Strategy and growth
Shift to growth
Our business area is focusing on five main areas to strengthen our market position. This includes cementing our leading position in autonomous mining equipment and working more with electrification and digitalization. We will evolve our portfolio through further partnerships and acquisitions. Safety and sustainability are at the top of our agenda and we are continuously working to identify the sustainability impact of our offering and bring value to our customers.
We focus on fast-growing commodities and have a high exposure to gold and electrification minerals. These are the minerals such as copper, nickel, zinc and lead, which are in high demand with the electrification of society. These commodities are growing faster than the industry as a whole and growth is also higher for underground applications where we have our largest exposure.
Our aim is to grow our market share in our core businesses. One of the biggest opportunities is within surface drilling, where we have a strong new competitive offering in the market that delivers the best productivity and cost of ownership. Expanding the aftermarket is something we do by having the best products, expertise close to or at our customers, connecting the equipment and collecting data to be able to maintain the products better than anyone else. We are also looking at new business models, such as selling battery packs as a service for our battery electric vehicles.
We aim to grow through acquisitions and entering partnerships in our core offering or adjacent technologies. We will turn around or divest the few businesses that we have that are not performing. In October, we completed the acquisition 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 December, we signed an agreement to acquire the market-leading underground safety solutions company DSI Underground.
We aim to shape the industry ecosystem with new technologies, products, companies and partners related to electrification, digitalization and automation. In July, we announced a partnership with Exyn Technologies Inc. where customers will benefit from the unique combination of Sandvik’s world-leading digital mining solutions and Exyn’s deep knowledge of autonomous aerial robot systems. In September, Sandvik presented an autonomous concept vehicle, equipped with an AutoMine® mining automation system.
With the electrification of our equipment, we can help our customers reduce their use of diesel and make the mining environment a safer and healthier one. In November, Sandvik and Barrick, the world’s largest mining company, signed a partnership agreement for battery electric vehicles for underground hard rock mining.
Agile through cycle
We continue to focus on internal efficiencies within our decentralized structure to be sure we have the agility to deliver according to fluctuations in market demands. We also work with a flexible manufacturing set-up using both inhouse and subcontracted manufacturing resources. We retained a healthy adjusted operating margin of 19.8 percent, supported by cost measures announced in 2019 and temporary savings in 2020, such as reduced travel, temporary layoffs, structural changes to further decentralize, and staff reductions.
We are gradually divesting product groups that fall outside of our core capabilities. During the year we completed the divestment of the oil and gas-related parts of Sandvik Drilling and Completions (Varel) and announced the divestment of our mineral exploration business.