Sandvik Materials Technology launches comprehensive improvement program

Sandvik Materials Technology launches comprehensive improvement program

As communicated by the Sandvik Group, 2 September 2011, the ambition for
Business Area Sandvik Materials Technology is

  · to within 2-3 years turn around the Business Area to a significantly
higher and sustainable profitability
  · subsequently evaluate alternatives for growth and expansion

To increase profitability to a significantly higher and sustainable
level and to strengthen the leading position in key segments, Sandvik
Materials Technology launches a comprehensive improvement program ("The
Step-Change-program"). The cornerstones of the program are the following

  · A step-change within the safety area
  · A simplified and more cost efficient organizational structure
  · Significantly reduced cost structure
  · Improved productivity and increased flexibility
  · A more aggressive approach to shift the product mix towards more
advanced and profitable products
  · Selective growth to ensure leadership in profitable key segments

One of the objectives is to sustainably reduce the overall cost
structure by approximately 500 MSEK over a two year period. Key areas in
focus are

  · Reduction of staff- and administration costs
  · Cost optimization of the sales organization
  · Increased cost efficiency in production support and purchasing

”I see this program as a great opportunity to significantly improve
profitability, to grow selectively in attractive and profitable niches
and to further strengthen our position in strategic segments and
markets. To reduce the cost base and increase profitability it will be
essential that we motivate and get the full commitment from the
organization. We will face tough challenges and will need to take some
hard decisions but I'm fully convinced that we will create a really
strong and attractive Sandvik Materials Technology for the future.” says
Jonas Gustavsson, President of Sandvik Materials Technology.  

The magnitude of the actions taken might have to consider a possible
deterioration of the business climate but the overall ambition is to
establish Sandvik Materials Technology as a world class performer. In
total the program is expected to increase Return On Capital Employed
(ROCE) by at least 10 percentage points. One off costs as a consequence
of the program are estimated to 800-900 MSEK of which 300-400 MSEK
affecting cash flow.

Sandviken, 13 September 2011
Sandvik Aktiebolag (publ)

For further information, contact Jonas Gustavsson, President of Sandvik
Materials Technology,
+46 26 26 36 28 or Jan Lissåker, Vice President Investor Relations,
Sandvik AB, +46 26 26 10 23.
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Sandvik Materials Technology
Sandvik Materials Technology is a business area within the Sandvik Group
and a world-leading manufacturer of high value-added products in
advanced stainless steels, special alloys, metallic and ceramic
resistance materials, as well as process systems. Annual sales 2010 were
about SEK 17,700 M with 9,100 employees. The product areas comprises
Tube, Strip, Wire and Heating Technology, Process Systems and MedTech.
Sandvik Group
Sandvik is a global industrial group with advanced products and
world-leading positions in selected areas - tools for metal cutting,
equipment and tools for the mining and construction industries,
stainless materials, special alloys, metallic and ceramic resistance
materials as well as process systems. In 2010 the Group had about 47,000
employees and representation in 130 countries, with nearly 83,000 MSEK
in annual sales.