Sandvik AB - Report on 2001 operations and the fourth quarter

SANDVIK AB - Report on 2001 operations and the fourth quarter · Invoiced sales: SEK 48,900 M, up 3% at fixed exchange rates for comparable units · Profit: SEK 5,606 M after financial items, up 2%, excluding items affecting comparability · Cash flow: SEK 5,093 M before investments · Extensive program of change under way; 800 fewer employees in Q4 · Proposals to Annual General Meeting 7 May 2002: - Dividend: SEK 9.50, increase of 6% - Buy-back: 10% of shares. Current authorization 5% Key figures Q4 Q4 Chang Full-year Full- Chang e year e SEK M 2001 2000 % 2001 2000 % Order intake 11 350 11 370 0 1 47 900 45 000 +6 1 ) ) Invoiced sales 12 780 11 940 +7 2 48 900 43 750 +12 2 ) ) Operating 1 278 1 552 -18 4 6 103 6 327 -4 3 profit ) ) % 10 13 12 14 Profit after 1 149 1 419 -19 4 5 606 5 804 -3 3 financial items ) ) % 9 12 11 13 Profit after financial items excl. items affecting 5 266 5 144 +2 comparability % 11 12 Net profit 1 065 990 +8 4 3 688 3 712 -1 3 ) ) % 8 8 8 8 Earnings per 14.40 14.30 share, SEK Return on net 17.4 20.3 assets, % 1) -11% and -4% at fixed exchange rates for comparable units. 2) -3% and +3% at fixed exchange rates for comparable units. 3) Including items affecting comparability SEK +340 M in 2001 and SEK +660 M in 2000. 4) Including costs for restructuring program expense SEK -515 M and capital gain SEK +340 M in Q4 2001. Short term market outlook* Demand is expected to remain weak in the near future. An extensive program of change is under way within the Group to further enhance efficiency and reduce cost levels. At the same time, the Group is ready to capitalize on business opportunities in the event of increased demand. * Previous short-term market outlook (published 9 November 2001) The market trend in NAFTA continues to be negative and a decline is now also being noted in Europe. Demand is expected to remain low in the near future, and now also in the investment-related segments. However, the Group is well positioned to take additional market shares, at the same time as the program of change aimed at retaining profitability is intensified. Sales (see appendix 2) [REMOVED GRAPHICS] Order intake in 2001 amounted to SEK 47,900 M (45,000), an increase of 6% in total but a decline of 4% at fixed exchange rates for comparable units. The business climate was favorable at the beginning of the year, but weakened sharply during the second half of the year. Order intake in the fourth quarter amounted to SEK 11,350 M (11,370). At fixed exchange rates for comparable units this was a decline of 11%. Sandvik Mining and Construction increased somewhat compared with the fourth quarter in the preceding year, Sandvik Tooling declined and Sandvik Specialty Steels fell sharply. Consolidated invoiced sales for the full year amounted to SEK 48,900 M (43,750). The increase was 12% totally, and 3% at fixed exchange rates for comparable units. Sandvik Tooling's invoicing was unchanged compared with a year earlier at fixed exchange rates for comparable units. Sandvik Mining and Construction's invoicing increased 26% at fixed exchange rates, including acquisitions. Sandvik Specialty Steels' invoicing declined 6% at fixed exchange rates for comparable units. Invoiced sales in the fourth quarter amounted to SEK 12,780 M (11,940), a total increase of 7%. At fixed exchange rates for comparable units, invoicing declined 3% compared with a year earlier. Higher exchange rates affected invoicing favorably by 6% during the quarter and 8% for the full year. Development by market area Fourth quarter 2001 Full-year 2001 Invoiced Share Change Invoiced Share Change sales * sales * Market area SEK M % % SEK M % % EU 5 188 41 -3 19 698 40 +2 Rest of Europe 912 7 +19 3 566 7 +27 Europe total 6 100 48 -1 23 264 47 +4 NAFTA 2 759 22 -14 11 543 24 -8 South America 561 4 -3 2 013 4 -6 Africa/Middle East 681 5 +23 2 511 5 +28 Asia/Australia 2 679 21 +8 9 569 20 +10 Total 12 780 100 -3 48 900 100 +3 * change from preceding year at fixed exchange rates for comparable units. Invoiced sales declined successively within the