Group

Order intake and revenue

During 2025, the demand for Sandvik solutions varied both regionally and by customer segments. The mining industry saw strong momentum, driven by high order intake growth in the equipment divisions as well as in Parts and Services and for digital solutions. During the first half of the year, the infrastructure market remained soft, while improvements were noted across both the demolition and recycling and aggregates segments in the latter part of the year. Strong underlying demand for cutting tools was seen in the aerospace segment, and in smaller segments such as defense. Industrial production remained subdued and hence impacted underlying demand in general engineering in Europe and North America, while it was positive in Asia. Good momentum was noted in the manufacturing software business. Demand for Sandvik’s tungsten powder was solid on the back of global supply limitations, and tungsten prices also contributed positively to the order intake and revenue development. Tariff surcharges were implemented by all business areas. Significant currency headwinds impacted the results throughout the year.

Earnings and return

EBITA increased to SEK 22,616 million (20,493), corresponding to 18.7 percent (16.7) of revenues. The adjusted EBITA decreased to SEK 23,309 (23,583) and the adjusted EBITA margin increased to 19.3 percent (19.2) compared to the previous year. Changes in foreign exchange rates affected adjusted EBITA negatively by SEK –2,482 million (–434) compared with the previous year. Net financial items amounted to SEK –1,351 million (–1,959). The profit before taxes was SEK 19,458 million (16,461). Income tax had a total impact of SEK –4,767 million (–4,216) on earnings, corresponding to 24.5 percent (25.6) of profit before taxes. Profit for the year attributable to owners of the Parent Company was SEK 14,690 million (12,243). Basic earnings per share amounted to SEK 11.71 (9.76). Return on capital employed was 15 percent (13) and return on equity was 16 percent (13).

Working capital

Net working capital in relation to revenue for the year was 29 percent (30). In absolute terms net working capital amounted to SEK 32,994 million (35,902) at the end of the year. In terms of volume, net working capital increased by SEK 1,092 million compared with the previous year. Changed currency rates decreased net working capital by SEK –3,990 million compared with the previous year. The structural effect from acquisitions and divestments decreased working capital by SEK –10 million.

Cash flow and financing

Cash flow from operating activities decreased to SEK 19,189 million (20,607). Net cash flow after investing activities was SEK 12,825 million (12,936). At the end of the year, cash and cash equivalents amounted to SEK 4,958 million (4,528) and free operating cash flow was SEK 21,216 million (21,194).

Financial net debt was SEK 26,515 million (32,116) and the financial net debt/EBITDA ratio was 0.9 (1.2).

At the end of 2025, Sandvik had unutilized committed credit facilities of SEK 11,000 million consisting of a revolving credit facility. The remaining duration for the Group’s outstanding bonds is currently 3.5 years.

According to the international credit rating agency Standard & Poor’s, Sandvik Group held a long-term rating of BBB+ with a stable outlook at year-end 2025. The short-term rating is A–2 and K1 on the domestic Nordic scale.

Equity

Equity at year-end amounted to SEK 93,237 million (96,999), or SEK 74.3 per share (77.3). The equity ratio was 55 percent (53).

Investments

Investments in tangible and intangible assets for the full year 2025 amounted to SEK 3,807 million (4,841) corresponding to 112 percent of scheduled depreciation. Investments in internally generated intangible assets were SEK 924 million (964). Proceeds from the sale of companies and shares, net of cash, amounted to SEK 336 million (–22). Investments in companies and shares, net of cash acquired, amounted to SEK –2,997 million (–3,187).

Acquisitions during the year

In January, Sandvik acquired FASTech, a US-based reseller of Computer Aided Manufacturing (CAM) solutions in the Mastercam network.

In February, Sandvik acquired three US-based resellers of CAM: ShopWare, MCAM Northwest, and the CAD/CAM solutions business line of OptiPro Systems.

In March, Sandvik acquired three US-based resellers of CAM solutions in the Mastercam network, Barefoot CNC, CAD/CAM Solutions, and CamTech Engineering Services.

Sandvik also acquired the probing and post processor business lines of CIMCO Group, a Denmark-based developer of software solutions for computer-integrated manufacturing.

In June, Sandvik acquired the acquisition of Verisurf Software Inc., a US-based 3D metrology software solutions provider.

