Sandvik

Annual Report
1999

Sandvik Annual Report 1999

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 Sandvik
during the 1900s
Sandvik was founded in 1862 by Göran Fredrik Göransson, who was the first in the world to succeed in
producing steel on an industrial scale using the Bessemer method. Operations were focused at an early
stage on high quality, added value, investment in R&D, close contact with customers and export. This
was a successful strategy that has largely been the same throughout the years. The following is a selection
of the most significant Sandvik events during the past century.

1900 Founder Göran Fredrik Göransson died.

1901 Sandvik introduced on the Stockholm Stock Exchange as one of the first companies listed.
1902 Sandvik started to deliver steel conveyor belts.
1907 Production of hollow drill steel for rock-drilling applications was started.
1914 The first subsidiary established, in the UK.
1919 First subsidiary in the US established.
1921 First electric-arc furnace for production of steel. Production of stainless steel started.
1924 First seamless, stainless steel tubes sold.
1934 First pilger mill taken into operation in Sandviken.
1942 Coromant trademark established. Cemented-carbide tipped rock drills developed.
1943 First cemented-carbide tools for metalworking produced.
1947 Production of Bessemer steel discontinued in Sandviken.
1948 Plant opened in South Africa for the production of integral drill steels.
1951 Production of cemented-carbide products was started in Gimo, Sweden. Plant and offices inaugurated in the US.
1953 Cemented-carbide plant started at Västberga, Stockholm, Sweden.
1957 Insert holder T-max premiered in US.
1958 Indexable technique with exchangeable cemented-carbide inserts introduced in Europe.
1960 Comprehensive investment activity started in Sandviken.
1961 Plants opened in India and Mexico.
Cover
Sandvik – A knowledge-based company 1962 Plant inaugurated in Brazil and 100-year anniversary celebrated in Sandviken.
1968 Group’s annual sales passed SEK 1 billion and regional warehouse established in Singapore.
Sandvik’s advanced products are the result of 1969 First in the world with coated cemented-carbide inserts.
extensive expertise in many areas. More than
1,200 highly qualified specialists of various 1971 Plants opened in US and Canada.
nationalities are engaged in research, development 1972 The company name changed to Sandvik AB from Sandvikens Jernverks AB.
and quality assurance operations. The cover
illustration shows three representatives of the
1973 Sandvik acquired 65% of all shares in Seco Tools AB.
knowledge-based company Sandvik, from left: 1976 Production of cemented carbide started in Japan.
1980 First Rotoform equipment developed.
Rainer Beccu, 39, Ph.D in solid mechanics. Head
of research and development at Driltech Mission 1981 Open-hearth production discontinued in Sandviken, thereby also all ore-based steel production.
in the US, a business sector of Sandvik Mining and 1983 Percy Barnevik appointed new Chairman of the Board.
Construction. Employee of Sandvik since 1989.
1984 Incorporation and decentralized organization with independent business areas.
Anna-Lena Nyström, 36, M.Sc. in Physics and 1985 Representative office opened in Beijing, China.
Chemistry. Senior Project leader for product
development of stainless steels, tube products, at 1990 Acquisition of 25% of Tamrock, the Finnish producer of rock-drilling equipment.
Sandvik Steels’ R&D Center in Sandviken, Sweden. 1992 World’s largest producer of high-speed steel tools, CTT Tools, acquired.
Employee of Sandvik since 1989.
1994 Largest cemented-carbide plant in Russia acquired. Plant for cemented-carbide tools opened in China.
Daniel Duan, 36, head of technical support and 1997 Kanthal, all of Tamrock and the American high-speed steel producer Precision Twist Drill acquired.
training at Sandvik Coromant in China. Employee 1999 Sale of Saws and Tools business area and concentration to three core areas.
of Sandvik since 1989.
Sandvik
Annual Report 1999
Sandvik Aktiebolag; (publ) Corporate Identity Number 556000-3468

Contents

Highlights of 1999 . . . . . . . . . . . . . . 2 Report of the Directors . . . . . . . . . . 36

This is Sandvik . . . . . . . . . . . . . . . . . 4 Consolidated income statement . . . . 41
The Sandvik share . . . . . . . . . . . . . . . 8 Consolidated balance sheet . . . . . . . 42
Letter from the President and CEO . . 10 Consolidated cash-flow statement . . 44
Parent Company financial statements 45
Business Areas
Accounting principles . . . . . . . . . . . 49
Sandvik Tooling . . . . . . . . . . . . . . . 12
US GAAP information . . . . . . . . . . . 51
Sandvik Coromant . . . . . . . . . . . 13
Notes to the accounts . . . . . . . . . . . 52
Sandvik CTT . . . . . . . . . . . . . . . 16
Appropriation of profits. . . . . . . . . . 65
Sandvik Hard Materials . . . . . . . 18
Audit report . . . . . . . . . . . . . . . . . . 65

Sandvik Mining and Construction. . . 20 Directors, Auditors . . . . . . . . . . . . . 66

Group executive management,
Sandvik Specialty Steels . . . . . . . . . . 26 group staffs and service companies . . 68
Sandvik Steel . . . . . . . . . . . . . . . 27 Business units . . . . . . . . . . . . . . . . . 69
Kanthal . . . . . . . . . . . . . . . . . . . 30 Key figures . . . . . . . . . . . . . . . . . . . 74
Sandvik Process Systems . . . . . . . 32 Annual General Meeting . . . . . . . . . 76
Payment of dividend . . . . . . . . . . . . 76
Sandvik and the environment . . . . . . 34 Sandvik during the 1900s. . . . . . . . . 77

● 1
Highlights
of 1999
● Successive improvement in order intake and profit.
● Profit for the year before tax totaled SEK 5,465 M (3,935).
● Continued improvement in business conditions.
● Divestment of the Sandvik Saws and Tools business area; One of the
major events
capital gain of SEK 1,625 M. of 1999 was the
sale of the Saws and
● New Group structure – focusing on core operations. Tools business area.

● Proposal regarding single share class.

1999 1998
Order intake, SEK M 39 650 41 700
Invoiced sales, SEK M 39 300 42 400
of which, outside Sweden, % 94 94
Profit after financial income and
expenses, SEK M 5 465 3 935
Return on net assets, % 15.1 16.3
Return on shareholders’ equity, % 12.4 11.9
Earnings per share, SEK 14.00 8.10
Dividend per share, SEK 8.00 * 7.00
Number of employees, 31 Dec. 33 870 37 520
* Proposed

In Sandvik Mining and

Construction, produc-
tion of roller bits in
Concentration in three core Köping, Sweden, was
areas: Sandvik Tooling, expanded.
Sandvik Mining and
Construction, and
Sandvik Specialty
Steels.

An increasingly large propor-

tion of Sandvik’s sales are
transacted on the Internet.

2● HIGHLIGHTS OF 1999
 During the year, Sandvik Steel was
awarded major contracts for advanced
steam-generator tubes for
nuclear-power plants in the US.

The expansive electronics

industry is highly significant
for several Sandvik busi-
ness operations.

Sales of Sandvik
Coromant’s new
generation of
cemented-carbide
inserts for steel
turning were very
strong.

A full 70% of the

employees in
Sweden subscribed
to the convertibles
offering.

The Sandvik Steel

operations in Sandviken
were environmentally
certified in accordance
with ISO 14001.
HIGHLIGHTS OF 1999 ● 3
This is
Sandvik
Sandvik is a high-technology engi- amount annually to more than 4% for research and development
neering Group with advanced prod- of sales and totaled SEK 1.6 billion (R&D), production and sales of
ucts and a world-leading position in 1999. their respective products. Seco
within selected niches – tools for The market consists of industri- Tools, an independent, publicly list-
metalworking, machinery and tools al customers that use Sandvik prod- ed company, is also included in the
for rock-excavation, products in ucts as integral components in their Group.
stainless steel, special alloys and production processes. Industrial
high-temperature materials. World- consumables account for about two- Business concept
wide business activities are con- thirds of the Group’s portfolio, with Sandvik shall contribute actively to
ducted through 300 companies and capital goods accounting for one- improving the productivity and prof-
representation in 130 countries. third. itability of its customers. Products
The Group has 34,000 employees Customers operate in many and services offered by the Group
and annual sales of approximately different industrial sectors, including shall provide customers with maxi-
SEK 40 billion. automotive and aerospace industries, mum value in terms of performance,
Two factors that have con- mining and civil engineering, chemi- quality, speed, safety, flexibility and
tributed greatly to Sandvik’s business cals, oil and gas, power, pulp and total economy. Sandvik shall be the
development are the determined mar- paper, household appliances, electron- obvious first choice for its cus-
keting efforts in close cooperation ics, medical technology, pharmaceu- tomers.
with customers throughout the world ticals and other engineering industries. Operations shall be concentrat-
and continuous product renewal, Sandvik’s objective is to increase its ed primarily in niche sectors where
with particularly strong focus on focus on operations in areas that Sandvik is – or has the potential to
advanced technology. Group invest- offer greater growth potential than become – a world leader.
ments in research and development overall industrial growth.
(R&D) and quality assurance of new The Sandvik Group consists of three
products and production technology separate business areas responsible

Organization SANDVIK AB

BOARD OF DIRECTORS

GROUP EXECUTIVE MANAGEMENT

GROUP STAFFS

BUSINESS AREAS

SANDVIK TOOLING SANDVIK MINING AND CONSTRUCTION SANDVIK SPECIALTY STEELS

SANDVIK COROMANT SANDVIK TAMROCK SANDVIK STEEL

SANDVIK CTT VA-EIMCO KANTHAL
SANDVIK HARD MATERIALS DRILTECH MISSION SANDVIK PROCESS SYSTEMS
ROXON

SEPARATE BUSINESS UNITS REGIONAL COMPANIES SERVICE COMPANIES

OTHER GROUP COMPANIES SANDVIK INTERNATIONAL SANDVIK INFORMATION SYSTEMS

ASSOCIATED COMPANIES SANDVIK SOUTHEAST ASIA SANDVIK SERVICE

4● THIS IS SANDVIK
Strategy The Sandvik Group’s suc-
cessful strategy is based on
Sandvik shall conduct sophisticated
the interaction of a num-
and comprehensive research and ber of value drivers.
development to improve productivity Profitable
Financial
and quality, create time savings and growth
strength
reduce costs for customers and the
Group’s own operations in the
Strong Own marketing
following four areas: corporate channels
culture and distribution
• Materials and surface-coating
technology
• Product and application solutions
• Production and process technology Direct contact
In-house
• Information, communications and manufacturing with customers
logistics systems Sales on customer
value

To ensure the best product supply

and support for Sandvik customers, Strong High value-
marketing operations shall be con- commitment added products
ducted primarily by Sandvik Group to R&D
employees, but also in cooperation
with a number of selected industrial
distributors. Direct contact with the to develop in their personal and Future growth
market is also essential to adapt professional pursuits. The Group One of Sandvik’s most important
R&D programs to customer needs. shall also promote equality, regard- objectives – and a fundamental prin-
Sandvik products shall be man- less of gender, race, color, religion, ciple for the achievement of financial
ufactured mainly in the Group’s nationality or ethnic origin. goals – is continued business growth.
own production plants. The coordi- In dealing with customers, sup- Concurrently, Group operations
nation of product development with pliers, employees and other interest- should be developed and adapted
production technology developed by ed parties, Sandvik shall act in a continuously to changes in the busi-
Sandvik ensures maximum quality, highly ethical manner, and as a good ness environment.
availability and cost efficiency and citizen in all countries where the The Group’s strong profitability
also contributes to Sandvik’s deter- Group operates. provides scope for increased R&D
mined efforts to create a favorable programs and investments in produc-
environment. Financial goals tion, marketing and supplementary
Standardized production tech- The goal since 1994 is an average company acquisitions as a means of
nologies and, in some cases, own volume growth, including acquisi- achieving a higher rate of growth.
production of strategically important tions, of 6%, with an average return Intensified efforts will be made
manufacturing equipment, guarantee on net assets for the Group of 20%. in geographical market regions
uniform high quality wherever prod- Shareholders shall receive a divi- where the Group has small market
ucts are manufactured in the world. dend of at least 50% of earnings per shares and where the opportunities
Sandvik shall capitalize on share and the dividend plus value for growth appear particularly
inherent synergy effects in R&D, growth of the Sandvik share shall attractive.
production, marketing and adminis- exceed the average for the industry, Growth will be achieved mainly
tration in the Group’s various busi- all measured over a business cycle. through a combination of internally
ness areas and markets. The Group shall have the finan- generated expansion, acquisitions
Sandvik shall strive to create cial strength that ensures commercial and the establishment of joint ven-
working conditions that stimulate freedom of action while maintaining tures in existing areas of operation ●
employees to perform effectively, a well-balanced capital structure
assume responsibility and continue over the long term.

THIS IS SANDVIK ● 5
Business Areas Focus Strategy

Sandvik Tooling
● Cemented-carbide tools and ● Close cooperation with
tooling systems for metalworking customers in developing their
applications production processes
● Drills, end mills and taps in high- ● Extensive investment in research
speed steel and solid carbide for and development of new products
metalworking applications and processes
● Blanks, components and tools made ● Focus on increasing customers’
of cemented carbide and other productivity and profitability
hard materials ● Most cost-efficient within develop-
● Technical service, advice and ment, production and marketing
training within the product areas ● Advanced training of customers and
own staff throughout the world

Sandvik Mining and Construction

● Machinery, tools and services for ● Offer innovative technology,
drilling, loading, transporting, products and services with high
breaking of rock and ore, and customer value
demolition in the mining and con- ● Leading supplier within selected
struction industries product and market niches
● Machinery, tools and services ● Highly advanced differentiation of
for mechanical mining of coal and products, marketing and distribu-
other soft minerals tion within business sectors
● Drill rigs, tools and services for ● Continued development of globally
down-the-hole and rotary drilling recognized trademarks
for blast-hole drilling, well drilling
and ground reinforcement
● Conveyor components, systems and
services for bulk materials handling
within mines, ports, etc.

Sandvik Specialty Steels

● Tube, strip, wire and bar made of ● Global market leader within
stainless steels and of alloys based prioritized niches
on titanium, nickel and zirconium ● Produce high value-added products
● Metallic and ceramic resistance based on own technology
materials ● Develop products and processes
● Steel belts and steel-belt in close cooperation with key
based processing plants and customers
sorting systems ● Contribute to customers’ increased
● Technical expertise and service competitiveness and profitability
for customers with high demands ● Develop new fields of application
on cost-efficiency, security and for existing products
performance
● Distribute own products as well
as complementary products in a
fast and cost-efficient manner

6● THIS IS SANDVIK
 Value drivers Customers

● World leader within specific product areas

● Leading position in materials technology, Other Aerospace industry
product and process development
● Complete in-house, cemented-carbide Automotive
production – from raw materials industry
to finished product
● Worldwide production and
distribution systems
● Efficient market coverage supported Electronics
by modern information technology industry Engineering
and advanced logistics industry

● Market’s most extensive product program

for drilling, mining, demolition, loading Other
and transport of rocks and minerals
● Worldwide marketing organization Coal mining
● A unique combination of high materials- Civil engineering
technology expertise and advanced and construction
applications know-how within
drill-and- blast, as well as mechanical
mining methods
● International leader within the
development of products and Mining of
production methods for the mining minerals
and construction industry, especially and metals
for underground mines

● Internationally well-established
trademarks Civil engineering and construction
● Fully-integrated manufacturing process
that ensures highest quality Other
Processing
● Strategically localized manufacturing industry
resources Household
appliances
● Extensive knowledge about materials, industry
processes and applications
Automotive
● Worldwide marketing organization industry
supported by advanced information
technology and efficient logistics systems Power industry
Electronics industry Engineering industry

