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1. Company Snapshot

1.a. Company Description

Sandvik AB (publ) operates as an engineering company in the areas of mining and rock excavation, rock processing, manufacturing and machining, and materials technology in Sweden and internationally.The company offers mining and rock solutions, including drill rigs, underground loaders and trucks, rock drills and other tools, and parts and services, as well as digital and sustainability solutions; and rock processing applications, which include crushing, screening, feeding, breaking, demolition, and recycling.It also provides manufacturing solutions, comprising traditional metal cutting under the Sandvik Coromant, Walter, Wolfram, Seco, and Dormer Pramet brands; and manufactures tools and tooling systems for advanced metal cutting.


In addition, the company develops and manufactures advanced stainless steels, powder-based alloys, and special alloys.It serves aerospace, automotive, construction, mining, general engineering, nuclear power generation, oil and gas, process, and renewable energy industries.The company was founded in 1862 and is headquartered in Stockholm, Sweden.

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1.b. Last Insights on SAND

Sandvik AB's recent performance was driven by strong Q3 2025 earnings, with robust demand and innovative product launches, including the AutoMine surface drilling training simulator. The company secured significant mining equipment orders, such as a SEK 450 million order from JCHX Mining Management Co., Ltd. for the Khoemacau Copper Mine in Botswana. Additionally, Sandvik received a SEK 280 million underground mining equipment order from Zimplats. Despite currency headwinds, the company's order growth remains strong, driven by increasing demand for autonomous and eco-friendly equipment in the mining sector.

1.c. Company Highlights

2. Sandvik's Q2 2025: A Mixed Bag with Strong Momentum in Mining

Sandvik reported an all-time high order intake in Q2 2025, driven by strong momentum in Mining and powder solutions, as well as a positive development in software business, aerospace, and some smaller segments. However, demand in general engineering, automotive, and infrastructure continued to be soft. The company's revenue decreased by 5% but grew organically by 3%, with an adjusted EBITA margin of 19%. The EPS came out at 2.61, relative to estimates at 2.94. According to Cecilia Felton, the company had a good cash flow in the quarter, with SEK 5.1 billion, corresponding to a cash conversion of 94%.

Publication Date: Jul -17

📋 Highlights
  • Record Order Intake: Sandvik achieved an all-time high order intake in Q2 2025, with a 10% organic growth year-over-year.
  • Revenue and Profitability: Total revenue decreased by 5%, but grew organically by 3%, with an adjusted EBITA of SEK 5.6 billion and a margin of 19%.
  • Strong Cash Flow: The company reported a strong cash flow of SEK 5.1 billion, up from SEK 4.2 billion in the same period last year, with a cash conversion of 94%.
  • Mining Segment Performance: The Mining segment saw a record-high order intake, driven by equipment divisions and high single-digit growth in parts and services, with an order intake of over SEK 16 billion.
  • Acquisitions and Guidance: The company completed several acquisitions, including Verisurf and OSA Demolition, and revised its CapEx guidance downwards from SEK 5 billion to SEK 4.5 billion, with an expected negative currency effect of SEK 800 million in Q3.

Financial Performance

The company's financial performance was mixed, with a strong organic order intake growth of 10% and revenues growing organically by 3%. The adjusted EBITA margin was 19%, with a rolling 12-month margin of 19.4%. The company reported a solid quarter from a profitability point of view, considering significant currency headwinds and the full mitigation of tariffs. The P/E Ratio of 20.37 and EV/EBITDA of 9.81 suggest that the company's valuation is relatively high.

Segment Performance

The Mining segment saw a very solid momentum, with record-high order intake, driven by equipment divisions and high single-digit growth in parts and services. The Machining and Intelligent Manufacturing segment saw a decline in demand for cutting tools, but strong development in powder and double-digit growth in software orders. The company also completed several acquisitions, including Verisurf in intelligent manufacturing and OSA Demolition, strengthening its demolition and recycling offer.

Guidance and Outlook

The company expects a negative currency effect of SEK 800 million in the third quarter and has revised its CapEx guidance downwards from SEK 5 billion to SEK 4.5 billion. The company remains confident in its ability to deliver through challenging periods, with a solid platform to execute from and strong abilities. The order intake for Mining and Rock Technology was strong, over SEK 16 billion for the second quarter in a row, excluding large orders.

Valuation and Estimates

Analysts estimate next year's revenue growth at 4.6%. The company's valuation metrics, including a P/B Ratio of 3.23 and a Dividend Yield of 2.4%, suggest that the company's stock may be fairly valued. However, the Free Cash Flow Yield of 4.54% and ROIC of 11.84% indicate that the company has a strong financial position.