EU, particularly for Sandvik Specialty Steels but also for Sandvik Tooling in the fourth quarter. Demand in the rest of Europe was strong during the entire year. The trend of invoicing in NAFTA was very negative, particularly for Sandvik Specialty Steels, but also for Sandvik Tooling in the fourth quarter. The trend was positive in Africa/Middle East and Asia/Australia, primarily for Sandvik Mining and Construction. Development for Sandvik's customer segments varied during the year. In the fourth quarter, demand from the general engineering industry weakened, while it continued to be favorable for investment-related products to the oil/gas industry. Activity in the automotive industry was weak in NAFTA and a weakening was noted in Europe during the quarter. As previously, sales to the electronics industry were very low, with no signs of recovery. Activity in the mining industry remained favorable, but demand weakened for heavy machinery. Earnings and cash flow (see appendix 1) [REMOVED GRAPHICS] Operating profit for the full year amounted to SEK 6,103 M (6,327) and the operating margin was 12%. Earnings for the year were charged with SEK 515 M for a restructuring program within Sandvik Tooling, but were affected positively by a capital gain of SEK 340 M on the divestment of Procera-Sandvik. Changes in currency exchange rates had a positive effect of approximately SEK 700 M on earnings, of which SEK 180 M in the fourth quarter. Development of the three business areas varied. Sandvik Tooling's operating profit declined, but was unchanged taking into account items of nonrecurring nature. Earnings rose sharply for Sandvik Mining and Construction, as a result of a strong increase in invoicing and acquisitions, among others factors. Sandvik Specialty Steels' earnings were largely unchanged, taking into account the charge against earnings in 2000 of SEK 280 M for a program of change. Operating profit in the fourth quarter amounted to SEK 1,278 M (1,552), a decline compared with a year earlier. Operating margin was 10% and was affected adversely by lower volumes and production rates within Sandvik Tooling and Sandvik Specialty Steels. In addition, operating margin in the quarter was reduced somewhat by a different product mix within Sandvik Mining and Construction, which delivered large projects for material handling equipment. The quarter was also affected by the aforementioned restructuring costs within Sandvik Tooling and the capital gain on the divestment of Procera-Sandvik. Net financial expense was SEK 497 M (expense: 523). Profit after net financial items amounted to SEK 5,606 M (5,804), an increase of 2% excluding items affecting comparability. The tax rate was 31% (32). Net profit amounted to SEK 3,688 M (3,712) for the year and to SEK 1,065 M in the fourth quarter. Excluding items affecting comparability, earnings per share were SEK 13.10 (12.20) and after dilution SEK 13.00. The return on capital employed amounted to 17.4% (20.3) and the return on equity amounted to 15.5% (17.3). Equity per share was SEK 95.50 (89.00). Net debt/equity ratio was 0.4 (0.3) and the equity/assets ratio was 50% (55). Key figures Full- Full- year year 2001 2000 No. of shares at end of period ('000) 250 950 258 696 Earnings per share excl. items affecting 13.10 12.20 comparability, SEK* after full dilution** 13.00 12.00 Earnings per share incl. items affecting 14.40 14.30 comparability, SEK* after full dilution ** 14.30 14.10 Return on net assets 17.4% 20.3% Return on shareholders' equity 15.5% 17.3% Net debt/equity ratio 0.4 0.3 * Most recent 12 months divided by average number of outstanding shares, 255,514,000. ** Average no. of shares after full dilution of outstanding convertible and warrants programs amounts to 260,435,000. The Group reports a continued strong operating cash flow, amounting to SEK 5,093 M (4,476) for the full year. The efforts to reduce working capital has successively yielded favorable results and cash flow from operating activities amounted to SEK 1,579 M (1,064) in the fourth quarter. The Group's investments in fixed assets for the full year totalled SEK 2,627 M (2,087). In addition, companies were acquired for an amount of SEK 1,456 M. After investments, acquisitions and divestments, cash flow for the full year was SEK 1,220 M. The Group's expenses 2001 for research, development and quality assurance were SEK 1,790 M (1,615), corresponding to 3.7% (3.7) of invoicing. The number of employees amounted to 34,848, a decrease of about 950 for comparable units from the beginning of the year. The decline in the fourth quarter was about 800 persons for comparable units, of whom about 330 within Sandvik Tooling, about 140 within Sandvik Mining and Construction and about 250 within Sandvik Specialty Steels. Acquisitions within Sandvik Mining and Construction increased the number of employees by about 1,000. The invoiced sales of the Parent Company amounted to SEK 12,270 M (12,084), operating profit was SEK 1,340 M (1,674). Liquid funds plus interest-bearing assets less interest-bearing liabilities amounted to SEK 1,636 M (1,785 at 31 December 2000). The number of employees at the Parent Company was 7,169 (7,257) at year-end. Business areas (see appendix 2) Sandvik Tooling Q4 Q4 Change Full- Full- Change year year SEK M 2001 2000 % 2001 2000 % Order intake 3 888 4 149 -12 * 16 355 15 744 -3 * Invoiced sales 4 053 4 204 -10 * 16 561 15 507 ±0 * Operating profit 459 830 -45 1 2 964 3 135 -5 1) ) % 11 20 1 18 20 ) * At fixed exchange rates for comparable units. 1) Q4 2001: operating profit includes charges for restructuring SEK -515 M and capital gain of SEK +340 M. Adjusted for these items, profit was SEK 634 M, 16% of invoicing. For full year 2001 the adjusted profit was SEK 3,139 M, 19% of invoicing. Sandvik Tooling's order intake for the full year amounted to SEK 16,355 M (15,744). Invoicing was SEK 16,561 M (15,507). Despite a weakening market, this level was unchanged at fixed exchange rates for comparable units. This means that the business area continued to gain market shares. Operating profit declined somewhat compared with a year earlier and amounted to SEK 2,964 M, 18% of invoiced sales. Earnings were affected favorably by currency effects, but adversely by lower volumes and production rates as well as sharply increased raw material costs. In spite of this, profit was the same as a year earlier excluding one-off costs of SEK 515 M and capital gain of SEK 340 M. Return on capital employed amounted to 22% (27). In the fourth quarter, order intake amounted to SEK 3,888 M (4,149), which was a decline at fixed exchange rates for comparable units of 12% compared with a year earlier. Order intake continued to be very negative for high-speed steel tools and cemented-carbide blanks and now also declined somewhat for metalworking tools in cemented carbide. Lower demand was noted in most markets in the EU. Sales in NAFTA remained weak, particularly in the automotive and electronics industries. In contrast, demand in Eastern Europe and Asia/Australia, particularly in China, remained favorable. Invoicing declined 10% at fixed exchange rates for comparable units and amounted to SEK 4,053 M (4,204). The decline for high-speed steel tools and cemented-carbide blanks was substantial. Operating profit in the fourth quarter amounted to SEK 459 M (830) or 11% of invoicing. The decrease compared with a year earlier was attributable to lower volume and rate of production as well as the charge against earnings in the quarter for the costs of a restructuring program of SEK 515 M. The measures announced in November 2001 were moved forward with the aim of increasing efficiency and reducing costs more rapidly. The objective is to achieve an annual earnings improvement of slightly more than SEK 500 M successively from the end of 2002. This is being accomplished, among other measures, through a consolidation of production and distribution units and is estimated to result in a reduction of the number of employees by about 1,000. The quarter was affected favorably by capital gains of SEK 340 M on the divestment of the half-owned Procera-Sandvik. Adjusted for the above one-off effects, operating profit in the fourth quarter amounted to SEK 634 M or 16% of