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Sandvik AB S/ADR (SDVKY) is a global high-tech engineering group known for offering cutting-edge tools, solutions, and services for a variety of industries, including mining, construction, and manufacturing.
The company recently made headlines by acquiring Almü and Ahno, two leading cutting tools and solutions providers, to strengthen its position in lightweight materials and expand its presence in China. Sandvik also secured significant orders for electric rotary drill rigs in Mongolia and underground mining equipment in India.
With a strong focus on innovation, sustainability, and customer satisfaction, Sandvik continues to lead the industry with its advanced engineering competence and tailor-made precision tool solutions.
Sandvik has successfully completed its acquisition of Spain-based Preziss, a firm specializing in cutting tools and solutions for high-precision drilling, reaming, milling, and tooling systems. Preziss generated approximately 10 MEUR in revenue in 2021 and has an EBITA margin considered neutral to Sandvik Manufacturing and Machining Solutions. The acquisition is expected to have a limited yet positive impact on Sandvik's earnings per share, and Preziss will now operate under the Sandvik Coromant division.
Sandvik is set to publish its second quarter results on July 15, 2022, at approximately 11:30 AM CEST. A combined webcast and conference call for investors and analysts will follow at 1:00 PM CEST, presented by Stefan Widing, President and CEO, and Cecilia Felton, CFO. Presentation slides will be available from 12:30 PM CEST on the company’s website. Dial-in details for the conference call include numbers for Sweden, the UK, and the US.
Sandvik has decided to wind down its operations in Russia following its initial pause on February 28, 2022. This decision arises from the ongoing situation in Ukraine. A non-recurring charge of approximately SEK 1 billion will be recorded in the second quarter results, comprising a SEK 0.7 billion write-down and a SEK 0.3 billion provision for personnel costs. As of May 31, 2022, remaining assets in Russia, excluding cash, are about SEK 0.7 billion. In 2021, Russian revenues accounted for 3.6% of Sandvik's total revenues.
Sandvik has agreed to acquire 100% of Portugal-based Frezigest, SGPS (Frezite), known for its custom polycrystalline diamond tools for metal and wood applications. The acquisition aligns with Sandvik's growth strategy in machining solutions, enhancing its PCD tooling capabilities for lightweight materials. Frezite generated approximately SEK 450 million in 2021 and is expected to grow at a mid-single-digit rate. The transaction is set to close in Q3 2022, with the purchase price undisclosed. The acquisition is anticipated to have a limited yet slightly positive impact on Sandvik's earnings per share.
On June 17, 2022, Sandvik acquired Akkurate, a Finnish company specializing in holistic battery management solutions. This strategic move aims to enhance Sandvik's capabilities in electrification and battery analytics, reinforcing its status as a leader in battery-electric vehicle technology. The acquisition aligns with Sandvik's growth strategy and commitment to improving safety, productivity, and sustainability in mining operations. With 12 experts in Li-ion technology, Akkurate bolsters Sandvik's existing offerings, paving the way for advancements in battery technology.
The President of Sandvik Mining and Rock Solutions, Henrik Ager, has left the company after eight years, including three as President. CEO Stefan Widing praised Ager's contributions during a successful period for the business unit. Widing will serve as the interim President while the search for Ager's replacement begins. This leadership change may impact the strategic direction of Sandvik's Mining and Rock Solutions segment.
Anders Svensson, President of Sandvik Rock Processing Solutions, will leave Sandvik to become the President and CEO of Konecranes, effective by November 2022. Svensson has been with Sandvik since 2008 and led Rock Processing Solutions since its formation in 2021. His leadership was acknowledged as beneficial during his tenure. A search for his successor will begin following his departure. This change may impact Sandvik's leadership stability as it transitions to new management.
Sandvik, based in Sweden, has successfully raised EUR 500 million in the corporate bond market under its Euro Medium Term Note (EMTN) program. The bonds, with a maturity date of June 7, 2027, have a re-offer yield of 2.26% and were oversubscribed by three times, attracting over 60 investors. The funds will be utilized for refinancing maturing loans and general corporate purposes. The bonds will be listed on the official list of the Luxembourg Stock Exchange.
On May 20, 2022, Sandvik announced its acquisition of Preziss, a Spanish provider of cutting tools and solutions in high-precision machining. This strategic move aims to enhance Sandvik's capabilities in lightweight components for the automotive sector, particularly in aluminum manufacturing. Preziss, founded in 1971, reported revenues of approximately 10 MEUR in 2021 and operates with a neutral EBITA margin relative to Sandvik's existing operations. The acquisition is expected to close in Q3 2022 and aims to bolster Sandvik's product and service offerings in the lightweight materials sector.
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