Sandvik Stock Price, News & Analysis

Sandvik AB (SDVKF) is described as a global, high-tech engineering group that provides solutions aimed at enhancing productivity, profitability and sustainability for customers in the manufacturing, mining and infrastructure industries. According to the company, it focuses on optimizing customer processes and is active in areas such as machining, mining, rock excavation and rock processing. Sandvik’s offering includes equipment, tools, services and digital solutions that are used across these industrial applications.

Business focus and industry role

Sandvik states that it is at the forefront of digitalization and concentrates on improving customers’ processes. Within mining and rock-related applications, the group’s offering covers equipment and solutions for mining, rock excavation and rock processing. In manufacturing-related activities, the company highlights machining solutions and digital tools intended to improve productivity. Its activities serve the broader manufacturing, mining and infrastructure sectors, which aligns with its classification in the manufacturing sector and iron and steel-related industrial activities.

The company has indicated that it operates in many countries and serves customers globally. In information released about its operations, Sandvik has referred to having employees and revenues across a large number of countries within continuing operations, underlining the international character of its business. The group also communicates that it aims to support customers’ sustainability and decarbonization efforts, for example through battery-electric mining equipment.

Mining and rock solutions

Within mining, Sandvik describes a business area called Sandvik Mining and Rock Solutions. This area provides equipment fleets and related solutions for underground mines. In a disclosed order from Torex Gold Resources for the Media Luna project in Mexico, Sandvik reported that it would supply a fleet of mining equipment that includes battery-electric vehicles (BEVs) and conventional internal combustion engine (ICE) units. The BEVs mentioned in that order include loaders and twin-boom jumbos, while the conventional equipment includes loaders, trucks, bolters, production drills and a raiseborer.

Sandvik has also communicated that it supports customers’ transition to more sustainable mining through its battery-electric offering, alongside conventional equipment. In connection with the Media Luna order, the company emphasized that BEVs and conventional ICE mining equipment can coexist in underground mines and provide value in different circumstances and applications. Sandvik positions this combination of equipment types as part of a broader offering that can help customers reduce their carbon footprint.

Rock processing and structural development

Sandvik has described structural changes to its organization to support growth in rock processing. The company decided to establish a dedicated business area called Sandvik Rock Processing Solutions (SRP), effective from 1 January 2021. This business area consists of the Crushing and Screening division, which was previously part of Sandvik Mining and Rock Technology. Sandvik stated that the reason for this change was to accelerate profitable growth within rock processing, as Crushing and Screening addresses separate parts of the value chain and faces different competition compared with other divisions.

In its communication, Sandvik noted that the crushing and screening business had its own manufacturing, sourcing and aftermarket operations and was already operating quite independently. By forming Sandvik Rock Processing Solutions as a business area, the company indicated that it aimed to improve transparency and support growth ambitions in rock processing.

Acquisitions and portfolio adjustments

Sandvik reports that it has pursued acquisitions and divestments to refine its portfolio. It completed the acquisition of DSI Underground, which it describes as a global leader in ground support and reinforcement products, systems and solutions for the underground mining and tunneling industries. DSI Underground is intended to form its own division within Sandvik Mining and Rock Solutions. Sandvik has stated that DSI Underground has thousands of employees and that the acquisition is expected to have a positive effect on earnings per share.

Sandvik has also signed an agreement to acquire Kwatani, a South African-based supplier of screens and feeders for the mining industry. The company notes that Kwatani’s product offering includes screens, feeders, fine separators, drives and services, and that Kwatani will be reported in Stationary Crushing and Screening, a division within Sandvik Rock Processing Solutions. Sandvik has communicated that Kwatani’s offering of large vibrating screens and feeders for the mining industry is in line with its strategy to strengthen capabilities in comminution and will complement its existing competence and experience within stationary crushing and screening.

On the divestment side, Sandvik signed an agreement to divest its Exploration business to Drillman, a subsidiary of the M Group of companies. The deal includes exploration rigs, consumables and production stock, along with selected trademarks and patents. Sandvik has stated that this divestment aligns with its focus on improving efficiency and profitability and that the Exploration business was reported within Sandvik Mining and Rock Technology until closing of the transaction.

Business areas and organizational changes

Sandvik has communicated several organizational developments. In addition to creating Sandvik Rock Processing Solutions, the company decided that the business area Sandvik Mining and Rock Technology would change its name to Sandvik Mining and Rock Solutions (SMR) as of 1 January 2021. The company has also described plans related to Sandvik Materials Technology (SMT). The Board of Directors decided that, after an internal separation of SMT, Sandvik would proceed with preparations to distribute SMT to Sandvik’s shareholders and list the shares on the Nasdaq Stockholm Exchange, subject to shareholder approval and favorable circumstances.

Sandvik has indicated that it believes both Sandvik and Sandvik Materials Technology can develop more favorably on their own and that a separate listing could improve long-term shareholder value. The company has stated that more information on this process would be provided as work progresses.

Capital markets communication and reporting

Sandvik regularly communicates with investors and analysts through capital markets days, interim reports and annual reports. The company has invited institutional investors, financial analysts and financial media to capital markets days, for example at Sandvik Manufacturing and Machining Solutions’ site in Gimo, Sweden. During such events, Sandvik presents its equity story, key achievements and strategic priorities, and showcases technologies with a focus on new technologies, digitalization and automation.

The company publishes interim reports and annual reports that include financial and operational information. For example, Sandvik has released an interim report for the third quarter of 2020 and an annual report for 2020, and has made these documents available through its investor channels. These reports provide details on order intake, revenues, operating profit, margins, cash flow and other performance indicators for continuing and discontinued operations.

Global footprint and customer focus

Sandvik describes itself as a global group serving the manufacturing, mining and infrastructure industries. It has stated that its offering is used in many countries and that it had employees and revenues across a large number of countries within continuing operations in a recent year. The company emphasizes that it is focused on digitalization and on optimizing customer processes, and that it aims to enhance productivity, profitability and sustainability for its customers.

In mining, Sandvik’s communication highlights support for customers’ decarbonization strategies, such as through the supply of battery-electric mining equipment. In rock processing, the establishment of a dedicated business area and acquisitions like Kwatani are presented as steps to strengthen capabilities and expand the equipment range. In underground mining and tunneling, the acquisition of DSI Underground broadens Sandvik’s offering in ground support and reinforcement systems.

Stock and investor information

Sandvik AB’s shares trade under the symbol SDVKF in certain markets. The company provides information to shareholders and the financial community through press releases, investor presentations, capital markets days, interim reports and annual reports. It has also indicated that certain distributions, such as a potential distribution of Sandvik Materials Technology shares, would be subject to shareholder approval and relevant regulations.

Summary

According to its own disclosures, Sandvik AB is a global engineering group focused on solutions for manufacturing, mining and infrastructure. Its activities span machining, mining, rock excavation and rock processing, with an emphasis on digitalization and process optimization. Through organizational changes, acquisitions and divestments, the company has adjusted its portfolio around areas such as mining and rock solutions, rock processing, ground support and screening equipment, while also considering a separate listing of Sandvik Materials Technology. The company communicates regularly with investors and stakeholders through reports and capital markets events, and positions its offerings as contributing to productivity, profitability and sustainability in demanding industrial environments.