Posted By Global Banking and Finance Review
Posted on January 23, 2025
(Reuters) - Swedish metal-cutting and mining equipment maker Sandvik on Thursday signalled stabilising orders for early 2025 and little immediate threat from U.S. tariffs, after it beat market expectations for fourth-quarter order intake.
Sandvik, one of the first Nordic industrial companies to report quarterly results, is considered a reliable indicator of demand given its broad customer base.
Its quarterly order intake was 31.56 billion Swedish crowns ($2.86 billion), up 5% from a year earlier and above analysts' consensus according to Jefferies and Kepler Cheuvreux.
Demand was solid in the Mining and Rock Solutions division, notably in the aftermarket business that saw double-digit percentage growth in new orders in the quarter, Sandvik said.
"While equipment orders were stable year on year, our equipment divisions saw a more favorable demand picture," CEO Stefan Widing said in a statement.
Its Manufacturing and Mining Solutions unit continued to suffer from weak demand in Europe and in the automotive sector, which Widing said was "not surprising" as macro-economic instability shakes its key customer markets.
However, Sandvik said order intake for the unit had been stable in the first two weeks of January, which Jefferies analysts said could lead to a slight consensus upgrade.
Mining and Rock Solutions make up around a half of Sandvik's sales, while Manufacturing and Mining Solutions generate nearly 40%.
Sandvik's shares rose 5.3% by 0943 GMT.
Looming U.S. tariffs on Canada, Mexico and China are raising concerns for many firms operating globally, but Widing told Reuters that Sandvik, which makes a quarter of its sales in North America, had very little exposure to the countries on top of President Donald Trump's agenda.
"We have been preparing in the sense of understanding our flows and what actions we can take, whether it's related to pricing, changing logistics flows or even moving assembly or production," he added about the upcoming U.S. policy changes.
Sandvik's adjusted operating profit was stable at 5.74 billion crowns, though it just missed analysts' expectations according to LSEG's IBES data.
($1 = 11.0243 Swedish crowns)
(Reporting by Anna Chaberska and Elviira Luoma in Gdansk; Editing by Milla Nissi)
