20/7/10 – Sandvik Posts Improved Second Quarter Results
20 July 10
Increased demand pushed up Sandvik’s operating result to SEK 3.4 billion and the operating margin rose to 17%. “Order intake remained strong in Asia and improved in other markets. Demand from the energy sector remained high and an increase was noted in the automotive, mining and process industries,” notes CEO, Lars Pettersson.
The company announced an order intake of SEK 23,179 m, invoiced sales of SEK 20,603 m, and an operating profit of SEK 3,471 m.
Within the Sandvik group, Sandvik Materials Technology and Sandvik Mining and Construction, benefitted most from the improvement. For mining and construction growth came from the aftermarket segment and for machinery and equipment.
In the report published today (20 July 10) it states that the global market situation improved and Sandvik’s order intake and invoiced sales rose by 43% and 15% respectively, at fixed exchange rates. When compared to the weak demand over the same period in 2009, global industrial production has improved resulting in Sandvik’s better results.
The positive trend in Europe started from a low level and the recovery was weaker than in other parts of the world, but was higher in Northern Europe than in southern regions.
Within its separate companies within the group, Sandvik Tooling’s sales proved positive in the second quarter. Order intake increased 45% and invoiced sales went up 38%. Cemented carbide and superhard materials showed the most growth while high-speed steel products were sluggish. The company has undergone some restructuring and this company incurred non-recurring costs of around SEK 300m as a consequence.
For Mining and Construction the intensification in activity in both sectors were beneficial. Higher metal prices and higher production rates for mining of copper, iron-ore and coal contributed to the increase in demand. For Sandvik Materials Technology, business was boosted by high value products and improvements in internal efficiency and lower operating costs also contributed to the improvement in the operating result and operating margin compared with the preceding year and quarter.