Sandvik reports strong start to 2018 with record operating profits
April 24, 2018
Sweden’s Sandvik AB has reported a strong start to the year in its first quarter 2018 Interim Report. Order intake and revenues during the period improved organically year-on-year by 7% and 14% respectively, with positive development reported in all business areas. Operating profit also rose by 22% year-on-year to 4,271 million SEK, with the operating margin said to be at 18.0%.
“The year got off to a strong start with a broad-based increase in customer activity resulting in growth in orders and revenues as well as increased earnings and margins compared with the year-earlier period,” stated Björn Rosengren, CEO and President of Sandvik. “In addition, we made further progress in relation to our active portfolio management. I am pleased with the performance of the Group.”
Sandvik Materials Technology reported an organic increase of 13% in orders and, excluding the impact of the large order received in the year-earlier period, orders increased by 27%. Sandvik Machining Solutions reported organic order growth of 8%. In Sandvik Mining and Rock Technology, orders improved organically by 4%, from the high level in the year-earlier period.
“Underlying demand improved in all business areas and geographical regions, yielding a book-to-bill of 107%. The strong growth in revenues supported operating profit, which increased by 22% to a record-high level of 4.3 billion SEK.”
In the three major regions, Asia displayed strongest momentum with growth of 19%, supported by a significant increase in China. Europe improved by 6% with strong development across most countries. North America posted stable development with 0% growth, however order intake increased by 8% excluding the major order received in the year-earlier period.
During the quarter, Sandvik announced an investment of around 200 million SEK in a new plant for manufacturing titanium and nickel fine metal powders in Sandvik Materials Technology. It was stated that the new plant will complement the company’s existing stainless-steel powder offering and thereby strengthen its position in the market for metal powder and metal Additive Manufacturing.
