Overview
Sandvik Manufacturing and Machining Solutions
Sandvik Manufacturing and Machining Solutions remained on a positive trend and grew organically despite geopolitical uncertainties. We expanded our round tools offering through acquisitions and saw a continued growing demand for our digital manufacturing solutions.
Sandvik Manufacturing and Machining Solutions brings together world-leading tools and machining and industrial know-how with the latest in digital manufacturing and software solutions, as well as technologies like additive manufacturing and in-line metrology. The business area consists of the two business area segments: Sandvik Machining Solutions and Sandvik Manufacturing Solutions.
Sandvik Machining Solutions provides tools, tooling systems, software and services that optimize machining operations such as turning, milling and drilling. We address the metal-cutting tools and solutions market through our market-leading brands Sandvik Coromant, Walter, Seco and Dormer Pramet, which operate independently to optimally capture market opportunities. They are supported by Wolfram, a world-leading provider of high-quality tungsten carbide used to manufacture tools.
Sandvik Manufacturing Solutions provides digital manufacturing and software solutions for design and planning and industrial metrology. Through its end-to-end agnostic digital offering, the business area segment automates and connects the component manufacturing value chain – from design and planning to preparation, production and verification. It also offers expertise and services across the entire additive manufacturing value chain with all relevant metal 3D-printing technologies in-house.
Market overview
The large-scale global events throughout the year, including COVID–19 lockdowns in China, the war in Ukraine and global energy, supply chain and inflation setbacks, meant the market was characterized by significant regional and industry segment specific variations. After a tough first part of the year, the second half of 2022 saw continued demand, despite the ongoing global challenges. The direct and indirect exposure to Russia was limited.
Overall demand was positive, with variations, and the highest growth was noted in energy and aerospace. General engineering and automotive also showed good growth, even though the automotive industry continued to be affected by supply chain issues.
2022 in figures
Revenues by customer segment
Revenues by market area
MSEK |
2021 |
2022 |
||||||
|---|---|---|---|---|---|---|---|---|
Order intake |
37,680 |
46,428 |
||||||
Revenues |
36,681 |
45,901 |
||||||
Adjusted EBITA2) |
8,473 |
10,023 |
||||||
Adjusted EBITA margin2), % |
23.1 |
21.8 |
||||||
Return on capital employed, % |
21.6 |
13.8 |
||||||
Number of employees3) |
20,435 |
20,802 |
||||||
Gender balance (men/women), % |
78/22 |
79/21 |
||||||
Women in managerial positions, % |
18.9 |
19.2 |
||||||
Lost Time Injury Frequency Rate (LTIFR) |
1.2 |
1.5 |
||||||
Total Recordable Injury Frequency Rate (TRIFR) |
2.3 |
2.3 |
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|
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Overview
Product portfolio
Providing customers with a leading and sustainable offer delivered via multiple divisions and brands in the form of metal cutting tools, digital manufacturing and software solutions, additive manufacturing and industrial metrology.
Market characteristics
Cutting tools represent a small share of the total manufacturing cost for customers, however they are significant for productivity and quality. Service levels and product solutions are the main differentiators for the premium market. The mid-market is more price sensitive but requires a lower degree of service.
Demand drivers
- Manufacturing volumes
- Material evolution
- New manufacturing technologies
- Complex component designs and functionalities
- Sustainability
- Automation
- Flexibility in manufacturing
Competitive landscape/Major competitors
- Competitors in the premium market: IMC Group (ISCAR brand), Kennametal (Kennametal brand)
- Fragmented in the mid-market including global premium players present with their mid-market brands: Mitsubishi, IMC Group (TaeguTec brand), Kennametal (Widia brand), Zhuzhou
- Hexagon, Autodesk, Open Mind, Tebis and Dassault System within CAM. A mix of larger competitors and smaller niche players within additive manufacturing and industrial metrology.
Go-to-market model
Direct sales approximately 55–60 percent. Distribution sales are predominant in North America whereas direct sales are predominant in Europe. In Asia, mainly distribution sales with a limited service offering in the mid-market segment and direct sales, with a high service level in the premium market.
Growth strategy
Expansion through organic growth, innovation and niche acquisitions, strengthen our position in the fast-growing sub segments of our core business. Expansion into digital and software solutions, additive manufacturing and industrial metrology, supporting customer value chains.
Strategic risk management
Systematic management and mitigation of business environment risks with an impact on the metal cutting market in general, including changes in customer behavior, acquisition-related risks, trade/geopolitical risks, structural changes in our industry, information security risks and compliance-related risks.