Release Date: July 16, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sandvik AB (SDVKF, Financial) achieved an all-time high order intake, driven by strong momentum in Mining and Powder Solutions.
- The company reported a solid adjusted EBITA of SEK5.6 billion, with a margin of 19%, despite significant currency headwinds.
- Strong cash flow was recorded at SEK5.1 billion, an improvement from SEK4.2 billion in the same period last year.
- Sandvik AB (SDVKF) continues to make strategic progress, including booking its largest battery electric vehicle order and launching new products like the Automine Surface Fleet.
- The software business, surface mining, and parts and services segments showed strong revenue growth, contributing positively to the company's performance.
Negative Points
- Total revenue decreased by 5% year-on-year, although it grew organically by 3%.
- The profitability margin decreased to 19% from 19.6% last year, impacted by currency headwinds and low leverage in key segments.
- Demand in General Engineering, Automotive, and Infrastructure segments remained soft, affecting overall performance.
- The company faced challenges with ERP go-live issues, impacting delivery and invoicing in the rock tools division.
- Currency fluctuations had a significant negative impact, with a minus 11% effect on order intake and minus 10% on revenues.
Q & A Highlights
Q: How should we think about the strong Mining order intake into the second half of the year?
A: Stefan Widing, President and CEO, explained that the strong order intake is driven by investments in capacity and maintaining production levels. As long as commodity prices remain stable, the demand is expected to continue being strong, supported by a healthy pipeline.
Q: Do you expect a pickup in demand for battery electric vehicles (BEVs) into 2025 and beyond?
A: Stefan Widing noted that while a boom similar to 2022-2023 is unlikely, there is a gradual increase in interest for BEVs. Some customers are committed to BEVs for future expansions, although challenges remain with total cost of ownership and mining infrastructure.
Q: What are you seeing in terms of customer sentiment in the Machining segment?
A: Stefan Widing mentioned that while there are signs of stability and PMIs are inching upwards, uncertainty around tariffs continues to pose challenges. A resolution on trade conditions is needed for a more positive outlook.
Q: Can you provide insight into the margins of the Mining business excluding ERP costs and revaluations?
A: Cecilia Felton, CFO, stated that Mining had a leverage of 12%, compared to a normal leverage of around 30%. The difference is attributed to ERP go-live issues and currency impacts from unhedged balance sheet items.
Q: How are you managing price versus cost in light of tariffs and inflation?
A: Cecilia Felton explained that price versus inflation was slightly accretive in the quarter. The company is continuously working with pricing strategies to offset inflationary pressures and does not expect a negative impact in Q3.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
