Overview
Sandvik Manufacturing and Machining Solutions
A broad set of focused activities throughout the year enabled Sandvik Manufacturing and Machining Solutions to achieve solid business momentum and a strengthened market position. Acquisitions, innovations and the integration of software solutions across the business area supported positive order intake developments and revenue growth.
Sandvik Manufacturing and Machining Solutions provides world-leading tools and tooling systems for advanced component manufacturing as well as digital manufacturing, additive manufacturing and metrology solutions. Our uniquely combined hardware and software solutions are being integrated to further increase our customers’ productivity and efficiency and we are aiming towards so called closed-loop manufacturing.
The business area consists of 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 as well as tool management solutions. We address the component manufacturing market through our market-leading brands Sandvik Coromant, Walter, Seco and Dormer Pramet, which operate independently to optimize market opportunities. We offer metal powders such as high-quality tungsten carbide and various powders for additive manufacturing.
Sandvik Manufacturing Solutions provides digital manufacturing and software solutions for design and planning automation and industrial metrology. Through our end-to-end agnostic digital offering, we automate and connect the component manufacturing value chain, from design and planning to preparation, production and verification.
Market overview
Aerospace provided strong growth throughout the year, together with solid demand from automotive, driven by strong backlogs and the removal of supply chain bottlenecks. Europe and North America saw stable momentum. These factors offset a slower than expected recovery in China and in Asia overall, and soft general engineering demand.
Key trends affecting our customer base included the slowing down of globalization. This means that manufacturing is becoming more local, and an ageing workforce is leading to less talent movement and therefore skill shortages, prompting a need for new solutions. Increasing material and component complexity means our customers require more advanced and customized machine tooling solutions. Sustainability and digitalization continue to be important market drivers.
2023 in figures
Revenues by customer segment
Revenues by market area
|
2022 |
2023 |
||||||
|---|---|---|---|---|---|---|---|---|
Order intake, MSEK |
46,428 |
49,247 |
||||||
Revenues, MSEK |
45,901 |
49,340 |
||||||
Adjusted EBITA2), MSEK |
10,023 |
10,597 |
||||||
Adjusted EBITA margin2), % |
21.8 |
21.5 |
||||||
Return on capital employed, % |
13.8 |
13.7 |
||||||
Number of employees3) |
20,802 |
20,326 |
||||||
Gender balance (men/women), % |
79/21 |
79/21 |
||||||
Women in managerial positions, % |
19.2 |
19.6 |
||||||
Lost Time Injury Frequency Rate (LTIFR) |
1.5 |
1.1 |
||||||
Total Recordable Injury Frequency Rate (TRIFR) |
2.3 |
2.3 |
||||||
|
||||||||
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
- Shortage of skilled labor
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 Systèmes 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 focused 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.