Sandvik reports record sales in 2019

March 16, 2020

Sandvik AB, Stockholm, Sweden, has published its Annual Report for 2019. The company stated that 2019 had been its second record year in a row, in which it achieved the best sales in its history at SEK 103 billion, up from its former record of SEK 100 billion in 2018.

The group reported a total order intake of SEK 104,075 million in 2019, up from SEK 102,440 million in 2018, with revenues totalling SEK 103,238 million, compared with SEK 100,072 million in the previous year. An operating profit of SEK 13,386 million was recorded, down from 2018’s operating profit of SEK 18,655 million.).

A breakdown of Sandvik’s revenues by customer segment showed that 37% of the group’s revenues came from the mining segment, 21% from engineering, 12% from energy, 11% from automotive, 8% from construction and 7% from aerospace, with the remaining 4% of revenues coming from other unspecified segments.

By region, 37% of Sandvik’s 2019 revenues came from Europe, 23% from North America, 19% from Asia, and a further 9% from Africa/Middle East, 7% from Australia and 5% from South America.

In 2019, the group conducted several acquisitions, including a major share in Italian metal Additive Manufacturing company BEAMIT, and presented new financial and new long-term sustainability targets. However, it was noted that it had also seen signs of a slowdown in the market, and has, therefore, adapted its costs to ensure continued profitability.

Sandvik Materials Technology

In 2019, the group initiated an internal separation of Sandvik Materials Technology within the Sandvik Group to give the business area more flexibility for improved performance and growth.

Although there were clear indications of a market slowdown in 2019, it was reported that the segment had a stable year overall, with strong demand coming from the oil and gas segment. There was also strong demand in other segments, such as aerospace and medical – areas with high growth potential.

As the industry moves towards increased levels of electrification, Sandvik believes that it is well-positioned to capture further opportunities within its industrial heating business, Kanthal. However, it was noted that a gradual slowdown in demand in several segments had a negative effect on parts of its business in all three divisions.

Total revenues for Sandvik Materials Technology in 2019 were reported at SEK 15,279 million, up from SEK (2018: 14,697 million in 2018). Operating profit was reported at SEK 1,444 million (2018: 1,307), with an operating margin of 9.4% (2018: 8.9%).

By market area, the majority of the division’s revenues came from Europe at 56%, with North America coming in second at 24%, followed by Asia (17%), Africa/Middle East (2%) and South America (1%).

By customer segment, 44% of the division’s revenues came from customers in energy, 21% engineering, 12% consumer and electronics, 6% automotive, 6% chemicals, 3% construction, 3% aerospace and 5% from other market segments.

Sandvik Machining Solutions

Sandvik Machining Solutions reported a somewhat challenging year in a climate in which economic instability, such as trade conflicts, affected the demand for products in the automotive and general engineering segments. This was said to have been felt most strongly in Asia, although the automotive sector in Europe also saw a slowdown, affecting the business area’s order intake and revenues negatively.

Revenues remained fairly stable in North America, supported by deliveries on project orders received early in the year, but by the end of 2019 orders in the automotive and engineering sectors declined. The aerospace sector continued to perform well throughout all geographic regions.

Total revenues for Sandvik Machining Solutions were SEK 41,163 million (2018: 41,094). The operating profit was reported at SEK 8,380 million (2018: 9,922), with an operating margin of 20.4% (2018: 24.3%). Europe represented the largest market area for the division, at 54% of total revenues, with North America coming in second at 23%, followed by Asia (19%), South America (2%), Africa/Middle East (1%) and Australia (1%).

Some 46% of the division’s revenues came from customers in the engineering segment, with 26% coming from automotive, 16% from aerospace and 9% from energy. 3% of revenues came from customers in other segments.

Sandvik Mining and Rock Technology

2019 was said to have been another solid year for Sandvik Mining and Rock Technology, which benefitted from a stable mining market. Mining equipment orders remained steady and the aftermarket reported strong performance, said to have accounted for 60% of the segment’s revenues.

Total revenues for Sandvik Mining and Rock Technology were SEK 44,777 million, up from SEK 41,058 million in 2018. An operating profit was reported of SEK 8,602 million, up from SEK 7,452 million, with an operating margin of 19.2% (2018: 18.2%).

The division’s best-performing commodities were gold and copper, making up 34% and 18% of its 2019 revenue, respectively. Coal represented 11% of revenues, while platinum represented 7%, zinc 6%, iron ore 4%, nickel 3%, and diamonds 1%. Other minerals made up 8%, other metals 6% and other base metals 2%.

By market area, 21% of the division’s revenues came from Asia, 21% from North America, 18% from Africa/the Middle East, 16% from Europe, 15% from Australia and 9% from South America.

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