Overview
Sandvik Manufacturing and Machining Solutions
Macroeconomic uncertainty resulted in weaker demand in general engineering and automotive, while aerospace and software solutions developed positively. Despite significant volume declines, Sandvik Manufacturing and Machining Solutions managed to deliver a resilient margin and capitalize on strategic opportunities.
Sandvik Manufacturing and Machining Solutions offers leading solutions for the component manufacturing industry, with general engineering, automotive and aerospace as its major customer segments. Our world-leading positions are based on extensive know-how and we continuously innovate in close collaboration with our customers. Our machining and software solutions enable component manufacturing to be more productive, energy efficient and less resource intensive.
The business area consists of two segments: Sandvik Machining Solutions and Sandvik Manufacturing Solutions. Sandvik Machining Solutions provides tools, tooling systems and services that optimize machining operations, such as turning, milling and drilling, as well as tool management solutions. Sandvik Manufacturing Solutions provides digital manufacturing and software solutions for design and planning automation and industrial metrology. Through an end-to-end agnostic digital offering, Sandvik can automate and connect the component manufacturing value chain, from design and planning to preparation, production and verification.
The two business area segments face both common and distinct opportunities and challenges. One major opportunity is to leverage their respective strengths and work together to automate, digitalize and optimize the machining process in the component manufacturing industry.
Market overview
Demand was mixed, both regionally and across customer segments. Macroeconomic challenges and geopolitical unrest led to lower industrial activity, and consequently weaker demand in general engineering. Challenges in the automotive industry negatively affected demand for our solutions while aerospace continued on a positive track, despite temporary supply issues in the sector. The tougher market conditions led to overall volume declines, with the most negative impact in Europe. North America remained the most resilient region, where we saw especially good momentum for our software solutions.
2024 in figures
Revenues by customer segment
Revenues by market area
|
2023 |
2024 |
||||
|---|---|---|---|---|---|---|
Order intake, MSEK |
49,247 |
49,187 |
||||
Revenues, MSEK |
49,340 |
48,567 |
||||
Adjusted EBITA1), MSEK |
10,597 |
9,718 |
||||
Adjusted EBITA margin1), % |
21.5 |
20.0 |
||||
Return on capital employed, % |
13.7 |
9.6 |
||||
Return on capital employed, excluding amortization of surplus values, % |
15.6 |
11.6 |
||||
Number of employees2) |
20,326 |
20,801 |
||||
Gender balance (men/women), % |
79/21 |
79/21 |
||||
Women in managerial positions, % |
19.6 |
19.2 |
||||
Lost Time Injury Frequency Rate (LTIFR) |
1.2 |
1.4 |
||||
Total Recordable Injury Frequency Rate (TRIFR) |
2.6 |
2.1 |
||||
|
||||||
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, metal powders, 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
- Regionalization
- Urbanization
- Demography challenges
- Material evolution
- Complex component designs require more advanced tooling solutions
- Skills gap due to an ageing workforce drive demand for automation and software solutions
- Sustainability
Competitive landscape/Major competitors
- Competitors in the premium market: IMC Group (ISCAR brand), Kennametal
- Fragmented in the mid-market including global premium players present with their mid-market brands: Mitsubishi, IMC Group (TaeguTec brand), Kennametal (Widia brand)
- Hexagon, Autodesk, Dassault, Siemens within CAM. Hexagon, Zeiss, Innovmetric within metrology solutions.
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 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.