THIS IS SANDVIK ● 7
The Sandvik
share
The price of the Sandvik share rose receive a dividend of at least 50% Convertibles and options
90% in 1999, compared with an aver- of earnings per share – all measured At the Annual General Meeting held
age increase of 65% for the engineer- over a business cycle. on 29 April, 1999, it was decided to
ing industry (excluding telecom shares), With the proposed dividend in carry out a part-ownership program
and 66% for the General Index. 1999 (SEK 8.00 per share), the directed to employees of the Sandvik
During the most recent ten-year period, increase in dividends has averaged Group, with the exception of those
the total return, including dividend, 16% annually since 1994. The divi- within the Seco Tools Group. The
rose an average of 20% annually. dend comprises 57% of earnings per offer was partially directed towards
The General Index total return rose share in 1999. The average payout Sandvik employees in Sweden, with
19%, including dividends, during the ratio during the past five years the right to subscribe for convertible
same period. The total number of amounts to 63%. debentures, and partially to employ-
Sandvik shares is 258,696,000, of ees of Sandvik outside Sweden, with
which 189,450,259 are A shares and Shareholders the right to subscribe for warrants.
69,245,741 are B shares. The number of shareholders is about The direct issue of convertible
The beta value for the Sandvik 45,000.The ten largest shareholders debentures to personnel in Sweden
share measured against the OM in Sandvik account for 55% of the attracted a great deal of attention
Stockholm Exchange rolling 48- number of shares and 60% of voting and was oversubscribed. Approxi-
month index was 0.84 (0.95). The rights. In total, publicly listed corpo- mately 70% of the employees
beta value is a risk measurement rations, insurance companies, funds applied for allotment. The total
showing the volatility of stock prices and foundations hold 91% (74) of convertible amount is SEK 955 M,
compared with the entire market all Sandvik shares. Shares owned by corresponding to 4,360,150 shares
over a given period. The value 0.84 foreign investors amount to 25% if fully converted. Some 560,900
means that the Sandvik share price (18) of all shares and 15% of the warrants were issued to employees
is 16% less sensitive than the market voting rights. outside Sweden, which, if exercised,
as a whole over the 48 months. During recent years, Sandvik will amount to a corresponding
Sandvik shares ranked fourteenth has made determined efforts to number of shares. Full conversion
among most actively traded shares increase the flow of information to and exercise will result in 4,921,050
on the OM Stockholm Exchange in financial market interests and estab- shares, which gives a dilution of
1999. A total of 199 million Sandvik lished a special function for investor 1.9%. The term of the convertible
shares were traded, of which 85 relations. debenture loan is from 2 July, 1999
million were A shares. The turnover through 30 June, 2004. The conver-
was 75% (74), compared with 94% Proposal for a single share class sion price is SEK 219. Conversion
(76) for the entire OM Stockholm Sandvik’s Board of Directors has to the new B shares in Sandvik will
Exchange. assessed that a transition from the occur during the period 2 July, 2001
Sandvik’s market capitalization current A class and B class to a – 31 May, 2004.
at year-end 1999 was SEK 69 billion single class of shares would benefit
(36), and Sandvik ranked as the the Sandvik share’s liquidity and Options
eleventh largest company on the valuation. Therefore, the Board Standardized options in Sandvik B
OM Stockholm Exchange. will propose to the Annual General shares were introduced for trading
Meeting that a decision be made in May 1993. Warburg Dillon Read
Dividend policy concerning changing the Articles has issued covered warrants on
The principal financial goal of the of Association so that the company Sandvik shares ●
Sandvik Group is to create attractive will only have one class of share.
capital return and value growth for
those who invest in the Sandvik share. American Depositary Receipts
DISTRIBUTION OF SHARES
The goal is that the dividend Sandvik B shares can also be traded AND VOTING RIGHTS
and value growth shall exceed the in the US in the form of ADRs
Share class No. of % of % of
engineering industry’s average and (American Depositary Receipts) on shares shares votes
be clearly higher than the yield on the OTC (over-the-counter) market. Class A 189 450 259 73 96
risk-free, long-term financial invest- There were 426,994 outstanding Class B 69 245 741 27 4
ments and that shareholders shall ADRs at the end of 1999. Total 258 696 000 100 100

8● THE SANDVIK SHARE

 SEK PRICE TRENDS ON THE OM STOCKHOLM EXCHANGE, SANDVIK B SHARES Number AVERAGE DAILY NUMBER OF SHARES TRADED
700 ON THE OM STOCKHOLM EXCHANGE
Source: DATASTREAM
(THOUSANDS)
600
447 451
500
296 184
251
400

136 166 295 338 337

95 96 97 98 99
300

Sandvik A Sandvik B

200

30 000

EARNINGS AND DIVIDEND

20 000 PER SHARE, SEK

13.40 14.00
100 10 000
11.20
10.15
8.10
80 0 8.00*
1994 1995 1996 1997 1998 1999 6.00 6.50 7.00 7.00

SANDVIK B AFGX GENERAL INDEX AFGX ENGINEERING INDEX, EXCL. TELECOM

95 96 97 98 99
TURNOVER: A AND B SHARES (THOUSANDS)
Dividend *Proposed
Earnings
PER-SHARE DATA, SEK

1999 1998 1997 1996 1995

Earnings 1)
14.00 8.10 10.15 11.20 13.40
Shareholders’ equity 77.70 72.00 67.30 72.00 66.40
Dividend (1999: proposed) 8.00 7.00 7.00 6.50 6.00
Direct return 2), % 3.0 5.0 3.1 3.5 5.2
Payout percentage 3), % 57 86 69 58 45
Quoted prices, A, highest 281 252 272 186 148
lowest 138 134 182 111 108
year-end 267 141 226 184 116
Quoted prices, B, highest 285 251 274 187 148 RESEARCH
lowest 137 134 182 111 109
year-end 271 140 227 185 116 The following companies published
P/E ratio 4) 19.1 17.4 22.3 16.4 8.7 research on Sandvik during 1999:
Quoted price, % of shareholders’ equity 5) 344 196 336 262 175
ABG Securities
Notes:
1) Net profit for the year per share. Alfred Berg Research
2) Dividend divided by quoted price for A shares at year-end. Aros Securities
3) Dividend divided by earnings per share.
CAI Cheuvreux
4) Market price of A shares at year-end in relation to earnings per share.
5) Market price of A shares at year-end, as a percentage of reported shareholders’ equity per share. Carnegie
Collins Stewart
Additional definitions are presented on page 50. Credit Lyonnais Securities
Deutsche Bank Research
LARGEST SHAREHOLDERS IN SANDVIK AB Dresdner Kleinwort Benson Securities
Votes (shares) in %, December 1999 Enskilda Securities
Fischer Partners Fondkommission
Goldman Sachs International
Robur Investment Funds, 14.9 (15.2)
Hagströmer & Qviberg
AB Industrivärden, 11.7 (11.7) Handelsbanken Markets
HSBC Securities
Nat. Swedish Pension Insurance Fund, 4th Fund Board, 9.7 (10.0)
J. P. Morgan Securities Ltd.
Handelsbanken’s Pension Foundation, 5.5 (5.5) Lehman Brothers
SPP Insurance Company, 3.9 (4.5)
MeritaNordbanken
Merrill Lynch
Chase Manhattan Bank, 3.1 (0.5) Morgan Stanley Dean Witter
Handelsbanken’s Investment Funds, 2.8 (2.2) Orkla Securities
Paribas
SEB Investment Funds, including Trygg Hansa, 2.7 (3.0)
Swedbank Fondkommission
AMF Pension, 2.7 (2.4) Warburg Dillon Read
Öhman Equities
Nordbanken Investment Funds, 2.6 (2.0)
L E T T E R F R O M T H E P R E S I D E N T A N D C E O

Sharper focus for

continuing success
The past year was another eventful year for the Sandvik which the technology content is high
and we are world-leading in selected
Group. One of the most important events was the sale of niches. At the same time, the
the Saws and Tools business area, as a result of which we Tooling business area has changed.
In addition to Sandvik Coro-
consolidated operations into areas in which we hold a mant and Sandvik CTT, the Tooling
world-leading position. This sharpened focus is expected to business area now includes Sandvik
Hard Materials – that is, three suc-
result in enhanced efficiency, strengthened competitiveness cessful companies, all world-leading
and improved profitability. The business climate during the in their respective product areas.
Opportunities have been created
year was subdued, with weak demand for investment-related within the business area to further
products and low prices for raw materials. The situation exploit the companies’ shared
strengths and synergies to enhance
improved gradually during the second half of the year and efficiency and growth.
the Group’s earnings, including the capital gain from the Specialty Steels comprises
Sandvik Steel, Kanthal and Sandvik
sale of Saws and Tools, were the second highest ever. Process Systems. Sandvik Process
Systems intensified its focus on steel
The business decline that began dur- industry. Due primarily to an exten- belts and steel-belt based processes.
ing the second half of 1998 contin- sive structural program launched in A planned divestment of the Sorting
ued during the first quarters of 1998, the business area succeeded Systems operations could not be
1999. The situation improved gradu- in improving its results. Structural concluded, since the purchaser
ally during the second half of the measures implemented are expected defaulted on the transaction despite
year, with industrial production in to yield further rationalization and a binding contract. The Sorting
the OECD countries rising in the last coordination benefits during the Systems operations were subsequent-
quarter by 2.5% on an annual basis. next few years. ly completely restructured in the US
The cyclical upturn applied par- Within the Sandvik Specialty and now focus on service and sales
ticularly to Europe. In the US, favor- Steels business area, earnings for of components and technology.
able growth continued throughout Sandvik Steel declined as a result of During 1999, the number of
the year, despite varying conditions lower demand and falling prices for Group employees in comparable
in sectors of key significance for investment-related products. Demand units decreased by more than 2,000,
Sandvik. In Asia, particularly Korea for consumption-based products following implementation of struc-
and Southeast Asia, demand improved was favorable. tural and rationalization measures.
markedly in several customer seg-
ments. Demand also increased in A niche company A knowledge-based company
Japan. During the Asian crisis, the During the year, the Saws and Tools Sandvik is often described as a high-
strategy of maintaining local market- business area was sold to the US technology engineering company
ing organizations gave us a clear company Snap-On Incorporated. offering sophisticated products.
competitive advantage. Despite a broad product range, Sandvik is also a modern knowl-
Despite the more restrictive Sandvik Saws and Tools has been a edge-based company in an ongoing
business climate, the Sandvik Tooling small company internationally and process of renewal. Behind our
business area, Sandvik Coromant in profitability has not measured up products lies advanced expertise in
particular, were once again able to to Group requirements. Snap-On is materials, processes and information
deliver highly favorable results due considerably larger in this field and technology. Our leading position in
to strengthened market positions and offers excellent possibilities for the materials technology is based on
cost savings. future development of Saws and Tools. access to both world-class laborato-
Sandvik Mining and Construc- The sale consolidated Sandvik’s ries and the internationally foremost
tion was affected by the continuing ongoing operations into three core researchers in the area. Through
low mineral prices and consequent areas – Tooling, Mining and Con- close long-term cooperation with
weak demand from the mining struction, and Specialty Steels – in larger customers, we have also accu-

10 ● LETTER FROM THE PRESIDENT AND CEO

 business is expected to grow sub- an aggressive program of investment
stantially in the long term. A more in plants and machinery, a substan-
developed system was introduced tial increase in R&D, 25 acquisitions
in the US in the beginning of 2000, – three of which were very large – as
and other countries will soon be well as share redemption and dividends
able to offer the same possibilities to shareholders. The sale of Sandvik
in all areas of Group operations, in Saws and Tools strengthened the
pace with customer preferences and Group’s financial position further,
requirements. and equity/assets amounted to 52%
Environmental considerations at year-end.
are an integral aspect of our opera- An important aspect of the goals
tions. During the year, the entire established in 1994 was the new div-
Sandvik Steel operations in Sandviken idend policy, whereby the dividend
were certified in accordance with would amount to not less than 50%
the ISO 14001 international envi- of average net earnings over a full
ronmental-management system. business cycle. The actual proportion
This quality certification represents has amounted to 63% during the
an extensive investment in develop- past five years.
ing environmental expertise. When the possibility of repur-
chasing the company’s own shares is
Convertibles and employee introduced, the Board will discuss a
share options new dividend policy involving a com-
mulated extensive knowledge of In order to demonstrate more clearly bination of recurring share repur-
applications. During the year, the its appreciation of employees’ chasing and dividend distribution.
business areas intensified their focus performance, to further stimulate To promote the liquidity and the
on service and the after-market. employees’ involvement in the Group valuation of the Sandvik share, the
SEK 1.6 billion, or 4%, of net and to further team spirit, Sandvik’s board will propose that the Annual
sales in 1999 was invested in research, Annual General Meeting in 1999 General Meeting adopt a transition
development and quality assurance. voted to offer all employees in to one share class only instead of the
The primary aim is to develop prod- Sweden an ownership-sharing pro- current division into A and B shares.
ucts and processes of particularly gram based on convertible deben-
promising growth potential. Powder tures. Employees in certain other A future-oriented company
metallurgy, special alloys, biocom- countries were offered share options As indicated by the historical sum-
patible materials and new rock- on financially equivalent terms. mary in this annual report, Sandvik
excavation techniques are examples The convertibles offer was widely has undergone an enormous trans-
of future growth areas. appreciated, and it was oversub- formation during the twentieth cen-
Increasingly extensive IT support scribed. Approximately 70% of the tury. The company’s business philo-
in all aspects of operations – from employees in Sweden applied to sophy has remained the same over
product development, production participate in the offer. the years, however, and it is also a
technology, process control and Sandvik’s Board of Directors winning concept for the twenty-first
logistics to sales, service and other decided to implement a share-option century. As a result of this, combined
customer contacts – is characteristic scheme as of 2000 for approximate- with the measures implemented,
of Sandvik today. We have more ly 300 key employees worldwide. we are well positioned to expand
than 1,000 specialists worldwide The share-option scheme replaces and further improve profitability ●
working in an innovative IT envi- the long-term incentive plan that
ronment and a comprehensive global was concluded in 1999.
IT network. Information technology
is a strategic requirement to achieve Continued financial strength
our goals in growth and profitability. Since our financial goals were estab-
Internet commerce is a rapidly lished in 1994, Group sales have
growing interactive sales channel, grown by an average of 10% annu- Sandviken, March 2000
through which information is com- ally. This is clearly in excess of the
municated between the company target 6% over a full business cycle.
and the customer in the form of In 1999, return on net assets remained
graphics, product data, etc. Sandvik at a favorable level (15% excluding
Coromant introduced Internet com- capital gain), amounting to an aver- Clas Åke Hedström
merce in Sweden in the summer of age of 19% over the past five years. President and Chief Executive Officer
1999. After only half a year, 17% Cash flow from operations has
of the company’s orders were being been strong throughout 1994 -1999.
received via the Internet, and this A large portion has been applied to

LETTER FROM THE PRESIDENT AND CEO ● 11

 B U S I N E S S A R E A
INVOICED SALES PER MARKET AREA

Asia, Australia
Africa, Middle East
South America
Sweden
Sandvik
NAFTA EU excl. Sweden
Tooling
Rest of Europe

The business area comprises tools and tooling systems

for metalworking applications as well as blanks and
components. Sandvik Coromant specializes in tools
INVOICED SALES, SEK M made of cemented carbide and other hard materials.
13 576 13 177
Sandvik CTT specializes in rotating tools in high-
12 164
10 800 10 420 speed steel and cemented carbide. Sandvik Hard
Materials, a part of Sandvik Tooling as of 1999,
manufactures blanks, components and tools and
95 96 97 98 99 operates within the entire area of hard materials,
from cemented carbide to diamond.
The total world market potential for the business
area is approximately SEK 80 billion. Sales in the
OPERATING PROFIT, SEK M
AS A PERCENTAGE OF INVOICED SALES
business area amounted to SEK 13,177 M and
2 724
operating profit was SEK 2,597 M. Return on net
2 595 2 597
2 164 2 204 assets exceeded the Group’s minimum requirement
24
21 18 20
20 of 20% by a broad margin. Including acquisitions,
the average annual increase in the volume of business
95 96 97 98 99 over the past six years has amounted to 9%.

INVESTMENTS IN FIXED ASSETS, SEK M

1 054 1 088
849 887
729

95 96 97 98 99

NUMBER OF EMPLOYEES, 31 DECEMBER

13 939 13 618
12 457 12 285 12 671

95 96 97 98 99
Sandvik
Coromant
Sandvik Coromant is the world leader in the develop- climate in the growth markets of
Eastern Europe was favorable,
ment, production and marketing of tools in cemented except in Russia.
carbide, ceramics, cubic boron nitride and diamond for A clear improvement could be
observed in Asia, particularly in
metalworking applications. The company’s modular Korea and Southeast Asia. The
tool system to enhance customers’ production-process strategy of maintaining the local sales
organizations proved correct. Sandvik
efficiency is becoming increasingly important. Coromant is now in a position to
quickly take advantage of the improved
Sales invoiced by Sandvik Coromant the European and South American business opportunities. The optimistic
declined by 2% in 1999 to SEK markets. In the North American assessment of the sales potential in
8,358 M as a result of a weak market, Kennametal is Sandvik the region remains unchanged.
business climate at the beginning Coromant’s largest competitor. In
of the year. Asia, several Japanese companies are Investments
Customers include companies large competitors. Sandvik During the year, a decision was
that use metalworking to upgrade Coromant is the most well-estab- taken regarding the expansion and
products made of various materials lished non-Japanese company in the modernization of the
– cast iron, steel, stainless steel, Asian markets, with production of production of
aluminum and composite materials cemented-carbide tools in India as cemented-carbide
– into finished components. Leading well as Japan and China. powder within
companies in the aerospace, steel the Group.
and other engineering industries, as Market and business conditions Most of the
well as most of the large manufac- In the NAFTA region – the United investment,
turers of cars, States, Canada and Mexico – totaling
trucks, buses, approxi-
construction mately
equipment, SEK 200 M,
motorcycles will concern
and forming Sandvik Coro-
tools use Sandvik mant’s plants in
Coromant’s products Gimo, Sweden. The
to improve their productivity current powder production
and profitability. in Stockholm will gradually
Globalization of industries be transferred to Gimo and
is causing structural shifts in the to Coventry, UK.
tooling area as well. About eight In 1999, Sandvik Coromant
Sandvik Coromant is the world’s leading
large manufacturers control approxi- manufacturer of cemented-carbide tools inaugurated a production plant in
mately two thirds of the world for turning, drilling and milling. Stafford outside Houston, Texas, in
market for cemented-carbide tools. the US. The new plant doubles
A large number of local or highly the weakening that began at the end capacity in manufacturing of tools in
specialized companies account for of 1998 was replaced by a modest cemented carbide, ceramics and other
remaining market shares. Sandvik upswing, which varied, however, in advanced materials, product areas
Coromant is the leader in different industries. considered to have great potential.
Sales in Europe declined slightly The plant site also includes an
Anders Thelin, in most markets. In the UK, however, advanced Training Center, the second
President of Sandvik sales declined sharply due to the in the US, for training customers and
Coromant effect of the strong British pound on company personnel.
(from 24 March 2000).
domestic industry. In Germany, During the year, several produc-
Born 1950,
M.Sc. Eng., demand increased during the lat- tion units were certified in accordance
employed ter part of the year following a with the ISO 9001 quality standard
since 1976. weak beginning. The business – for example, Sandvik Coromant’s

SANDVIK TOOLING ● 13
plant in China, Sandvik MKTC
in Moscow, Russia and Sandvik
Baildonit in Poland. All Sandvik
Coromant production plants world-
wide are now quality certified.
Sandvik Baildonit was environmen-
tally certified in accordance with
ISO 14001 at the same time.

