Sandvik's Strategic Shift: Exiting Non-Core Business Ventures
Sandvik's Strategic Shift in Business Focus
Sandvik is opening a new chapter in its corporate journey by strategically exiting non-core businesses. This shift aims to enhance focus on software solutions and essential hardware integrated into Sandvik Manufacturing Solutions. During the recent Capital Markets Day, Sandvik elaborated on its newfound dedication to advancing its additive manufacturing strategy, particularly emphasizing metal powders, which are crucial in modern manufacturing.
Divestiture of DWFritz Automation
In alignment with its revised strategy, Sandvik has divested its engineer-to-order business segment, DWFritz Automation, to Balmoral Funds, a private equity firm based in the U.S. This decision comes after Sandvik acquired DWFritz in 2021, intending to expand the ZeroTouch® technology, renowned for its innovative inspection gauging capabilities.
The Importance of ZeroTouch®
The ZeroTouch® platform stands out in Sandvik's portfolio, serving as a vital element in the broader goal of ensuring seamless metrology in manufacturing processes. Although DWFritz has been sold, the ZeroTouch® platform will continue to be an integral part of Sandvik's offerings as the company pushes forward with its innovative plans.
Exit from BEAMIT Stake
Alongside the divestiture of DWFritz, Sandvik has decided to pursue an exit from its minority stake (approximately 30%) in BEAMIT, an Italian additive manufacturing service provider. This decision reflects Sandvik's commitment to concentrating its efforts on the core aspects of its revised additive manufacturing approach, primarily focusing on metal powders.
Impact on Sandvik Manufacturing Solutions
These significant strategic decisions are expected to streamline operations within Sandvik Manufacturing Solutions and Machining Solutions. By divesting from DWFritz and BEAMIT, Sandvik aims to improve operational efficiency and drive more value from its primary business avenues.
Financial Implications of Strategic Changes
As a result of these exits, Sandvik anticipates accounting for charges nearing SEK 390 million in its third quarter financial reports, categorized as items affecting comparability. Out of this amount, approximately SEK 250 million is linked to a capital loss from the DWFritz divestment, which includes transaction costs. Additionally, the decision to exit BEAMIT will lead to a write-down of around SEK 140 million.
Looking Ahead: Focus on Core Competencies
Going forward, Sandvik is poised to redirect its resources towards software solutions, additive manufacturing innovation, and the development of metal powders. This emphasis will not only reinforce Sandvik’s market position but also align with global trends in sustainable manufacturing practices.
Contact Information
For those seeking further information, representatives are available for inquiries. Louise Tjeder serves as the VP of Investor Relations and can be reached at +46 (0) 70782 6374. Johannes Hellström, Press and Media Relations Manager, is also available at +46 (0) 70721 1008.
Frequently Asked Questions
What prompted Sandvik to exit non-core businesses?
Sandvik aims to enhance its focus on software solutions and metal powders, resulting in strategic exits from certain business segments.
Who acquired DWFritz Automation?
The engineer-to-order business of DWFritz Automation was sold to Balmoral Funds, a private equity firm from the U.S.
What is the significance of the ZeroTouch® platform?
ZeroTouch® is essential for inspection gauging in manufacturing, aiding in near-line and in-line metrology, and will remain with Sandvik even after the DWFritz sale.
How do these changes affect Sandvik's financials?
Sandvik expects to incur charges totaling about SEK 390 million, primarily due to capital losses from divestments.
Who can I contact for more information about Sandvik?
For inquiries, you can contact Louise Tjeder at +46 (0) 70782 6374 or Johannes Hellström at +46 (0) 70721 1008.
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