Relevant GRI Indicators

Group total


The Covid-19 pandemic made 2020 a challenging year. The market demand was heavily affected, particularly in the short-cycle business and in the oil and gas industries, while the mining industries remained robust during the year. However, in the end of the year the recovery gradually improved for the early-cycle business, mainly the automotive and general engineering segments. It remains difficult to predict the short-term consequences, and in the long-term, the handling of the pandemic and economic policy decisions will determine the speed and strength of the recovery. Meanwhile, our priorities are to continue with precautionary measures to keep our employees and customers safe and to stay focused on executing our savings initiatives while capturing the interesting growth opportunities that lie ahead of us. For the full year, Sandvik’s order intake for continuing operations decreased by –12 percent ( –2) and revenues decreased by –11 percent (0) at fixed rates for comparable units.

Earnings and return

Sandvik’s order intake amounted to SEK 86,288 million in 2020 (104,147), and revenue totaled SEK 86,409 million (103,533). The operating profit was SEK 11,184 million (13,182), corresponding to 12.9 percent (12.7) of revenues. The adjusted operating profit decreased to SEK 14,531 million (19,015) and the adjusted operating margin decreased to 16.8 percent (18.4) compared to the previous year. Movements in metal prices for Sandvik Materials Technology made a negative contribution to the operating profit of SEK –172 million (274). Changes in foreign exchange rates affected earnings negatively by SEK –974 million (1,879) compared with the preceding year. Net financial items amounted to SEK 54 million (–1,238). The result after financial income and expenses for the Group was SEK 11,238 million (11,945), and SEK 11,270 million (12,150) for continuing operations. Income tax had a total impact of SEK –2,517 million (–3,421) on earnings, corresponding to 22 percent (29) of profit before taxes. Profit for the year attributable to equity holders of the Parent Company was SEK 8,721 million (8,539). Earnings per share for the Group amounted to SEK 6.96 (6.81) and SEK 6.99 (6.97) for continuing operations. Return on capital employed was 13 percent (15) and return on equity was 14 percent (14).

Earnings and return




Operating profit, MSEK



as a % of revenue



Adjusted operating profit, MSEK



as a % of revenue



Profit after net financial items, 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 net financial items, MSEK



as a % of revenue



Basic earnings per share, SEK



Working capital

Relative net working capital for the year was 28 percent (25) of revenues. In absolute terms net working capital amounted to SEK 20,355 million (25,027) at the end of the year. In terms of volume, net working capital decreased by SEK –2,055 million (447) compared with the preceding year. Changed currency rates decreased net working capital by SEK –2,486 million (869) compared with the preceding year. The structural effect from acquisitions and divestments decreased working capital by SEK –132 million (264).

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 decreased to SEK 15,347 million (16,894). Net cash flow after investing activities was SEK 10,571 million (11,703). At the end of the year, cash and cash equivalents amounted to SEK 23,752 million (16,987). Interest-bearing liabilities, including net pension liabilities, less cash and cash equivalents, yielded a net debt of SEK 2,646 million (11,131). The net debt to equity ratio was 0.04 (0.18).

Sandvik’s revolving credit facility of SEK 9,000 million was unutilized at year-end. Under the Swedish bond program, totaling SEK 15,000 million, bonds corresponding to a nominal amount of SEK 2,650 million were outstanding at year-end. Under the European bond program, totaling EUR 3,000 million, a nominal amount of EUR 1,103 million was outstanding at year-end. The remaining maturity of bonds averaged 1.0 years for Swedish bonds and 5.5 years for European bonds. 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 Sandvik’s short-term borrowings.

Financial position




Cash flow from operating activities, MSEK



Cash flow after investing activities, MSEK



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



Net debt as of December 31, MSEK



Net financial items, MSEK



Equity ratio, %



Net debt/equity ratio, times



Equity as of December 31, MSEK



Equity per share as of December 31, SEK




Equity at year-end amounted to SEK 65,082 million (61,858), or SEK 51.9 per share (49.3). The equity ratio was 55 percent (51).


Investments in tangible and intangible assets for the full year 2020 amounted to SEK 3,197 million (4,136) corresponding to 80 percent of scheduled depreciation for continuing operations. Proceeds from sale of companies and shares, net of cash, amounted to SEK 778 million (95). Acquisition of companies and shares, net of cash, amounted to SEK 3,274 million (1,870). Investments in internally generated intangible assets were SEK 405 million (533).

Acquisitions and divestments

On January 14, Sandvik announced the completion of the acquisition of the US-based privately owned Summerill Tube Corporation, a manufacturer of high precision tubes for industries such as aerospace, transportation and petrochemical. In 2018, it generated revenues of about SEK 100 million.

On March 12, Sandvik completed the divestment of Sandvik Drilling and Completions (Varel), the operations relating to the oil and gas industry, to the private equity firm Blue Water Energy and the privately owned Nixon Energy Investments. Sandvik will remain a minority owner of 30 percent of the company and hold a position on the board.

On June 1, Sandvik completed the acquisition of Quimmco Centro Tecnológico (QCT), a privately owned Mexican company offering integral machining solutions. In 2019, QCT’s cutting tools division generated SEK 90 million and had 130 employees.