In July, Sandvik acquired Osa Demolition Equipment S.r.l. (OSA), an Italy-based manufacturer of demolition tools and hydraulic hammers.

In November, Sandvik acquired QTE Manufacturing Solutions (QTE), a US-based reseller of Computer Aided Manufacturing (CAM) solutions in the Mastercam network.

Divestments during the year

In September, Sandvik divested its holding of shares in the associated company Eimco Elecon (India) Limited. The holding has previously been reported as assets held for sale.

In September, Sandvik also divested the additive business of Cimquest, Inc.

In October, Sandvik divested the company Advanced Theodolite Technology, Inc., previously reported as assets held for sale.

Parent Company¹⁾

The Parent Company’s revenues for 2025 amounted to SEK 13,465 million (13,427) and the operating result was SEK 1,662 million (793). The result from shares in Group companies of SEK 12,311 million (9,147) for the year consists of dividends and contributions. Interest-bearing liabilities, less cash and cash equivalents and interest-bearing assets, amounted to SEK 37,154 million (36,753). Investments in property, plant and machinery amounted to SEK 220 million (438).

The number of employees in the Parent Company and the subsidiaries operating on commission for Sandvik AB as of December 31, 2025, was 3,550 (3,569).

Dividend

The Board of Directors proposes a dividend of SEK 6.00 per share (5.75) to the 2026 Annual General Meeting, corresponding to approximately SEK 7.5 billion (7.2)

Employees

The average number of full-time equivalent employees amounted to 41,624 (41,162), of which 21 percent (21) were women. The employee turnover rate was 11 percent (11). Wages, salaries and other remunerations for the year totaled SEK 26,793 million (26,798).

Current guidelines for the remuneration of senior executives

The below remuneration guidelines were approved by the 2024 Annual General Meeting. The Board has decided to propose new guidelines for approval by the 2026 Annual General Meeting, as set out below under Proposal for new guidelines for the remuneration of senior executives.

Scope of the guidelines

These guidelines encompass the President and other members of the Group Executive Management. The guidelines do not apply to any remuneration decided on or approved by the General Meeting.

The guidelines’ promotion of the Company’s business strategy, long-term interests and sustainability

A prerequisite for the successful implementation of the Company’s business strategy and safeguarding of its long-term interests, including its sustainability, is that the Company can recruit and retain qualified personnel. To this end, it is necessary that the Company offers competitive remuneration. These guidelines enable the Company to offer senior executives competitive total remuneration. For more information regarding the Company’s business and sustainability strategy, see the Company’s website: home.sandvik.

Types of remuneration

The total remuneration package should be based on market terms, be competitive and reflect the individual’s performance and responsibilities as well as the Group’s earnings trend. The remuneration may consist of fixed salary, variable remuneration, pension benefits and other benefits.

Fixed salary

The purpose of the fixed salary is to attract and retain senior executives with the right competence for the respective positions. The salary level should be determined by comparing the salary to similarly complex positions within a defined peer group.

Variable remuneration

Variable share related remuneration

The Company may offer long-term share related or share price related remuneration. Such programs are adopted by the General Meeting and are therefore not covered by these guidelines. There are currently ongoing long-term share related incentive programs for senior executives and key employees in the Group. For more information on these programs, see the Company’s website: home.sandvik.

Variable cash remuneration

The Company may offer short or long-term variable cash remuneration. The fulfillment of objectives for awarding such remuneration shall be measured over a period of one to three years. Such remuneration may amount to not more than 75 percent of the fixed annual salary per year.

Variable cash remuneration shall be conditional upon the fulfillment of defined and measurable criteria. These criteria shall aim at promoting the Company’s business strategy and performance as well as its long-term interests, including its sustainability. At the beginning of each year the Board of Directors and the Remuneration Committee shall establish the criteria, including key performance indicators (KPIs) and the target ranges, deemed relevant for the upcoming measurement period. The criteria may be financial, with at least three KPIs, and non-financial, and shall always be related to business performance. At least 80 percent of the variable cash remuneration shall be linked to the financial criteria. The President and Group function heads shall be measured on Group level KPIs and the business area Presidents shall be measured on both Group level and business area level KPIs. The established KPIs shall be presented on the Company’s website: home.sandvik.

