Company Reports

Sandvik is a Swedish industrial technology group serving mining, rock processing, and precision manufacturing markets through four business areas: mining, rock processing, machining, and intelligent manufacturing.

Sandvik delivered 25% organic revenue growth and 22.5% adjusted EBITA margin in the third quarter, helped by robust mining demand and tungsten-related gains in machining. Shares fell 4.5% intraday as investors questioned the durability of earnings.

Sandvik is a Swedish industrial technology group serving mining, rock processing, and precision manufacturing markets through four business areas: mining, rock processing, machining, and intelligent manufacturing.

We transfer coverage of Sandvik, a Swedish industrial technology group and global leader in underground hard-rock mining equipment and precision cutting tools, serving mining, rock processing, and manufacturing end markets.

Sandvik enjoys strong market positions in niche mining equipment and premium metal-cutting tools. Sandvik has established a more resilient and profitable business than its past, via a continuous focus on improving operational efficiency, divestments and a large share of aftermarket sales and servicing throughout the life of its mining equipment. Despite this, the short-cycle nature of demand for its products, most notably in its machining segment, exposes the group to cyclical swings in demand and leads to regular restructuring programs to protect profitability through the cycle.

Sandvik's second-quarter adjusted EBITA grew by 27% year over year, which saw its margin expand by 120 basis points reaching a record 22.6%. Shares are trading 7% lower intraday on July 17.

Sandvik enjoys strong market positions in niche mining equipment and premium metal-cutting tools. Sandvik has established a more resilient and profitable business than its past, via a continuous focus on improving operational efficiency, divestments and a large share of aftermarket sales and servicing throughout the life of its mining equipment. Despite this, the short-cycle nature of demand for its products, most notably in its machining segment, exposes the group to cyclical swings in demand and leads to regular restructuring programs to protect profitability through the cycle.

Sandvik grew its first-quarter organic order intake and revenue by 23% and 15%, respectively. Record-high demand for mining equipment is driven by continued elevated gold and copper prices, with both commodities collectively accounting for over 60% of orders in the mining segment.

Sandvik enjoys strong market positions in niche mining equipment and premium metal-cutting tools. Sandvik has established a more resilient and profitable business than its past, via a continuous focus on improving operational efficiency, divestments and a large share of aftermarket sales and servicing throughout the life of its mining equipment. Despite this, the short-cycle nature of demand for its products, most notably in its machining segment, exposes the group to cyclical swings in demand and leads to regular restructuring programs to protect profitability through the cycle.

Sandvik reported 11% organic order intake and 5% sales growth for fiscal 2025. Organic growth was hit by unfavorable currency translation, resulting in adjusted EPS growth of 2% to SEK 12.17. The stock is largely unchanged intraday following a 40% rally during the last six months.

Sandvik enjoys strong market positions in niche mining equipment and premium metal-cutting tools. Sandvik has established a more resilient and profitable business than its past, via a continuous focus on improving operational efficiency, divestments and a large share of aftermarket sales and servicing throughout the life of its mining equipment. Despite this, the short-cycle nature of demand for its products, most notably in its machining segment, exposes the group to cyclical swings in demand and leads to regular restructuring programs to protect profitability through the cycle.

Sandvik reported third-quarter earnings, which reinforced the secular growth themes across the mining sector. Organic order intake grew 16% year over year, driven by its mining segment, where high commodity prices and a shift toward underground mining continue to propel demand for equipment.

Sandvik reported a 10% increase in organic order intake during its second quarter, boosted by record intake from its mining segment. The shares were trading 3% higher intraday on July 16.

Sandvik’s first quarter saw growth of 2% in organic order intake and 1% in revenue, with adjusted EBITA margin up 150 basis points year over year. The shares were trading 1% lower intraday on April 16.

We've updated our view on Swedish mining equipment suppliers Epiroc and Sandvik. Epiroc is a pure play of niche mining equipment with high aftermarket requirements, while Sandvik has two other business segments, machining and rock processing, which contribute half of its revenues.

Sandvik enjoys strong market positions in niche mining equipment and premium metal-cutting tools. Sandvik has established a more resilient and profitable business than its past, via a continuous focus on improving operational efficiency, divestments and a large share of aftermarket sales and servicing throughout the life of its mining equipment. Despite this, the short-cycle nature of demand for its products, most notably in its machining segment, exposes the group to cyclical swings in demand and leads to regular restructuring programs to protect profitability through the cycle.

Sandvik reported a 7% decline in its adjusted EBITA during fiscal 2024, which saw its margin fall 80 basis points to 19.2%.

Narrow-moat Sandvik reported a 7% decline in its adjusted EPS to SEK 2.94 during the third quarter, missing FactSet consensus of SEK 3.07 per share. We attribute the underperformance to lower sales volumes, most notably for its macroeconomic-driven short-cycle cutting tools business, which underpinned a 70-basis-point fall in its adjusted EBITA margin to 19.4%. Several restructuring programs have already been implemented to restore its EBITA margin to between Sandvik’s 20%-22% midterm target. Shares are trading broadly in line with our SEK 210 fair value estimate, which we maintain.

Narrow-moat Sandvik‘s 3% organic order growth during the second quarter is impressive in the context of current global economic conditions. Demand was supported by SEK 1.5 billion worth of major orders for mining equipment and double-digit growth in China within its short-cycle machining segment, which enjoyed prebuying in anticipation of higher prices and is therefore unlikely to be maintainable in the future. A 2% decline in organic revenue year over year was underpinned by a mid-single-digit decline in its rock processing segment and is consistent with our estimates. We reiterate our SEK 210 fair value estimate and view shares as fairly valued.

The short-cycle nature of demand for Sandvik’s metal-cutting tools and mining equipment exposes the group to cyclical swings in industrial manufacturing and commodity prices. A combination of divestments and continuous focus on ways to improve operational efficiency has successfully created a more resilient and profitable business. However, restructuring programs are frequently required to protect profitability once macroeconomic conditions change.