Financial and sustainability targets
Financial targets
Sandvik has long-term financial targets focusing on growth, profitability, financial position and dividend.
Growth
Target
A growth of 7 percent through a business cycle, organically and through acquisitions.
Outcome: 9%
A revenue growth (CAGR vs 2019) of 9 percent. In 2023, total growth at fixed exchange rates was 9 percent, of which organic growth was 6 percent. Revenue growth was 12 percent over a three-year period and 7 percent over a five-year period.
EBITA margin range
Target
An adjusted EBITA margin range through a business cycle of 20–22 percent.
Outcome: 20.0%
The adjusted EBITA margin amounted to 20.0 percent (20.0), in line with the target.
Financial net debt/EBITDA
Target
A financial net debt/EBITDA ratio (excluding transformational M&As) below 1.5.
Outcome: 1.2
The target was achieved as the financial net debt/EBITDA ratio was 1.2.
Dividend payout ratio1)
Target
A dividend payout ratio of 50 percent of earnings per share, adjusted for items affecting comparability, through a business cycle.
Outcome: 43%
A solid performance in 2023 resulted in a proposed dividend of SEK 6.9 billion (6.3) corresponding to a payout ratio of 43 percent. The average payout ratio for a three-year period amounted to 42 percent and for a five-year period to 39 percent.
Target outcomes are 2023 results. All figures except financial net debt/EBITDA are excluding Alleima and other operations for previous years.
1) The dividend payout ratio is only related to cash dividends and does not consider the distributed value from Alleima to shareholders in 2022. The ratio is calculated on adjusted earnings per share, diluted, for the total Group for all years except 2022 when it excludes earnings related to Alleima.
Sustainability targets
We have set sustainability goals in selected focus areas and we report on KPIs for our operations to track progress towards targets. In addition to our own operations, we also work with customers and suppliers to achieve the goals.
Net zero
Target
Our target is to reduce our scope 1 and 2 greenhouse gas (GHG) emissions by 50 percent by 2030, compared to 2019.
Outcome: 141 ktons
In 2023, we increased our GHG emissions by 1 percent to 141 ktons. The increase was primarily due to lower sourcing of low-emission electricity, such as certificates. Emissions from own operations (scope 1) decreased by 3 percent. Compared to the base year (2019), GHG emissions have been reduced by 23 percent and we are on track to reach the 2030 target.
Circularity
Target
Our target is to increase our waste circularity to 90 percent by 2030.
Outcome: 71%
We achieved 71 percent (73) waste circularity. The decrease is mainly due to acquired companies and we are still in line to achieve the 2030 target. Total waste decreased by 21 percent to 336 ktons.
Safety
Target
Our target is to reduce the Total Recordable Injury Frequency Rate (TRIFR) to 1.9 by 2030, representing a 50 percent reduction from the baseline average 2016–2018.
Outcome: 3.0
The TRIFR amounted to 3.0 (3.1). Compared to the baseline (average 2016–2018) it has decreased by 21 percent. Acquisitions continue to negatively impact both TRIFR and LTIFR trends. Regrettably, one fatality was reported.