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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 announced its agreement to acquire GWS Tool Intermediate Holdings LLC, a US-based manufacturer of round tools, from L Squared Capital Partners and GWS management. The acquisition aims to enhance Sandvik's machining solutions business, increasing market share in round tools and expanding its North American presence. GWS, expected to generate revenues of approximately SEK 875 million for 2021, will complement Sandvik's existing product offerings, particularly in the general engineering and aerospace markets. The transaction is set to close in Q4 2021, subject to regulatory approvals.
Sandvik has successfully raised EUR 500 million in the corporate bond market through its Euro Medium Term Note (EMTN) program, achieving a re-offer yield of 0.47% with a maturity date of November 25, 2028. The bond offering was oversubscribed 4 times, with placements made to over 110 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.
Sandvik has signed an agreement to acquire Gerling GmbH, a German precision tube engineering company, enhancing its presence in the hydrogen market. This strategic acquisition aims to leverage innovative engineering solutions for hydrogen refueling stations and strengthen Sandvik’s capabilities in high-precision tubing, particularly for medical applications. The transaction, whose financial details remain undisclosed, is anticipated to close in Q1 2022 and is expected to have a neutral impact on Sandvik's earnings per share initially.
Sandvik announced plans to propose the distribution and listing of its business area, Sandvik Materials Technology (SMT), at a shareholder meeting in 2022, targeting a listing on Nasdaq Stockholm in Q2 or Q3 2022. The Board appointed Andreas Nordbrandt as Chairman and named Claes Boustedt and Karl Åberg to the SMT Board. These appointments aim to ensure effective governance and strategic direction for the new company as it prepares for its upcoming market debut.
Sandvik has finalized its acquisition of Fabryka Narzędzi FANAR S.A., a Polish manufacturer of round tools, enhancing its market presence. In 2020, FANAR reported revenues of approximately SEK 175 million. The financial impact on Sandvik's earnings per share is expected to be minimal. This acquisition will be integrated into Seco, a division of Sandvik's Manufacturing and Machining Solutions business area, reflecting a strategic move to strengthen product offerings and operational capabilities.
Sandvik AB reported strong performance in its third quarter 2021 with order intake soaring to SEK 26,292 million, reflecting a remarkable organic growth of 21%. Revenues also increased to SEK 24,826 million, with organic growth of 13%. Adjusted EBITA reached SEK 4,731 million, representing a margin of 19.1%. Profit after net financial items stood at SEK 4,437 million, driving earnings per share to SEK 3.12. Free operating cash flow was SEK 3,940 million, a slight decrease from the previous year.
The Sandvik Board of Directors has reaffirmed plans to distribute Sandvik Materials Technology (SMT) to shareholders and list SMT on the Nasdaq Stockholm Exchange. The targeted completion date for the listing is the second or third quarter of 2022, pending shareholder approval. Chairman Johan Molin stated that both Sandvik and SMT's independent growth potential justifies this move. A formal proposal for distribution will be made at a shareholders' meeting next year.
Sandvik has successfully completed the acquisition of US-based Cambrio, a leader in CAD/CAM software for various manufacturing sectors, including automotive and aerospace. In 2020, Cambrio generated approximately SEK 628 million (about 68 million USD) in revenue, although its EBIT margin was slightly dilutive to Sandvik's Manufacturing and Machining Solutions. This acquisition is expected to have a positive impact on Sandvik's earnings per share and will be included in its Design & Planning Automation division.
Sandvik has acquired Accuratech Group, a Swiss manufacturer specializing in medical wire forming and components. This strategic acquisition aligns with Sandvik Materials Technology's growth strategy and its intent to become a separately listed entity. Accuratech's capabilities are expected to enhance Sandvik's position in the medical sector, which is a defined area for growth. The 2020 revenues of Accuratech were around SEK 75 million, with an EBIT margin neutral to Sandvik. The purchase price remains undisclosed, and the immediate impact on Sandvik's earnings per share is projected to be neutral.
Sandvik will release its third quarter results on October 18, 2021, at approximately 11:30 PM CEST. Following the report, a webcast and conference call for investors, analysts, and media will occur at 1:00 PM CEST, presented by President and CEO Stefan Widing and CFO Tomas Eliasson. The presentation will be accessible on Sandvik's website. Dial-in options for the conference call include numbers for Sweden, the UK, and the US. Further details can be obtained from Vice President Investor Relations Louise Tjeder.
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