Sandvik Venture Capital Markets Day 2013 Tomas Nordahl President 1
Safety first Sandvik s objective is zero harm to our people, the environment we work in, our customers and our suppliers Emergency Number Protective Equipment Alarm Emergency Exit Assembly Point 2
Tomas Nordahl Executive Vice President and Head of IT, Sourcing and Strategy, President of Sandvik Venture M.Sc Economics and Business Employed since 2011 Senior Partner with Boston Consulting Group before joining Sandvik 3
Agenda Introduction Financial update Sandvik Venture priorities Questions and Answers 4
Sandvik Venture Sandvik Venture creates value through profitable growth of small to mid-sized businesses of particular interest for Sandvik. Mission Grow profitable stand-alone businesses that can provide value to Sandvik, strategically as well as financially. Create an environment where adequate focus and resources can be directed at small and mid-sized businesses while still benefitting from being a part of the Sandvik Group. Offer an environment for people that like to build businesses and expand their leadership capabilities. 5
Sandvik Venture 2012 Sales: SEK 5,963 M EBIT: SEK 1,120 M ROCE: 17.1% No of Employees: 2,700 6
Sandvik Venture Product Areas Sandvik Venture Wolfram Bergbau und Hütten A world-leading manufacturer of tungsten oxide-, tungsten metal-, and tungsten carbide powders. Sandvik Process Systems A leading global manufacturer of steel belt technology in continuous processes and for products with customized surfaces. Diamond Innovations/ Sandvik Hard Materials A leading global manufacturer of Hard and Superhard materials and applications 7
Recapitulation Capital Markets Day 2012 High level attention and ambition Crisp strategies for each Product Area Growth Value creation 8
Achievements to date Dormer transferred to Sandvik Machining Solutions as of 1 January 2013 Focused Product Area strategies for profitable growth in place Capacity investments Sandvik Process Systems in Sandviken, Sweden Increased recycling capacity for Wolfram in St. Martin, Austria Supply chain optimization Closure of Sandvik Hard Materials Production Unit at Mayfield, Australia Consolidation of Diamond Innovations two production facilities to the existing in Worthington, USA Creating a new leading Product Area focusing on Hard and Superhard materials Acquisition of TechnoPartner Samtronic 9
Agenda Introduction Financial update Sandvik Venture priorities Questions and Answers 10
Financial update Q2 2013 Order intake SEK 1,532 M Invoicing SEK 1,332 M EBIT SEK -18 M Adjusted EBIT SEK 182 M ROCE 9.2% SEK M 4 000 3 000 2 000 1 000 0 2007 2008 2009 2010 2011 2012 2013-1 000-2 000-3 000 40% 30% 20% 10% 0% -10% -20% -30% -4 000-40% -5 000 Invoicing EBIT margin ROCE 12 months -50%
Agenda Introduction Financial update Sandvik Venture priorities Questions and Answers 12
Sandvik Venture s role Extend Sandvik s capability into high growth segments Commercialize technology offers Develop existing portfolio Close collaboration with Group R&D and Group Strategy 13
Targeting high growth segments Sandvik Process Systems Diamond Innovations/ Sandvik Hard Materials Wolfram Sulphur granulation Diamond cutters Carbide cutters Wear parts Tailored raw materials Recycled raw materials Superhard materials for metal cutting Cutting tool blanks for solid carbide drills and end mills Tailored raw materials Recycled raw materials Food processing equipment Fertilizer processing equipment Saphire display polishing medium Can manufacturing equipment Cutting solutions for personal care 14
Diamond Innovations/ Sandvik Hard Materials Merger of previously independent Diamond Innovations and Sandvik Hard Materials to further strengthen the position in Hard and Superhard materials. Entity to be operational as one Product Area as of 1 January 2014 Short facts President: Johan Israelsson Head Office location: Fair Lawn, USA No of Employees: 1,800 15
Johan Israelsson Product Area President 27 years of industry experience with Sandvik Coromant Previous President for Sandvik Coromant Market Area Americas and member of core global Sandvik Coromant Management 16
Key success factors Diamond Innovations/ Sandvik Hard Materials Increased focus on and exposure to key customer segments Higher customer value through a comprehensive offering materials, applications and technologies More scale within Research & Development, Sales and Marketing and Product Management 17
Sandvik Process Systems Priorities Growth in key focus segments such as Oil & Gas, chemicals, construction and furniture, fertilizer, food and composites Continue expanding sales and services footprint in BRIC and other growth markets Complete leveling investment in Sandviken 18
Expansion in the composites segment Sandvik has aquired TechnoPartner Samtronic - a manufacturer of customer specific double belt press machines, up- and downstream equipment and know-how transfer packages. The acquisition is a part of Sandvik Process Systems strategy to grow in the attractive composites segment.
About TPS TechnoPartner Samtronic (TPS) Established in 1990 in Göppingen, Germany. About 35 employees. Core capabilities within reinforced Teflon beltbased double belt press machines. The main market is Europe, outside Europe the most important markets are North America, China and Japan. Approximately EUR 13 M in average annual sales. 20
Wolfram Priorities Securing Sandviks raw material base and independence Provide tailored and high consistency tungsten carbide powders Investments in increased recycling capacity 21
Sandvik Venture focus 2013 Growth in key focus segments Identify, assess and commercialize new opportunities Continued efficiency measures 22
23 Q&A Capital Markets Day 2013