Sandvik Group releases interim results for the second quarter of 2021
August 4, 2021
Sandvik AB, headquartered in Stockholm, Sweden, has released its interim report on the second quarter of 2021. Revenues increased organically by 22%, while adjusted operating profit increased by 19.1% to SEK 4,469 million (Q2 2020: 2,837). Order intake saw organic growth of 43% to SEK 25,857 million.
Demand strengthened both year on year and sequentially across most regions, with the largest increase noted in Europe (+63%) and North America (+49%). Asia, mainly driven by China, grew strongly year on year, albeit at a slower rate due to more challenging comparables than in the other regions. Changed exchange rates had a negative impact of -6% on both order intake and revenues.
Sandvik Materials Technology
Sandvik Materials Technology saw increased order intake (74%) and a decrease in revenue (-4%). Organic revenue was reported to be negatively impacted by weak backlog for umbilicals, which was somewhat offset by strong development in consumer-related segments, industrial heating and application tubing. Strong increases in order intake were reported from all regions compared with the corresponding period in the preceding year.
During the second quarter, the Kanthal division within Sandvik Materials Technology signed a strategic partnership with HYBRIT (Hydrogen Breakthrough Ironmaking Technology) in order to produce fossil-free heating.
Sandvik Manufacturing and Machining Solutions
Sandvik Manufacturing and Machining Solutions saw order intake (+44%) and revenues (+33%) increase year on year, driven by automotive and engineering. The strongest year-on-year growth in order intake was noted in North America and Europe of 48% and 50%, respectively. Growth of 23% was recorded in Asia.
Three acquisitions were announced during and after the quarter: agreements were signed by Sandvik Manufacturing to acquire Cambrio, a company with an end-to-end portfolio in CAD/ CAM software for manufacturing industries and DWFritz, a global provider of precision metrology, inspection and assembly solutions for advanced manufacturing. Sandvik Machining Solutions, meanwhile, signed a deal to acquire Fanar.
Sandvik Mining and Rock Technology
Sandvik Mining and Rock Technology reported order intake and revenues increases of 31% and 21%, respectively. The organic order intake is well above the levels seen prior to the COVID-19 pandemic, with high demand in load & haul, underground drilling and surface drilling. All major regions reported strong growth rates, with South America reporting an increase of 93%; Europe, 50%; North America, 39% and Africa/the Middle East, 15%.
During the quarter, Sandvik signed an agreement to acquire Tricon Drilling Solutions Pty. Ltd. On July 7, Sandvik completed the previously announced acquisition of DSI Underground, a global actor in ground support and reinforcement products, systems and solutions for the underground mining and tunnelling industries.
Stefan Widing, president and CEO of Sandvik, commented, “We are, indeed, operating in a different business environment compared with a year ago, with stronger momentum for both our short and long-cycle businesses. The economic recovery and high demand are posing some challenges on a global scale, with raw material and component shortages, as well as container and port imbalances, to name a few. While the impact of this is difficult to predict, I feel confident in the underlying business momentum. We are seeing strong demand for our products and services, and are combining this with solid operational execution and profitability levels. We are also stepping up the pace of acquisitions, firmly executing on our shift to growth ambition.”
Further details are available through the report, hosted on the company’s website.
