock excavation and comminution. The customer base is fragmented with more than 25,000 individual customers. Localized offering and local competition.

Demand drivers

Mining
  • GDP growth rate and resource intensive industry development
  • Metal and mineral prices
  • Production levels in existing mines and expansion projects (greenfield and brownfield)
  • Productivity improvements and new technology, for example automation and electrification
  • Demand in the areas of environment, health and safety
Construction
  • GDP growth/urbanization
  • Infrastructure investments and spending
  • Government stimulus programs
  • Aggregates production
  • Cement consumption

Competitive landscape/Major competitors

Mining

Consolidated in certain segments, i.e. underground hard-rock mining: Epiroc, Metso Minerals, Caterpillar and Komatsu Mining.

Construction

Some global competitors present in several niches and many local players: Epiroc, Terex, Metso Minerals, Caterpillar and Furukawa.

Go-to-market model

Mining

Direct sales ~95 percent with worldwide service network.

Construction

Due to a fragmented customer base, 50 percent of sales is via distributors. Global sales and service organization.

Growth strategy

Grow aftermarket business on the installed base. Climb the service ladder by data-driven productivity and advanced services. Automation, electrification and exploring complementary technologies and offerings through mergers and acquisitions.

Strategic risk management

Various forms of business environment risks with an impact on the mining and construction market in general, such as increased market competition with new technological developments and the emergence of new competitors, fluctuations in commodity prices and compliance-related risks. Political uncertainty in some parts of the world.