Shift to growth

In 2022, we increased our growth ambitions and raised the long-term growth target from at least 5 percent over a business cycle to 7 percent, organically and through acquisitions. We have the ambition to grow faster than the market and we aim to grow 10 percent (CAGR 2019–2025) for Sandvik Mining and Rock Solutions and Sandvik Rock Processing Solutions, respectively, 5 percent for Sandvik Machining Solutions and more than 10 percent for Sandvik Manufacturing Solutions. Our investments in research and development (R&D) amount to about 4 percent of net sales annually.

This year we achieved a total sales growth of 21 percent, in fixed currency. We added approximately SEK 4 billion in annualized inorganic growth through eight strategic acquisitions. The acquisitions strengthened our core business and helped us expand into adjacent areas in our customers’ value chains. The organic growth amounted to 8 percent and was supported by the launch of innovative new products, many of which were connected to digitalization and automation.

We have a New Sales Ratio (NSR), the share of sales from products launched in the last five years, target of 30–35 percent in 2025. In 2022, the NSR was 26 percent.

Growth areas

We have set up a number of prioritized growth areas for our businesses. Digitalization is one that is relevant for all businesses.

Sandvik Mining and Rock Solutions is world-leading within underground electrification and automation and the business area has increased its focus on surface drilling. We also see continued potential in parts, services and consumables where a high share of total sales improves our resilience over time. Parts, services and consumables sales amounted to 69 percent.

In 2022, we saw a large interest in autonomous and battery-electric vehicles (BEVs) and received record orders. In 2030, we will have a full underground electric offering. With the acquisition of Australia-based Deswik, a market leading provider of mine planning software, we expanded in the underground mining value chain. The acquisition of Polymathian Industrial Mathematics further improved our offering, with solutions for automated decision-making and optimization of our customers’ operations. We expanded our battery analytics competence with the acquisition of Akkurate, a frontrunner in holistic battery management. Sandvik Mining and Rock Solutions is the only OEM in the industry with a unique end-to-end digital offer.

Sandvik Rock Processing Solutions has the ambition to reduce energy consumption with its crushing and screening solutions. The business area aims to optimize its sales channels by developing its distributor business and increasing OEM sales. The acquisition of the mining part of Schenck Process Group (SP Mining) in 2022, a SEK 2 billion business, will increase the business area’s mining exposure substantially. It will also increase our aftermarket exposure since SP Mining has 70 percent of sales in parts, services and consumables. For 2019–2025, the business area target is more than 30 percent increased penetration within parts, services and consumables. In 2022, its share of sales was 55 percent.

Sandvik Machining Solutions aims to grow by becoming a market leader in round tools, an increased exposure to lightweight materials and the mid-market segment as well as geographical expansion. In 2022, we made five round tools acquisitions. Two of the acquisitions, Preziss and Frezite, will help us support automotive customers’ shift to electric vehicle production. Sphinx Tools is a manufacturer of micro precision tools used for electronics and surgical instruments in the medical industry. The acquisitions of Balax and Peterson Tool Company support our exposure to the US market.

Sandvik Manufacturing and Machining Solutions has a vision to create a closed loop component manufacturing process. In 2021, we made several digital manufacturing software acquisitions. In 2022, we focused on their integration and the business area’s combined hardware and software solutions are unique. Additive manufacturing and metal powder are other growth areas.