Development in business areas

In 2020, Sandvik’s operations consisted of three business areas: Sandvik Mining and Rock Technology, Sandvik Manufacturing and Machining Solutions, and Sandvik Materials Technology.

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 SEK 41,403 million (44,379), a decrease of –1 percent at fixed exchange rates for comparable units. Revenue totaled SEK 40,032 million (44,777), down –5 percent at fixed exchange rates for comparable units. The operating margin was 18.5 percent (19.2) of revenues and the adjusted operating margin was 19.8 percent (19.9) of revenues. The items affecting comparability of SEK –533 million (–309) were predominantly related to efficiency measures to ensure cost efficiency. Effects from the Covid-19 pandemic: Production was impacted only to a minor extent during the year, and both supply and distribution proceeded as planned. During the second quarter there was a temporary negative impact on demand due to limited access to mines but there was a recovery during the second half of the year.

Sandvik Manufacturing and Machining Solutions

Sandvik Manufacturing and 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 SEK 32,677 million (41,163), a decrease of –18 percent at fixed exchange rates for comparable units. Revenue totaled SEK 32,477 million (41,123), down –19 percent at fixed exchange rates for comparable units. The operating margin was 14.2 percent (20.4) of revenues and the adjusted operating margin was 18.8 percent (22.6) of revenues. The items affecting comparability of SEK –1,494 million (–930) were related to efficiency measures to mitigate a slower demand environment and to ensure optimized efficiency. Effects from the Covid-19 pandemic: The business area had a sharp drop in demand in the beginning of the second quarter, with large customer segments impacted by production stops and lower business activity. After the second quarter, the demand had a steady recovery for automotive and general engineering, especially in the fourth quarter. However, the Covid-19 pandemic continued to weigh heavily on demand in aerospace and the oil and gas segments.

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 and medical wire. Order intake for the business area amounted to SEK 11,910 million (16,475), a decrease of –27 percent at fixed exchange rates for comparable units. Revenue totaled SEK 13,598 million (15,279), down –10 percent at fixed exchange rates for comparable units. The operating margin was 3.6 percent (9.4) of revenues and the adjusted operating margin was 7.6 percent (11.7) of revenues. The items affecting comparability of SEK –540 million (–343) were related to efficiency measures to mitigate a slower demand environment as well as separation costs. Production during the year was largely unaffected by the Covid-19 pandemic, although there were some temporary shutdowns in the second quarter. Supply and distribution chains remained largely intact. However, the market weakness remains high in the oil & gas and aerospace segments.

Other operations

After the divestment of Sandvik Drilling and Completions (Varel) in March 2020 there were no active operations in Other operations during the last three quarters. Varel was 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 SEK 297 million (2,059), a decrease of –5 percent at fixed exchange rates for comparable units. Revenue totaled SEK 297 million (2,059), down –5 percent at fixed exchange rates for comparable units. The operating margin was –194.9 percent (–207.0) of revenues and the adjusted operating margin was –10.4 percent (–6.8) of revenues. The items affecting comparability of SEK –547 million (–4,123) were related to the divestment of Varel in March 2020.

Items affecting comparability