Research and development

Development of new products,
services and production methods is
critical to the company’s ongoing
competitiveness. Of net sales, 6% Sandvik Coromant operates some 20 Training Centers for training of employees and customers.
– that is slightly more than SEK 500
M in 1999 – is invested annually in on their need for newer, lighter and Gimo. The methods and systems
research and development. This has stronger component materials, faster developed in Gimo are applied in
resulted in a constant flow of new machine tools, and more automated other units of Sandvik Coromant.
products and systems. More than processes. Research is conducted in Sandvik Coromant’s production
1,000 new products or product own laboratories, at customer facilities is carried out at some 40 plants
variants are introduced each year. or at universities and colleges. worldwide. All manufacturing is
During the past few years, approxi- Customers are increasingly inter- based on identical raw materials,
mately 50% of sales have come from ested in solutions that eliminate the equipment and processes, as well as
products younger than 5 years. The use of cutting fluids, which is expens- the application of common quality
company’s ongoing extensive focus ive and causes environmental impact. standards.
on research and development has Over the past few years, Sandvik Every larger market region con-
made Sandvik Coromant the techno- Coromant has introduced several tains one or more production plants
logical leader in its field. products that permit dry machining that can quickly satisfy local cus-
Development work within Sandvik in both turning and milling opera- tomers’ requirements of special tools.
Coromant focuses primarily on three tions, and which have brought major These units are currently interconnect-
main areas: new cutting materials, improvements to customers, for ed in a global network so that special-
coatings and tooling systems to example, in the automotive industry. ist expertise established in the markets
increase customer productivity. The Technology for increasingly can be available to all customers.
work is carried out in close coopera- automated production is continually
tion with customers and it is based being developed at the main plant in New products
A large number of product innova-
tions were introduced in 1999. Several
of them represent technological
breakthroughs, consolidating Sandvik
Coromant’s leading position as a
supplier of highly productive tools.
The innovations include a new
tool concept for parting and grooving,
CoroCut, which can create major
efficiency gains. Tests have shown a
doubling in productivity through use
of the new CoroCut tools.
Turning of steel is one of the
most common metalworking opera-
tions. In this area, Sandvik has devel-
oped a new type of cemented carbide
that delivers up to 20% higher cut-
ting speed, resulting in considerable
productivity gains. Particularly high
performance can be achieved with
dry machining due to the properties

A new tool concept for parting and

grooving, CoroCut, was introduced
during the year.

14 ● SANDVIK TOOLING
of the cutting edge and the excellent Sandvik Coromant
capacity to resist plastic deformation. developed a new cutting
material in the form
A completely new cutting materi- of nickel-free cermet.
al in the form of a nickel-free cermet
for steel machining was launched
during the year. The new material Daishowa Seiki, a lead-
has excellent toughness and com- ing Japanese manufac-
bines the properties of traditional turer of precision tools
cermet and cemented carbide. It is for such machines, was
particularly suitable for mass pro- signed during the year.
duction of components requiring The agreement will
top-quality surface finish and high create a broader market
productivity while maintaining base for Coromant
metalworking precision. The new Capto.
nickel-free cermet is both user and
environment-friendly, since it is Electronic commerce
recyclable and can be used both and increased
with and without cutting fluid. globalization
In the milling segment, new Sandvik Coromant’s
standardized inserts optimized for customers increasingly
stainless-steel machining were pre- have their production
sented. Sandvik Coromant’s intro- facilities spread over
duction of the new generation of several locations throughout the processing of an extremely large
end mills, CoroMill 390, was a world. This is particularly apparent number of small customer orders
major success. The program was in the automotive industry. The every working day. The internally
extended with the addition of mills Volkswagen Group, for example, has developed business, production and
equipped with Coromant Capto expanded vigorously in several coun- inventory-management systems used
coupling to further enhance preci- tries during the past few years, and it since the mid-1980s have gradually
sion and productivity. has chosen Sandvik Coromant as been modernized and coordinated.
The growth in sales of the Coro- tool supplier to all of its plants. The During the year, a completely new
mant Capto modular tool system cooperation has been worthwhile, order-handling system was implement-
continued. Many manufacturers and during the year Sandvik Coromant ed in all central warehouses, with
the result that Sandvik Coromant
now has a highly modern routine for
transferring customer orders directly
into the system.
Internet sales were launched on
the Swedish market in the spring.
After slightly more than half a year,
Internet sales already accounted for
17% of orders. Several other markets
are now preparing to launch electron-
ic commerce in the near future, in
During 1999, a new production plant for advanced tools was inaugurated in Stafford,
TX, in the US. pace with customer requirements.
The ongoing aggressive focus on
of the latest generation of multi- was named “Leading Edge Supplier,” research and development, produc-
operation machine tools are now as one of Volkswagen’s most impor- tion and marketing – for instance,
integrating Coromant Capto in their tant international suppliers. of electronic commerce – and service,
equipment right from the start. Sandvik Coromant’s business will further strengthen its leading
A licensing agreement with Big operations are based on the rational position ●

INVOICED SALES, SEK M INVESTMENTS IN FIXED ASSETS, SEK M NUMBER OF EMPLOYEES, 31 DECEMBER

8 527 8 358 787

8 050 705 7 892 7 918 8 050 7 861
7 184 6 984 616 645 7 485

393

95 96 97 98 99 95 96 97 98 99 95 96 97 98 99
 Sandvik CTT is the world-leader in high-speed steel tools.

Sandvik CTT
Sandvik CTT is the world’s largest manufacturer of 1999. The world market for high-
speed steel tools amounts to between
high-speed steel tools for metalworking applications and SEK 25 billion and SEK 30 billion,
is rapidly expanding operations in rotating solid-carbide but it is gradually shrinking, declin-
ing during the year by approximately
tools. Sandvik CTT’s primary markets are the EU, NAFTA 10%. The industry is highly frag-
and Latin America. Sandvik CTT is now entering the mented, with several hundred produc-
ers, many of which have profitability
Asian market with a plant in India. Global brand names problems. Sandvik CTT’s growth in
are Dormer, Titex, Prototyp and Precision. the product area will be generated
mainly through organic growth, but
Sales invoiced by Sandvik CTT also through acquisitions of niche
in 1999 decreased by 8% to SEK companies with specialist expertise.
3,322 M. In contrast, the market for rotat-
Demand in the United States was ing solid-carbide tools, estimated
clearly lower than in the preceding at approximately SEK 10 billion,
year in most customer segments, par- is growing and increased by nearly
ticularly the aerospace industry. In 10% in 1999. There is no clear mar-
Europe as well, demand was lower ket leader in this sector, but rather
in the most important markets and many small and medium-size com-
for most customer groups. In Latin petitors. The proportion of special
America, too, the business climate tools is large. Sandvik CTT has
was weaker. Brazil, however, recov- expanded sharply within the sector
ered somewhat toward the end of in recent years, its objective being to
the year. Demand in Asia showed a become a world leader here as well.
clear improvement in most markets.

Market and business conditions Håkan Larsson,

Dormer, Titex and Prototyp increased President of Sandvik
their market shares in high-speed CTT. Born 1951,
Prototyp delivers tools in high-speed B.A. Econ.,
steel tools. The market share for steel and solid carbide to the American employed since 1993.
Precision declined, however, in aerospace industry.

16 ● SANDVIK TOOLING
Sandvik CTT’s strategy is to invest Titex started manufacturing and
more resources in research and marketing of a new solid-carbide
development, fulfill the investment drill for deep holes, as well as drills
program begun and exploit the with improved chip removal for
synergies between own brand names drilling deep holes, based on a new
and other segments of the Sandvik coating technology.
Tooling business area. Sandvik CTT At the beginning of 2000, Titex
will also continue to take advantage acquired a former agent in the US,
of opportunities to further market Titex Tools Inc., to enable the com-
channels via a multibrand concept, pany to intensify its marketing of
and increase the focus on the Titex application tools to qualified
strongest brand names. US industries.
During 1999, Titex strengthened its
position in the area of solid-carbide tools.
Dormer Prototyp
Dormer increased its market shares The company has a large proportion
in Europe, the US and Brazil. The of sales of special tools. This seg- rapidly, and several new products
restructuring of the company’s ment continued to grow strongly due were developed during the year.
manufacturing resources to a well-functioning organiza-
continued and a small tion and high- Precision
drill plant in the UK In 1999, US-based Precision suffered
was sold. from falling demand from the aero-
During the year, space industry. The goal has been
several new products to quickly recover service levels
were launched – for exam- after the far-reaching invest-
ple, a top-coated standard ments and relocations of
drill, a complete program of flute- machinery that occurred
less taps, a long solid cemented- in the plants over the
carbide drill, multilayer coat- past few years.
ing for end mills and a new By expanding
range of cobalt end mills. and rationalizing
the logistics center,
Titex among other measures,
Titex maintained its focus on service levels were restored.
Sandvik CTT has a broad range of drills,
solid-carbide products, strength- The workforce was reduced sharply
end mills and taps in high-speed steel
ening its position in this area. The and solid carbide for metalworking. to adjust expenses and raise produc-
new factory in India recorded strong tivity. As part of the restructuring, a
demand, particularly for solid- quality product range. Prototyp plant for manufacturing high-speed
carbide products. strengthened its position both in steel drills was shut down at year-
During the year, high-speed steel and solid-carbide end. Measures implemented after the
all production of products, and the new sales compa- acquisition will improve productivity
special tools in nies in Italy and France also devel- and profitability.
high-speed steel was oped favorably. Given the rational production
transferred from The most important products resources, high productivity, excellent
Germany to France. introduced during the year were a service levels and strong market
new tap range for dry machining and positions, the various Sandvik CTT
new solid-carbide end mills for high- brand names are well positioned for
speed machining. Prototyp’s tools for further expansion ●
the medical segment and tools for
production of implants are growing

INVOICED SALES, SEK M INVESTMENTS IN FIXED ASSETS, SEK M NUMBER OF EMPLOYEES, 31 DECEMBER

3 594 263 4 496 4 289

3 322
3 755
2 725
2 334 184 3 047 2 864
2 170 151
129 125

95 96 97 98 99 95 96 97 98 99 95 96 97 98 99
Sandvik
Hard Materials
Sandvik Hard Materials is the world’s largest enterprise in its
industry and is active in the full spectrum of its field, ranging
from cemented carbide to diamond, including special ceramics
for applications in biotechnology. The business sector develops,
manufactures and markets cemented-carbide blanks for tool Blanks in extremely
fine-grain cemented
manufacturers, components for the engineering industry and carbide are necessary
for the manufacture
advanced cutting and forming tools for other industries. of microtools for the
electronics industry.

30–40 small and medium-size com-

petitors in Europe, nearly as many in
NAFTA and well over 100 in Asia.
The number of major competitors is
very small.
The company’s strategy involves
concentrating operations on prod-
ucts, market segments and customers
with expected high growth. This
strategy should produce a favorable
sales trend, long-term high profitabil-
ity and reduced cyclical sensitivity.

Market and business conditions

The total world market potential for
cemented-carbide products is consid-
ered to have declined somewhat in
1999. The product orientation of
Sandvik Hard Materials, however,
resulted in volume growth during
the year, which in combination with
increased capacity provides the basis
for further expansion when the busi-
ness cycle begins to rise again.

New products
The operations of Sandvik Hard Materials focus on areas of high growth, such as The pace of product renewal is high.
cemented-carbide components for the automotive industry. Over a third of the company’s prod-
uct portfolio consists of products or
Sales invoiced by Sandvik Hard age. Competitors are mainly active cemented-carbide grades that were
Materials during the year increased in individual large domestic mar- not part of the range five years
by 3% to SEK 1,497 M. kets or within limited product ago. A good example of such
Sandvik Hard Materials has niches. However, there are still new products is composite
production units in eleven countries drill blanks for microdrills
Lars Wahlqvist, President of
and is represented on more than 50 used in the manufacturing of
Sandvik Hard Materials. Born
markets. It is the only company in 1938, M.Sc. Eng., employed mobile telephones and
the industry with truly global cover- 1969–1975 and since 1981. computers. The com-

18 ● SANDVIK TOOLING
posite blanks are considerably smaller dental products such as bridges and
that the traditional microdrill blanks, caps has increased the market poten-
substantially reducing the need for tial to SEK 25 billion and assures
raw materials, lowering the customer’s long-term growth. In 1999, the
costs and creating a relatively higher product was recognized by the Royal
added value for Sandvik. Swedish Academy of Engineering
Development is ongoing within Sciences (IVA) as one of the major
the area of round cemented-carbide innovations in Sweden in recent years.
rods for drills and end mills to
produce new products, both with Structural changes
and without helical internal cooling The new plant in Mexico started in
channels. 1998 primarily to facilitate expan-
Carbide rotary cutters used for sion in NAFTA was extended in
the production of diapers and sani- 1999. The plant is now the second-
Custom-made ceramic dental crowns is
tary products are additional examples largest after Coventry, UK, in terms an expanding product area.
of advanced product development. of volume.
In 1999, the developers of the tool, Due to the country’s high import UK. As a result of the decision, the
Gérard Romagnolo and Daniel tariffs, manufacturing of ready-to- powder plant in Coventry will under-
Tartavez, received the Wilhelm Hag- press cemented-carbide powder was go substantial expansion. Semi-fin-
lund medal as product developers of launched in India during the year to ished tungsten carbide will be sup-
the year within the Sandvik Group. make the cemented-carbide manufac- plied essentially from company
Cemented-carbide tools for man- turing operations more competitive. facilities in Coventry,
ufacturing beverage cans are a new The cobalt powder used where major
product with excellent growth. in the cemented investments
Approximately 250 billion cans are carbide is also were under-
manufactured per year in the world, taken from a taken in 1999.
which is why the tools’ market proprietary This ensures a
potential is considerable. supply of the
Individually-made ceramic extrafine-grain
dental crowns have been manu- tungsten
factured and sold by carbide used in
Procera Sandvik AB the manufacturing
(Sandvik 50% and of the company’s
Nobel Biocare 50%) foremost specialty,
for the past few ultrafine-grain cemented carbide.
years. Sales of the During the year an extensive
dental crowns rose project was concluded to concentrate
by 65% during all sales and production warehouses
Sandvik Hard Materials
the year. The US is a globally leading for stocked products in Europe in
is a primary manufacturer of blanks, a single location – Schiedam in the
market. The prod- components and tools Netherlands.
in cemented carbide and
uct is also being The company’s strategic focus
other hard materials.
sold throughout on growth areas, complete product
Europe and Australia, and in 2000 it local manufacturing unit. programs, high product quality,
will be introduced in several markets During the year Sandvik decided advanced research, and rapid and
in Asia. A new plant for Procera to concentrate the Group’s European reliable delivery is a sound founda-
products was started at the end of manufacturing of cemented-carbide tion for ongoing long-term volume
1999. The plant is located at the powder to Sandvik Coromant in growth and increasing profitability ●
Sandvik facilities in Fair Lawn, NJ, Gimo, Sweden, and the Sandvik
in the US. The introduction of new Hard Materials plant in Coventry,

INVOICED SALES, SEK M INVESTMENTS IN FIXED ASSETS, SEK M NUMBER OF EMPLOYEES, 31 DECEMBER

1 455 1497 1 447 1 423 1 468 1 431

1 361 1 374
1 224 1 209
140 152
120
102 91

95 96 97 98 99 95 96 97 98 99 95 96 97 98 99
 B U S I N E S S A R E A
INVOICED SALES PER MARKET AREA

Asia, Australia
Sweden
EU excl. Sweden Sandvik
Africa,
Middle East
Rest of Europe
Mining and
South America NAFTA

Construction
Sandvik Mining and Construction offers the market's
INVOICED SALES, SEK M most extensive product program for drilling, excavation,
8 100*
9 600* 9 379
8 808 loading and transportation of rock and minerals, for
7 350*
demolition and for bulk-materials handling within the
mining and construction industries.
The total market potential for the business area is
95 96 97 98 99
* pro forma estimated to be around SEK 50 billion. Sandvik Mining
and Construction possesses solid knowledge of both
drilling and blasting as well as mechanical excavation
methods. Sandvik’s advanced knowledge of materials
OPERATING PROFIT, SEK M
AS A PERCENTAGE OF INVOICED SALES provides substantial added value for customers. Sandvik
674
Mining and Construction supplies innovative technology,
414*
478* 467* 8
products and solutions, to assist customers to increase
340
6 6 4
their capacity and productivity and to lower their costs.
5

