Growth, digitalization and sustainability
Shift to growth
Sandvik Machining Solutions has a number of strategic priorities, including expansion outside of Europe, a leading position in round tools, as well as in the mid-market segment, and to take action to master the shift to electric vehicles (EVs) within automotive. During 2024, progress was made in all these areas.
North America, our second-largest market, is of significant importance. With support from key growth fundamentals, such as production being moved back to the US (re-shoring) and positive forecasts for segments, such as aerospace and medical, we have built a solid position and strengthened our exposure in the region. In 2024, a special tools division with focus on the North American market was created, GWS, and we enhanced our offering with the acquisition of PDQ, the leading US-based workholding fixtures and tooling company.
Asia is another important market, particularly the fast-growing local premium segment in China. In 2024, Sandvik acquired a majority stake in Suzhou Ahno Precision Cutting Tool Technology. Suzhou Ahno holds a leading position in the local premium segment, with a broad product and service offering and an extensive sales, distribution and production footprint. With this acquisition, Sandvik took a big leap towards becoming leading in round tools and strengthened its exposure in China. A new China division, based on Suzhou Ahno and focused on the local premium market, was created.
The shift in the automotive industry towards EVs requires lighter materials, such as aluminum, which in turn requires new tool assortments and machining solutions. The acquisitions of Pro-micron and Almü were both completed during the year. They add market-leading capabilities in sensorized tools, automation software, and aluminum machining solutions, and strengthen our capabilities and position in the automotive segment. Sensorized tools is a high-growth market, with strong underlying drivers such as the accelerated shift to automated production and increasing demand for production data from our customers.
In recent years, Sandvik Manufacturing Solutions has invested in building a solid offering within digital manufacturing with software solutions for design and planning automation, and industrial metrology. This work continued in 2024, as we strengthened our ability to serve our customers through the acquisition of Cimquest, a US-based reseller of Computer Aided Manufacturing (CAM) solutions and one of the largest resellers in the network of our CAD/CAM software solutions provider Mastercam®.
Sandvik divested its engineer-to-order business DWFritz Automation and decided to exit its minority ownership in BEAMIT, a provider of additive manufacturing services. The decisions were motivated by portfolio optimization and our focus on software and powder technology, respectively.
Digital shift
Sandvik has increased its focus on software solutions in Sandvik Manufacturing Solutions’ offering to better leverage synergies within product integration and development, as well as synergies from common business models. Software revenue in Sandvik Manufacturing Solutions showed mid single digit growth, and we are on track to meet the 2025 target of SEK 4 billion.
Product innovation is key to our growth and a number of digital solutions were launched during the year. Sandvik Manufacturing Solutions launched a Manufacturing Copilot based on generative artificial intelligence (AI) in alliance with Microsoft. This new capability is available in several of our CAD/CAM software solutions, and will gradually be integrated into more brands, enabling a shift in the customer experience by simplifying their machining processes.
The business area agreed on a common roadmap for the development of software integrations, AI, and the modernization of products, and started to expand its R&D hub in India to ensure a cutting-edge position within AI and cloud solutions.
We continued to add combined software and tooling offerings as well as combined industrial metrology software and hardware.
Sustainability shift
By introducing new, more efficient cutting tools, and combining them with software solutions, we help minimize our customers’ energy consumption and raw material waste. At our Gimo (Sweden) site, the integration of Vericut™ Force software for analyzing and optimizing cutting conditions during component manufacturing reduced energy consumption by 15 percent, for example.
Sandvik Coromant introduced new features in its Productivity Analyzer tool to help manufacturers measure their energy consumption and carbon footprint. The enhanced tool provides data-driven insights into increased productivity, details the exact savings achievable by using Sandvik tools and offers suggestions for further improvement.
Circularity includes all parts of the product lifecycle, from design and sourcing to use, and resource recovery. For many years, Sandvik has been buying back used tools from customers for recycling into new tools. In 2024, the customer recycling program was recognized with the ‘Sandvik Sustainability Award in Memory of Sigrid Göransson’ for digitalizing the process and making it much simpler for the customer, with increased transparency and traceability. We also enhanced the overall circularity rate of our metal powders and made significant progress in our reconditioning services.