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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 Mining and Rock Solutions has secured a substantial order valued at approximately SEK 400 million from the Chilean mining company Codelco for its AutoMine® load and haul automation system. This project will span from 2022 to 2027 and includes the delivery of Toro™ TH663i trucks and Sandvik LH514 loaders. During the first two years, Codelco will receive initial equipment, followed by additional deliveries in subsequent years. This order highlights the growing demand for automation solutions in mining.
Sandvik has acquired US-based Dimensional Control Systems (DCS), a leader in dimensional quality management software. This strategic acquisition aims to enhance Sandvik's digital manufacturing capabilities, particularly in industrial metrology. DCS's offerings include CAD simulation tools that help reduce scrap and improve quality for customers across various industries, including automotive and aerospace. In 2020, DCS reported revenues of approximately SEK 92 million (USD 10 million), with a growth rate of about 10%. The deal is expected to have a neutral impact on Sandvik's earnings per share initially.
Sandvik Mining and Rock Solutions has secured a contract in the EMEA region valued at approximately SEK 1 billion for the delivery of tunnelling equipment, roadheaders, and underground drill rigs. This order, booked in Q4 2021, will see equipment deliveries scheduled from Q4 2022 to Q1 2024.
Sandvik has successfully acquired 100% of GWS Tool Intermediate Holdings LLC, a US-based manufacturer of round tools focusing on engineering and aerospace. The acquisition, valued at SEK 875 million in projected 2021 revenues, is expected to have a neutral impact on Sandvik's EBITA margin and EPS initially. GWS will operate within Sandvik Manufacturing and Machining Solutions division, enhancing Sandvik's portfolio in the fast-growing round tools market.
Sandvik has accelerated its acquisition strategy in 2021, completing 13 acquisitions, including the notable acquisition of Deswik. For Q4, the company anticipates transaction costs of approximately SEK 180 million and PPA amortization of around SEK 260 million. Specific segments report SEK 105 million in transaction costs and SEK 170 million in amortization for Manufacturing and Machining Solutions, while Mining and Rock Solutions will incur SEK 50 million in transaction costs related to Deswik. Overall, the acquisitions span various sectors, indicating a robust growth strategy.
Sandvik will host its Capital Markets Day on May 17, 2022, in Stockholm, Sweden. This event is designed for institutional investors, financial analysts, and media to receive updates on the company's strategy and development. Key presentations will be made by Sandvik's CEO, CFO, and business area management. Details regarding virtual attendance or in-person participation will be communicated closer to the date. For more information and registration, please visit Sandvik's official website.
Sandvik has pledged to establish targets aligned with the Science Based Targets initiative (SBTi) to address climate change in line with the Paris Agreement. This commitment is part of Sandvik's sustainability strategy, which aims for a 50% reduction in greenhouse gas emissions by 2030. By joining the SBTi, Sandvik will validate its sustainability goals against scientific standards. The initiative requires halving emissions by 2030 and reaching net zero by 2050. The CEO emphasized the importance of sustainability for business growth and societal impact.
Sandvik has successfully completed its acquisition of Kwatani, a South African company specializing in screens and feeders for the mining industry. In 2020, Kwatani reported revenues of approximately 175 million SEK with an EBIT margin that is slightly dilutive to Sandvik's Rock Processing Solutions. Initially, the acquisition is expected to have a neutral impact on Sandvik's earnings per share. Kwatani will be integrated into Sandvik's Stationary Crushing and Screening division.
Sandvik has agreed to acquire Australian mine planning software provider Deswik, aiming to enhance its digitalization offerings within the mining sector. Deswik, with over 10,000 licenses and strong financial growth, will become part of Sandvik's new Digital Mining Technologies division. The acquisition is expected to fill a critical gap in Sandvik's offerings, promoting end-to-end optimization solutions. Deswik's revenue reached AUD 79 million with a 30% EBITA margin, and the transaction is set to close in Q1 2022, subject to regulatory approval.
Sandvik has signed an agreement to acquire ICAM Technologies Corporation, a Canadian software provider specializing in CAM data solutions for CNC machining. The acquisition, expected to close in Q4 2021, aligns with Sandvik's strategy to enhance its offerings in verification and optimization in manufacturing processes. ICAM reported approximately SEK 30 million in revenues with a 25% EBITA margin in 2020. This integration will strengthen Sandvik's position in the market, benefitting its value proposition across various industries including aerospace, automotive, and general engineering.
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