• Order Intake: Increased by 2%, with organic growth also at 2%.
• Revenue: Increased by 1%, with organic growth at 1%.
• Adjusted EBITDA Margin: Improved by 1.5 percentage points to 19.7%.
• Adjusted Profit: 3.8 billion, up from 3.3 billion in the same period last year.
• Free Operating Cash Flow: 3.8 billion, slightly improved from the previous year.
• Mining Solutions Order Intake: Strong organic growth, 26% up in equipment.
• Net Financial Items: Decreased from 500 million to 300 million year over year.
• Net Debt: 40 billion, with financial net debt over EBITDA at 1.1%.
• Adjusted EPS: Improved to 3.016.
• Cash Conversion: 70% in the quarter, with a 12-month rolling basis at 93%.
• Regional Performance: Europe down 8%, North America up 4%, Asia up 9%, Australia up 12%, South America up 8%.
• Segment Performance: Mining strong, automotive down low double digits, aerospace up mid single digits in Europe.

• Warning! GuruFocus has detected 4 Warning Sign with SDVKF.

Release Date: April 16, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Sandvik AB (SDVKF) reported a 2% increase in total order intake and a 1% increase in revenue, with organic growth contributing equally to these figures.
• The company achieved an improved adjusted EBITDA margin of 19.7%, up by 1.5 percentage points, driven by successful restructuring programs and cost savings.
• Strong performance in the mining sector, particularly in Australia and South America, with a 26% increase in equipment orders and double-digit growth in parts and services.
• Sandvik AB (SDVKF) launched several innovations, including an electric option for rotary drill rigs and a mobile electric cone crusher, enhancing its product portfolio.
• The company announced nine acquisitions in the quarter, strengthening its position in CAM and demolition and recycling equipment.

Negative Points

• The cutting tools and infrastructure segments were negatively impacted by the uncertain macroeconomic environment, with Europe and North America experiencing declines.
• The automotive segment saw a significant downturn, with low double-digit declines in Europe and North America.
• Despite a positive sentiment in aerospace, North America reported a mid-single-digit decline in order intake.
• The company faces potential risks from global tariffs and trade barriers, which could impact the overall economy and Sandvik AB (SDVKF)'s operations.
• Currency fluctuations had a negative impact on the company's financial performance, with a reported negative currency impact of 1% on orders and revenue.

Q & A Highlights

Q: Could you elaborate on the stable comment for SMM in the first two weeks of April, particularly regarding US demand and any signs of a CapEx freeze due to tariffs? A: Stefan Widing, President and CEO, stated that there was no abnormal activity observed in the first two weeks of April across geographies. The levels were stable compared to Q4, and there were no specific signs of a US CapEx freeze. The situation remains stable despite overall uncertainty.

Q: How are you handling US cutting tools that come from Sweden, and are you passing tariffs onto prices? A: Cecilia Felton, CFO, explained that the company is mitigating the impact of tariffs through various strategies such as redirecting flows, using existing production footprints, and implementing customer surcharges. Stefan Widing added that they have a plant in the US, which they can leverage for production rebalancing and pricing adjustments.

Q: Could you comment on the performance of metal powders in Q1 and the impact of tariffs on cost structures? A: Stefan Widing noted that combining Q4 and Q1, there is a net positive impact on metal powders. The demand for tungsten powder is increasing due to China's export restrictions, which could be a potential upside. Cecilia Felton mentioned that current tariff levels are not expected to have a material impact on cost structures, supported by restructuring initiatives.

Q: Have you seen any supply chain disruptions or component shortages affecting your business? A: Stefan Widing confirmed that there are currently no supply chain disruptions or component shortages impacting their business.

Q: How is the defense business performing, and what is its current growth rate? A: Stefan Widing acknowledged the interest in the defense business, noting it is a positive segment. However, more detailed analysis and numbers will be shared at the Capital Markets Day in May.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.