Letter from the CEO
Solid performance in an uncertain environment
Sandvik made important progress in 2024. In an environment where macroeconomic uncertainty and geopolitical volatility dampened business activity, we proved the resilience of our business. Despite lower demand in several key end markets, we delivered solid profitability and a strong cashflow, while continuing to advance our strategy.
Sandvik comprises 23 divisions, grouped in three business areas within the mining, infrastructure and manufacturing industries. These are world-leading businesses that share a common purpose and business models to help our customers become more efficient, productive and sustainable. Our decentralized operating model offers the best prospects for our businesses to develop close to customers while leveraging the full benefit of being part of the Sandvik Group. Our strong financial position, renowned brands, performance-oriented culture and global presence provide a unique platform for achieving success, scaling operations and growing profitably.
Solid performance
Our performance during the year showed that our transformation into a more resilient, flexible and fast-moving company, with an enhanced potential for long-term growth, has continued to yield results. Order intake increased by 2 percent, at fixed exchange rates, while revenues declined by 1 percent to SEK 123 billion. We delivered an adjusted operating profit (EBITA) of SEK 23.6 billion, corresponding to a robust 19.2 percent margin and a strong free operating cash flow of SEK 21 billion.
Innovating for success
Sandvik is built on world-leading innovations, and our ability to develop and supply our customers with value-creating solutions will remain core to our future success. Our R&D investments amounted to SEK 5.1 billion in 2024, corresponding to about 4 percent of the Group’s revenue. We continued to build on the strong innovation pipeline across our businesses. We saw solid growth in many of the strategic areas identified as particularly important for future growth, including parts, services and consumables, software solutions for both mining and manufacturing operations, automation solutions and surface drilling operations.
Our customers’ industries are experiencing a major technology shift in which digital technologies and developments in areas such as artificial intelligence provide new opportunities for Sandvik to further enhance the value we provide with our solutions. A great example of how we lead the way was the launch of an industry-first AI-based Manufacturing Copilot for computer aided manufacturing (CAM) software.
In a world of fast-paced change, we have a clear strategy for driving long-term growth and resilience. The parts, services and consumables business is a priority area for Sandvik, as it strengthens our position with customers and provides a more stable revenue and high earnings profile. Our focus in this area is clearly paying off, which was evident in 2024. Parts, services and consumables showed strong growth throughout the year, as mining customers maintained high activity in the mines. The combination, with a favorable momentum in software, is very positive as we aim to increase the share of recurring revenues in the business.
“In macroeconomic uncertainty and geopolitical volatility, we proved the resilience of our decentralized organization.”
Strengthened portfolio
A central piece of our strategy includes expanding our presence in faster-growing geographies outside Europe and in growth segments where we have been underrepresented. In 2024, we acquired a majority stake in Suzhou Ahno, a leading local premium company in China. The addition of Suzhou Ahno is an important step for us to achieve our ambitions in the important Chinese market for cutting tools. Their strong market position, combined with our leading competence and the international presence of our brands, will form an attractive growth platform in China.
We continuously look at means of improving ways of working, and took several steps to optimize our organizational structure and strengthen our operational efficiency. This contributed significantly to the resilient earnings performance in 2024.
Sustainable business
Sustainability is a major business opportunity for Sandvik, and our solutions help our customers improve productivity, safety, and resource efficiency in their operations. Through our technology leadership and innovation capabilities in areas such as automation, digitalization and electrification, we have a unique opportunity to drive the sustainability shift in our customers’ industries.
Minerals are a necessity to enable the green transition and we have an important role to play in supplying our customers with solutions to maximize output in an efficient, safe and sustainable way. The year included several strong innovations and customer collaborations that support the mining industry’s shift towards automated and electrified operations. Another example of how we drive sustainable business was this year’s winner of the ‘Sandvik Sustainability Award in Memory of Sigrid Göransson’, awarded to a digitalized solution for carbide tool buyback programs. This sustainable business solution benefits both the customers and Sandvik, while also reducing waste.
Safety always comes first at Sandvik. We have a zero vision for accidents in the workplace and continuously review initiatives to ensure that we continue the long-term positive trend in this area. The total recordable injury frequency rate was 3.0 (3.2) during the year. Sandvik continues to support the principles of the United Nations Global Compact and contributes to the UN Sustainable Development Goals.
A stronger Sandvik
In 2024, we continued to build a stronger Sandvik, in a complex and challenging external environment, through solid execution of our strategic priorities. I would like to thank our employees whose outstanding efforts are the reason for this progress. I also want to extend a big thank you to our shareholders and customers for your continued trust.
Stefan Widing
President and CEO