invoicing. The decline compared with a year earlier is attributable mainly to lower production volume. Due to the weakening business climate, additional personnel reductions were announced in December involving notices to 250 employees in Gimo, Sweden, of termination of employment. Sandvik Mining and Construction Q4 Q4 Change Full- Full- Change year year SEK M 2001 2000 % 2001 2000 % Order intake 3 273 2 512 +2 * 13 407 10 659 +11 * Invoiced sales 3 849 2 668 +23 * 13 501 10 184 +18 * Operating profit 346 291 +19 1 348 1 073 +26 % 9 11 10 11 * At fixed exchange rates for comparable units. Sandvik Mining and Construction's order intake for the full year amounted to SEK 13,407 M (10,659). Invoicing was SEK 13,501 M (10,184), an increase of 18% at fixed exchange rates for comparable units and 26% including acquisitions. Operating profit rose 26% compared with a year earlier and was SEK 1,348 M or 10% of invoiced sales. Return on capital employed amounted to 18% (16). In the fourth quarter, order intake rose to SEK 3,273 M (2,512), which was an increase of 30% in total and 2% at fixed exchange rates for comparable units. Demand remained relatively favorable from the mining industry, but there were distinct indications of a future weakened trend, particularly for heavy machinery and equipment. Activity in the energy field, including coal mining and hydropower construction, remained favorable. Demand in the civil engineering industry was stable in Europe, weak in NAFTA and highly favorable in certain parts of Asia. Development for the newly formed Sandvik Rock Processing business sector was good. Invoicing increased 23% at fixed exchange rates for comparable units and amounted to SEK 3,849 M (2,668). A large share of the increase was attributable to the Sandvik Materials Handling business sector, in which deliveries, mainly project-related, were very high. Machinery invoicing declined, while the level for tools, service and spare parts was stable. New acquisitions (Sandvik Rock Processing and Sandvik Smith) are included in the amount of SEK 519 M in order intake for the quarter and SEK 436 M in invoicing. Operating profit in the fourth quarter reached SEK 346 M (291) or 9% of invoicing, an increase of 19%. Earnings in the quarter were the highest since the business area was formed and the sharp increase was due mainly to a strong volume trend and high capacity utilization. However, the margin was reduced somewhat by the high invoicing of engineering projects. Lower demand within certain product areas required a review of capacity and staffing to successively adapt cost levels. During the quarter, the number of employees declined by about 140 for comparable units and in the beginning of 2002 further reductions were announced of about 100 persons. Sandvik Specialty Steels Q4 Q4 Change Full- Full- Change year year SEK M 2001 2000 % 2001 2000 % Order intake 3 151 3 693 -21 * 13 843 14 732 -14 * Invoiced sales 3 817 4 021 -9 * 14 528 14 209 -6 * Operating profit 328 306 +7 1 281 980 +31 % 9 8 9 7 * At fixed exchange rates for comparable units. Sandvik Specialty Steels' order intake for the full year amounted to SEK 13,843 M (14,732). Invoicing was SEK 14,528 M (14,209), a decline of 6% at fixed exchange rates for comparable units. Operating profit rose 31% compared with a year earlier and amounted to SEK 1,281 M or 9% of invoiced sales. Earnings were largely unchanged taking into account that earnings a year earlier were charged with SEK 280 M for Sandvik Steel's program of change. Return on capital employed was 12% (10). In the fourth quarter, order intake amounted to SEK 3,151 M (3,693), which was a decline of 21% compared with a year earlier at fixed exchange rates for comparable units. Demand in NAFTA fell further from an already low level and the decline also continued in Europe. Order intake in Asia/Australia increased through projects in the energy area. The sharp decline during the year in demand from the electronics industry continued also during the fourth quarter, which affected parts of the business area, primarily Kanthal. In contrast, demand from the oil/gas and