Strategy and technology

Strategic focus areas

In the short-term, we aim to reach a 10 percent EBIT (Earnings Before Interest and Tax) margin by 2019. We are in line with that target with many opportunities to grow and further improve the profitability, focusing on operational and commercial excellence. In the long term, we aim to be a leading materials technology innovator, providing customers with solutions that make them safer, more sustainable, energy efficient and productive.

Focus on core

Today, Sandvik Materials Technology’s portfolio is more focused than in the past, due to restructuring and divestments. In the first quarter, we completed the divestment of our welding wire business to industrial company ESAB, including the global sales organization and production units in Sandviken, Sweden and Scranton, US. In May, we announced a divestment of our 50 percent stake in the Fagersta Stainless wire rod mill, in a transaction that is expected to close by the end of 2019. In the third quarter, we divested our stainless wire business to the German family-owned Zapp Group. The deal included a production unit in Sandviken, Sweden, and a global sales organization along with selected trademarks and patents. In the fourth quarter, we signed an agreement to divest our electric components business to power resistor manufacturer Ohmite.

We are building on our core capabilities and in August we announced the acquisition of Custom Electric Manufacturing, a leading manufacturer of industrial heating equipment and replacement heating elements in North America. This acquisition will strengthen Sandvik’s leading position in industrial heating systems.

Technology leadership and innovation

Sandvik Materials Technology is a leading expert in special alloys and advanced stainless steels. In 2018 we received an order from CERN, the European organization for particle physics research, to develop a new advanced stainless steel for the world’s largest and most powerful particle collider, the Large Hadron Collider (see case below). Sandvik Materials Technology is also supplying components to the prestigious NASA WFIRST project for a space-based telescope that will help astronomers improve their understanding of dark energy. We are growing in the medical segment, which is an area where we see excellent potential for our medical wire Exera™. Exera is used for many applications, including ear implants, spine stimulation, heart solutions, and glucose and thermal measurements.

Overview