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Shift to growth

Sandvik is well positioned to capture future growth opportunities. Our long-term target is to grow at least 7 percent over a business cycle, organically and through acquisitions. The ambition is to grow faster than the market and we aim to grow (CAGR vs 2019) 10 percent for Sandvik Mining and Rock Solutions and Sandvik Rock Processing Solutions respectively, and 5 percent for the Sandvik Machining Solutions business area segment. We updated the ambition for the Sandvik Manufacturing Solutions business area segment with a new growth target, defined as SEK 4 billion in software revenues by 2025.

Since 2019, the annual growth has been 9 percent (CAGR), a strong result considering, for example, the exit from Russia. Organic growth is paramount to achieve our targets and in 2023 we launched a number of innovative new products connected to electrification, digitalization and automation (see Sandvik Mining and Rock Solutions – Innovations, Sandvik Rock Processing Solutions – Innovations and Sandvik Manufacturing and Machining Solutions – Innovations). We have a New Sales Ratio (NSR) target of 30–35 percent by 2025, defined as the share of sales from products launched in the last five years. In 2023, the NSR was 25 percent. Investments in R&D amounted to 3.8 percent of revenues.

We have added approximately SEK 19 billion in annualized growth through 31 acquisitions, of which seven took place in 2023.

Growth areas

Sandvik has identified prioritized growth areas for each of its businesses, with digitalization and sustainability as common denominators.

Sandvik Mining and Rock Solutions is world-leading within underground electrification and automation. In 2023, we received record orders for battery-electric vehicles and won 75 percent of all load and haul tenders we participated in. Our goal is to have a full underground electric offering by 2030. The acquisition of Deswik in 2022 made Sandvik world-leading within mine planing software and this year Deswik acquired Polymathian Industrial Mathematics, an Australia-based provider of AI solutions for mine optimization. Sandvik is the only OEM in the industry with an end-to-end digital offering.

Sandvik has increased its focus on growing within surface drilling. In 2023 we introduced an electric concept surface drill rig and acquired a new surface testing facility in Finland. Parts, services and consumables accounted for 66 percent (69) of sales in 2023. A high share of total sales improves our resilience over time.

Sandvik Rock Processing Solutions is shaping eco-efficient rock processing solutions. By replacing the high energy-consuming grinding process with fine crushing solutions we expand our offering in the value chain and reduce energy use at the customer site. The acquisitions of Kwatani in 2021 and SP Mining in 2022 broadened our screening offering, increased the share of mining sales to 53 percent (39) and increased the share of parts, services and consumables sales to 59 percent (55). We already provide a fully electrified stationary crushing and screening equipment offer, and aim to have 90 percent of our mobile offering electric by 2025. In 2023 we launched several electric mobile products and introduced a wider range of attachment tools to the US market.

Sandvik Manufacturing and Machining Solutions is aiming for end-to-end optimization and automation within component manufacturing, so-called closed loop manufacturing. The Sandvik Machining Solutions business area segment aims to grow within inserts, round tools, the mid-market segment and outside Europe, also aiming for digital industry leadership and to master the automotive shift. Round tools revenues have increased by more than 20 percent since 2021 and we have increased our market share in North America. In 2023 we acquired Buffalo Tungsten Inc (BTI), a leading US-based manufacturer of tungsten powders; esco GmbH, a German supplier of software solutions for a gear machining technology; and 95 percent of the shares of Irish medical machining solutions provider Premier Machine Tools Limited.

The Sandvik Manufacturing Solutions business area segment is growing through the provision of an end-to-end agnostic digital offering with a portfolio of strong brands. In 2023, we strengthened our offering with the acquisition of Postability, a Canadian company that develops post processors for Mastercam (acquired by Sandvik in 2021). We also acquired a minority stake in up2parts, a German closed loop manufacturing software start-up. We continued to integrate hardware and software solutions, automating and connecting the component manufacturing value chain.