other energy industries remained favorable. Invoicing amounted to SEK 3,817 M (4,021), a decrease of 9% at fixed exchange rates for comparable units. Invoicing was nearly SEK 700 M higher than order intake, which was largely due to final deliveries of projects within Sandvik Process Systems. The low order intake in the quarter will affect invoicing in the future quarter. Operating profit in the fourth quarter amounted to SEK 328 M (306) or 9% of invoicing. Lower prices for nickel in inventory affected profits marginally. The earnings improvement compared with the preceding year, despite lower volumes, was mainly an effect of ongoing rationalization measures and structural changes as well as of a better product mix within Sandvik Steel. The program of change initiated within Sandvik Steel during 2000 includes rationalization of the production structure and sales organization in Europe. In the program, which is being implemented from year-end 2000 for three years, the number of employees will be reduced by a total of 600-700. The total reduction at year-end amounted to slightly more than 600 persons. As a result of the weakened business climate during the year, the program of change was intensified at the same time as measures were taken to align resources and costs to the lower demand. Accounting principles This report has been prepared in accordance with the Swedish Financial Accounting Standards Council's recommendation RR20. At 1 January 2001, an additional number of recommendations from the Swedish Financial Accounting Standards Council became effective. Application from this date of RR9 Income Taxes resulted in a change in accounting principles and the comparable figures for 2000 were adjusted accordingly. The application of other new recommendations has not had any material effect on Sandvik's reporting. Effective in the first quarter of 2002, Sandvik will apply the Swedish Financial Accounting Standards Council's recommendation RR15 pertaining to Intangible Assets. This means that a small portion of Sandvik's Groupwide expenses for R&D will be capitalized and amortized over the estimated useful life. Buy-back of shares At 31 December 2001, Sandvik's holding of own shares (treasury stock) totaled 7,747,000, corresponding to 3% of the total number of shares (258,697,100). The purchase amount was SEK 1,676 M. In accordance with the decision at the Annual General Meeting in May 2001; Sandvik is authorized to repurchase a total of 12,934,800 shares, corresponding to 5% of the total number of shares. The authorization is valid for the period up to the date of the next Annual General Meeting on 7 May 2002. Company acquisitions · In January 2001, Sandvik became one of five part owners in Endorsia.com International AB, an e-business site for industrial products and services in Europe. · In February, Sandvik CTT entered into an agreement with the UK based company Angus MacInnes & Co., Glasgow, to take over the sales and marketing of Prototyp products in the UK with about 10 employees. · In March, Sandvik Specialty Steels acquired the remaining 49% of the shares in Sandvik Choksi Ltd. Sandvik has owned 51% of the shares since the company was founded in 1996. The company's operations are in Mehsana, India, with production of extruded seamless stainless steel tube. · In June, Sandvik Mining and Construction acquired the Chilean company Bafco Mineria y Servicios S.A. in Santiago, a leader in providing service to the mining industry in Chile. Sales amount to about SEK 85 M, with 180 employees. · Following completion of a public share offer in July 2001, Sandvik secured an additional 284,530 shares in Sandvik Asia Ltd, Pune, India. Consequently, the ownership interest increased from 73% to 89%. Sandvik Asia was formed in 1960 and has annual sales of approximately SEK 400 M, with about 700 employees. · In September, Sandvik Tooling and the Brazilian company Hurth- Infer SA formed a company for the production and sale of solid-carbide tools, Sandvik Hurth-Infer SA, in which Sandvik Tooling owns 80% of the shares. The company is located in Sorocabo, near Sao Paulo, and has