Sandvik as an investment
We continue to thrive on our value creating offering of productivity and sustainability based on more than 150 years of leading materials and applications know-how. We stay relevant by advancing the world through engineering, expanding our core competencies and adding new digital technologies, enabling us to broaden our customer offering. Our market-leading position and strong customer relationships combined with a decentralized organization enable us to respond faster to market trends and customer needs.
In a cyclical world, our decentralized business model helps us to be more flexible, reduce earnings volatility and increase predictability. Our proven resilience in earnings and a strong balance sheet creates a solid platform from which to leverage interesting growth opportunities.
Market-leading positions – the customer’s first choice
- By providing products and services that improve customers’ productivity and sustainability we ensure our market-leading positions and can maintain value-based pricing
- Strategic and long-term relationships with our customers combined with a decentralized decision model enable us to adapt faster to current and future needs
- About 4 percent of our annual revenues are spent on R&D to ensure a leading product offering
- High barriers to entry, resulting from leading technology position, capital intensity and materials know-how
Solid financial position supports shift to growth
- A solid balance sheet, good cashflow generation and a net cash position
- Growth target of at least 5 percent through a business cycle to come from organic and acquired growth
- CAPEX at <SEK 4 billion annually
- Investments in product development, digitalization and automation
- Acquisitions to broaden our value-creating offering, lead digitalization and automation and expand geographically in faster growing markets
Agile through cycle – strong financial performance
- Proven resilience in economic downturns
- Fast adoption through structural and volume cost-savings initiatives
- Solid adjusted EBIT margin, excluding metal price effects, of 17.1 percent delivered in 2020, above trough margin target of 16.0 percent, despite a significant drop in volumes
- Continuous work to improve cost structures and operational efficiency
- Responsible and value-creating capital allocation
- Target of 50 percent dividend pay-out ratio through a business cycle
- 10-year average: 66 percent dividend ratio 3 percent yield
- During 2020, the Board decided to continue the process for a separate listing of Sandvik Materials Technology1)
1) Pending shareholders’ approval in 2022 and provided that the circumstances are deemed right at the time.