Agile through cycle

Being agile through the cycle starts with resilient revenues through, for example, a higher share of parts, services and consumables or increased software revenues. During 2024, Sandvik made good progress with, for example, double-digit growth in our parts, services and consumables business and the strong momentum of our software solutions.

Due to leading positions and solutions that help our customers run more sustainable and productive operations, Sandvik successfully mitigated cost inflation with pricing.

Sandvik continuously seeks ways to strengthen operational efficiency and resilience. At the beginning of the year, we implemented a new program of restructuring measures, supporting the strategy and the financial targets of the Group. These measures included consolidation of production units and optimizing the structure of the organization globally. The program is estimated to generate annual savings of about SEK 1.2 billion, and at year-end, we had delivered almost 80 percent of the program. The 2022 program is also tracking as planned, with annualized run-rate savings achieved of approximately 90 percent at year-end 2024.

The transformation of Sandvik includes a repositioning into faster-growing areas and also a successful portfolio optimization which has resulted in reduced volatility in profitability. Since 2017, we have added more than SEK 20 billion in revenues through acquisitions and divested or spun out revenues of SEK 30 billion, including Alleima. This work continued during the year as we made a strategic decision to focus on software solutions in Sandvik Manufacturing Solutions. We also revised our additive manufacturing strategy to focus mainly on metal powders. As a consequence, we divested the engineer-to-order business DWFritz Automation and decided to seek an exit of our minority stake in AM service provider BEAMIT.

The key measurement for success is our target of an adjusted EBITA margin ranging between 20–22 percent through a business cycle. The EBITA corridor is to be seen as a guide for when additional corrective measures may be necessary or what may not be seen as long-term sustainable margins during the peak of a cycle. Our decentralized organization helps us act quickly on market changes and all business areas have well-prepared contingency plans for different scenarios. In 2024, we showed margin resilience in a weaker market with an EBITA margin amounting to 19.2 percent (20.0).