capital markets day 2007 - sandvik · sandvik tooling q2 2007q2 2007 invoiced sales ebit- margin* 7...
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CAPITAL MARKETS DAY20072007
Anders ThelinPresident
Sandvik Tooling
Tanya FrattoP id tPresident
Diamond Innovations
Agendag
Update
B i d lBusiness model
Growth leversGrowth leversStrategic acquisitions
Market leadership
Capacity and productivityCapacity and productivity
Future opportunitiespp
Sandvik Tooling
Agendag
Update
B i d lBusiness model
Growth leversGrowth leversStrategic acquisitions
Market leadership
Capacity and productivityCapacity and productivity
Future opportunitiespp
Sandvik Tooling
Sandvik Tooling
Tools and tooling systems for metalworkingW t d b i tWear parts and superabrasive components
Solutions using products in cemented carbide, high-speed steel, synthetic diamond cubic boron nitride and special ceramics
2006
synthetic diamond, cubic boron nitride and special ceramics
Sales SEK 22,500 M
EBIT SEK 5,191 M, 23.1%
ROCE 34.4%
15,100 employees
Sandvik Tooling
Financial objectives
SandvikSandvik
Mi i dSandvikM t i lSandvik
ToolingMining and
ConstructionMaterials
Technology
Growth 7% 9% 8%ROCE 30% 25% 20%ROCE 30% 25% 20%
Sandvik Tooling
Sandvik Tooling Q2 2007Q2 2007
EBIT- margin*Invoiced sales
Continued strong growth7 000 35%
EBIT marginROCE 12-months*
Invoiced salesSEK M, Quarter
Invoiced sales +12%Organic growth +9%5 000
6 000
25%
30%
EBIT +19%, 24.8% of salesSEK 1,568 M
4 000
5 000
20%
25%*
Currency effect SEK -90 M
Insurance comp. >+1% unit2 000
3 000
10%
15%
Diamond Innovations -1% unit
ROCE 33.8% (32.9%)1 000 5%
Diamond Innovations -1.5% unit0
03 04 05 06 070%
Adjusted to IFRS from 2004
Sandvik Tooling
* Excluding one-offs in PTD in Q4 2003
Sales by customer segment 2006Small Part Machining Aerospace
Pump & Valve
Automotive
Mechanical engineering
Die & Mould
Heavy Equipment
Oil & GasMedical Machine
Tool Makers
q p
Sandvik Tooling
Sales by customer segment 2006Small Part Machining Aerospace
Pump & Valve
Automotive
Mechanical engineering
Die & Mould
Heavy Equipment
Oil & GasMedical Machine
Tool Makers
q p
Sandvik Tooling
Sales by region 2006Australia, New
Zealand Eastern EuropeAsia
Africa, Middle East
South AmericaSouth America
Western Europe
NAFTA
Sandvik Tooling
Profitable growth
SEK M25 000
45%
50%
20 000
35%
40%
15 000
25%
30%InvoicingROCE
10 000
15%
20%EBIT-marginROCE target
5 000
5%
10%
02003 2004 2005 2006
0%
Sandvik Tooling
Profitable growth
SEK M25 000 25%
20 000 20%
15 000 15%InvoicingOrganic growth
10 000 10%Organic growthGrowth target
5 000 5%
02003 2004 2005 2006
0%
Sandvik Tooling
Agendag
Update
B i d lBusiness model
Growth leversGrowth leversStrategic acquisitions
Market leadership
Capacity and productivityCapacity and productivity
Future opportunitiespp
Sandvik Tooling
Customer offerCustomer offer
Sandvik Tooling
Creating customer value
Sandvik Tooling
Business model
SEK 2 900 B2 500 000 MSEKSEK 116 B2.500.000 MSEKSEK 116 B
WorkpieceMaterial
Machinery & Equipment
Operators OverheadTools
4 5%4-5%
Sandvik Tooling
Productivity leverage
C t d ti C t d tiCost reductionper component: -1%
Cost reduction per component: -15%Free capacity
Sandvik Tooling
p y
Utilization
8 760 h8 760 h
Sandvik Tooling
Platform for superior growthp g
Multibrand strategy
Multibrand strategy >7%
Global presence
Global presence
Sales and MarketingSales and Marketing Sandvik
ToolingProduction and
distributionProduction and
distribution
Tooling growth premium
Research and DevelopmentResearch and Development
Market growthMarket growth ~4 %
Sandvik Tooling
Agendag
Update
B i d lBusiness model
Growth leversGrowth leversStrategic acquisitions
Market leadership
Capacity and productivityCapacity and productivity
Future opportunitiespp
Sandvik Tooling
Diamond
Cubic Boron Nitride
Diamond
Cubic Boron Nitride(CBN)
Cemented
Ceramics
High Speed
Cemented Carbide
g pSteel
Stainless SteelSteel
Diamond & CBNGrowth potential 10%Growth potential 10%
Fully integrated value chain
Sandvik Tooling
Sandvik Tooling
Sandvik Tooling
Sandvik Tooling