The extent to which the criteria for awarding variable cash remuneration have been fulfilled shall be determined when the measurement period has ended and will be published in the Report on Evaluation of Remuneration the following year. For financial criteria, the evaluation shall be based on the latest financial information made public by the Company.

Special arrangements

In specific cases, the Company may offer one-off remuneration provided that such remuneration is only made on an individual basis, for the purpose of recruiting or retaining senior executives, does not exceed an amount corresponding to 100 percent of the individual’s fixed annual salary and maximum variable cash remuneration, and is not paid more than once per year and individual.

Right to withhold or reclaim remuneration

Terms and conditions for variable remuneration shall be designed so that the Board of Directors (i) has the right to limit or refrain from payment of variable remuneration if exceptional economic circumstances prevail and such a measure is considered reasonable, and (ii) has the right to withhold or reclaim variable remuneration paid to an executive based on results that afterwards were found to have been misstated because of wrongdoing or malpractice (so called malus and clawback).

Pension benefits

For the President, the pension benefit shall be defined contribution and the pension premiums shall amount to not more than 37.5 percent of the fixed annual salary. For the other senior executives, pension benefits shall be defined contribution and amount to not more than 35 percent of the fixed annual salary.

Other benefits

Other benefits may include, for example, life insurance, medical insurance and company car benefit. Such benefits may amount to not more than 5 percent of the fixed annual salary. For senior executives in need of double accommodation, paid accommodation, etc. may be added in line with Sandvik regulations and such benefits may amount to not more than 20 percent of the fixed annual salary.

Termination of employment

Severance pay may be paid when employment is terminated by Sandvik. The President and the other senior executives may have a period of notice of not more than 12 months, in combination with severance pay corresponding to 6–12 months fixed salary. When employment is terminated by the senior executive, the notice period may not exceed six months and no severance pay shall be paid.

In case a senior executive is not entitled to severance pay, but is covered by a non-compete undertaking, the senior executive may instead be compensated for such a non-compete undertaking. Any remuneration paid as compensation for a non-compete undertaking shall not exceed 60 percent of the fixed salary at the time of notice of termination of the employment and shall not be paid for a longer period than 18 months. Fixed salary during the notice period together with any compensation for the non-compete undertaking shall not exceed an amount equivalent to the senior executive’s fixed salary for 24 months.

Consideration of remuneration to the Company’s employees

When preparing the proposal for these guidelines, the employment conditions applied within the Company as a whole have been used as a benchmark, following the principle that the remuneration packages of all Sandvik employees should be based on the complexity of the position, performance and market practice. In general, the same combination of remuneration components such as fixed salary, variable remuneration, pension and other benefits are offered within Sandvik.

The decision-making process to determine, review and implement the guidelines

The Board of Directors has established a Remuneration Committee. The Committee’s tasks include preparing the Board of Directors’ decision to propose guidelines for senior executive remuneration. The Board of Directors shall prepare a proposal for guidelines at least every fourth year and submit it to the General Meeting. The guidelines shall be in force until new guidelines are adopted by the General Meeting. The Remuneration Committee shall also monitor and evaluate programs for variable remuneration for the executive management, the application of the guidelines for senior executive remuneration as well as the current remuneration structures and compensation levels in the Company. The members of the Remuneration Committee are independent of the Company and its executive management. The President and the other senior executives do not participate in the Board of Directors’ processing of and resolutions regarding remuneration-related matters to the extent that they are affected by such matters.

Decisions on remuneration to the President are taken by the Board of Directors, based on proposals from the Remuneration Committee, and decisions on remuneration to the other senior executives are taken by the Remuneration Committee.

Adjustments to local rules

Remuneration for employment subject to rules other than Swedish may be duly adjusted to comply with mandatory rules or established local practice, taking into account, to the greatest extent possible, the overall purpose of these guidelines.

Derogation from the guidelines

The Board of Directors may temporarily resolve to derogate from the guidelines, in whole or in part, if in a specific case there is special cause for the derogation and a derogation is necessary to serve the Company’s long-term interests, including its sustainability, or to ensure the Company’s financial viability. As set out above, the Remuneration Committee’s tasks include preparing the Board of Directors’ resolutions in remuneration- related matters. This includes any resolutions to derogate from the guidelines.