annual sales of SEK 65 M with 75 employees. · Sandvik Mining and Construction formed a jointly owned company (50/50) in October with the American company Smith International, Inc., Houston, Texas covering operations in the area of roller cone bits for the mining and construction industry. The new company, Sandvik Smith AB, with head office in Köping, Sweden, has sales of about SEK 360 M and slightly more than 200 employees. There are subsidiaries in the NAFTA region, South America, Africa and Australia. · In September, Sandvik Mining and Construction concluded the acquisition of parts of Svedala Industri's units for crushing and screening in accordance with an agreement with the Finnish company Metso Corporation. The operations, which are included in the new Sandvik Rock Processing business sector, generate sales of SEK 1,400 M with about 900 employees. · Sandvik reached an agreement in September with the main owners of the German company Walter AG covering the acquisition of 60% of the shares in the company. The transaction was approved at the end of December by the relevant competition authorities and during 2001 Sandvik acquired most of the shares held by the main owners. Walter's operations include tools for metalworking, software systems for tool-management and numerically controlled grinding machines. Sales amount to approximately SEK 2,700 M annually. The head office is in Tübingen, Germany, and the number of employees is about 2,000. Other structural changes · In January 2001, Sandvik Steel sold the subsidiary Guldsmedshytte Bruks AB, with sales of approximately SEK 90 M and about 80 employees. · At the beginning of the year, Sandvik Steel announced plans to shut down its manufacturing of seamless tubes at the UK subsidiary Sterling Tubes as part of its program of change. The closing was carried out in August and affected approximately 250 employees. · During the autumn, Sandvik Mining and Construction closed the unit for down-the-hole drilling tools in Mexico City with about 60 employees and transferred the operations to its plants in Sandviken, Sweden, which are already producing the corresponding tools. At the same time, Sandvik Hard Materials invested in the expansion of its production in the same factory area in Mexico City. Cemented-carbide microdrill blanks for the electronics industry are produced at the site as well as cemented-carbide blanks for balls in ballpoint pens. · In August, Sandvik's Pension Fund in Sweden was formed. Concurrently, SEK 1,070 M was transferred from the Swedish Sandvik companies to this newly formed pension fund, which is independent of the Group. The amount represented the companies' pension liability to salaried employees which thereby is no longer included in the consolidated balance sheet. · In December, Sandvik sold its 50%-interest in the dental technology company Procera-Sandvik to Nobel Biocare. The sale yielded a capital gain to Sandvik amounting to SEK 340 M. In addition, Sandvik will receive an annual compensation based on the sales trend for the Procera products to and including 2012. Profit sharing and options Since 1986, Sandvik has a profit-sharing system for all employees at wholly-owned companies in Sweden. The Group's return during 2001 means that the maximum amount, SEK 150 M, is allocated to the fund. Sandvik's Board decided in 1999 to establish a stock option plan for about 300 senior executives in Sweden and abroad. The plan provides the possibility of an annual allocation of so-called personnel options on Sandvik shares with a lifetime of five years and the right to exercise after three years, conditional upon continued employment. The allocation, which is consideration free, is based on Sandvik's return on capital employed in the preceding year. The program is based on existing shares. Accordingly, there is no dilution effect for the current shareholders. The option plan is secured financially so that the effect of future increases in the price of the Sandvik share on the Company's costs will be limited. The Board decided for 2002 to allocate 800,000 options to about 300 senior executives in the