Sandvik Materials Technology to sell welding and stainless wire businesses and create new powder business unit

May 15, 2017

Sandvik Materials Technology has reported that in order to further consolidate its product portfolio and improve its long-term performance, the company intends to divest parts of its wire operations business. A new organisational structure was also announced that will see four new product areas established as Tube, Kanthal, Powder and Strip, from July 1, 2017.

Sandvik stated that its welding and stainless wire businesses are subject to intense competition and it does not hold a No. 1-2 market position. In 2016 the wire businesses, which are to be divested, generated total annual revenues of about SEK 700 million.

“The divestment of the welding and stainless wire businesses will make Sandvik Materials Technology more focused on its core operations; advanced stainless steels and special alloys for the most demanding industries,” stated Petra Einarsson, President of business area Sandvik Materials Technology.

The company added that it plans to retain its Kanthal wire for industrial heating etc. These businesses will be included in the Kanthal product area and are regarded as core businesses due to the strong market positions and growth potential. In 2016 operations now transferred into the Kanthal product area had annual revenues of around SEK 800 million.

“We will continue to develop our core businesses to ensure long term value creation. A new organisational structure is being created, effective as from 1 July 2017, whereby each product area will be responsible and accountable for the entire value chain and its results. The four new product areas will be Tube, Kanthal, Powder and Strip,” added Einarsson.

A charge of SEK -450 million related to the transaction will impact the result for the second quarter 2017. This is primarily impairments related to fixed assets. The cash flow impact from the transaction is expected to be positive.

www.sandvik.com

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