In This Article:
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Order Intake: SEK28.8 billion, flat year over year.
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Revenue: SEK30.3 billion, declined by 4%.
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Organic Growth: Orders up 2%, revenues down 1%.
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Adjusted EBITDA Margin: 19.4%, decreased by 7%.
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Adjusted Profit: SEK3.7 billion.
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Cash Flow: SEK6.8 billion, cash conversion rate of 121%.
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EBITA: SEK5.9 billion, margin of 19.4%.
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Net Financial Debt: SEK46 billion, financial net debt over EBITA at 1.4.
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Tax Rate: 24.1% excluding items affecting comparability.
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Currency Impact: Negative impact of 5% on orders and 4% on revenues.
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Major Order: SEK1.9 billion order from BHP for the Jansen project.
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Segment Performance: Mining and Rock Solutions margin at 20.6%, Rock Processing margin at 15.2%, Manufacturing and Machining Solutions margin at 19.8%.
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Savings from Restructuring: SEK388 million in total savings.
Release Date: October 21, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Sandvik AB (SDVKF) reported a strong cash flow of SEK6.8 billion for the quarter, indicating robust financial health.
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The company achieved significant savings from restructuring programs, amounting to SEK388 million, which positively impacted the financial results.
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Sandvik AB (SDVKF) saw solid momentum in its mining and software businesses, with double-digit growth in the aftermarket segment.
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The acquisition of Universal Field Robots is expected to strengthen Sandvik AB (SDVKF)'s mine automation offerings.
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Participation in major industry trade shows like MINExpo and IMTS showcased Sandvik AB (SDVKF)'s new innovations, enhancing its market presence.
Negative Points
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Total revenues declined by 4% year-over-year, with organic revenue growth being negative at 1%.
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The cutting tools segment was negatively impacted by a weak macroeconomic environment, particularly in Europe and China.
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The automotive segment experienced significant declines, particularly in Europe, affecting overall performance.
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Currency fluctuations had a negative impact on both orders and revenues, reducing the top line by approximately 5%.
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There is continued caution on new equipment sales in the mining sector, with customers preferring to prolong the life of existing machines.
Q & A Highlights
Q: Can you discuss how committed Sandvik is to maintaining the A- rating or would you be content with a BBB+ rating? A: Cecilia Felton, CFO, stated that Sandvik aims to maintain a financial net EBITA below 1.5, which is their balance sheet target. They plan to reduce financial net debt to allow room for mid-sized acquisitions, which will be financed through cash flow rather than additional debt.