Group, of which 24,000 options to the designated President. The exercise price of the options will be 110% of the average share price during the next three trading days following publication of the year-end report. Proposed dividend and repurchase of shares The Board of Directors proposes a dividend of SEK 9.50 per share (9.00) or SEK 2,382 M (2,328). The proposal represents an increase of 6% from a year earlier and the dividend corresponds to 66% of earnings per share. The proposed record date for dividend entitlement is 13 May 2002. Sandvik's high profitability and its strong cash flow facilitate organic growth and acquisitions as well as an aggressive policy for dividend and repurchases. Against this background, the Board has decided to propose that the Annual General Meeting on 7 May 2002 authorize the Board to continue to repurchase shares. It is proposed that the company may hold its own shares (treasury stock) amounting to not more than 10% of the total number of shares outstanding, corresponding to 25.8 million shares. At 31 December 2001, Sandvik held 7,747,000 of its own shares, corresponding to 3% of the total number of shares (258,697,100). The purchase shall be made on the Stockholm Exchange at the prevailing market price. The buy-back is a step in an adjustment of the company's capital structure in accordance with established financial goals. New President and new Board Chairman On 16 January 2002, the Board of Directors announced that Clas Åke Hedström, President and CEO of Sandvik AB, will leave his position in conjunction with the Annual General Meeting on 7 May 2002. Clas Åke Hedström will be 63 in July and has been employed with the company for 37 years, of which eight as President. The Board of Directors has appointed Lars Pettersson, 47, as new President and CEO, as of 7 May 2002. Pettersson, is currently Executive Vice President of the Group, President of Sandvik Specialty Steels Business Area and President of Sandvik Steel. Percy Barnevik, Chairman of Sandvik AB since 1983, has expressed his desire to step down and has declined reelection. The Board intends to elect Clas Åke Hedström as new Chairman. Peter Gossas, Executive Vice President of Sandvik Steel and head of the company's tube division has been appointed the new President of the Business Sector Sandvik Steel, effective 7 May 2002. The Annual General Meeting will be held in Sandviken on 7 May 2002, at 3:00 p.m. The annual report will be distributed to the shareholders approximately two weeks prior to the Meeting. Sandviken, 14 February 2002 Sandvik AB; (publ) Board of Directors Appendices: 1. Group summary 2. Invoicing and operating profit Sandvik Group's result for the first quarter of 2002 will be published in connection with the Company's Annual General Meeting on 7 May 2002. For additional information, please call +46 (0)26-26 10 01 A combined presentation and telephone conference will be held at the Operaterrassen in Stockholm on 14 February, 10:00 a.m. For further information visit www.sandvik.com Consolidated Financial Information, SEK M Q4 Q4 Full- Full- year year Income statement 2001 2000 2001 2000 Invoiced sales 12 11 48 43 780 940 900 750 Cost of goods sold -9 -7 -33 -29 210 971 877 357 Gross profit 3 570 3 969 15 14 023 393 Selling, general and administrative -2 -2 -9 -9 expenses 603 587 324 029 Other operating income and expenses -29 170 64 303 Items affecting comparability 340 0 340 660 Operating profit 1 278 1 552 6 103 6 327 Financial income and expenses, net -129 -133 -497 -523 Profit after financial items 1 149 1 419 5 606 5 804 Taxes -48 -378 -1 -1 712 881 Minority interests -36 -51 -206 -211 Net profit 1 065 990 3 688 3 712 Cash-flow statement Profit after financial items 1 149 1 419 5 606 5 804 Items not affecting cash flow 41 -136 -579 -871 Reversal of depreciation 627 640 2 446 2 336 Taxes paid -405 -484 -1 -1 762 688 Change in inventories 323 -280 -583 -859 Change in current receivables and operating -156 -95 -35 -246 liabilities Cash flow from operating activities 1 579 1 064 5 093 4 476 Investments, acquisitions and divestments -2 -828 -3 -2 064 873 691 Change