For information concerning the current remuneration of senior executives, including ongoing long-term incentive programs, refer to note G4.

Proposal for new guidelines for the remuneration of senior executives

The Remuneration Committee has recommended that the Board of Directors proposes a change to the remuneration guidelines, in relation to the STI objectives for the business area Presidents. Under the proposed change, their performance may be measured on either solely business area level objectives or on both business area level and Group level objectives (whereas the current guidelines require measurement on both levels).

In light of the above, the Board of Directors proposes that the 2026 Annual General Meeting resolves on guidelines for remuneration with the same material content as the guidelines that were approved by the 2024 Annual General Meeting, with the exception of the section Variable cash remuneration, second paragraph, which is proposed to have the following new wording:

Variable cash remuneration shall be conditional upon the fulfillment of defined and measurable criteria. These criteria shall aim at promoting the Company’s business strategy and performance as well as its long-term interests, including its sustainability. At the beginning of each year the Board of Directors and the Remuneration Committee shall establish the criteria, including objectives and the target ranges, deemed relevant for the upcoming measurement period. The criteria may be financial, with at least three objectives, and non-financial, and shall always be related to business performance. At least 80 percent of the variable cash remuneration shall be linked to the financial criteria. The President and Group function heads shall be measured on Group level objectives, and business area Presidents shall be measured either solely on business area level objectives or on both business area level and Group level objectives. The established objectives shall be presented on the Company’s website: home.sandvik.

Research and development (R&D)

Each business area is responsible for its own R&D activities. Focus areas are machining materials and process development, powder metallurgy, electrification and digital solutions.

Sandvik has a portfolio of 7,502 (8,264) active patents. In 2025, 822 (1,157) new patents were granted. This year’s decrease is due to a refined reporting method, in which each Unitary Patent is counted as a single patent, while traditional European patents continue to be counted per country. This adjustment aligns with the evolving UP/UPC system and provides a more accurate reflection of our patent portfolio. Investments in R&D were SEK 4,542 million (5,053), corresponding to 3.8 percent (4.1) of revenues. The number of employees in R&D, including Quality Assurance, was 2,942 (3,075).

Tax

Sandvik is a multinational group with many inter-company transactions. The OECD has issued guidelines for transfer pricing of cross-border transactions in multinational groups. Sandvik adheres to these guidelines and also to the local legislation of each country to ensure that a correct pricing model is deployed and that a correct amount of tax is paid in each country. Sandvik monitors the OECD’s tax reform work and the EU initiatives on tax transparency carefully and observes these standards as and when enacted. We strive to have good relations with our stakeholders, such as tax authorities, non-governmental organizations and investors.

Sandvik has initiated cooperation with tax authorities in several countries. We are convinced that an open discussion and cooperation with tax authorities around the globe will help us to reduce uncertainty about the taxes we are obliged to pay. We contribute to the local communities and countries in which we operate in the form of, for example, taxes and employment opportunities. In 2025, the Group paid SEK 5,156 million (5,474) in income taxes globally. Income tax comprises just a portion of all taxes paid by Sandvik worldwide. In addition, we pay social security contributions, environmental and energy taxes, property taxes, etc. Furthermore, Sandvik collects and pays taxes at the request of governments and authorities, including indirect taxes and withholding taxes.

Environment

In Sweden, Sandvik operates under licenses at seven sites in accordance with the Swedish Environmental Code, with each site holding the necessary environmental permits. During the year, there were a couple of minor environmental incidents, along with two exceedances of regulatory limits. All incidents are managed in consultation with the respective local supervisory authorities. In 2023, Sandvik Rock Tools in Sandviken applied for new permits, and the permit process was still ongoing at the end of 2025.

Statutory sustainability statement

Sandvik has, in accordance with the Annual Accounts Act, prepared a statutory sustainability statement, approved for issue by the Board of Directors and the President and CEO. The statement comprises section Sustainability Statement.

Events after the end of the period

On January 27, 2026, Sandvik announced that Mats Eriksson, President of the Mining business area, has decided to retire in 2027, when he turns 65 years. In 2026 he will step down from his position and as member of the Group Executive Management once a successor has assumed the role, tentatively on July 1, 2026.