Sandvik as an investment

Sandvik is governed through a decentralized operating model where each division has full accountability for results and strategy execution. The Group provides a strong platform for the divisions to grow and scale their businesses globally through our well-established brands, financial strength and exceptional talent pool.

A company with 23 world-leading divisions

Our strategy is to have a portfolio of businesses that are/have:

• Number 1 or number 2 in their chosen market or segment

• Industrial technology leaders in mining, component manufacturing, and rock processing with particular focus on automation, electrification and digitalization

• Value-based pricing and strong pricing power that generate attractive margins

• Solutions that build lasting customer relations

• Sustainability integrated into the business model

Solid track record of successful strategy execution

We made significant progress transforming Sandvik during 2020–2025. Through careful and targeted investments, Sandvik has:

• Expanded in areas, segments and regions with higher structural growth

• Strengthened our presence in the customer value chain

• Became a leader in digital solutions within our industries

• Significantly improved our resilience

• Delivered on ambitious financial and sustainability targets

• Divested or spun out non-core, higher risk and lower margin businesses for a total SEK 30 billion in revenues since 2017, and acquired companies with a higher structural growth profile and margin resilience corresponding to more than SEK 22 billion in revenues (2020–2025)

Innovation at core

Our market-leading positions stem from long-standing customer relationships, know-how in customer applications, and successful innovations. Our competitive advantage includes an extensive presence at customer sites, and agility to act on market trends and customer needs. R&D is part of our DNA, and we continuously keep a stable and high innovation pace. During the year, Sandvik:

• Invested approximately 4 percent of revenues in R&D

• Achieved 25 percent in New Sales Ratio

Resilient business

Sandvik has significantly improved its revenue and margin resilience through the following:

• Increasing its share of the aftermarket business from 31 percent to 40 percent (2019–2025)

• Building leading digital platforms and reaching SEK 5.5 billion in revenues from our digital offering, with an ambition to increase digital revenues to SEK 13 billion by 2030

• Continuous efforts on cost optimization and operational efficiency. Solid execution on the 2022 and 2024 restructuring programs with total run rate savings of SEK 2 billion

• New restructuring initiatives announced in the Machining business

• Significantly improved margin resilience through higher share of variable costs, and speed and agility through an adaptive mindset

Strong cash flow generator and a solid balance sheet for growth

Sandvik has industry-leading margins with a solid cash conversion. We generated SEK 21.2 billion in free operating cash flow in 2025, corresponding to a cash conversion of 95 percent. A strong balance sheet allows for value creating investments that drive growth. Sandvik capital allocation priorities are:

• Capex of approximately 4 percent of revenues

• Dividend policy: 50 percent of adjusted earnings per share

• Debt target (financial net debt/EBITDA) of <1.5

• Inorganic growth

• Share buy back

Our primary focus is to drive organic growth by leveraging our leading offering, and in addition, to target value accretive acquisitions that strengthen our growth profile and core. We have a balanced approach for allocating capital between the business areas. Sandvik carefully evaluates each business or acquisition on its own merits and returns. Thanks to a solid financial position and a stringent capital allocation process, we deliver good shareholder returns through steadily growing dividends.