95 96 97 98 99
* pro forma Invoiced sales of Sandvik Mining Elphinstone, Australia, in the area
and Construction declined by 6%, of underground loaders and trucks,
compared with 1998 sales, to SEK Boart, South Africa, is a competitor
8,808 M. Extensive restructuring in drilling tools and Krupp, Germany,
resulted in considerable cost savings, and Nippon Pneumatic, Japan,
INVESTMENTS IN FIXED ASSETS, SEK M which improved the result despite compete in the demolition area.
lower business volumes. Operating Joy and Long-Airdox, both
profit was 8% (4) and return on net based in the US, are main competi-
404 assets was 12% (5). tors of VA-Eimco. US-based Kenna-
359
290*
254* Sandvik Mining and Construction metal and South African Boart
215*
comprises four separate business compete in offering mineral-mining
sectors: Sandvik Tamrock, VA-Eimco, tools. Roxon’s major competitors
Driltech Mission and Roxon, which for conveyor components and sys-
95 96 97 98 99
have different competitors. Sandvik tems are US-based Continental and
* pro forma
Tamrock and Driltech Mission Krupp Fördertechnik, Germany.
compete with Atlas Copco (Sweden),
Ingersoll-Rand (US) and Furukawa Sandvik Tamrock
(Japan), all within several product Sandvik Tamrock is the largest
NUMBER OF EMPLOYEES, 31 DECEMBER areas. Other, more specialized sector in the business area.
competitors are Caterpillar/ Sales totaled SEK 5,478 M
7 100* 6 977* 6 630
6 323
in 1999 and the number of
6 032*
Anders Ilstam, President of Sandvik employees was 3,853.
Mining and Construction and The company is a
President of Sandvik
Tamrock. Born 1941, A.E., world-leading sup-
employed since 1993. plier of equipment,
95 96 97 98 99
* pro forma
Sandvik Mining and Construction is the world-leading manufacturer of rock-excavation products.

well as customers who produce and 1,357 employees in 1999,

cement and aggregate, etc., and supplies a large number of products
companies that demolish buildings and services for mechanical rock
and recycle materials. excavation. The company’s products
Production units for drilling are used for the mining of coal and
equipment are located in Finland other soft minerals, for tunneling
and France. Units for the production and the production of underground
of loaders and underground trucks spaces in loose and fragmented rock
are located in Finland and Canada. as well as for highway maintenance
Demolition tools are produced in and asphalt milling.
Finland, while rock-drilling tools are Customers are active in both the
produced in Sweden, Mexico, Brazil, mining and construction industries.
South Africa and India. The first group consists of customers
This business sector includes that use tools for the underground
A Sandvik Company such well-known trademarks as mining of coal, potash or salt and
Tamrock, Toro, EJC, Brøyt, the contractors that
Rammer, Sandvik Rock Tools serve these kinds
tools and services to the mining and and Morgon. of mines.
construction industries. Products Customers
include rigs for surface and under- VA-Eimco within the
ground drilling, loaders and trucks VA-Eimco, construction
used in underground mines and tun- which had and engi-
neling, hydraulic hammers and other sales of SEK neering
tools for demolition and breaking of 1,761 M industries
materials, and cemented-carbide rock-
drilling tools.
Customers in the mining indus-
try include operators of mines con-
taining precious metals and base
metals, as well as the contractors
who work in these mines. Customers
within the construction industry
include local and international gen-
eral contractors and others who
specialize in drilling and blasting as Sandvik Tamrock delivers cemented-carbide tools for percussive and rotary drilling
in all types of rock.

SANDVIK MINING AND CONSTRUCTION ● 21

 The Sandvik Tamrock plant in Tampere,
Finland, develops and manufactures
advanced rock-drilling rigs.

coal mining was especially charac-

terized by a global recession. In the
infrastructure markets, conditions
varied substantially. The construc-
tion industry was strong in several
primary markets but continued to be
weak in others.
At the beginning of the year,
prices for base metals were at their
lowest levels since 1993/1994. Many
mining companies showed a loss.
The already declining prospecting
activity decreased further and cus-
tomers focused on reducing operat-
ing costs.
Metal prices improved during
the year and at year-end the price of
copper and zinc had reached a satis-
factory level at the same time that
the nickel price increased dramati-
cally. The profitability of mining
companies improved but there was
still hesitation regarding further
development of mines and entirely
new projects. One exception was the
African mining industry, which initi-
are primarily large contractors or Roxon ated several interesting expansion
specialized tunnel and road-building Roxon had sales of SEK 873 M in projects. Overall, production of base
companies. 1999 and 544 employees. Roxon is metals was unchanged, which affect-
The largest production units are an engineering company with a focus ed after-market business positively.
located in Austria and the US, while on the handling of bulk materials. There was a great deal of turbu-
production resources for tools are The company supplies conveyor lence in gold mining during the year.
located in France, the US, South components, complete conveyors Gold prices, which have been falling
Africa and Australia. VA-Eimco and systems for warehousing and since 1996, continued to fall during
includes the product names Voest- bulk material handling equipment the first six months of the year. Gold
Alpine, Eimco and Sandvik MGT. for coal and metal mines, quarries prices turned upward in September
and the construction industry. Its after fifteen European central banks
Driltech Mission most important customers are oper- decided to create a ceiling for the
In 1999, Driltech Mission had sales ators of mines, quarries, harbors, sale of gold for the next five years.
of SEK 696 M and 475 employees. terminals and solid-fuel power plants. Prices stabilized around USD 280
The company’s product range consists Trademarks include Roxon, Prok, per ounce. The situation is particu-
of drilling rigs for rotary and down- Voest-Alpine, Kopo, Gurtec and larly uncertain and the industry is
the-hole drilling and cemented-car- Rox‘n Roll.
bide tools used in open-pit mines, Production of conveyor compo-
exploration drilling and other large- nents is located in Finland, Sweden,
scale surface excavation, and also in Germany and Australia. Small, flex-
water-well drilling. ible workshops are located close to
Drilling rigs are manufactured customers in many markets in order
in the US. Down-the-hole drilling to provide fast service in an expand-
tools are produced in Sweden, ing after-market.
Mexico, the United States and
India. The company’s products are Market conditions
marketed under the names Driltech, Sandvik Mining and Construction’s
Mission and Drillmaster. main markets varied considerably
during 1999. Activity in the mining A new Toro loader offers a safer and
market was generally weak, where more comfortable work environment.

22 ● SANDVIK MINING AND CONSTRUCTION

 Sandvik Tamrock obtained a sub-
stantial order for drilling rigs and
loaders for a nickel mine in Russia.
The weak underground market
for coal had a negative impact on
VA-Eimco’s business. Sales of machin-
ery to customers outside the coal
area increased, however, and new
customer segments developed in
North America and Japan. A large
follow-up order for so-called bolter-
miners came from an important
American coal-mining customer.
This production method is now
Roxon signed a major project contract for equipment for loading and unloading of firmly established in the US market.
coal in Australia. VA-Eimco also delivered a jet boring
system to a Canadian uranium mine
awaiting further developments. Despite market in the US, Europe and some and signed a large order for a so-
all these changes, gold consumption countries in Asia. Sales of spare called full-area boring rig for the
and production increased somewhat. parts, tools and service increased. subway in St. Petersburg, Russia.
The market for coal was very The newly introduced surface- Driltech Mission’s sales gradually
weak during the year due to contin- drilling rigs, Ranger and Pantera, improved during the year. The demand
uing low prices for crude oil. The were successful in the markets for for blast-hole drilling equipment was
situation remained unchanged during construction work and quarrying. relatively low, but successes were
the year, despite increased oil prices. Sandvik Tamrock received several achieved in the US and Russia. The
The underground coal mines in the orders for large projects from market for water-well drilling in the
Eastern US and Australia were European contractors and a larger US developed satisfactorily. Sales of
particularly affected. Coal mining in order for tunnel drilling rigs from hammers and tools for down-the-hole
Europe continued to decrease, even Japan. Deliveries to a gold mining drilling were weak in Asia but better
faster than expected. project in Tanzania as well as Supra in Europe and the US.
The demand for products and underground trucks in the US and Roxon’s sales of conveyor com-
services within the construction and Australia were among the most inter- ponents were good in the Nordic
civil engineering areas continued to esting orders. At the end of the year, countries and Central Europe, while
be strong in the US as a result of
investment in highway construction
and was also relatively high in many
European countries. It now seems
that the tunnel construction that has
been planned for a long time in
Central and Southern Europe will
begin, primarily because of environ-
mental considerations and increased
traffic congestion. Two large tunnel
fires led to discussions concerning
increased safety and the planning of
additional Alp tunnels in proximity
to several existing tunnels.
Conditions for the construction
market improved somewhat in Asia,
with a noticeable recovery in Korea
and an improvement in Japan. Total
business activity in the area was,
however, still rather low.

Business development
Sandvik Tamrock was affected by
the low investment activity within Driltech Mission is a
leading supplier of
the mining industry and deliveries
machinery and tools
declined. This was offset to some for rotary and down-
extent by a strong contractor the-hole drilling.
 VA-Eimco specializes Within the new corporate structure,
in products for Sandvik Tamrock created a new unit
mining of coal and
with a focus on rentals and used
other soft minerals,
as well as tunneling equipment.
road headers. Special emphasis was placed on
developing the after-market business.
Sandvik Tamrock established central
warehouses for spare parts in Lyon,
France and Burlington, Ont., Canada,
which will mean better logistics and
faster access to components. Within
the service sector, focus was on
expanded training and service con-
tracts. A project was initiated for elec-
tronic commerce in the after-market.
demand in Australia decreased Investments Driltech Mission closed its plant
noticeably. Project activities were The most significant measures for for down-the-hole drilling tools in
concentrated to Scandinavia and improving profitability and strength- Houston, Texas in the US. Production
several Asian countries. Demand ening Sandvik Mining and Construc- of small drilling bits and hammer
for service increased within all tion’s competitiveness were the new parts was relocated to Mexico and
areas. Roxon delivered under- operative organization, which took the assembly of hammers to Mans-
ground belt conveyors to LKAB’s effect at the beginning of 1999, and field, Texas, US. Technology, market-
iron-ore mine in Sweden and a large personnel reductions, particu- ing and customer support for down-
system for the storage and transport larly among staff personnel. The the-hole (DTH) drilling tools are
of sulfur to Taiwan. At the end of reduction, which totaled more than concentrated to Driltech’s plant in
the year, Roxon finalized a large 1,000 employees, was largely com- Alachua, FL, in the US.
project for equipment for loading pleted during the year. At the same Larger investments were carried
and unloading coal in Australia. time, the number of project-based out at the breaker plant in Lahti,
employees within service and speci- Finland. In Köping, Sweden, produc-
fic project deliveries increased. tion of roller bits was expanded and
in São Paulo, Brazil, production of
top hammer tools was modernized.
In September, Sandvik Mining
and Construction acquired the
Norwegian company, Brøyt’s, pro-
duction of hydraulic loaders. These
machines are specially adapted for
tunnels and quarries and mean a
strong complement to Sandvik
Tamrock’s offering to this customer
segment. Production has moved to
Sandvik Tamrock’s plant for loaders
in Turku, Finland.
A new service and sales company
was established in Tanzania, where
Sandvik Tamrock supplies equipment
to a large gold mine.

New products
Sandvik Mining and Construction is
placing increasingly heavy emphasis
on developing new products and
processes. Investments in research
and development correspond to over
2% of invoiced sales and that pro-
portion is expected to increase to

During the year, sales of the

new Ranger surface drilling
rig were strong.

24 ● SANDVIK MINING AND CONSTRUCTION

3% during the coming years through
development of electronics and auto-
mation to meet customer demands
for better safety and increased pro-
ductivity.
During the year, Sandvik
Tamrock introduced the new under-
ground drilling rig, Tamrock Axera
DO 6, which is specially designed for
operations in confined spaces. The
patented concept provides especially
good maneuverability and stability.
New Toro loaders are being devel-
oped to work safely and comfortably
in temperatures as high as +55° C.
Sandvik Tamrock continued to
invest considerable resources in the
development of automated equip-
ment. A system is being developed
for a project in Canada, together
with the mining company Inco, for
the complete remote control of
drilling, charging, loading and trans-
port. Another project has made it
possible for LKAB’s iron-ore mine
in Kiruna, Sweden, to work with
several unmanned Toro loaders.
Sandvik Tamrock’s tool divisions
launched many new and improved
products on the market. New raise-
boring heads require substantially
New raise-boring heads from Sandvik Tamrock enhance
less torque and provide more even
customers’ drilling efficiency and profitability.
drilling. The Top Hammer division
introduced a spool-shaped bit that
provides higher production. of increasing investments can be
VA-Eimco continued investing detected even though the industry
in the Icacutroc concept for mechan- still focuses on productivity and
ical excavation of medium to hard cost savings and is hesitant to
rock. The new concept has also expand. Coal mining is expected to
yielded several positive spin-off remain weak despite the continuing
effects to improve conventional road price increases in crude oil. Develop-
header equipment. ment in the construction area is
Driltech Mission’s new 6-inch expected to be generally positive,
hammer contains patented technolo- although a certain degree of uncer-
gy that makes it possible to increase tainty does exist.
performance by 30% compared The new organization and the
with conventional tools. Additional structural measures that have been
hammer models based on the new implemented, together with an
technology are being developed. aggressive development program,
Product development within are expected to lead to improved
Roxon focused largely on the competitiveness and increased prof-
handling of waste products as well itability ●
as recycling. Roxon has considerable
experience in producing heavy-duty
shredding machines, and many
such machines were delivered during Rammer’s hydraulic hammers are used
the year. in breaking and demolition, primarily in
Rising prices for base metals the construction industry.
and gold have improved the outlook
within the mining industry. Signs

SANDVIK MINING AND CONSTRUCTION ● 25

 B U S I N E S S A R E A

Sandvik
INVOICED SALES PER MARKET AREA

Asia, Australia Sweden

Africa,

Specialty Steels
Middle East
South
America
EU excl.
Sweden
NAFTA

Rest of Europe
The business area includes the Sandvik Steel and
Kanthal companies, and from 1999, Sandvik Process
Systems. Sandvik Steel is a world-leading manufacturer
INVOICED SALES, SEK M of high value-added products made of stainless steels
13 260* 12 536* 13 673* 13 579
and special alloys. Kanthal is the world leader in
11 971
producing metallic and ceramic resistance materials.
Sandvik Process Systems has a leading position in
regard to steel belts and process plants based on
95 96 97 98 99
* pro forma
steel conveyor belts and systems for automatic
package sorting.
The world market for the business area’s products
is in the range of SEK 80 billion. Customers are
OPERATING PROFIT, SEK M
AS A PERCENTAGE OF INVOICED SALES
found in most industrial segments, including chemicals,
1 976* oil and gas, power, pulp and paper and engineering,
1 338* as well as in consumer-oriented sectors such as
1 067*
15
11
902
633
the automotive, household appliances, food and
8
7 5 electronics industries.
95 96 97 98 99 Sandvik Specialty Steels’ invoicing in 1999
* pro forma

amounted to SEK 11,971 M with operating profit of

SEK 633 M. The return on net assets was 7%.
Including acquisitions, the average growth in volume
INVESTMENTS IN FIXED ASSETS, SEK M
of the business area’s operations during the past six
899*
834* years amounted to 9% annually.
681
561*
448

95 96 97 98 99
* pro forma

NUMBER OF EMPLOYEES, 31 DECEMBER

10 360* 10 008* 9 8 62
9 505* 9 238

95 96 97 98 99
* pro forma
Sandvik Steel

Sandvik Steel manufactures tube, strip, wire and bar for and the French company Ugine, as
well as many small independent
users with high demands on economy, reliability and drawing plants and cold-rolling mills
performance. Products are produced mainly in stainless without own metallurgy. The various
competitors individually cover only
steels as well as titanium, nickel and zirconium alloys. between 5% and approximately 20%
Average value-added is high relative to raw material of Sandvik Steel’s product program.

content. Operations are focused on product niches in Market and business conditions
which Sandvik Steel has leading positions in the market. The reduction in invoiced sales for
Sandvik Steel in 1999 was a result of
a generally weaker business climate
Sandvik Steel’s invoicing dropped The competitive situation varies with a receding demand as a
by 14% compared with the preced- according to product area. result of reduced invest-
ing year to SEK 8,437 M. Profits Sandvik Steel is a ments within several of
decreased as a result of continued world leader in the Sandvik’s important
shrinking volumes and falling prices, field of seam- industrial clients.
especially for tube products. Demand less stainless Falling oil prices in
was very weak in Eastern Europe steel tubes, 1998 resulted in reduced
and South America. Invoicing where there investment within
increased somewhat in Asia, despite
lower prices. At the end of the year,
order intake improved notably in
several markets.
The largest group of products
are seamless tubes made of
stainless and high-alloy
steels and special metals
for users with high
demands on performance,
reliability, corrosion-
resistance and precision.
The customers are in the
chemical and petrochemical
industry, the power, oil and
gas, automotive, aerospace and
electronics industries – among others.
Strip and wire products are used both oil and gas
in the production of saws, razor blades, exploration and pro-
Sandvik Steel is a world-leading manu-
knives, electric shavers, catalysts for facturer of tube, strip, wire and bar in
duction, as well as in the
cars, flapper valves for refrigerator stainless steel and special alloys. refinement phase that follows. The
compressors, springs, welding material activity and investment levels for
and other products for the precision Sandvik Steel’s important nuclear
mechanics industry. are three major competitors: power, aerospace and fertilizer indus-
Sumitomo Metals (Japan), DMV tries also declined. Together, this
(Europe) and Tubacex (Spain). In resulted in a very dramatic reduction
Lars Pettersson, the wire and strip field there are a in demand and a profit deterioration
President of Sandvik Steel
few individual competitors that, like for Sandvik Steel’s seamless tubes in
(from 24 March 2000).
F 1954, M.Sc.Eng., Sandvik, are active in the entire stainless steel and titanium. Demand
employed since 1979. production chain such as the from such consumer-oriented sectors
Japanese company Hitachi as the automotive, electronics and

