Sandvik AB (publ)

Sandvik reported total order intake of SEK 37.8 billion and revenues of SEK 36.8 billion, with organic growth of 17% and 23%, respectively. Adjusted EBITA was SEK 8.3 billion versus SEK 5.6 billion a year ago, and the adjusted EBITA margin expanded to 22.6% from 19%; adjusted profit for the period was SEK 5.8 billion versus SEK 3.7 billion. Free operating cash flow was SEK 3.6 billion with 46% cash conversion, and 12-month rolling cash conversion was 80%. Looking ahead, management guided for a positive Q3 currency effect of about SEK 0.2 billion and a positive tungsten timing effect of about SEK 0.2 billion; full-year guidance for CapEx, interest net and tax rate was unchanged.

Stefan Widing described the quarter as very strong, with momentum across key regions and segments and good price realization. He emphasized strategic execution, especially the Diemme Filtration acquisition, the launch of AutoMine Aura, and the new electric drill rig, framing these as steps in Sandvik’s long-term growth strategy. His tone was upbeat but measured, noting that the macro and political backdrop remains uncertain even though Sandvik is not yet seeing a demand impact.

Cecilia Felton focused on the P&L strength: adjusted EBITA of SEK 8.3 billion, up 48% year over year, with a 22.6% margin and 40% organic leverage. She said net financial items fell to SEK 254 million due to lower borrowing, the normalized tax rate was 24.2%, net working capital improved to 27.5% of revenues on a rolling 12-month basis, and net debt was SEK 37 billion with financial net debt/EBITDA at 1. She also explained that the SEK 550 million tungsten timing effect lifted Q2 margins, would step down in Q3, and that CapEx, interest net and tax guidance for the full year stayed unchanged.

Analysts focused heavily on the machining margin, tungsten dynamics, mining aftermarket growth, and mining operational leverage. Management said the machining margin was boosted by a temporary SEK 550 million tungsten-related timing effect, while the underlying cutting tools margin was still aided by volumes, pricing and savings but remained slightly dilutive on price versus inflation. On mining aftermarket, management said the 17% growth was driven by parts and services plus digital mining, with no material pricing contribution and only limited commodity-specific differences. They also said mining leverage was held back by one-offs, including litigation settlement costs and a closed diamond mine in South Africa, and that the current order-to-revenue lead time is around 10-11 months.