A strategy for growth

The Sandvik strategy aims to drive profitable growth, create value for our shareholders and build a strong company. It rests on our core values, explicit target setting in six strategic areas, and a decentralized way of working.

Our core values of Customer Focus, Innovation, Fair Play and Passion to Win represent the essence of the Sandvik culture. Together with our Code of Conduct, they guide us in our daily business decisions and form a solid platform for our strategy.

The strategy is focused on six strategic objectives, addressing growth and operational excellence. Shift to growth, the digital shift and the sustainability shift are of a transformative character while customer’s first choice, agile through cycle and employer of choice have more focus on continuous improvements.

For optimal execution of the strategy we have established a decentralized way of working with full profit and loss responsibility at the divisional level, creating transparency and accountability. Decision-making close to the customer will ensure an agile organization that can rapidly respond to customer needs. Strong leaders and engaged employees are key to delivering on this strategy and we make substantial investments in employee and leadership development.

Customer Focus Fair Play We make the Shift - Advancing the world through engineering Passion to win Innovation Shift to growth Customers choice Agile through cycle Digital shift Employer of choice Sustainability shift

Shift to growth

2025 targets

  • We will grow at least 5 percent (CAGR) through a business cycle, which would make us a SEK 115 billion company by 2025
  • We will have a New Sales Ratio of 30–35 percent, defined as share of sales of products younger than 5 years

2021 key results

  • We grew 5 percent (CAGR) in 2016–2021. We added more than SEK 10 billion in annual revenues from strategic acquisitions
  • We achieved a New Sales Ratio of 20–25 percent

Digital shift

2025 targets

  • We will expand our software and digital offering
  • 70 percent of our sites1) will have modern ERP platforms implemented to enable a seamless flow

2021 key results

  • Sales from our software and digital offering amounted to SEK 1.9 billion
  • 41 percent of our sites had implemented seamless flow platforms

Sustainability shift

2025 targets

  • We will reduce carbon emission by 25 percent
  • We will reduce waste by 25 percent
  • We will achieve a Total Recordable Injury Frequency Rate (TRIFR) at 2.5

2021 key results

  • Carbon emissons were reduced by 16.4 percent in 2021 and have decreased 34 percent in relation to the baseline (2016–2018)
  • Total waste increased by 8 percent in 2021 and has decreased by 10 percent compared to the baseline
  • The Total Recordable Injury Frequency Rate increased by 9 percent to 3.5. Compared to the baseline it has decreased by 24 percent

Customer’s first choice

2025 targets

  • 100 percent of our divisions will measure customer satisfaction and show verified improvements

2021 key results

  • The divisions focused on establishing structured ways to measure and improve customer satisfaction

Agile through cycle

2025 targets

  • We will have a 16 percent trough margin through a business cycle with the ability to fully offset a 10 percent volume decline

2021 key results

  • The adjusted EBIT margin amounted to 18.3 percent

Employer of choice

2025 targets

  • We will have 25 percent female managers
  • We will have an employee engagement rate above industry average

2021 key results

  • At year-end, 19.8 percent of our managers were women
  • The average employee engagement rate was 79 percent

Core values and purpose

Customer Focus, Innovation, Fair Play and Passion to Win are our core values. They capture the culture of the company and they guide us in our actions and daily business decisions. Customer Focus: We constantly strive to exceed our customers’ expectations and enable them to excel in their business. We are decentralized and decisions are taken close to customers. Innovation: We always strive for technology leadership and successful partnerships. We work to ensure everyday advancements and innovative shifts. Fair Play: We put health and safety first. We are ethical and compliant and conduct our business sustainably. Passion to Win: We establish our market leadership through strong performance management, continuous improvements and empowered people. We are passionate about making our company number one.

In 2021 we defined a new company purpose: We make the shift – advancing the world through engineering. It captures our ambition whereby our innovative solutions make the shift in areas such as digitalization and sustainability, creating value for employees, customers, shareholders and society

1) Excluding Sandvik Materials Technology