SANDVIK SPECIALTY STEELS ● 27

household appliance industries con- more than half of invoiced sales

Photo: Alcatel.
tinued to be strong during most of were generated from areas where
the year. This particularly favored the world market share exceeds
the sales of strip and wire products. 20%. To further strengthen this
Capacity utilization varied consider- favorable market position Sandvik
ably, from a very high utilization, Steel is cooperating very closely
primarily within strip and wire areas, with key customers through joint
to a very weak level within steel product development projects and
manufacturing and in tube products IT-supported communication. In
associated with the power and chem- addition, there is an increasingly
ical industry. Capacity utilization for efficient distribution of products
precision tubes, however, continued from the central warehouse for
to be high. the maintenance market within
One of the associated companies the various customer segments. Stainless steel tubes from Sandvik Steel are
of Sandvik Steel, Avesta Sandvik Tube used for electro-hydraulic control lines,
AB (Sandvik 25%), had improved Investments so-called umbilicals, for remote control in
subsea oil and gas production. The umbili-
earnings in 1999 compared with 1998 During the year, a number of new
cals are deployed using special ships.
and affected Sandvik Steel’s result by investments were put into operation,
SEK 7 M (loss: 27). The other associ- which collectively accounted for a new system, together with the
ated company, Fagersta Stainless AB significant portion of Sandvik introduction of so-called sequence
(Sandvik 50%), which manufactures Steel’s comprehensive investment casting, will increase the yield and
wire rod, had invoiced sales totaling program for the years 1996-1999 efficiency in steel manufacturing.
SEK 1,098 M (1,246), which was a totaling more than SEK 2,000 M. Thanks to the installation of a
decrease from 1998 and burdened The new heat-treatment facility new hardening and tempering line,
Sandvik Steel’s earnings by a loss of for large-size bar steel in Sandviken production capacity for strip steel
SEK 39 M (loss: 13). Problems dur- made it possible for this product was increased. Through that,
ing the start-up operations of new group to continue to grow and, invoicing of flapper-valve steel and
equipment caused extensive delivery through that, become an increasingly other precision strip products could
disturbances during the autumn. important product for Sandvik Steel. increase.
Sandvik Steel’s comprehensive At the end of the year, a new A decision was made concerning
goal is to be a global market leader control system for continuous cast- an investment in a new cold-rolling
within prioritized niches. In 1999, ing was put into operation. The mill for thin strip steel in Sandviken.
The rolling mill will be placed into
operation at the beginning of 2001
and will primarily be used for the
production of thin strip for catalytic
converters and razor blades.
The concentration of warehouse
storage and distribution of tube and
bar products to regional centers con-
tinued during the year. The ware-
house for welded tubes in Düssel-
dorf, Germany, was transformed into
a regional warehouse for Central
Europe. The warehouse in Singapore
was developed into a logistics center
for Asia.

Product development
To ensure Sandvik Steel’s world-
leading position within prioritized
product niches, the business area is
continually investing in research and
development of new products as well
as production methods.

The efficiency of distribution of tube

and bar products were enhanced
through the establishment of regional
logistics centers in Europe and Asia.
This is carried out through both long- now being tested for use in the next
term development work and through generation of power plants. Develop-
daily contact with customers and ment work is being carried out in
various industry groups. close cooperation with the manu-
The launch of a new generation facturer as part of the pan-European
of stainless steels with improved research program, Thermie.
machinability, in accordance with
the Sanmac concept, was initiated IT development
at the end of the year. Sanmac is the Sandvik Steel’s IT development is
result of close cooperation between concentrated on areas that increase
Sandvik Steel and Sandvik customer benefits, improve pro-
Coromant. The products, ductivity and lower costs.
which are in the form System solutions shall
of billets, bar steel provide us with clearly
and hollow bar, are defined competitive
used within the advantages. In order to
majority of industri- limit costs, hardware,
al sectors where software and applica-
components are pro- tions are standardized.
duced by metalwork- Web-based systems for
ing. Customer advan- electronic commerce and
tages include higher Sandvik Steel is world-leading relationship creation
productivity, lower in flapper-valve steel which is marketing were devel-
tool costs and used for air-conditioning oped and introduced
reduced downtime units in cars, for example. during the year. A large
for machinery. The new products can number of customers are now using
advantageously be used together with this to have daily contact with
Sandvik Coromant’s new series of Sandvik Steel’s commercial and tech-
cemented-carbide inserts for the pro- nical functions.
cessing of stainless steel. Intranet and document databases
Sandvik’s unique so-called marag- are being used to a continually
ing steel, which combines toughness, increasing extent for internal infor-
strength and hardness, has found mation, knowledge transfer, manage-
several areas of application within ment by objectives, project work, etc.
the medical and automotive indus- This has resulted in large changes
tries, and cutting applications where and improvements, both for employ-
the grade’s special mechanical prop- ees and for efficiency within the
erties can be fully utilized. Patent organization.
protection has been developed for A standardized sales support
this type of steel and for the most system was installed at around twenty At the Sandviken plant, several
investments in increased capacity and
important usage areas. sales units throughout the world.
productivity were made in 1999
For medical applications, prima- In addition to noticeable efficiency – for instance, a new bell furnace
rily implants, Sandvik Steel expanded gains in the organization, the system for annealing of strip steel.
its selection with a new steel grade has also contributed to improved
that is exceptionally well-adapted to customer service. tion of modern information tech-
human tissue and has extremely high Advanced products, extensive nology, is improving Sandvik Steel’s
strength and corrosion resistance. research and development, efficient competitive situation and is creating
For applications within the power organization and logistics as well as continuing good conditions for
industry, a new steel grade for super- a customer-oriented way of working, long-term growth ●
heaters was patented. The material is especially through increased utiliza-

INVOICED SALES, SEK M INVESTMENTS IN FIXED ASSETS, SEK M NUMBER OF EMPLOYEES, 31 DECEMBER

9 807 9 751 9 786 681 693 7 660 7 381 7 378

8 980 7 257 6 915
8 437
552
452
343

95 96 97 98 99 95 96 97 98 99 95 96 97 98 99
 Development of heating elements for radiant tubes for industrial
furnaces at the Kanthal Technical Center in Hallstahammar, Sweden.

Kanthal
Kanthal is the leading global manufacturer of metallic tion, lower production costs. High
production volumes are necessary
and ceramic resistance materials in the form of wire, for a cost-efficient operation. Prod-
strip, electric heating elements and systems for house- uction is, therefore, concentrated to
fewer and more efficient units.
hold appliances, industrial furnaces and processing Resources within R&D and the abil-
equipment within the electronics industry. ity to offer customer-adapted devel-
opment projects and materials are
Kanthal’s invoiced sales increased by German company VDM and the important competitive advantages.
6%, to SEK 2,019 M, including com- French company Rescal comprise The furnace industry requires heavy
pany acquisitions. Development for Kanthal’s major competition for wire, strip, and heating elements,
metallic resistance materials, the metallic resistance materials. In
largest product group, was positive. the segment for high-temperature
There was a noticeable recovery in elements in ceramic materials,
Asia, where sales reached the same competition consists primarily of
2
levels that were in force before the the American company I R and
financial crisis in the area. The tech- the Japanese companies, Riken and
nologically most advanced products Tokai Konetsu.
for the furnace and electronics indus-
tries also had good growth, resulting Product areas
in a sales increase of approximately The market for Kanthal’s products
10%. The semiconductor industry can be divided into three segments:
began to grow again after two weak producers of household appliances,
years, which gave rise to a strongly users and producers of industrial fur-
increasing order intake for wire, naces, and the electronics industry.
heating elements and furnace sys- Household appliance producers The new, thin Kanthal strip attracted great
interest from manufacturers of glass-top stoves.
tems. Invoiced sales decreased for a are mainly supplied with heating
number of less profitable products, wire, thin strip and thermostatic and to an increasing extent, complete
such as stainless steel wire. These bimetal. The customers are large, heating systems. Customers consist
products are now gradually being well-known appliance manufacturers of a limited number of furnace pro-
phased out of the product range. or their suppliers and sales are char- ducers and a very large number of
Demand for gold-coated wire from acterized by strong competition and end-users. Competition centers mainly
HP Reid decreased dramatically due price pressure from suppliers. Kanthal on the products’ properties, economic
to altered technological solutions is the world leader in this segment life and quality – and there is some-
among customers. and the strategy is to maintain a what less sensitivity to prices than in
The world market for resis- strong market presence, and the consumer-product field. Kanthal
tance materials is estimated at through ongoing rationaliza- is focusing aggressively on both
approximately SEK 5 billion. products and application develop-
Harry Furuberg,
A few specialized steel mills ments and is currently carrying out
President of Kanthal.
and independent redrawers that Born in 1951, long-term studies of new combustion
refine purchased starting M.Sc. Eng., employed systems for natural gas, using Kanthal’s
materials, such as the since 1998. patented high-temperature alloys.

30 ● SANDVIK SPECIALTY STEELS

The electronics industry is supplied Investments in products for the indus- ried out to reduce costs and increase
with heavy heating wire, furnace trial furnace industry yielded results. the focus on profitability. Business
cassettes and complete furnace heat- The largest order ever received for a operations are now carried out in
ing systems for the processing of single furnace was signed for delivery four divisions, each with individual
semiconductors as well as heating of Tubothal heating elements and financial responsibility: Wire, Strip
elements for other processes such as tubes to the Czech Republic for a and Bimetal, System Products, and
ferrite sintering. Kanthal’s precision value of over SEK 7 M. Kanthal also Ceramics. Research and development
wire in very thin dimensions is used received large orders operations were also adapted to
in the production of different elec- from Japan and the new organization.
tronic components and in computers Romania for The strategy to concentrate
and loudspeakers. Demand is cyclical, Kanthal production to fewer units with
with an underlying, clearly positive Super increased volumes continued
trend. The segment has through the
grown and today accounts shutdown of
for approximately 25% drawing mills
of total sales. The in Australia
electronics industry is and Brazil as
expected to enter a well as the
new period of strong termination of
growth, and sales a joint venture in
potential is substantial. China for the pro-
duction of silicon-
Market and business carbide elements.
conditions A decision was made
Sales had strong growth regarding the closing of
in for example, Southeast a plant in Italy within the
Asia and South previously acquired company,
Korea. Japan, Kanthal is the leading Driver-Harris. These structur-
manufacturer of resistance
Kanthal’s largest al changes, in combination with
materials in the form of
and most important wire, strip, heating elements increased demand, led to produc-
market in Asia, also and complete systems for tion at the drawing plant in Hallsta-
showed a gradual electrical heating. hammar reaching its highest level
improvement in the during the autumn. The number
business situation during the year and elements. With Kanthal products, the of employees in Kanthal decreased
interest for more advanced system furnaces become more reliable and during the year by 143 persons to
products continued to increase. have a longer operating life, which 1,476 for comparable units. Invest-
In Europe, which accounts for contributes to substantially increased ments included a new scanning-
around half of sales, Germany, in productivity within the glass, steel, electron microscope for the central
particular, had continued positive aluminum, heat-treatment and other laboratory in Hallstahammar.
growth. One contributing factor is industries. The American company In addition, a decision was made
the sales success for the new thin MRL Industries, which was acquired concerning a major expansion of
Kanthal strips among the largest in early 1999 and produces equip- MRL’s production capacity.
German producers of hot plates for ment for the semiconductor industry, Production rationalization and
modern glass-topped stoves. The had positive development during the customer adaptation, combined
strips are produced in cooperation year with gradually increasing order with continued expansive product
with Sandvik Steel. In the rest of intake. development, will further improve
Europe and the US, sales were profitability and secure Kanthal’s
moderate. A number of orders for Restructuring world-leading position ●
furnace systems were obtained in the At the beginning of the year, a com-
US from semiconductor producers. prehensive reorganization was car-

INVOICED SALES, SEK M INVESTMENTS IN FIXED ASSETS, SEK M NUMBER OF EMPLOYEES, 31 DECEMBER

110* 1 743* 1 619

2 060* 2 019 97* 1 575* 1 596
1 901
1 653* 1 731* 86 1 360*
64
44*

95 96 97 98 99 95 96 97 98 99 95 96 97 98 99
* pro forma * pro forma * pro forma
Sandvik
Process Systems
Sandvik Process Systems manufactures and markets
process plants for chemical and food processing
industries and complete systems for automatic goods
sorting. The process plants are generally based on
steel conveyor belts, which are also sold separately.
Invoiced sales of Sandvik Process will be fully implemented dur-
Systems decreased by 20% in 1999, ing the first six months of
while earnings improved substanti- 2000. Administrative costs
ally as a result of a comprehensive will be reduced at the same
Most of the Sandvik
restructuring program. time that sales work is given Process Systems
Sandvik Process Systems is a considerably more support. operations are based
world-leading manufacturer in its on steel belts and
steel-belt systems.
product niches. There are a limited Steel Belts
number of competitors in the steel Development continued towards
belt field. In the processing sector increased volumes in larger special quite large.
Sandvik Process Systems is competing belts while the demand for standard
with many companies, as well as belts was unchanged for the year. Processing Equipment
with processes based on other meth- Sandvik entered an agreement Processing Equipment mainly serving
ods and materials than steel belts. with the German machine manu- the chemical industry, reported a
facturer, Berstorff, concerning the lower order intake at the beginning
takeover of its belt production for of 1999 compared with the preced-
stationary presses and concerning ing year, particularly in Europe.
cooperation in marketing. An improvement occurred at the
A new grinding and leveling line end of the year and invoiced sales
was installed at the production plant reached 1998 levels.
in Sandviken that makes possible The new strategy is to focus on
the production of very wide belts plants that have steel belts as an
(up to a width of 4,500 mm). The essential component, as well as pri-
plant is the largest of its type in the oritizing plants for granulation and
world and makes it possible to supply manufacturing of foils and panels.
customers’ increased demands for Through this concentration within
large special belts. core areas, it will be possible to
The Finnish engineering compa- achieve a higher degree of standard-
Rotoform equipment for granulating has
many applications – for example, in the ny, Valmet, has developed an entire- ization and through that, improved
chemicals industry. ly new concept for paper drying. profitability. The development of a
Sandvik Process Systems entered an granulation process for high temper-
The work of creating regional market agreement in 1999 concerning the atures can be extremely important
and sales organizations was complet- development and supply of steel within growth areas for Processing
ed and yielded major coordination belts for this new process. Market Equipment. The pastille technology,
benefits, especially in Europe. Sales potential for the new paper dryer Rotoform Plus, achieved additional
are led from three centers: Fellbach, with steel sales successes in 1999.
Germany, Totowa, NJ, in the US and belts is An order for five plants
Nishinomiya, Japan for the respective considered for the granulation of
markets, Europe, NAFTA and Asia. sulfur was finalized
A new global IT system that Svante Lindholm, with the Russian oil
President of Sandvik
includes active sales support, order and gas ministry,
Process Systems. Born
management and customer databas- 1947, B.L., employed Gasprom.
es was installed during the year and since 1981.

32 ● SANDVIK SPECIALTY STEELS

 The world’s largest
grinding and leveling
line for extremely
wide steel belts was
placed in operation
in Sandviken, during
the year.

Servicing the equipment will

become an increasingly important
competitive factor. The service orga-
nization was expanded and became
a global operation during the year.
Very fast reaction times as well as a
high level of competence among ser-
vice personnel constitutes a very
important source of support for sales.

Sorting Systems
Despite a binding contract, the
American investment company
Advent International did not complete
its purchase of the operations with-
in Sorting Systems and Sandvik,
consequently, sued Advent in the US.
Because of the failed sale, opera-
tions were restructured, primarily in
the US, but also in Europe. Opera-
tions in the US were tems, which are based on steel- After the changed business
assigned a new direc- belt technology. Operations focus in the US, new opportunities
tion, with a focus on in Japan are now conduct- arose to sell strategic components to
the sale of technolo- ed through an indepen- various system suppliers.
gy, service, spare dent Sandvik company. Cooperation agreements were con-
parts and compo- Upgrading and modern- cluded with these companies for
nents. ization of the 300 larger projects for the US Postal
Accordingly, installations in Japan Service.
Sorting Systems strongly contributed to After continued investments in more
no longer assumes Sandvik Process efficient production equipment, the
overall responsi- System’s good profitabil- creation of regional sales organiza-
bility for larger ity in the country. tions, completed restructuring and
projects. To further increase reinforced focus on service, the
Restructuring was competitiveness within the foundation has been laid for a
completed in the European operation, a more stable and profitable business
autumn. rationalization program was operation ●
Japan is the most implemented during the lat-
Equipment from Sandvik
important market for Process Systems is used ter part
Sandvik Process in the production of of the year at the CML
Systems’ sorting sys- semi-finished products company in Italy.
for the rubber industry.

