SANDVIK MINING AND ROCK TECHNOLOGY

SANDVIK MINING AND ROCK TECHNOLOGY
CAPITAL MARKETS DAY
LARS ENGSTRÖM, PRESIDENT
HENRIK AGER, PRESIDENT PRODUCT AREA ROCK TOOLS
1
TOPICS FOR TODAY
• Business Area Sandvik Mining and
Rock Technology overview
• Market outlook and strategy
• Aftermarket and data driven productivity
• Automation and innovation
• Profitability roadmap and summary
2
SANDVIK MINING AND ROCK TECHNOLOGY
OPERATING PRINCIPLES
MERGER OF TWO BUSINESS AREAS sharing
common products, technology, infrastructure
DECENTRALIZED BUSINESS MODEL with
eight application-focused product areas
GLOBAL SALES ORGANIZATION
SMALL BUSINESS AREA COMMON TEAM
3
SANDVIK MINING AND ROCK TECHNOLOGY
MANAGEMENT TEAM AND PRODUCT AREAS
Jan Petzold
UNDERGROUND
DRILLING
Fredrik
Westin
CFO
Johan
Hedlund
HR
Kobus
Malan
MID
MARKET
4
Reinhard
Reinartz
MECHANICAL
CUTTING
Patrick Murphy
ROCK DRILLS &
TECHNOLOGIES
(Including Drilling
& Completion)
Joanne
Cooke
SURFACE
DRILLING
Riku
Kesäläinen
LOAD & HAUL
Snejana
Koleva
STRATEGY
Henrik Ager
ROCK TOOLS
Ed
Santamaria
PARTS &
SERVICES
Anders
Svensson
CRUSHING &
SCREENING
Gary
Huges
GLOBAL
SALES
SANDVIK MINING AND ROCK TECHNOLOGY
ORGANIZATION
PRESIDENT
Lars Engström
HR
FINANCE
(HR and EHS)
(Finance, IT, Legal,
Compliance)
Johan Hedlund
Fredrik Westin
STRATEGY
MID-MARKET
Snejana Koleva
Kobus Malan
UNDERGROUND
DRILLING
SURFACE
DRILLING &
EXPLORATION
ROCK TOOLS
LOAD & HAUL
MECHANICAL
CUTTING
CRUSHING &
SCREENING
ROCK DRILLS &
TECHNOLOGIES
PARTS &
SERVICES
GLOBAL SALES
Jan Petzold
Joanne Cooke
Henrik Ager
Riku Kesäläinen
Reinhard Reinartz
Anders Svensson
Patrick Murphy
Ed Santamaria
Gary Hughes
5
SANDVIK MINING AND ROCK TECHNOLOGY
FY 2015
EXTERNAL INVOICING, BSEK
2.2
OPERATING PROFIT*, BSEK
33.1
8.6
MARGIN, PERCENT
22.4
MINING
CONSTRUC- DRILLING &
TION
COMPLETION
* ADJUSTED FOR ONE-OFF ITEMS
6
MRT
14.7
4.5
-8.5
10.5
3.3
0.4
-0.2
3.5
MINING
CONSTRUC- DRILLING &
TION
COMPLETION
MRT
SANDVIK MINING AND ROCK TECHNOLOGY
APPLICATIONS OFFERING
UNDERGROUND
HARD ROCK
SURFACE
MINING
DRILLING
COMMINUTION
DEMOLITION&
RECYCLING
OIL&GAS
SOFT ROCK
MINING
TUNNELING
MINING
EXPLORATION
EQUIPMENT
AFTERMARKET
STRONG MOMENTUM
7
STABLE MOMENTUM
WEAK MOMENTUM
PRODUCT AREAS
CHALLENGES AND OPPORTUNITIES
LOAD & HAUL
UNDERGROUND
DRILLING
ROCK TOOLS
MECHANICAL
CUTTING
SURFACE DRILLING
CRUSHING & SCREENING
STABILITY
8
PROFITABILITY
GROWTH
MARKET OUTLOOK
GDP DEVELOPMENT
METALS & MINERALS
OIL & GAS
GDP GROWTH YEAR- ON- YEAR
2014 & 2016 OUTLOOK
CAPITAL EXPENDITURE
EXCL. EXPLORATION
INDEX (2014=100)
DRILLING ACTIVITY- RIG COUNT1
INDEX (2014=100)
150
150
5.0
4.5
4.0
3.5
-0.4ppt
-0.9ppt
+1.9%
100
100
3.0
+2.1%
2.5
2.0
50
50
1.5
1.0
2016 Outlook
0.5
2014 Outlook
0.0
2014 2015 2016 2017 2018 2019 2020
0
0
2014 2015 2016 2017 2018 2019 2020
2014 2015 2016 2017 2018 2019 2020
CAGR 2015-2020
1 Excluding Russia and Central Asia
SOURCE: Baker Hughes, U.S. Energy Information Administration (EIA), Spears & Associates, IHS Global Insight
9
SMRT EXPOSURE
MINING
COMMODITY EXPOSURE
CONSTRUCTION
INDUSTRY EXPOSURE
INVOICING
with Mining Systems
INVOICING
Diamonds
Other metals
INVOICING
without Mining Systems
Other minerals
Gold
Iron
ore
Iron
ore
2011
Copper
Coal
Other
base
metals
Coal
Tunneling
Demolition &
Recycling
Gold
PGM
PGM
10
Diamonds Other minerals
Other metals
2015
Other
base
metals
Copper
2015
Aggregates
STRATEGIC FOCUS NEAR TERM
2014-15
2016-18
Increase pace
Deliver fundamentals
Strengthen leadership and
adjust portfolio
SAFETY
SAFETY CULTURE
WORLD CLASS SAFETY – ZERO HARM
SALES
Sales heat map
Account management, Value selling
COST/CAPITAL
EFFICIENCY
Sourcing
Headcount
Decentralization and
end-to-end responsibility
