Sandvik recently released its interim report for the first quarter of 2025. Despite facing macroeconomic uncertainty and fluctuations in global tariff policies, the group has achieved counter trend growth with its diversified business structure and cost control capabilities, and multiple financial indicators have reached new highs.
Sandvik Q1 2025 Financial Overview
The report shows that the total order volume in the first quarter reached SEK 32.763 billion, a year-on-year increase of 2% (an increase of 3% under fixed exchange rates); The total revenue increased slightly by 1% to 29.301 billion Swedish kronor (an increase of 2% under fixed exchange rate).
Adjusted EBITA increased by 9% year-on-year to 5.768 billion Swedish kronor, and the profit margin increased from 18.2% in the same period last year to 19.7%. The net profit performance was particularly outstanding, with a year-on-year surge of 200% to 3.736 billion Swedish kronor, and diluted earnings per share reaching 2.97 Swedish kronor, far exceeding market expectations. Free operating cash flow remained stable, recording 3.809 billion Swedish kronor and a cash conversion rate of 70%.
During the reporting period, Sandvik announced the completion of 9 acquisitions, focusing on computer-aided manufacturing (CAM), industrial metrology software, and segmented market expansion, including the acquisition of multiple CAM solution distributors headquartered in the United States, Danish computer integrated manufacturing software solution developer CIMCO Group, American 3D measurement software solution provider Verisurf Software, Inc. (Verisurf), and Italian dismantling tool and hydraulic hammer manufacturer Osa Demolition Equipment S.r.l. (OSA), further consolidating its leading position in intelligent manufacturing and sustainable solutions.
Business sector differentiation: Strong mining, but pressure on industrial manufacturing
Mining and rock solutions: Strong equipment demand, accelerated automation landing
As the largest business unit of the group, the organic order volume of the mining and rock solutions department increased by 10%, and the revenue increased by 4% year-on-year to 14.675 billion Swedish kronor. The adjusted EBITA profit margin increased by 2.6 percentage points to 20.8%, mainly due to cost control and favorable exchange rates. This quarter, the department secured three large orders totaling 977 million Swedish kronor and launched a series of electric intelligent rotary blasting drilling rigs. In addition, Sandvik has made significant progress in automation and safety solutions, implementing AutoMine among customers ® Newtrax Advanced Proximity Detection System (APDS) solution.
Rock Processing Solution: Acquisition Helps Breakthrough in Segmented Markets
Mining demand remains stable, but weak infrastructure activities have dragged down overall order volume by 3%. Despite a decrease in order volume, the department drove revenue growth of 8% to 2.615 billion Swedish kronor through price strategy and cost optimization, and adjusted EBITA profit margin increased to 15.1%. After acquiring OSA, Sandvik has further enriched its equipment portfolio in the field of dismantling and recycling, which is expected to drive growth in Europe and emerging markets.
Manufacturing and processing solutions: maintaining profit margins against the trend
Affected by weak demand for automotive and general engineering, the department's order volume decreased by 3% year-on-year, but the software business achieved medium single digit growth. Through strict cost control and acquisition synergies, the adjusted EBITA profit margin has risen against the trend to 20.9%, highlighting business resilience. The integration of 7 CAM distributors completed within the year injected channel vitality into the Mastercam product line.
Stefan Widing, President and CEO of Sandvik Group, emphasized in the financial report: "I am very satisfied with our performance this quarter. We have achieved solid results in all key financial indicators, continuing to demonstrate the company's resilience and achieving important strategic progress in a challenging macroeconomic and geopolitical environment. Currently, we are once again facing new challenges brought by global trade tariffs and barriers. We are fully prepared for such scenarios. Thanks to the company's manufacturing capacity layout in major regions around the world, strong market position, and solutions to create value for customers, we have the ability to cope with this situation. At the current tariff level, combined with the mitigation measures we are implementing, we expect its impact on profit margins. It will be relatively limited. We will continue to rely on a strong platform and steadfastly focus on achieving our established goals and strategic vision."
Looking ahead to the full year, Sandvik maintains its expectation of capital expenditures of approximately 5 billion Swedish kronor in 2025, and expects the annual tax rate to remain at 23% -25%.