INVOICED SALES, SEK M INVESTMENTS IN FIXED ASSETS, SEK M NUMBER OF EMPLOYEES, 31 DECEMBER

1 810 1 836 1 873 1 892 108 1 125

1 515 888 884 865
727
65
44 43 41

95 96 97 98 99 95 96 97 98 99 95 96 97 98 99
 All of the Sandvik Steel
operations in Sandviken,

Sandvik and Sweden, were environ-

mentally certified in
accordance with ISO
14001 during 1999.

the environment
Environmental awareness is integrated as a natural past year, comprehensive measures
have been taken to further improve
element in Sandvik’s total business operations. interior environments at facilities and
Environmental consideration is always included in the to inform employees about the risks.

development of new products, changes in processes Energy and CO 2

and production methods and in assessments of invest- Sandvik consumed approximately 450
million kWh of electrical power, not
ments and acquisitions. including electric boiler power, at its
The Group conducts licensed opera- from the Sandvik Group’s production facilities in Sandviken, and another
tions in accordance with the Environ- facilities is linked primarily to the 147 million kWh at its facilities in
mental Protection Act at its main energy-intensive conversion of raw Gimo, Stockholm and Hallstahammar.
plants in Sandviken, Gimo, Stockholm materials into semi-finished goods in Together, they account for more than
and Hallstahammar and at a number the form of steel billets in Sandviken 75 % of the total electrical power con-
of other locations in Sweden, in the and Hallstahammar and the production sumption within the Group.
Swedish parent company, subsidiaries of cemented-carbide powder in Gimo, Combustion of oil and natural
and in partly owned companies. Most Stockholm and Coventry, UK. These gas at Sandvik’s facilities around the
of the large foreign subsidiaries also activities account for only a small world, including the combustion of
conduct operations that are covered portion of Sandvik’s total value-added. carbon in certain alloys, along with
by specific environmental legislation. Most of the operations are more fuel for trucks and cars, generated
characteristic of the engineering indus- approximately 125,000 tons of CO2
try, with limited air and water emis- emissions. During 1999, that amount
sions. Here, environmental measures was reduced, due partly to an eco-
are aimed primarily at controlling heat nomic downturn, but also to increased
treatment facilities and dealing with utilization of electric boilers at
cutting fluids, lubricants and chemicals.
The metallurgical units in
Sandviken and Hallstahammar are
Environmental policy
both self-contained and connected to ● Matters pertaining to the exterior environment
modern filtering systems, eliminating and the work environment are an integral part of
99% of the lime and metallic oxide the Group’s overall approach to business opera-
tions. Decisions related to business activities that
dust emissions into the air. Metallic
affect the environment are guided by considera-
content recovered from the filter dust tions of what is ecologically justified, technically
The environmental aspects are an
is recycled after remelting. Other possible and economically reasonable.
important element of Sandvik’s extensive
research and development. metallic dusts are also formed into
● Sandvik shall strive continuously to improve
briquettes and reused in steel produc- the exterior environment and work environment.
Extensive annual environmental reports tion. The entire Sandvik industrial The aim is to minimize consumption of energy and
are submitted for the main operations area in Sandviken, one of Sweden’s scarce resources and the use of materials that are
in Sweden to the environmental author- largest, is connected to a self-con- harmful to humans and the environment.

ities in which statutory license decisions tained recirculation system for cooling ● A minimum requirement for all Group opera-
and compliance with their conditions water, with a purifying plant for vari- tions shall be to protect employees and eliminate
ous kinds of contaminated water. risks that may impair their health or the health of
are reported. Similar reports are submit-
others. Sandvik shall comply with applicable laws
ted in other countries. In conjunction Numerous safety regulations per-
and agreements with respect to the exterior envi-
with an ongoing investment program, taining to the manufacture of cement- ronment and the work environment, and follow
applications for expansion permits are ed-carbide powder regulate emissions good industrial practice in the countries where it
being sought for Kanthal’s facilities in into the environment, as well as set operates.
Hallstahammar, Gusab Stainless in limits for allowable levels of powder ● In their dealings with Sandvik, suppliers shall be
Mjölby and Sandvik Coromant in in the air within the plants. Cemented- encouraged to adopt principles compatible with
Gimo. Reconsideration is also being carbide powder, which consists par- the Company’s environmental policy. Sandvik
believes that common environmental requirements
given to a plan for Guldsmedshytte tially of cobalt powder and tungsten-
and standards should be established internationally
Bruk in Guldsmedshyttan. carbide powder, can cause allergies and will work with others to develop such require-
and is poisonous if inhaled, which is ments and standards.
Environmental impact why certain parts of the manufacturing
● The company will support employees in imple-
The environmental impact resulting process are self-contained. Over the menting the environmental policy.

34 ● SANDVIK AND THE ENVIRONMENT

Sandviken, the result of plentiful, Swedish refuse tax will result in facturing at Sandviken come from
inexpensive hydroelectric power. increased annual costs of SEK 2.5 M recycled materials, that is, scrap. As
at Sandviken. A majority of the waste for metalworking, manufacturing is
Environmental management system is stored on-site in approved landfills. increasingly being accomplished with-
in accordance with ISO14001 A new disposal area for metal-hydrox- out the use of cutting fluid, thanks to
The Sandvik Group has decided to suc- ide sludge was put into operation Sandvik’s recently developed cemented-
cessively establish environmental man- during 1999. carbide inserts.
agement systems in its production facil- A comprehensive cleanup of the Many of Sandvik’s products help
ities in accordance with ISO 14001. soil and groundwater at the tube plant customers improve the environment.
The system is based on goal-oriented in Chomutov, in the Czech Republic, The worldwide automotive industry is
control and continuous improvement. contaminated by organic chlorine com- one example. The manufacturing of
Accordingly, it is well suited to Sandvik’s pounds, was completed as agreed to in lighter, more fuel-efficient cars, which
work methods in accordance with its the acquisition. The work was paid for continues to increase, is based partly
environmental policy. with funds reserved by the seller. on new tools and components from
During 1999, all of Sandvik Steel At the tube plant in Scranton, PA, Sandvik that were specially designed
in Sandviken, which is Sandvik’s in the US, soil cleanup was completed for working the new, lightweight
largest and most influential produc- for an old solvent spill, at a cost of materials.
tion unit in terms of energy consump- SEK 8 M. Soil cleanup is also currently Sandvik’s extremely thin strip
tion and environmental impact, under way at Precision in the US, steel is increasingly being utilized in
received environmental certification in financed by the previous owner. automotive catalytic converters,
accordance with ISO 14001. Other A program was started to eliminate resulting in considerably lower emis-
units to receive certification include trichloroethylene as a cleaning solution sions released into the environment.
the Sandvik P&P tube facility in at Sandvik P&P in Germany and at Another area where Sandvik
Werther, Germany and the Sandvik Sandvik Steel’s tube plant in Arnprior, products are having a positive effect
Baildonit cemented-carbide plant in Ont., Canada. Improvements to the on the environment is energy recovery
Katowice, Poland. Several more units water cleaning plant at Sandvik Steel’s in the burning of refuse. Sandvik has
are expected to receive certification tube plant in Kennewick, WA, in the developed advanced, stainless steel
during the year 2000. The facilities in US, were made at a cost of approxi- heat-exchanger tubes that can with-
Gimo will be certified during 2001. mately SEK 5 M. stand the highly corrosive environ-
ment found in waste incineration
Significant events during 1999 Development for the environment facilities, resulting in increased opera-
Emissions into the water at the main Environmental considerations are a tional stability for heat and electricity
Swedish facilities in Sandviken, Gimo natural element of the Group’s work production, while providing consider-
and Stockholm, were reduced during in developing both new processes and able cost savings to the customer ●
the year and were well below stipula- products. Approximately 85% of
tions for metals. Dust emissions from the raw materials for steel manu-
metallurgical operations were also
below stipulations. Emissions of nitro-
DISCHARGE OF CHROME (KG), DISCHARGE OF CARBON DIOXIDE (TONS),
gen compounds from the pickling
SANDVIK PRODUCTION PLANTS SANDVIK PRODUCTION PLANTS
facilities in Sandviken diminished some-
what, due mainly to less activity as a
result of decreased economic activity. 71 66 127 131
141 560
122 930
Dust emissions from slag handling are 296 51 296
under review. Noise measurements
taken in Sandviken show that an
investment of SEK 2.5 M in noise
suppression measures is necessary. 1997 1998 1999 1997 1998 1999
Starting in the year 2000, the new
 Report of the Directors
Group review
INVOICED SALES, SEK M Invoiced sales of the Sandvik Group in Systems. The divestment would have
1999 amounted to SEK 39,300 M (42,400), marginal effects on Sandvik’s earnings.
42 400 39 300
a decline of 7% in value and 8% for com- Despite a binding agreement, the invest-
34 119 parable Group units at fixed exchange ment company did not complete the
29 700 28 265
rates. Markets outside Sweden accounted transaction and, accordingly, Sandvik
for 94% (94) of sales. The order intake sued the company in the US. Sorting
declined to SEK 39,650 M (41,700), Systems was restructured during the
down 5% in value and 6% for compara- autumn and, as previously, is part of the
95 96 97 98 99 ble Group units at fixed exchange rates. Sandvik Process Systems business sector.
Profit after financial income and
expenses totaled SEK 5,465 M (3,935), Major acquisitions in recent years
OPERATING PROFIT AFTER FINANCIAL ITEMS, SEK M
including a capital gain of SEK 1,625 M Sandvik has carried out three major
AS A PERCENTAGE OF INVOICED SALES on the sale of Sandvik Saws and Tools. company acquisitions in recent years:
Earnings per share amounted to SEK Tamrock, Kanthal and the American
5 620 5 465 14.00 (8.10). Excluding the capital gain, company Precision Twist Drill.
4 453 4 205 earnings per share amounted to SEK Strong measures were undertaken in
3 935
19 14 9.00 and return on net assets was the past two years to integrate the acqui-
16
15.1% (16.3). sitions into the Sandvik Group.
12 9
The Board of Directors proposes a div- An extensive restructuring and ratio-
idend of SEK 8.00 (7.00) per share, corre- nalization program was carried out with-
95 96 97 98 99 sponding to 57% of earnings per share. in Sandvik Mining and Construction
business area, in which Tamrock and
Sale of Sandvik Saws and Tools former Sandvik units have been inte-
In April, Sandvik signed an agreement grated and reorganized. This program
RETURN ON NET ASSETS, %
with the American company Snap-on resulted in a reduction of more than
28.0 Incorporated covering the sale of the 1,000 employees and a significant earn-
Sandvik Saws and Tools business area, ings improvement.
20.2
17.7 16.3
with annual sales of about SEK 2,700 M. The entire production process within
15.1*
The sale was concluded on 30 September. Precision Twist Drill was realigned and
The selling price for the operations, cash rationalized. One of the three production
and debt free, was about SEK 3,300 M, units in the US was closed. The number
resulting in a capital gain of SEK 1,625 M. of employees was reduced by about 600
95 96 97 98 99
Snap-on has formed the transferred units since the acquisition. The restructuring
into an independent operation, Bahco. measures adversely affected earnings in
During a transition period, Sandvik 1998 and 1999 due to a weakened service
INVESTMENTS IN FIXED ASSETS, SEK M
will continue to sell and distribute Bahco’s level, concurrent with a decline in demand.
2 811
products in certain markets. Sales are The service level was improved at the
2 486 2 353 estimated at about SEK 500 M annually end of 1999.
2 050 1 875 and will be included in the Sandvik Extensive reorganization was carried
Tooling business area as of 2000. out in Kanthal to reduce costs. At the
same time, production was concentrated
Other structural changes to fewer units through the shutdown of
In January 1999, Sandvik’s subsidiary plants in Italy, Brazil, China and Australia.
95 96 97 98 99
Kanthal AB acquired the US company Since the acquisition, the number of
MRL Industries Inc., based in California. employees has declined by about 250.
MRL is one of the world’s largest manu-
NUMBER OF EMPLOYEES, 31 DECEMBER
facturers of heating cassettes for the Concentration to three business areas
electronics industry. MRL posted sales After the aforementioned acquisitions
38 406 37 520 of SEK 182 M in 1999. and sales, Sandvik’s operations are
33 870
29 946 30 362 In September, Sandvik Tamrock Oy concentrated on three core areas:
acquired the Norwegian Brøyt Group’s Sandvik Tooling, Sandvik Mining and
production of hydraulic loaders, repre- Construction and Sandvik Specialty
senting annual sales of about SEK 50 M. Steels. The new organization was applied
In February 1999, Sandvik reached for reporting as of 1999.
95 96 97 98 99 an agreement with the US investment
company Advent International covering Board procedures
the sale of operations within Sorting The members of the Board of Directors
* Excluding capital gain

36 ● REPORT OF THE DIRECTORS

are presented separately on page 66-67. SANDVIK GROUP
The Board met five times during the year, 1999 1998 Change, %
of which once in conjunction with a visit Order intake, SEK M 39 650 41 700 -5
to Group subsidiaries in Italy. Invoiced sales, SEK M 39 300 42 400 -7
The Board has adopted a written Profit after financial items, SEK M 5 465 3 935 +39
work procedure and instructions regard-
ing division of work between the Board
and the President and for financial report-
ing. The Board established internally a
INVOICED SALES BY MARKET AREA
committee to decide on the salaries of
1999 Share 1998 Change
certain senior executives. The Board’s SEK M % SEK M % *
work has involved issues regarding acqui- EU, excl. Sweden 15 271 39 16 777 -9 -7
sitions and their integration, significant Sweden 2 249 6 2 375 -5 -3
investments and review of the company’s Rest of Europe 2 146 5 2 401 -11 -12
long-term goals as well as the sale of the
Total, Europe 19 666 50 21 553 -9 -7
Sandvik Saws and Tools business area.
Certain matters in which the Board
NAFTA 9 952 25 10 626 -6 -9
retains decision authority include:
South America 1 548 4 1 978 -22 -21
• investments in amounts of Africa, Middle East 1 606 4 1 916 -16 -11
SEK 15 M and higher Asia, Australia 6 528 17 6 327 3 -5
• acquisition and divestment of Group total 39 300 100 42 400 -7 -8
companies or operating units
* Change excluding currency effects and company acquisitions.
• increases in share capital in the
subsidiaries and associated companies
• the company financing policy and
policy for trading in currencies and
INVOICED SALES IN THE 10 LARGEST MARKETS
interest-rate instruments.
1999 1998 Change
During the year, the business area SEK M SEK M %
managers reported to the Board about USA 8 336 8 943 -7
strategic and other important matters Germany 3 965 4 443 -11
within their respective areas. Italy 2 775 3 010 -8
France 2 476 2 631 -6
Market conditions and sales Sweden 2 249 2 375 -5
The business climate in 1999 improved UK 2 151 2 543 -15
successively from a weak start. At its Australia 2 079 2 323 -11
lowest, the growth in industrial produc- Japan 1 668 1 654 1
tion within the OECD was about 1%, Canada 1 134 1 231 -8
but rose to 2.5% at year-end. The Spain 964 1 028 -6
increase during the autumn was attribut-
able to continued strong economic condi-
tions in the US, improvement within
the EU, an upturn in Japan and strong
recoveries in Southeast Asia and Korea. INVOICED SALES BY BUSINESS AREA**

The prospects for Russia and South 1999 1998 Change

MSEK MSEK % *
America brightened.
However, development within several Sandvik Tooling 13 177 13 576 -3 -5
industrial sectors of importance to Sandvik Sandvik Mining and Construction 8 808 9 379 -6 -9
was considerably weaker than the average. Sandvik Specialty Steels 11 971 13 579 -12 -16
The prices of oil and base metals rose Sandvik Saws and Tools 2 153 2 694 -20 1
during the year, however, which will have Seco Tools 3 128 3 151 -1 -4
an effect through a higher willingness to Group activities 63 21 / /
invest in these sectors. Group total 39 300 42 400 -7 -8
The SEK continued to weaken against * Change excluding currency effects and company acquisitions.
the USD during the year, but remained ** Values in 1998 adjusted to apply to new business area organization
unchanged on average against the EUR.
The currency rates in Japan, Korea and Seco Tools is a listed company and publishes its own Annual Report on its operations.

