Relevant GRI Indicators
Overview
Sandvik Manufacturing and Machining Solutions
The shift to growth accelerated with several acquisitions related to manufacturing software, industrial metrology and round tools. The acquisitions resulted in an updated 2025 revenue target for Sandvik Manufacturing Solutions. The recovery continued despite a negative impact from supply chain challenges and the pandemic.
Sandvik Manufacturing and Machining Solutions brings together world-leading tools, machining and industrial know-how with the latest in digital manufacturing and software solutions, as well as disruptive technologies like additive manufacturing and in-line metrology. Our end-to-end digital offering is agnostic and automates and connects the component manufacturing value chain – from design and planning to preparation, production and verification.
On January 1, 2021, we formed two business area segments with strong synergies but different challenges and opportunities. Sandvik Machining Solutions comprises machining solutions including traditional metal cutting with the brands Sandvik Coromant, Walter, Wolfram, Seco and Dormer Pramet. Sandvik Manufacturing Solutions addresses digital manufacturing and software solutions, additive manufacturing and industrial metrology in three divisions: Design and Planning Automation, Additive Manufacturing and Industrial Metrology.
Market overview
The market continued to be affected by the Covid‑19 pandemic in the beginning of the year, with the aerospace and energy segments most affected. The market picked up by mid-year, mainly driven by general engineering. Order intake from the areospace and energy sectors improved towards the end of the year, but were still at lower levels than prior to the pandemic. Supply chain challenges in the market affected our business, particularly in the second half of the year. Despite growing underlying demand in the automotive sector, production volumes were lower due to semi-conductor shortages.
We noted positive customer trends arising from the pandemic: Customers have accelerated their digital strategies both to encompass remote work and to be more cost competitive coming out of the downturn.
2021 in figures
Revenues by customer segment
Revenues by market area
MSEK |
2020 |
2021 |
||||
|---|---|---|---|---|---|---|
Order intake |
32,677 |
37,680 |
||||
Revenues |
32,477 |
36,681 |
||||
Adjusted EBITA1) |
6,281 |
8,183 |
||||
Adjusted EBITA margin1), % |
19.3 |
22.3 |
||||
EBIT |
4,606 |
8,058 |
||||
EBIT margin, % |
14.2 |
22.0 |
||||
Adjusted EBIT1) |
6,100 |
7,803 |
||||
Adjusted EBIT margin1), % |
18.8 |
21.3 |
||||
Return on capital employed, % |
14.6 |
21.6 |
||||
Number of employees2) |
17,301 |
20,435 |
||||
Gender balance (men/women), % |
79/21 |
78/22 |
||||
Women in managerial positions, % |
17.7 |
18.9 |
||||
Lost time injury frequency rate (LTIFR) |
1.3 |
1.2 |
||||
Total recordable injury frequency rate (TRIFR) |
2.5 |
2.3 |
||||
|
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Overview
Product portfolio
Providing customers with a leading and sustainable offer delivered via multi divisions and brands in the form of metal cutting tools, digital manufacturing and software solutions, additive manufacturing and industrial metrology.
Market characteristics
Cutting tools represent a small share of the total manufacturing cost for customers, however they are significant for productivity. Service levels and product solutions are the main differentiators for the premium offering, with a lower degree of service for the mid-market which is more price sensitive.
Demand drivers
- Global manufacturing
- Material evolution
- New manufacturing technologies
- Complex component designs and functionalities
- Sustainability
- Automation
Competitive landscape/Major competitors
- Competitors in the premium segment: IMC group (Iscar brand), Kennametal (Kennametal brand)
- Fragmented in mid-market including global premium players present with their mid-market brands: Mitsubishi, IMC group (Taegutec brand), Kennametal (Widia brand), Zhuzhou
- Within software solutions, additive manufacturing and industrial metrology, a mix of larger competitors and smaller niche players
Go-to-market model
Direct sales approximately 55–60 percent. Distribution sales are predominant in North America whereas direct sales are predominant in Europe. In Asia, mainly distribution sales with a limited service offering in the mid-market segment and direct sales, with a high service level, in the premium segment.
Growth strategy
Expansion through organic growth, innovation and niche acquisitions in the core. Expansion into digital and software solutions, additive manufacturing and industrial metrology, supporting customer value chains.
Strategic risk management
Various forms of business environment risks with an impact on the metal cutting market in general, mainly changes in customer behavior, acquisition-related risks, structural changes in our industry, information security risks and compliance-related risks.