Sales by region 2006Diamond Innovations
Sandvik Tooling
Sandvik Tooling
Polycrystalline products
Granular products
Sandvik Tooling
Macroeconomic trends
DemandsDemandsSmaller, stronger, lighter products
Stricter environmental regulations
Material Offer
Composite materialsMachining compactMachining compact graphite iron Efficient aluminum
hi imachining
Sandvik Tooling
Successful combination
Sandvik Tooling Diamond InnovationsSandvik ToolingCemented carbide technology Know-how
Superhard material technology Know-how
Diamond Innovations
Know how cemented carbidemetal-cutting applications
Know how diamond & CBNsuperabrasive applicationsg pp
Strong R&D culturep pp
Strong R&D culture
Sandvik Tooling
Sandvik and Diamond InnovationsSuccessful combinations
Future applications Oil & Gas Exploration drilling
Sandvik Tooling
Diamond Innovations
Sales 2006 SEK >1 000 M Global presenceSales 2006 SEK >1,000 M 600 employees Main units in US & Ireland
Global presenceComplementary business
Sandvik Tooling
Agendag
Update
B i d lBusiness model
Growth leversGrowth leversStrategic acquisitions
Market leadership
Capacity and productivityCapacity and productivity
Future opportunitiespp
Sandvik Tooling
Market leader in major industrial marketsmarkets…
25%
% share of global production, 2006
20%
25%
15%
10%
5%
0%
USA China Japan * Germany Eastern Europe
UK Italy
Sandvik Tooling*Note: Market leadership among non-Asian manufacturers Source: Economist Intelligence Unit
…and in fast growing markets…g g
18%
Actual production growth, 2006
14%
16%
18%
10%
12%
14%
6%
8%
10%
2%
4%
6%
0%
2%
China South Korea * India Eastern Europe Germany USA Japan *
Sandvik Tooling*Note: Market leadership among non-Asian manufacturers Source: Economist Intelligence Unit
…and where the absolute growth isg
Production growth 2006,Production growth 2006, in SEK B
Sandvik Tooling*Note: Market leadership among non-Asian manufacturers Source: Economist Intelligence Unit
Sandvik Tooling in ChinagIndex,100=2001
400
300
200
100100
02001 2002 2003 2004 2005 2006
Sandvik Tooling
Sandvik Tooling in IndiagIndex,100=2001
250
100=2001
200
150
100
50
02001 2002 2003 2004 2005 2006
Sandvik Tooling
Sandvik Tooling in RussiagIndex,100=2001
400
100 2001
300
200
100100
02001 2002 2003 2004 2005 2006
Sandvik Tooling
Agendag
Update
B i d lBusiness model
Growth leversGrowth leversStrategic acquisitions
Market leadership
Capacity and productivityCapacity and productivity
Future opportunitiespp
Sandvik Tooling
Consolidation of productionp
2002200281
2004200466
200747 + 4 Diamond Innovations
Sandvik Tooling
Westminster South Carolina, USA
Sandvik Tooling
São Paulo B ilBrazil
Sandvik Tooling
Sandvik Hard MaterialsBarcelona, Spain
Sandvik Tooling
ChiplunpIndia
Sandvik Tooling
Walter Tübingen, GermanyTübingen, Germany
Sandvik Tooling
W ltWalter, MünsingenWalter
Münsingen, Germany
Sandvik Tooling
SchmalkaldenGermany
Sandvik Tooling
Improved productivity
46% growth
2004
200281
200466
200747 + 4 Diamond Innovations
Sandvik Tooling
Resources to the front line
Index,,100=2002
11525 000
105
110
20 000
25 000
95
10015 000
Invoicing, SEK M
Administration
90
95
10 000Sales and marketing
80
855 000
752002 2003 2004 2005 2006
Sandvik Tooling
Agendag
Update
B i d lBusiness model
Growth leversGrowth leversStrategic acquisitions
Market leadership
Capacity and productivityCapacity and productivity
Future opportunitiespp
Sandvik Tooling
Growth activities 2007-2010Growth activities 2007 2010
Multibrand strategy
Multibrand strategy Brand positioning
Global presence
Global presence Strategic acquisitions
Sales and MarketingSales and Marketing Expansion of sales force
Production and distribution
Production and distribution Continued consolidation & rationalization
Research andResearch and
R i f d l d hi i hi h th k t
Research and DevelopmentResearch and Development Increased New Sales Ratio
Market growthMarket growth Reinforced leadership in high-growth marketsMarket growthMarket growth
Sandvik Tooling
Sandvik Toolingreinforcedreinforced
with diamonds
Sandvik Tooling