SDVKY - Sandvik AB (publ) (SDVKF) Q4 2023 Earnings Call Transcript

2024-01-25 16:36:04 ET

Sandvik AB (publ) (SDVKF)

Q4 2023 Earnings Conference Call

January 25, 2024 4:00 AM ET

Company Participants

Louise Tjeder – Head-Investor Relations

Stefan Widing – Chief Executive Officer

Cecilia Felton – Chief Financial Officer

Conference Call Participants

Klas Bergelind – Citi

Sebastian Kuenne – RBC

Daniela Costa – Goldman Sachs

Max Yates – Morgan Stanley

Elliott Robinson – Bank of America

Vlad Sergievskiy – Barclays

James Moore – Redburn

Andreas Koski – BNP

Presentation

Louise Tjeder

Good morning, everyone, and a warm welcome to Sandvik's Presentation of the Fourth Quarter Results 2023. My name is Louise Tjeder, Head of Investor Relations here at Sandvik. And beside me, I have our CEO, Stefan Widing; and our CFO, Cecilia Felton. We will start with the presentation. Stefan and Cecilia will take you through the quarterly highlights, and after that, we will do the Q&A session.

And with this, it's time for the presentation. Over to you Stefan.

Stefan Widing

Thanks, Louise, and also from my side welcome to our fourth quarter report for 2023. We believe, we ended the year with a stable fourth quarter. We continue to see strong demand in aerospace. We have a positive development in automotive and a stable development in general engineering. We also see mining demand to continue to be robust at high levels, while the infrastructure segment continues to be challenging, as it has been for most of the year. If we look at the order intake, it declined by 2% at fixed exchange rates and declined by 4% organically. The revenue grew by 2% at fixed exchange rates and 1% organically.

If you look at the profit level, we show a resilient margin. The adjusted EBITA declined by 3%. This corresponds to a margin of 19.5% versus 20.6% last year. At the full year or rolling 12 months, we delivered a margin of 20%, which is in line with our target range. And of course, in the given macroeconomic situation, we are pleased that we, for a second consecutive year, can deliver a margin within our margin corridor target. This was partly aided by the 2022 savings and restructuring program. And we said we would be at the 50% run rate by the end of this year. We ended up at 48%. So I think well executed in line with our plans. If you look at the adjusted profit level for the period, it was SEK4 billion, same as last year.

We also continue to execute in a solid way on our strategy. We have made some important investments in this quarter to ensure we strengthen our position in the future, and I will come to that in the various BA presentations later today. We also announced three acquisitions, all of them within SMS, come back to those as well. And also happy to see a number of really good and groundbreaking innovations launched in the quarter. Those of you that attended our Capital Markets Day will have seen live the new battery-electric surface drill rig that we launched at the CMD, has received very positive attention from customers.

But the innovation I wanted to highlight today here is our launch of AutoMine for underground drills. We have, of course, had underground drill automation for a long time. But here, we've become the first OEM or solution provider in the industry to provide a common automation platform, not only for a fleet of underground drills, but also integrated with loaders and trucks. So a customer can choose to automate a single drill, a fleet of drills or a fleet of machines, leading to increased efficiency and more automation penetration among our customers....

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