AFTERMARKET
Installed base infrastructure,
Customer service center
Advanced services,
Data driven productivity
OFFERING
Automated equipment
‘Game changer’
New products & features
SUPPLY CHAIN
Product transfers and site closures
Lean transformation
Finalize footprint program
11
SALES
CHINA IN FOCUS
• Focus on improved development and
manufacturing of competitive local premium
and mid-market products – both through
Sandvik and through partners
• Build on breakthrough deals in Surface
drilling
• Capture market share through updated
soft-rock rock tools offering
12
COST/CAPITAL EFFICIENCY
CONTINUED FOCUS ON REDUCING NET
WORKING CAPITAL
Indexed*
NET WORKING CAPITAL DEVELOPMENT
Sales
100
106
Inventory
100
92
Receivables
100
95
NET WORKING CAPITAL DEVELOPMENT,
Percent of Invoicing
-4 ppt
35
31
Payables
100
108
105
Advances
100
105
2014
2015
* Sales: 2014 vs 2015, Inventory, Receivables, Payables, Advances closing numbers for 2014 vs 2015
13
2014
2015
AFTERMARKET
PRO-ACTIVE IN A CHALLENGING MARKET
Enable effective market share growth
Prioritize targeted customer activities
Tailor customer offering
Fit portfolio development to active fleet
14
>90%
accuracy
of active
fleet
AFTERMARKET
LIFTING CUSTOMER EXPERIENCE
NEW CUSTOMER
E-SOLUTIONS
GLOBAL ROLL-OUT
CUSTOMER SERVICE
CENTERS
REMOTE
MONITORING
CAPTURE
PARTS POTENTIAL
+8.5%
2013
15
2015
AFTERMARKET
DATA-DRIVEN PRODUCTIVITY: PREDICTIVE MAINTENANCE
DATA-DRIVEN PRODUCTIVITY IN
LOAD & HAUL
DATA-DRIVEN PRODUCTIVITY IN
CRUSHING & SCREENING
ENGINE OIL PRESSURE, BAR
ENGINE
FAILURE
DATA
REPOSITORY &
ANALYTICS
>80%
prediction
accuracy of
pilot model
TIME
MONTH 1
MONTH 2
SOURCE: OPTIMINE SENSOR DATA
16
MONTH 3
MONTH 4
• Real-time access to key crusher information
• Parts and service planning
• Reduced down-time
OFFERING
MINING AUTOMATION: INTEGRATED APPROACH
INFORMATION
MANAGEMENT SYSTEMS
INCREASE
PRODUCTION
Monitoring & Reporting
for Sandvik Fleet
EQUIPMENT
Intelligent Machines
Mine visualization,
Location Tracking, Scheduling,
Task Management for Total Fleet
AUTOMATION
SYSTEMS
Single Unit & Fleet
Automation Systems
SERVICES
Integration, Delivery,
Training, Support &
Optimization
SAFE,
COST
EFFECTIVE
MINING
REDUCE
COST
IMPROVE
HEALTH &
SAFETY
OPTIMINE®
AUTOMINE®
OFFERING
AUTOMINE® PRODUCTIVITY IMPROVEMENTS
LOADER
PRODUCTIVITY
COST
PER TON
COST
PER TON
INDEXED
INDEXED
INDEXED
221
+121%
100
-24%
100
-50%
100
76
~50
MANUAL
18
AUTOMATED
MANUAL
AUTOMATED
MANUAL
AUTOMATED
20
OFFERING
INNOVATION IN DRILLING
INCREASED
PRODUCTIVITY
~15%
increased
productivity
21
“With the current autodrilling
performance Byrnecut,
Australia achieves an extra
40m of lateral advance per
month.”
OFFERING
HARD ROCK CUTTING
Environment, health and safety benefits
Speed and reduced time to full production
Improved tunnel quality reducing support
and rehabilitation costs
Reduced operating costs – lower
manpower requirements
2-4x
Faster
time to
production
SANDVIK MINING AND ROCK TECHNOLOGY
EBIT IMPROVEMENT
PROFITABILITY
2015
23
Aftermarket
penetration
Merger &
decentralization savings
Cost
efficiencies
Footprint
New
PROFITABILITY
products and
2018
technologies
SUMMARY
 Market continues to be challenging across
Mining, Construction and Oil&Gas
 Decentralized organization to drive speed
and efficiencies
 Aftermarket with solid foundation to drive
parts sales/unit
− >90% transparency on installed fleet
− Closeness to customer through
e-solutions, customer service centers
− Data analytics
 Automation & innovation delivering productivity
gains to our customers
 Execute profitability and net working capital
reduction through Product Areas
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