REPORT OF THE DIRECTORS ● 37

Southeast Asia strengthened sharply, par- restructuring of Precision Twist Drill in resulted in low capacity utilization during
ticularly at the end of the year. In total, the US. most of the year, which to a large extent
Sandvik’s invoiced sales were 2% higher Sandvik Mining and Construction’s was offset by rationalization measures
in 1999 than would have been the case at invoiced sales amounted to SEK 8,808 and cost reductions. Lower prices for
1998 exchange rates. M (9,379), down 6%. The order intake Sandvik Specialty Steels had a negative
Demand was low for Sandvik’s was SEK 9,039 M, 1% lower than a effect on earnings of about SEK 500 M.
products at the beginning of the year, year earlier. The rise in metals prices Positive currency effects improved earn-
but rose during the year and at year-end meant that demand for machinery to the ings by about SEK 300 M. Operating
was at a significantly higher level than at mining industry increased somewhat at profit improved at the end of the year
the same time in 1998 for comparable the end of the year. The mining industry’s through higher volumes than earlier in the
units. The upward trend was evident for recovery of metals was largely constant year, better productivity and higher raw
all business areas and particularly for during the year, which resulted in favor- material prices in inventory valuation.
Sandvik Specialty Steels. able demand for tools and spare parts. Allocations to the profit-sharing plan
Invoicing declined during the year for The construction industry showed high for employees in wholly-owned compa-
comparable units. However, the trend activity while the business climate for nies in Sweden totaled SEK 150 M (150).
was positive also for invoicing and the coal mines remained weak. Net financial items amounted to an
highest quarterly rate was achieved in the Sandvik Specialty Steels’ invoiced expense of SEK 585 M (expense: 660).
fourth quarter. sales amounted to SEK 11,971 M (13,579). Profit after financial income and expenses
Invoiced sales by market area are The decline was 12% and pertained increased to SEK 5,465 M (3,935). Tax
presented in a separate table. mainly to investment-related tube prod- expenses totaled SEK 1,688 M (1,675),
Invoicing declined in the EU and ucts for the oil/gas, chemical and petro- or 31% (43) of profit before taxes.
NAFTA. South America was affected high- chemical industries. Sales were consider- Net profit was SEK 3,620 M (2,095).
ly adversely by the devaluation in Brazil ably better for consumer-oriented steel Earnings per share amounted to SEK
at the beginning of 1999. The increase in products. Order intake was SEK 12,084 14.00 (8.10). Excluding capital gain,
China, Southeast Asia and Korea was M, or 8% lower than a year earlier. net profit was SEK 2,340 M (2,095) and
sharp, while invoicing declined in Japan The trend was positive toward year-end, earnings per share SEK 9.00.
and Australia. with a strong increase in NAFTA and Return on net assets excluding the
The Group’s invoiced sales by business Asia. Prices declined 7% for Sandvik capital gain declined to 15.1% (16.3)
areas are presented in a separate table. Steel during the year, but increased at and return on shareholders’ equity was
Sandvik Tooling’s invoiced sales year-end. 12.4% (11.9).
declined 3% to SEK 13,177 M (13,576).
Order intake was SEK 13,155 M. A sharp Earnings and returns Operating profit by business area
improvement occurred in the fourth quar- Operating profit before capital gain Sandvik Tooling’s operating profit
ter, with increases in Germany and Asia, improved successively during the year amounted to SEK 2,597 M (2,724), that
among other areas. Sandvik Coromant and, as in 1998, was 11% of invoiced is, unchanged at 20% of invoiced sales.
developed well in NAFTA while Sandvik sales. Lower volumes in all business areas Sandvik Coromant successively increased
CTT continued to be affected by the its margin during the year mainly as a
result of cost reductions. Sandvik CTT’s
earnings were affected by continued low
EARNINGS AND RETURNS
results for Precision Twist Drill in the US.
1999 1998 Sandvik Mining and Construction’s
Operating profit before capital gain, SEK M 4 425 4 595 operating profit amounted to SEK 674 M
as a percentage of invoiced sales 11.3 10.8 (340), corresponding to 8% of invoiced
Capital gain on sale of Sandvik Saws and Tools, SEK M 1 625 - sales. The significant improvement during
Operating profit, SEK M 6 050 4 595 the year was attributable to a higher por-
as a percentage of invoiced sales 15.4 10.8 tion of profitable products, effects of the
Profit after financial income and expenses, SEK M 5 465 3 935 implemented restructuring program and
as a percentage of invoiced sales 13.9 9.3 rising capacity utilization at the business
Return on net assets before capital gain, % 15.1 16.3 area’s main units.
Return on shareholders’ equity before capital gain, % 12.4 11.9 Sandvik Specialty Steels’ operating
Earnings per share before capital gain, SEK 9.00 8.10 profit improved gradually during the year
Earnings per share, SEK 14.00 8.10 and for the full year was SEK 633 M
Definitions, page 50.
(902), 5% of invoiced sales. Lower sales
volume and low prices were the main
QUARTERLY TREND OF PROFIT AFTER NET FINANCIAL ITEMS, reasons for the decline in profit for the
EXCLUDING CAPITAL GAIN year. Nevertheless, the program to reduce
Profit after
expenses and align operations to volumes
Invoiced sales financial items Net margin had positive effects as well as a higher
SEK M SEK M % inventory valuation of about SEK 150 M
1998: 1st Quarter 10 770 1 140 11 in the fourth quarter due to rising prices
2nd Quarter 10 480 1 135 11 for raw materials.
3rd Quarter 10 020 827 8 Sandvik Saws and Tools’ operating
4th Quarter 11 130 833 7 profit of SEK 153 M included operations
through the divestment date as well as
1999: 1st Quarter 9 630 810 8 Sandvik’s remaining distribution opera-
2nd Quarter 10 360 1 001 10 tions for Saws and Tools products on
3rd Quarter 9 280 824 9
certain markets.
4th Quarter 10 030 1 205 12

38 ● REPORT OF THE DIRECTORS

Group activities include operating OPERATING PROFIT BY BUSINESS AREA

expenses for central administration and 1999 1998

SEK M % of sales SEK M % of sales
finance operations and other activities in
the Group units worldwide not linked to Sandvik Tooling 2 597 20 2 724 20
the business areas. Sandvik Mining and Construction 674 8 340 4
Sandvik Specialty Steels 633 5 902 7
Raw materials Sandvik Saws and Tools 153 7 205 8
The raw material prices rose during the Seco Tools 572 18 677 21
year. The repurchasing price for nickel Group activities -204 / -253 /
doubled. The change in raw material Operating profit 4 425 * 11 4 595 11
prices was less significant for the *Excluding capital gain

cemented-carbide products, with a FINANCIAL POSITION

slight increase in the price of tungsten. 1999 1998
Cash flow from operating activities, SEK M 3 394 3 919
Financial position Cash flow after investments and divestments 4 710 963
Cash flow from operating activities Net cash flow, SEK M 577 -791
amounted to SEK 3,394 M. Cash flow Liquid assets and short-term investments, 31 Dec., SEK M 2 369 1 800
after investments and sale of Sandvik Loans, 31 Dec., SEK M 5 611 7 529
Saws and Tools was SEK 4,710 M.
Net debt, SEK M 6 014 8 412
Liquid funds at year-end amounted to
Net financial items, SEK M -585 -660
SEK 2,369 M (1,800). Interest-bearing
Equity ratio, % 52 47
provisions and liabilities less liquid
Debt/equity ratio, times 0.4 0.5
funds yielded a net debt of SEK 6,014 M
Shareholders’ equity, SEK M 20 109 18 621
(8,412).
Shareholders’ equity per share, SEK 77.70 72.00
The company’s fixed-interest term
Definitions, page 50.
is slightly less than one year. A portion
of the company’s financing, directly or free for Sandvik. Group companies in Capital expenditures
indirectly, was made in currencies in the European economic and monetary 1999 1998
high interest-rate countries to fund and union, EMU, are now preparing for a Investments in property,
plants and equipment, SEK M 1 875 2 811
hedge working capital in these countries. shift from the various local currencies
As a percentage
As a result, the company’s financing costs to the euro as their accounting currency. of invoiced sales, % 4.8 6.6
were higher than if all financing had At year-end, Sandvik had hedged
been carried out in Swedish kronor. the SEK value of exports from Sweden
Major investments included:
In accordance with the decision at the for about two months through forward
Annual General Meeting, all employees in contract sales of currency. This flow • Increase in capacity for production
Sweden were offered to subscribe for represents the company’s largest trans- of solid-carbide rotating tools in
convertible debentures in Sandvik AB action exposure. Gimo, Sweden.
during the year. Interest was very high Sandvik’s net inflows of currencies, • New production facility for Sandvik
and the allotment was reduced by 25% for the largest producing companies, Coromant in Texas, US, for tools
for all those who applied for a maximum denominated in SEK M were: in cemented carbide, ceramics and
share. A total of about 7,000 employees other advanced materials.
utilized this opportunity to share in the 1999 Share • Production unit in India for cemented-
expected future increase in the value of Euro currencies 5 583 50 % carbide powder.
the company. In total, convertibles were USD and CAD 2 877 26 % • Increase in production for Sandvik
subscribed for SEK 955 M. If the entire GBP 681 6% Hard Materials in Mexico.
loan is converted to shares, the number AUD 498 5% • Sandvik Mining and Construction’s
would increase by 4,360,150. JPY 459 4% investments in rental equipment and
Concurrently, employees outside Sweden Other currencies 952 9% central warehouses.
were offered the opportunity to acquire Total 11 050 100 % • Expansion of Sandvik Mining and
warrants, each carrying the right to Construction’s production resources
purchase a B share. A total of 560,900 Inventories in Finland, Sweden and Brazil.
warrants were issued. The value of inventories amounted to SEK • A new heat-treatment plant for heavy
During the year, Sandvik signed a 10,040 M (10,350) at year-end, which steel bar and a new annealing line for
financing agreement amounting to SEK was 26% (24) relative to invoiced sales. flapper-valve steel and other precision
750 M with the European Investment strip products at Sandvik Steel in
Bank regarding current investments in Trade receivables Sandviken.
Sandviken. The long-term credit facility Trade receivables at year-end totaled SEK • New grinding and leveling line for
that the company established in 1997 8,038 M (8,629). In relation to invoiced wide belts at Sandvik Process System’s
amounting to USD 650 M was unutilized sales in the fourth quarter, receivables plant in Sandviken.
at year-end. This facility secures the amounted to 20% (19) on an annual basis.
company’s current liquidity needs. SEK 200 M of total investments in
The Standard & Poor’s international Shareholders’ equity property, plant and equipment was for
credit rating institute retained its A+ Shareholders’ equity at year-end Sandvik Mining and Construction’s
rating for Sandvik’s long-term borrowing amounted to SEK 20,109 M (18,621), rental fleet.
and A-1/K-1 for short-term. or SEK 77.70 (72.00) per share. Total purchase prices for companies
The introduction of the new European The equity ratio was 52% (47). acquired during the year amounted to
currency, the euro, proceeded problem- SEK 358 M (391).

REPORT OF THE DIRECTORS ● 39

Research, development shares during the five-year period from Annually, comprehensive environmental
and quality assurance 1995 to 1999, and was paid at year-end reports on the main Swedish operations
Group investments during 1999 in research 1999 or in the beginning of 2000. The are submitted to the supervisory authori-
and development and quality assurance terms are described in Note 1.4. After ties in which the license standards and
amounted to SEK 1,593 M (1,568), corre- the increase in the Sandvik shares during compliance with all the various require-
sponding to 4% of invoiced sales. the autumn of 1999, the total bonus ments are presented. Similar reporting is
Examples of new products within amount was SEK 209 M. Through also required in other countries. In con-
Sandvik Tooling include a new tool hedging of the bonus amount’s changes junction with the ongoing investment
concept for parting and grooving, new in recent years, the actual cost of the program, applications for extended per-
cemented-carbide grades for turning of Group was SEK 136 M distributed over mits are being considered for Kanthal’s
steel, totally new insert material in the the years 1995 -1999. plant in Hallstahammar, Gusab Stainless
form of nickel-free cermet, an increased Sandvik’s Board of Directors decided in Mjölby and Sandvik Coromant in
range of end mills, new cemented-carbide in 1999 to establish a stock option plan Gimo. A reappraisal is also under way
drills for deep holes and composite blanks for about 300 senior executives in Sweden regarding Guldsmedshytte Bruk in
for microdrills. and abroad, which replaces a five-year Guldsmedshyttan.
Sandvik Mining and Construction’s incentive program concluded during the The environmental impact from the
introductions included a drilling rig, year. The option plan provides the possi- Sandvik Group’s production facilities is
technology and equipment for automa- bility of an annual allocation of so-called linked mainly to the energy-demanding
tion of mining processes, new raise- personnel options on Sandvik shares with transformation of raw materials to semi-
boring heads and a down-the-hole a lifetime of five years and the right to finished goods in the form of steel billets
drilling hammer. exercise after three years, conditional in Sandviken and Hallstahammar and
Sandvik Specialty Steels introduced upon continued employment. The alloca- production of cemented-carbide powder
a new generation of stainless steel with tion, which is consideration-free, is based in Gimo, Stockholm, and Coventry, UK.
improved machinability, a new steel on Sandvik’s return on net assets in the These activities account for a minor por-
grade for implants and new applications preceding year. tion of Sandvik’s total added value.
for high-temperature alloys. The program is based on existing Through closed loops and external
shares. Accordingly there is no dilution treatment processes, the impact is mini-
Personnel effect for the current shareholders. The mized on the external environment from
The number of employees at year-end option plan is secured financially so that emission to water and air of dust and
was 33,870 (37,520). For comparable future increases in the price of the Sandvik nitrogen compounds, from the handling
units, the number of employees declined share will not affect the company’s costs. of slag and waste and from noise.
by 2,233 (1998: decrease of 995). The Board decided in February 2000 to Most of the operations are charac-
1999 1998 allocate 1.4 million options to about 300 teristic of the engineering industry,
senior executives in the Group, of which with limited emission to air and water.
Number of employees,
31 Dec.* 33 870 37 520 42,000 options to the President. The Environmental improvement efforts are
Average number option has an exercise price of SEK 289. aimed mainly at chemical substances.
of employees
Women 6 961 7 331 Pension surplus Year 2000 project
Men 28 734 30 632 The SPP (Swedish Staff Pension) insur- The millennium shift occurred without
Total 35 695 37 963 ance company announced in October incident for Sandvik. The estimated costs
* Part-time employees adjusted to reflect an equivalent number that, based on certain specified condi- for the Groupwide project for prepara-
of full-time employees.
tions, an amount of about SEK 500 M tion and readiness was SEK 200 M, most
At 31 December 1999, the number of has been allotted to the Sandvik Group of which was expended prior to 1999.
persons employed by the Group in for pension purposes. The amount repre-
Sweden was 9,706 (11,112). sents a surplus earned on pension funds Parent Company
Details regarding personnel costs and paid previously by Sandvik in recent Parent Company invoiced sales amounted
the average number of employees in Sweden years. In December SPP decided to post- to SEK 10,457 M (12,491) and operating
and abroad are provided on page 52. pone the possibilities for companies to profit was SEK 933 M (1,182). Capital
utilize the funds. Accordingly, these have expenditures in property, plant and equip-
Employee profit-sharing not been included in Sandvik’s income ment amounted to SEK 498 M (841).
and bonus program statement and balance sheet for 1999. The number of employees in the
Sandvik adopted a profit-sharing fund in Information is expected from SPP in the Parent Company and subsidiaries at
1986 for employees at the Parent Company first half of 2000 regarding how the 31 December 1999 was 7,361 (8,309).
and wholly owned subsidiaries in Sweden. funds can be utilized. In addition to Sweden, the Parent
Under the rules for this fund, a mini- Company’s operations are carried out in
mum return requirement must be met Environment a number of countries, through affiliates
before an allocation is made from profits. The Group conducts licensed operations and representative offices.
The allocation is restricted to a maximum in accordance with the Environmental
of SEK 150 M. The Sandvik Group Protection Act at its main plants in
return in 1999 meant that the maximum Sandviken, Gimo, Stockholm and Hall-
requirement was achieved and that SEK stahammar and a number of other
150 M was allocated to the fund. locations in Sweden within the Swedish
The possibility of a long-term bonus Parent Company and in a number of
was provided to Group executive man- subsidiaries and partly-owned companies.
agement and about 250 senior executives Most of the larger foreign subsidiaries
in Sweden and abroad, which was based also conduct operations that are covered
on price trends for Sandvik Series B by specific environmental regulations.

