Sandvik reports 31% increase in profits during 2021
January 26, 2022
Sandvik AB, headquartered in Stockholm, Sweden, has released its full-year financial results for 2021. Revenues increased organically by 12% to SEK 99,105 million (Q1-Q4 2020: 86,404), adjusted profit for the period was SEK 14,126, up 31% from 2020 (Q1-Q4 2020: 10,823). Order intake saw organic growth of 26% to SEK 108,898 million (Q1-Q4 2020: 86,287).
The year is said to have been characterised by high customer activity and strong broad-based demand, with record-high order intake levels in mining and construction. Underlying demand in general engineering has been solid throughout the year, while the automotive segment has been impacted by component shortages with Sandvik’s customers.
A cautious pick up in aerospace was noted at the beginning of 2021, with significant growth during the second half of the year, although against low levels in the preceding year.
The energy segment continued to improve, but with oil & gas not having caught up with pre-COVID-19 pandemic levels. Adjusted EBITA increased by 27% year on year to SEK 18,935 million (Q1-Q4 2020: 14,878) corresponding to a margin of 19.1% (17.2).
“2021 was a very successful year for Sandvik,” stated Stefan Widing, president and CEO. “Thanks to our agility and dedicated employees, we navigated through supply chain imbalances and inflationary pressures while staying focused on our shift to growth strategy. We delivered strong organic and acquisitive growth as well as solid profitability. And we made important acquisitions that were purposely targeted to fill value chain gaps in our offering, enhance our core portfolio and regional exposure, accelerate our digital shift, and consequently strengthen our position going forward. Organic order intake and revenues for full year 2021 rose by 24% and 12%, respectively. Total order intake and revenue growth for the full year, at fixed exchange rates, was 30% and 18%, respectively.”
“I am proud of this year’s achievements. Much progress has been made and we have accomplished what we set out to do, and more. We have delivered a solid set of results, advanced our strategic objectives by achieving our key results for the year and completed more acquisitions than ever in Sandvik’s history, all with a strong strategic rationale. As we now enter the new year, we do so with a more robust foundation – a Sandvik with stronger digital capabilities and higher growth potential,” added Widing.
Sandvik Materials Technology
Sandvik Materials Technology saw an increased order intake of 25% and a 4% decrease in revenue for the full period. Organic order intake in Sandvik Materials Technology increased with improvements across all segments. There was a continued positive trajectory in the oil & gas segments and all major regions noted a favourable order intake trend, with a strong contribution from North America and Europe. Organic revenues were flattish year on year which were mainly related to lower invoicing for umbilical.
During this period, Sandvik signed the agreement to acquire Gerling GmbH, a precision tube engineering company serving multiple industries including the fast-developing hydrogen market. The offering includes engineering solutions, such as high-pressure control technology in hydrogen refuelling stations.
Sandvik Manufacturing and Machining Solutions
Sandvik Manufacturing and Machining Solutions saw order intake increase by 16% and a 14% increase in revenue. There was solid underlying demand, with organic order intake growth driven by general engineering and aerospace. All core SMS brands recorded high-single to double-digit organic growth in orders. All major regions contributed to year on year order intake growth, with Europe accounting for 13%, North America 17% and Asia 3%. The number of working days had a year on year impact of +0.6% on orders and revenues.
Sandvik signed an agreement to acquire 100% of the equity interests of GWS, an established and fast-growing provider of made-to-order round tools with large exposure to the general engineering and aerospace segments. The acquisition is expected to increase market share in round tools and presence in the North American market. Additionally, Sandvik acquired Dimensional Control Systems (DCS) – a provider of dimensional quality management software and on-site engineering services. DCS’s offering will complement and enhance Sandvik’s existing metrology portfolio.
Sandvik Mining and Rock Solutions
Sandvik Mining and Rock Solutions reported an order intake increase of 29% and a revenue increase of 16% for the period. There was continued strong demand with record orders received for Sandvik’s Automine solutions (SEK 254 million) and for Newtrax collision avoidance system (SEK 155 million). There was solid broad regional demand with organic order intake growth of 60% in North America, 14% in South America, 6% in Europe and 9% in Africa/Middle East. Including major orders, South America grew by 65% and Africa Middle East by 55%.
During this period, Sandvik agreed to acquire Deswik, a leading provider of mine planning software. The company’s software suite combined with Sandvik’s digital and automation is expected to create a clear a leading provider of digital solutions for the mining industry. Deswik will fill a value chain the gap in SMR’s offering, increasing upstream mining coverage and enabling opportunities for end-to-end optimisation solutions. A new division, Digital Mining Technologies has been established which will include mine planning, automation solutions and the Newtrax telemetry and collision avoidance solutions.