Relevant GRI Indicators

Sandvik Rock Processing Solutions

Sandvik Rock Processing Solutions had a solid year with strong organic growth driven largely by higher demand for both infrastructure and mining. The acquisition of South African Kwatani will strengthen our capabilities in the comminution process and expand our footprint in Africa.

Sandvik Rock Processing Solutions was established on January 1, 2021. Prior to that it was a part of Sandvik Mining and Rock Technology. The new business area was formed to accelerate profitable growth within rock processing.

The business area comprises four divisions: Stationary Crushing and Screening, Mobile Crushing and Screening, Attachment Tools, and Shanbao. The rock processing applications include crushing, screening, feeding, breaking, demolition and recycling, primarily within the mining and infrastructure industries.

Market overview

Overall, it was a good year for the new business area. Mining mineral prices were at a high level for much of the year despite a drop in iron ore prices in the third quarter. The high prices helped drive demand for equipment, which accounted for 48 percent of revenues while highest-ever orders in the aftermarket business accounted for 52 percent of revenues. Infrastructrure bounced back well from 2020 levels with government infrastructure programs stimulating investments in many countries. Aftermarket sales related to maintenance benefited from a surge in demand following lockdowns in the previous year.

2021 in figures

Revenues by customer segment

Pie chart that shows split by customer segment: Infrastructure 53% and Mining 47% (pie chart)

Revenues by market area

Pie chart for revenues by market area. Top 3 are: Europe 30%, Asia 23% and North America 22%. (pie chart)

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Overview

MSEK

20201)

2021

Order intake

6,571

8,524

Revenues

6,459

7,610

Adjusted EBITA2)

1,038

1,255

Adjusted EBITA margin2), %

16.1

16.5

EBIT

990

1,255

EBIT margin, %

15.3

16.5

Adjusted EBIT2)

1,038

1,255

Adjusted EBIT margin2), %

16.1

16.5

Return on capital employed, %

21.9

28.7

Number of employees3)

1,736

2,091

Gender balance (men/women), %

87/134)

85/15

Women in managerial positions, %

12.54)

15.9

Lost time injury frequency rate (LTIFR)

1.7

2.1

Total recordable injury frequency rate (TRIFR)

6.2

4.0

1)

Restated due to the new business area structure as of January 1, 2021.

2)

Adjusted for items affecting comparability of SEK 0 million (–48).

3)

Full-time equivalent.

4)

Quarter 1 2021.

Overview

Product portfolio

Equipment for crushing, screening, feeding, breaking, demolition, tools, service, spare parts, wear parts, digital solutions and sustainability-driving technologies for processing rock.

Market characteristics

Mining:

Consolidated customer base of some 200 global major and junior miners. Remote locations, decreasing ore grades as well as increased safety requirements drive volume output and need for eco-efficient comminution as customers focus on energy and water conservation. Significant aftermarket business.

Infrastructure:

Sandvik is active in the rock processing areas of crushing, screening, feeding, demolition and recycling. The customer base is fragmented with thousands of individual customers. However, there is an ongoing consolidation towards larger capacity quarries driven by productivity, cost per ton, sustainability and safety. Localized offering and local competition.

Demand drivers

Mining:

  • GDP growth rate and resource-intensive industry development
  • A growing middle class
  • Metal and mineral prices
  • Declining ore grades, fewer minerals extracted per ton
  • Production levels in existing mines and expansion projects (greenfield and brownfield)
  • Productivity improvements and new technology, for example digital solutions and electrification
  • Demand in the areas of environment, health and safety, for example Eco-efficient comminution, energy and water conservation

Aggregates:

  • GDP growth/urbanization
  • Infrastructure investments and spending
  • EHS and sustainability trend for premium technology
  • Aggregates and cement production
  • Growth in emerging markets

Demolition and recycling:

  • Laws and regulations
  • Transformation in customers’ demand
  • Focus on recycle and reuse

Competitive landscape/Major competitors

Mining:

Mainly global competitors such as Metso Outotec, FLSmidth, WEIR, Terex and Thyssen Krupp.

Infrastructure:

Some global competitors present in several niches: Metso Outotec, Terex, Keestrack, Furukawa and Epiroc. Many local players.

Go-to-market model

Mining:

Direct sales approximately 90 percent with worldwide service network.

Infrastructure:

Due to a fragmented customer base, approximately 75–80 percent of sales is via distributors.

Growth strategy

Grow aftermarket business on the installed base and new offerings. Sales channel optimization, direct sales, distributor sales and OEM. Eco-efficient rock processing offering, automation, digitalization, electrification and exploring complementary technologies and offerings through mergers and acquisitions.

Strategic risk management

Various forms of business environment risks with an impact on the mining and infrastructure market in general, such as increased market competition with new technological developments and the emergence of new competitors, fluctuations in commodity prices and compliance-related risks. Political uncertainty in some parts of the world.