Strategic progress
Strong momentum in key segments and geographic expansion
Strong growth momentum was noted in strategically important segments, such as aerospace, consumer electronics and defense, where Sandvik has made targeted investments in recent years. The segments grew by high single or double digits.
During the year, Sandvik also gained further traction in round tools and took important steps to expand in key regions. Following the acquisition of Suzhou Ahno in 2024, Sandvik has established a solid position in the fast-growing local premium segment in China. The inauguration of a new inserts factory has expanded the offering further, leveraging the company’s leading round tools position in the region.
Strong growth was noted in the China division, with double-digit growth in organic order intake compared to the same period in previous year.
Another important step was the investment in our innovation hub for software development in India, a strategically important market for Sandvik. The center will support our software development and innovation, and strengthen our combined offering of software and tools. It will also support our business in India and the rest of Asia, as well as attract local competence within the digital area.
Digital advancements
A key highlight of the year was our digital advancement, both organic and through acquisitions. We increased the portfolio of software solutions and services to enhance revenues, while also leveraging these solutions to capture a larger share of customer wallet. An important launch within Machining was Toolhive™, a cloud-based tool management solution that provides customers with real-time tool data and improved productivity with a minimal setup. Within Intelligent Manufacturing, we launched Mastercam® Copilot, an AI-infused Copilot built for machinists to simplify CAM programming by providing conversational help and command execution. Cimatron launched CAD-AI, a software module enabling automated part feature recognition and generation of high-quality CNC toolpaths to efficiently drive machine tools.
During the year, Sandvik also made several acquisitions. One was Verisurf Software, a US-based 3D metrology software provider. The company is strong with small- and medium-sized customers, particularly in North America. It also has presence in Europe and Asia and significant business with large aerospace and defense customers in the US market. We also completed eight reseller acquisitions in the US as part of a growth strategy in Intelligent Manufacturing.
These companies expand our CAM offering and strengthen our regional presence in the US, while transitioning to a direct software sales model in these regions. This also extends our ability to offer multiple software brands to the same customer base.
Total software revenues increased by double digits during the year. However, we did not reach the SEK 4 billion revenue target, mainly due to the timing of acquisitions and currency headwind. With the increased share of software, and hence recurring revenues, Sandvik made important steps to improve both revenue and margin resilience.
Sandvik has a strategy to leverage its strong cutting tools position, including component manufacturing expertise, to expand software sales to SMEs and large enterprises, and also to enable increased share-of-wallet of cutting tool sales through our market positions with industrial software. This presents a strong offer towards companies in the manufacturing industry. On our Capital Markets Day in May 2025, we presented a successful cross-selling example, on how sales leads from our Sandvik Coromant cutting tool brand resulted in a 7 percent increase in new Vericut® software license revenue. For the coming strategy period, 15 percent of Machining’s organic growth and 25 percent of Intelligent Manufacturing’s growth, will come from synergy realization.