On July 15, Sandvik divested a 10 percent minority interest in Xiamen Golden Egret Special Alloy Co., Ltd. (Gesac), a Chinese joint venture orginally formed in 2005 to secure the supply of tungsten. The minority holding was divested to Xiamen Tungsten Co, the majority owner of Gesac.

On October 2, Sandvik acquired the remaining 79 percent of Allied Construction Products LLC (Allied), a US distributor of hydraulic hammers to the construction and mining industries and manufacturer of compactor plates and mounting brackets. In 2019, Allied generated USD 29 million in revenues with 38 employees. Sandvik was already a 21 percent minority shareholder and Sandvik products generated about 80 percent of Allied’s revenues.

On October 9, Sandvik announced a signed agreement to divest its Exploration business to Drillman. Drillman is a subsidiary of the M Group of companies. In 2019, Exploration had revenues of SEK 450 million.

On October 19, Sandvik signed an agreement to acquire US-based CGTech, a global market leader in software for numerical control (NC/CNC) simulation, verification and optimization software. CGTech had about 180 employees and a revenue of SEK 470 million in 2019. The acquisition was completed on December 31.

On December 23, Sandvik completed the acquisition of the Indian company Miranda Tools, a manufacturer of high speed steel and solid carbide round tools. In 2019, Miranda Tools had revenues of about SEK 200 million and around 580 employees.

On December 24, Sandvik signed an agreement to acquire DSI Underground, the global leader in ground support and reinforcement products, systems and solutions for the underground mining and tunneling industries. DSI Underground has approximately 2,000 employees and the 2020 revenue is expected to be about EUR 518 million (excluding four joint ventures that are part of the acquisition).

On December 30, Sandvik acquired a minority stake in the privately owned American software company Oqton, a leading provider of AI-powered manufacturing solutions that allows manufacturers to manage, optimize, and automate their manufacturing workflows.

Quarterly trend of revenue and profit after financial items




Profit after financial items

Net margin, %














































Impact on the financial reporting due to Covid-19

Goodwill attributable to the Sandvik Mining and Rock Technology business area amounting to SEK 304 million was written down in the second quarter due to an expected closure of smaller business. The cost is booked in Other operating income and expenses. The impairment testing of goodwill performed during 2020 did not indicate any other impairment requirements. See note G13 for details.

Sandvik has received various forms of government grants in different countries where the Group operates. The grants have been recognized as a reduced cost to which the grant is attributable to. The main part is related to personnel costs, however no government grants related to reduced work hours have been received in our Swedish entities for the fourth quarter. See note G33 for more details.

As of December 31, there is no significant impact on the valuation of inventory related to the Covid-19 pandemic, see note G18.

As of December 31, expected credit losses remain on a low level compared to twelve months rolling revenues. There are no indications of any significant impact related to the Covid-19 pandemic, see note G19.

Parent company1)

The Parent Company’s revenues for 2020 amounted to SEK 9,599 million (21,038) and the operating result was SEK 2,950 million (4,224). Result from shares in group companies of SEK –1,558 million (11,989) for the year consists primarily of costs related to the separation of Sandvik Materials Technology from the commissionaire structure, partially set off by dividends. Interest-bearing liabilities, minus cash and cash equivalents and interest-bearing assets, amounted to SEK 7,057 million (15,601). The Parent Company’s total assets decreased by SEK –12,462 million, from SEK 76,797 million to SEK 64,335 million. Investments in non-current assets amounted to SEK 430 million (976).

The number of employees in the Parent Company and the subsidiaries operating on commission for Sandvik AB as of December 31, 2020 was 3,354 (6,627).


The Board of Directors proposes an ordinary dividend of SEK 4.50 per share (0). In addition, the Board proposes an extra dividend of SEK 2.00. The dividend proposal represents 75 percent (0) of adjusted EPS for the Sandvik Group in total.

Dividend 6.50 per share


x number of shares




Profit carried forward


Total, SEK



The average number of employees amounted to 38,666 (41,120), of which 19 percent (19) were women. The employee turnover rate was 8 percent (10). Wages, salaries and other remunerations for the year totaled SEK 18,864 million (21,770).

Guidelines for the remuneration of senior executives

The guidelines for the remuneration of senior executives adopted by the 2020 Annual General Meeting are set out below. The Board of Directors does not propose any new guidelines.

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 G4.

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 5,977 (6,060) active patents. In 2020, 853 (964) new patents were granted. Investments in R&D were SEK 3,429 million (3,674), corresponding to 4.0 percent (3.7) of revenues. The number of employees in R&D, including Quality Assurance, was 2,534 (2,740).


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 2020, the Group paid SEK 3,518 million (3,598) 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 nine plants. All of them hold a requisite environmental permit. A number of guideline values were exceeded for emissions to air and water, and on one occasion, emission limit values to water were exceeded. In all these occurences corrective actions were taken to comply with the target values. One environmental permit needs renewal in 2021.

Statutory sustainability report

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

Events after the end of the period

On January 1, 2021, a new business area, Sandvik Rock Processing Solutions, was established, formed out of the former Crushing and Screening division. The remaining operations within Sandvik Mining and Rock Technology changed their name to Sandvik Mining and Rock Solutions.

1) The Parent Company includes subsidiaries operating on commission for Sandvik AB. These are presented in note P12.