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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 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.
Sandvik has finalized its acquisition of DWFritz Automation, a prominent US-based provider of precision metrology and automation solutions. DWFritz recorded approximately SEK 720 million (around USD 78 million) in revenue for 2020, but its EBIT margin was slightly dilutive to Sandvik's existing operations. The acquisition is expected to have a neutral impact on Sandvik's earnings per share initially and will be integrated into the Metrology division under Sandvik Manufacturing and Machining Solutions.
Sandvik reports transaction costs of approximately SEK 180 million for Q3 2021 due to accelerated M&A activities, with eight total acquisitions this year. Of this, Sandvik Manufacturing and Machining Solutions accounts for SEK 160 million, while Sandvik Mining and Rock Solutions incurs SEK 20 million mainly from acquiring DSI Underground. The acquisitions will dilute SMR's EBIT margin by around 400 basis points in Q3 and 200 basis points in Q4 2021. These costs won't impact reported operating profit.
Sandvik has finalized its acquisition of CNC Software Inc., a top provider of CAD/CAM solutions, known for Mastercam, the industry's leading CAM brand. In 2020, CNC Software reported revenues of approximately USD 60 million with an EBIT margin of 25-30%, and about 60% of its revenue was recurring. This acquisition will enhance Sandvik's Design & Planning Automation division within its Manufacturing and Machining Solutions.
Sandvik projects that over half of its underground mining equipment sales will be electric by 2030, driven by increasing demand for sustainable solutions. The company highlights the advantages of electric equipment, including cost savings and an emission-free environment. Showcased at MINExpo International 2021, Sandvik launched new battery-electric products, including the TH550B truck, designed to enhance operational efficiency with innovations like battery-swapping technology. With plans to cover all underground applications by 2022, Sandvik solidifies its position as a leader in electric mining solutions.
Sandvik AB has established its Nomination Committee ahead of the 2022 Annual General Meeting scheduled for April 27, 2022. The committee comprises representatives from the four largest shareholders and the Chairman of the Board, Johan Molin. Key members include Fredrik Lundberg, Anna Magnusson, Marianne Nilsson, and Lars Pettersson. The committee will prepare proposals regarding board elections and auditor appointments. Shareholders can submit proposals to the committee's Secretary, Åsa Thunman, by January 14, 2022.
Sandvik has signed an agreement to acquire CNC Software Inc., the creator of Mastercam, a leading CAD/CAM software solution. This acquisition enhances Sandvik's digital manufacturing strategy and positions it as a leader in the CAM market with over 270,000 Mastercam licenses. CNC Software, founded in 1983, reported 2020 revenues of USD 60 million and a strong EBIT margin of 25-30%. While the acquisition is expected to have a slightly negative impact on Sandvik's earnings per share initially, it promises to boost productivity in manufacturing through enhanced tooling and automation solutions.
Sandvik has raised its revenue target for the Sandvik Manufacturing Solutions segment from SEK 4 billion to SEK 6 billion by 2025. This revision follows the announced acquisitions of Cambrio, DWFritz Automation, and CNC Software, which are expected to enhance organic growth. The EBITA margin target for the segment has also been set at 20% by 2025. Previously, this segment's revenue was approximately SEK 800 million in 2020, indicating significant growth plans. The overall target growth for Sandvik remains at ≥ 5% through organic and acquisition strategies.
On August 20, 2021, Sandvik announced the completion of its acquisition of 67% of Chuzhou Yongpu Carbide Tools Co., Ltd, a China-based premium solid round tools company. This transaction allows Sandvik to expand its market presence, with revenues of approximately SEK 400 million for the prior twelve months. The acquisition has an initial neutral impact on earnings per share and is expected to enhance Sandvik's manufacturing capabilities. A call option for the remaining shares exists after three years.
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