in short- and long-term loans 389 -727 4 153 147 Buy-back of own shares -419 0 -1 0 676 Payment to newly established pension funds 0 0 -1 0 070 Dividends paid 0 0 -2 -2 554 266 Net cash flow -515 -491 73 -334 Liquid funds at beginning of period 2 796 2 588 2 097 2 369 Exchange-rate differences in liquid funds -23 0 88 62 Liquid funds at end of period 2 258 2 097 2 258 2 097 Balance sheet Full-year Full-year 2001 2000 Fixed assets 22 505 19 156 Inventories 12 953 11 508 Current receivables 11 833 11 147 Liquid assets 2 258 2 097 Total assets 49 549 43 908 Shareholders' equity 23 972 23 019 Minority interests 967 931 Interest-bearing provisions and liabilities 12 222 8 741 Non-interest-bearing provisions and liabilities 12 388 11 217 Total provisions, liabilities and shareholders' 49 549 43 908 equity Change in shareholders' equity Opening equity as shown in approved balance sheet 22 472 20 109 Effect of change in accounting principles 547 516 Opening equity adjusted to new principles 23 019 20 625 Effect of change in exchange rates 1 269 752 Dividend to shareholders -2 328 -2 070 Buy-back of own shares -1 676 - Result of the period 3 688 3 712 Closing balance 23 972 23 019 Key figures by business area 2001 SEK M Invoiced Investments Personnel sales Sandvik Tooling 16 561 1 234 12 881 Sandvik Coromant 10 855 815 7 947 Sandvik CTT 3 619 253 3 521 Sandvik Hard Materials 1 782 165 1 333 Saws and Tools 305 1 80 Sandvik Mining and Construction 13 501 436 8 073 Sandvik Tamrock 7 629 240 4 338 VA-Eimco 2 358 66 1 316 Driltech Mission 1 047 61 385 Sandvik Materials Handling 1 993 14 932 Sandvik Rock Processing 398 26 876 Sandvik Smith 76 5 131 Sandvik Specialty Steels 14 528 572 8 564 Sandvik Steel 10 253 382 6 275 Kanthal 2 487 151 1 526 Sandvik Process Systems 1 788 39 763 Seco Tools 4 259 270 3 904 Group activities 51 115 1 426 Investments in company - 1 456 - acquisitions Group total 48 900 4 083 34 848 Invoiced Q4 Full- Q1 Q2 Q3 Q4 Full- Change sales by year year market area SEK M 2000 2000 2001 2001 2001 2001 2001 % % 1 ) EU (excl. 4 256 15 559 4 551 4 464 3 882 4 502 17 399 +12 +2 Sweden) Sweden 634 2 375 586 583 444 686 2 299 -3 -3 Rest of 713 2 623 853 899 902 912 3 566 +36 +27 Europe Europe 5 603 20 557 5 990 5 946 5 228 6 100 23 264 +13 +4 total NAFTA 2 974 11 273 2 960 2 969 2 855 2 759 11 543 +2 -8 South 488 1 888 451 526 475 561 2 013 +7 -6 America Africa/Midd 560 1 921 611 616 603 681 2 511 +31 +28 le East Asia/Austra 2 315 8 111 2 038 2 383 2 469 2 679 9 569 +18 +10 lia Group total 11 940 43 750 12 050 12 440 11 630 12 780 48 900 +12 +3 Invoced sales by business area SEK M Sandvik 4 204 15 507 4 258 4 296 3 954 4 053 16 561 +7 0 Tooling Sandvik 2 668 10 184 2 984 3 270 3 398 3 849 13 501 +33 +18 Mining and Constructio n Sandvik 4 021 14 209 3 690 3 763 3 258 3 817 14 528 +2 -6 Specialty Steels Seco 1 028 3 785 1 103 1 092 1 005 1 059 4 259 +13 +3 Tools2) Group 19 65 15 19 15 2 51 - - activities Group total 11 940 43 750 12 050 12 440 11 630 12 780 48 900 +12 +3 Operating profit by business area SEK M Sandvik 830 3 135 878 892 735 459 4 2 964 4 Tooling ) ) Sandvik 291 1 073 315 351 336 346 1 348 Mining and Constructio n Sandvik 306 980 317 341 295 328 1 281 Specialty Steels Seco 197 740 240 220 165 162 787 Tools2) Group -72 399 3 -110 -44 -106 -17 -277 activities ) Operating 1 552 6 327 3 1 640 1 760 1 425 1 278 4 6 103 4 profit ) ) ) Operating profit by business area % of invoicing Sandvik 20 20 21 21 19 11 18 Tooling Sandvik 11 11 11 11 10 9 10 Mining and Constructio n Sandvik 8 7 9 9 9 9 9 Specialty Steels Seco 19 20 22 20 16 15 18 Tools2) Operating 13 14 14 14 12 10 12 profit 1) Change compared with year earlier at fixed exchange rates for comparable units. 2) As a result of the majority holding in Seco Tools, Sandvik consolidates this company. For comments, refer to the company's report. 3) Inclusive SEK 660 M items affecting comparability. 4) Inclusive SEK 340 M items affecting comparability. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/02/14/20020214BIT00110/bit0001.doc http://www.waymaker.net/bitonline/2002/02/14/20020214BIT00110/bit0001.pdf