3. NewsRoom

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Mining Drill Bits Global Market Report 2025: $1.62 Billion Market Led by Caterpillar, Schlumberger, Komatsu, Sandvik as New Product Launches and Strategic Acquisitions Accelerate Industry Innovation

Dec -04

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Faron Pharmaceuticals Ltd: Appointment of CFO

Dec -01

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EIB provides €500m to Sandvik for advanced mining solutions

Nov -25

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Sandvik (OM:SAND): Evaluating Valuation After Recent 46% Shareholder Return

Nov -13

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New Sandvik report reveals a golden opportunity to attract engineers to the mining industry

Nov -12

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Atlas Salt Announces Filing of NI 43-101 Technical Report for the Updated Feasibility Study of Its Great Atlantic Salt Project

Nov -06

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Sandvik Debuts Concept Car That Doesn't Work

Oct -29

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The world's first electric car without metals or minerals is launched - and it doesn't work

Oct -27

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.70%)

6. Segments

Sandvik Mining and Rock Solutions

Expected Growth: 3.5%

Sandvik Mining and Rock Solutions' growth is driven by increasing demand for mining equipment, expansion into new markets, and focus on digitalization and sustainability. The segment's 3.5% growth is also attributed to a strong order backlog, improved operational efficiency, and strategic acquisitions, positioning the company for long-term success in the mining industry.

Sandvik Rock Processing Solutions

Expected Growth: 4.2%

Sandvik Rock Processing Solutions' growth is driven by increasing demand for mining and construction equipment, expansion into new markets, and innovation in digitalization and automation technologies. The segment's 4.2% growth is also attributed to Sandvik AB's strategic acquisitions and strong customer relationships, enabling the company to capitalize on trends in sustainable and efficient processing solutions.

Sandvik Manufacturing and Machining Solutions

Expected Growth: 3.8%

Sandvik Manufacturing and Machining Solutions' 3.8% growth is driven by increasing demand for precision machining and advanced manufacturing technologies. The segment benefits from Sandvik's strong product portfolio, innovation capabilities, and expanding presence in key markets, particularly in Asia. Additionally, the company's focus on digitalization and sustainability supports growth in this segment.

Eliminations

Expected Growth: 0.0%

The eliminations from Sandvik AB (publ) with 0.0% growth indicate a stable and mature business segment. This suggests that there are no significant changes in the market or industry, and the company is maintaining its market share. The growth drivers are likely driven by steady demand, efficient operations, and effective cost management, resulting in a stable financial performance.

7. Detailed Products

Rock Drilling Tools

Sandvik's rock drilling tools are designed for drilling and blasting in mining, quarrying, and construction applications.

Metal-Cutting Tools

Sandvik's metal-cutting tools are designed for machining and cutting of metals in various industries.

Mining Systems

Sandvik's mining systems provide a range of solutions for underground and surface mining operations.

Materials Technology

Sandvik's materials technology provides advanced materials and manufacturing solutions.

Industrial Processes

Sandvik's industrial processes provide solutions for industrial heating, cooling, and processing applications.

Additive Manufacturing

Sandvik's additive manufacturing solutions provide 3D printing and rapid prototyping capabilities.

Digitalization and Automation

Sandvik's digitalization and automation solutions provide data analytics, automation, and IoT solutions.

8. Sandvik AB (publ)'s Porter Forces

Forces Ranking

Threat Of Substitutes

Sandvik AB (publ) operates in a niche market with specialized products, reducing the threat of substitutes. However, the company's products can be substituted with alternative materials or technologies, posing a moderate threat.

Bargaining Power Of Customers

Sandvik AB (publ) has a diverse customer base, reducing the bargaining power of individual customers. The company's products are often customized, making it difficult for customers to switch suppliers.

Bargaining Power Of Suppliers

Sandvik AB (publ) relies on a few critical suppliers for raw materials, giving them some bargaining power. However, the company's large scale of operations and diversified supply chain mitigate this risk.

Threat Of New Entrants

The capital-intensive nature of Sandvik AB (publ)'s business, combined with the need for specialized expertise and technology, creates a barrier to entry for new competitors.

Intensity Of Rivalry

The industrial equipment and tools market is highly competitive, with several established players competing for market share. Sandvik AB (publ) faces intense rivalry from companies like Atlas Copco and Epiroc.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 35.94%
Debt Cost 5.02%
Equity Weight 64.06%
Equity Cost 10.55%
WACC 8.57%
Leverage 56.11%

11. Quality Control: Sandvik AB (publ) passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Sandvik

A-Score: 5.6/10

Value: 3.1

Growth: 4.9

Quality: 7.1

Yield: 3.8

Momentum: 6.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Siemens

A-Score: 5.5/10

Value: 3.6

Growth: 5.0

Quality: 5.6

Yield: 5.0

Momentum: 7.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Alfa Laval

A-Score: 5.4/10

Value: 2.7

Growth: 6.9

Quality: 6.8

Yield: 3.8

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Schindler

A-Score: 5.3/10

Value: 1.1

Growth: 3.9

Quality: 7.2

Yield: 3.1

Momentum: 7.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Eaton

A-Score: 4.5/10

Value: 0.7

Growth: 5.9

Quality: 6.9

Yield: 2.5

Momentum: 6.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
KONE

A-Score: 4.3/10

Value: 1.8

Growth: 3.3

Quality: 6.4

Yield: 5.6

Momentum: 6.0

Volatility: 2.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

291.0$

Current Price

291$

Potential

-0.00%

Expected Cash-Flows