Sandvik has long-term financial targets focusing on growth, profitability, dividend and financial position.
Financial targets are excluding discontinued operations, unless otherwise stated.
Growth 7 percent
A growth of 7 percent through a business cycle, organically and through acquisitions, in fixed currency
Adjusted EBITA margin range: 20–22 percent
An EBITA margin range of 20–22 percent through a business cycle, adjusted for items affecting comparability
Dividend payout ratio: 50 percent
A dividend payout ratio of 50 percent of EPS through a business cycle, adjusted for items affecting comparability, (Group total)
Financial net debt / EBITDA: <1.5
A financial net debt / EBITDA <1.5, excluding transformational acquisitions (Group total)
Adjusted earnings per share*
Profit/loss for the year adjusted for items affecting comparability attributable to equity holders of the Parent Company divided by the average number of shares outstanding during the year.
Earnings before interest and tax adjusted for items affecting comparability.
Earnings before interest and tax adjusted for items affecting comparability, excluding amortizations and other accounting effects arising from business combinations.
Adjusted EBITA margin*
Earnings before interest and tax adjusted for items affecting comparability, excluding amortizations and other accounting effects arising from business combinations in relation to sales.
Earnings per share
Profit/loss for the year attributable to equity holders of the Parent Company divided by the average number of shares outstanding during the year.
Financial net debt/EBITDA
Interest-bearing current and non-current liabilities, excluding net pension liabilities and leases, less cash and cash equivalents divided by rolling 12 month EBITDA.
Items affecting comparability
Items with a significant impact on the Group or business area results from gains and losses on business disposals, restructuring and impairments costs.
Lost Time Injury Frequency Rate (LTIFR)
Number of lost time injuries per million worked hours.
Net debt/equity ratio
Interest-bearing current and non-current debts, including net pension liabilities, less cash and cash equivalents divided by total equity.
Order intake for a period refers to the value of all orders received for immediate delivery and those orders for future delivery for which delivery dates and quantities have been confirmed. General sales agreements are included only when they have been finally agreed upon and confirmed. Service contracts are included in the order intake with the full binding contract amount upon signing.
Rate of capital turnover
Revenues for the last quarter annualized divided by average total capital.
Relative working capital
Average working capital for the last four quarters, divided by revenues in the last twelve months.
Return on capital employed
Earnings before interest and tax plus financial income, as a percentage of a four quarter average capital employed. Capital employed is defined as total capital less current non-interest-bearing debt.
Return on total capital
Earnings before interest and tax plus financial income, as a percentage of a four quarter average total capital.
Return on total equity
Consolidated net profit/loss for the year as a percentage of average total equity during the year.
Total Recordable Injury Rrequency Rate (TRIFR)
Total number of injuries per million worked hours.
Total of inventories, trade receivables, account payables and other current non-interest-bearing receivables and liabilities, excluding tax assets and liabilities and provisions.
* Alternative Performance Measures; Sandvik presents certain financial measures that are not defined in accordance with IFRS. Sandvik believes that these measures have an important purpose of providing useful supplemental information to investors and the company’s management when they allow evaluation of trends and the company’s performance. As not all companies calculate the financial measures in the same way, these are not always comparable to measures used by other companies. These financial measures should not be seen as a substitute for measures defined under IFRS.