40 ● REPORT OF THE DIRECTORS

Consolidated
income statement

Amounts in SEK M 1999 1998

Invoiced sales Notes 2, 3 39 300 42 400

Cost of goods sold Note 5 -26 297 -28 817
Gross profit 13 003 13 583

Selling expenses -6 321 -6 675

Administrative expenses -2 164 -2 080
Other operating income 95 279
Other operating expenses -188 -512
Capital gain 1 625 -
Operating profit Notes 1, 6, 7, 8 6 050 4 595

Income from securities and loans held

as fixed assets Note 11 6 17
Other interest income and similar income Note 12 -7 113
Interest expense and similar charges Note 12 -584 -790
Profit after financial items Note 4 5 465 3 935

Income taxes Note 14 -1 688 -1 675

Profit after tax 3 777 2 260

Minority interests -157 -165

Net profit for the year 3 620 2 095

CONSOLIDATED INCOME STATEMENT ● 41

Consolidated
balance sheet

Amounts in SEK M 1999 1998

ASSETS
Fixed assets
Intangible fixed assets
Patents and other intangible assets Note 15 175 140
Goodwill Note 15 4 243 4 462
4 418 4 602
Tangible fixed assets
Land and buildings Note 15 3 918 4 179
Plant and machinery Note 15 7 622 7 656
Equipment, tools, fixtures and fittings Note 15 1 003 1 135
Construction in progress and
advance payments for tangible assets Note 15 705 1 172
13 248 14 142
Financial fixed assets
Participations in associated companies Note 18 311 371
Loans to associated companies 2 3
Other investments held as fixed assets Note 19 54 64
Other long-term receivables 285 279
652 717

Total fixed assets 18 318 19 461

Current assets
Inventories Note 20 10 040 10 350

Current receivables
Trade receivables 8 038 8 629
Due from associated companies 123 97
Prepaid income taxes 100 89
Other receivables 793 765
Prepaid expenses and accrued income 415 415
9 469 9 995

Liquid assets Note 21 2 369 1 800

Total current assets 21 878 22 145

TOTAL ASSETS 40 196 41 606

Assets pledged Note 28 320 692

42 ● CONSOLIDATED BALANCE SHEET

Amounts in SEK M 1999 1998

SHAREHOLDERS’ EQUITY AND LIABILITIES

Shareholders’ equity
Restricted equity
Share capital Note 22 1 552 1 552
Restricted reserves 9 065 9 436
10 617 10 988
Unrestricted equity
Unrestricted reserves 5 872 5 538
Net profit for the year 3 620 2 095
9 492 7 633

Total shareholders’ equity Note 23 20 109 18 621

Minority interests 888 872

Provisions
Provisions for pensions Note 26 2 288 2 463
Provisions for taxes Note 14 2 434 2 236
Other provisions Note 27 1 250 1 649
5 972 6 348
Interest-bearing liabilities
Bond loans - 194
Loans from financial institutions 4 587 7 335
Convertible debenture loan 1 024 -
Other long-term liabilities 483 220
Note 28 6 094 7 749

Non-interest-bearing liabilities
Advance payments from customers 307 286
Trade payables 2 117 2 323
Bills payable 199 288
Due to associated companies 53 50
Income tax liabilities 426 560
Other liabilities 1 191 1 408
Accrued expenses and deferred income Note 30 2 840 3 101
Note 29 7 133 8 016

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 40 196 41 606

Contingent liabilities Note 31 629 866

CONSOLIDATED BALANCE SHEET ● 43

Consolidated
cash-flow statement

Amounts in SEK M 1999 1998

Cash flow from operating activities

Profit after financial income and expenses 5 465 3 935
Reversal of depreciation 2 273 2 099
Adjustment for items that do not require the use of cash -2 049 -73

Taxes paid -1 524 -759

Cash flow from operations

before changes in working capital 4 165 5 202

Cash flow from changes in working capital:

Change in inventories -144 25
Change in current receivables -297 -205
Change in current operating liabilities -330 -1 103

Net cash flow from operating activities 3 394 3 919

Cash flow used in investment activities

Acquisitions of companies and shares, net of cash acquired -344 -386
Investments in tangible fixed assets -1 875 -2 811
Sales of companies and shares, net of cash disposed of 3 216 44
Proceeds from sale of tangible fixed assets 319 197
Net cash flow used in investment activities 1 316 -2 956

Net cash flow after investment activities 4 710 963

Cash flow from financing activities

Change in short-term loans -2 862 864
Change in long-term loans 904 -419
Redemption of pension liabilities -245 -
Dividends paid -1 930 -2 199
Net cash flow from financing activities -4 133 -1 754

Cash flow for the year 577 -791

Liquid funds at beginning of the year 1 800 2 494

Effects of exchange rate changes on liquid funds -8 97

Liquid funds at end of the year 2 369 1 800

Supplementary information, Note 33

44 ● CONSOLIDATED CASH-FLOW STATEMENT

Parent Company
income statement

Amounts in SEK M 1999 1998

Invoiced sales Note 2 10 457 12 491

Cost of goods sold Note 5 -8 164 -9 902
Gross profit 2 293 2 589

Selling expenses -380 -458

Administrative expenses -1 018 -881
Other operating income 46 132
Other operating expenses -8 -200
Operating profit Notes 1, 6, 7 933 1 182

Result from financial items

Income from shares in Group companies Note 9 1 641 1 120
Income from shares in associated companies Note 10 308 397
Income from securities and loans held
as fixed assets Note 11 39 70
Other interest income and similar income Note 12 192 147
Interest expense and similar charges or expenses Note 12 -463 -455
Profit after financial items Note 4 2 650 2 461

Appropriations
Other appropriations Note 13 -109 -83
Profit before tax 2 541 2 378

Income taxes Note 14 -255 -334

Net profit for the year 2 286 2 044

PARENT COMPANY FINANCIAL STATEMENTS ● 45

Parent Company
balance sheet

Amounts in SEK M 1999 1998

ASSETS
Fixed assets
Intangible fixed assets
Patents and other intangible assets Note 16 4 6
4 6
Tangible fixed assets
Land and buildings Note 16 369 376
Plant and machinery Note 16 2 656 2 416
Equipment, tools, fixtures and fittings Note 16 218 266
Construction in progress and
advance payments for tangible assets Note 16 379 763
3 622 3 821
Financial fixed assets
Shares in Group companies Note 17 6 565 6 398
Loans to Group companies 1 150 1 046
Shares in associated companies Note 18 17 17
Loans to associated companies 2 3
Other investments held as fixed assets Note 19 12 0
Other long-term receivables 20 21
7 766 7 485

Total fixed assets 11 392 11 312

Current assets
Inventories Note 20 2 565 2 389

Current receivables
Trade receivables 547 621
Due from Group companies 5 604 4 830
Due from associated companies 124 99
Other receivables 297 198
Prepaid expenses and accrued income 140 109
6 712 5 857

Liquid assets Note 21 432 100

Total current assets 9 709 8 346

TOTAL ASSETS 21 101 19 658

Assets pledged Note 28 2 4

46 ● PARENT COMPANY FINANCIAL STATEMENTS

Amounts in SEK M 1999 1998

SHAREHOLDERS’ EQUITY AND LIABILITIES

Shareholders’ equity
Restricted equity
Share capital Note 22 1 552 1 552
Share premium reserve 20 20
Legal reserve 297 297
1 869 1 869
Unrestricted equity
Profit brought forward 651 708
Net profit for the year 2 286 2 044
2 937 2 752

Total shareholders’ equity Note 23 4 806 4 621

Untaxed reserves
Accelerated depreciation above schedule Note 24 1 575 1 476
Tax allocation reserves Note 25 1 666 1 605
Tax equalization reserve Note 25 53 107
Other untaxed reserves Note 25 39 36
3 333 3 224
Provisions
Provisions for pensions Note 26 784 1 029
Provisions for taxes Note 14 175 175
Other provisions Note 27 31 49
990 1 253
Interest-bearing liabilities
Bond loans 0 194
Loans from financial institutions 675 2 075
Loans from Group companies 8 049 5 247
Convertible debenture loan 955 -
Note 28 9 679 7 516
Non-interest-bearing liabilities
Advance payments from customers 65 12
Trade payables 483 517
Due to Group companies 373 976
Due to associated companies 296 394
Income tax liabilities 25 164
Other liabilities 85 105
Accrued expenses and deferred income Note 30 966 876
Note 29 2 293 3 044

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 21 101 19 658

Contingent liabilities Note 31 3 078 3 304

PARENT COMPANY FINANCIAL STATEMENTS ● 47

Parent Company
cash-flow statement

Amounts in SEK M 1999 1998

Cash flow from operating activities

Profit after financial income and expenses 2 650 2 461
Reversal of depreciation 460 401
Adjustment for items that do not require the use of cash -48 -593

Taxes paid -281 -126

Cash flow from operations before changes in working capital 2 781 2 143

Cash flow from changes in working capital:

Change in inventories -176 -161
Change in current receivables -957 -1 815
Change in current operating liabilities -1 015 492

Net cash flow from operating activities 633 659

Cash flow used in investment activities

Acquisitions of companies and shares, net of cash acquired -215 -334
Investments in tangible fixed assets -498 -841
Sales of companies and shares, net of cash disposed of 12 97
Proceeds from sale of tangible fixed assets 256 15
Net cash flow used in investment activities -445 -1 063

Net cash flow after investment activities 188 -404

Cash flow from financing activities

Change in short-term loans 1 276 989
Change in long-term loans 887 861
Redemption of pension liabilities -208 -
Dividends paid -1 811 -1 811
Net cash flow from financing activities 144 39

Cash flow for the year 332 -365

Liquid funds at beginning of the year 100 465

Liquid funds at end of the year 432 100

48 ● PARENT COMPANY FINANCIAL STATEMENTS

Accounting principles

The same principles were applied in 1999 is included in Group tax expenses as resulting from sales of goods is expected
as in 1998, with the exception of the cash- estimated future taxes. The remaining to cover the forward contracts.
flow statement which has been prepared portion is included in the Group’s net
in accordance with the new recommen- profit for the year. In the event of a Short-term investments
dation of the Swedish Financial Accounting change in the tax rate, the change in tax Bonds and other short-term investments
Standards Council. liability is included in tax expenses for are valued at historical cost or market
the year. value on the balance sheet date, whichever
Consolidation principles In classifying the shareholders’ is lower. In the process of valuation, this
The consolidated accounts cover the equity of the Group as unrestricted or principle is applied to the portfolio as a
Parent Company, all subsidiaries and restricted, the method proposed in the whole, meaning that unrealized losses
associated companies. Subsidiaries are Swedish Financial Accounting Standards are offset against unrealized gains.
defined as companies in which the Council’s recommendation is followed, Any remaining loss is deducted from
Parent Company directly or indirectly with net effects of any applicable with- interest income, whereas gains are not
holds more than half the votes. holding taxes also taken into account. recognized.
Associated companies are companies
connected to the Group’s operations and Foreign currency Inventories
in which the Parent Company has a In preparing the consolidated financial Inventories are valued at the lower of
direct or indirect long-term holding rep- statements, the accounts of foreign sub- historical cost in accordance with the
resenting not less than 20% and not sidiaries are translated in accordance first-in/first-out principle and net realiz-
more than 50% of voting rights. The with the recommendation of the Swedish able value, taken as replacement cost in
proportional consolidation method is Financial Accounting Standards Council. the case of semifinished goods and raw
applied for certain joint ventures. Since most of the foreign subsidiaries materials.
The consolidated accounts are pre- are independent foreign entities, the
pared in accordance with the principles current-rate method is used. Changes in Depreciation of tangible fixed assets
stated in the Swedish Financial Accounting Group equity arising from variations in Scheduled depreciation charged in indus-
Standards Council’s recommendation. exchange rates prevailing on the balance trial operations is based on the historical
All acquisitions of companies are sheet date, compared with rates at the cost of assets and their estimated eco-
reported in accordance with the pur- preceding year-end, have direct effects nomic lives. Straight-line depreciation
chase method. Goodwill is determined on Group equity. The financial state- is normally applied over 5-10 years for
in the local currency. While goodwill is ments of companies operating in high- machinery and equipment, 10-50 years
normally amortized on a straightline inflation countries are initially translated for buildings, and 20 years for site
basis over 5 to 10 years, amortization into US dollars or euro in accordance improvements. Declining balance depre-
periods up to 20 years may be decided with the temporal method. Translation ciation over 3-5 years is applied to com-
in cases of important strategic acquisi- differences that then arise have an effect puter equipment. The difference between
tions. Amortization is reported as selling on earnings for the year. In a second scheduled depreciation and depreciation
expenses. If goodwill is determined to stage, the balance sheets and income state- for tax purposes is shown by individual
have been permanently impaired, an extra ments of these companies are translated to companies as accumulated excess depre-
write-down is made. Internal transactions SEK using the current-rate method. ciation under untaxed reserves.
are eliminated. Accumulated translation differences
Divested companies are included in for each foreign operation was not regis- Profit recognition
the consolidated accounts until the time tered previously. The Company has not Sales are recognized at the time of delivery
of the sale. Companies acquired during considered that it was practically possi- and are equal to sales price less deduc-
the current year are consolidated from ble to secure this information retroac- tions for value-added tax, discounts and
the time of purchase. tively. Accordingly, information about returns. Income from contracts extending
The consolidated balance sheet and accumulated translation differences will more than one year is reported in accor-
income statement are presented without pertain to exchange-rate changes as of dance with the percentage of completion
untaxed reserves and appropriations. the 1999 fiscal year. method
Untaxed reserves reported by individual Receivables and liabilities in foreign Estimated costs of product guarantees
companies within the Group have been currencies are stated at the applicable are charged against operating income at
apportioned so that deferred tax is rate of exchange on the balance sheet the time of sale.
reported under provisions for taxes, with date. In cases where forward-exchange
the remainder included in the Group’s contracts have been entered into, how- Research and development costs
shareholders’ equity. Deferred tax, gen- ever, the forward rate of exchange is Research and development costs are
erally at the tax rate for the next fiscal used in valuations of underlying receiv- expensed as incurred.
year, has been calculated separately for ables or liabilities.
each company. The tax attributable to Outstanding forward-exchange con- Taxes
changes during the year in the untaxed tracts relating to sales of currencies are Tax expense for the year includes taxes
reserves of individual Group companies not assigned values if the currency flow paid, deferred taxes and the share of

ACCOUNTING PRINCIPLES ● 49
taxes in associated companies. Current DEFINITIONS
taxes also include foreign withholding
taxes paid in respect of dividends. Earnings per share
Deferred tax includes tax effects taken Net profit for the year divided by the
into account in the Consolidated Accounts average number of shares outstanding
according to the Swedish Financial during the year.
Accounting Standards Council’s recom-
mendation. This includes deferred tax in Equity ratio
the untaxed reserves of individual Shareholders’ equity and minority
Group companies, deferred tax when interests in relation to total capital.
different values are assigned at Group
and company level, including unrealized Debt/equity ratio
internal profits, as well as tax effects on Interest-bearing current and long-term
purchase-accounting fair-value adjust- debts (including pension liability)
ments, including those attributed to divided by the total of shareholders’
acquired tax-loss carryforwards. Under equity and minority interests.
deferred tax, Sandvik also includes any
tax deferred in consequence of participa- Rate of capital turnover
tion in net losses of partly owned limit- Invoiced sales divided by average total
ed partnerships. capital.

Cash-flow statement Return on shareholders’ equity

The cash-flow statement is based on the Consolidated net profit for the year as
recommendation of the Swedish Financial a percentage of average shareholders’
Accounting Standards Council. Receipts equity during the year.
(inflow) and payments (outflow) are
divided into categories: operating activi- Return on net assets
ties, investment activities and financing Profit after financial income and expenses,
activities. The indirect method is used to plus interest expenses and translation
report flows from operating activities. differences on loans, as a percentage of
Changes during the year in operating average total capital, less non-interest-
assets and operating liabilities are adjusted bearing debts.
for exchange differences. Acquisitions and
divestments are reported among invest-
ment activities. The assets and liabilities
held by the divested and acquired compa-
nies at the transfer date are not included
in the analysis of changes in working
capital or net investments.

50 ● ACCOUNTING PRINCIPLES
 US GAAP
information
The Sandvik Group’s financial statements US GAAP requires that such interest the projected unit method, and calcula-
have been prepared in accordance with expense be capitalized and depreciated tions of the discount interest rate, as
aforementioned Swedish accounting prin- with other acquisition costs over the well as differences in accounting for
ciples. The significant differences between useful life of the asset. actuarial gains and losses as well as plan
these principles and generally accepted changes. The actuarial assumptions used
accounting principles in the US (US Foreign exchange may also differ.
GAAP) as applicable to the Sandvik Under Swedish GAAP, unrealized gains
Group are described below. and losses on forward exchange contracts General
to hedge anticipated future transactions Other areas in which the application of
Deferred tax are normally deferred and reported with US GAAP to Sandvik Group accounts
Sandvik reports deferred taxes to the extent the underlying transaction when it occurs. differ include mainly general provisions
promulgated by recommendations of the US GAAP allows such reporting only for and restructuring reserves recorded
Swedish Financial Accounting Standards specifically identified future flows. In other when a company is acquired.
Council regarding consolidated accounts. cases, forward exchange contracts are Under Swedish GAAP, the provision
Accordingly, reported deferred taxes marked to market and unrealized gains for costs for restructuring is made when
include primarily deferred tax liabilities and losses are included in reported profit. the plan is prepared and the decision
relating to untaxed reserves, certain taken. US GAAP includes additional
deferred taxes reported in the local sub- Pensions requirements for recording a provision.
sidiaries and deferred taxes recorded as There is no comprehensive standard in This means that the costs for these and
a result of the consolidation adjustments. Sweden for reporting of pension liabilities similar measures are booked at a later
The effects of tax-loss carryforwards are for all companies operating within a multi- date in accordance with US GAAP.
reported mainly as reduced tax expenses national group. Although the Swedish The application of US GAAP would
when they are utilized. Under US GAAP, principles have similar objectives for have the following approximate effect
deferred tax effects on all differences accounting for pensions and other post- on the Sandvik Group's reported net
between book values and tax values of retirement benefits, the US rules are profit, earnings per share and share-
assets and liabilities, including operating more prescriptive. US GAAP specifies holders’ equity:
loss carryforwards, are taken into account. certain methods for actuarial calculations,
Values of deferred tax assets, however,
are subjected to a recoverability test. (Amounts in SEK M, unless otherwise stated) 1999 1998
Overall, the value of certain tax-loss
Net profit for the year according
carryforwards is recognized earlier under to the consolidated income statement 3 620 2 095
US GAAP than under Swedish principles. Increase/decrease in
Additionally, tax effects arise from Deferred tax -266 -146
other differences between Swedish and Acquisitions -4 -4
US GAAP, as shown in the reconciliation Revaluations of assets 45 7
below. Capitalization of interest -4 -5
Foreign exchange 100 -103
Acquisitions Pensions -33 -
Swedish principles for valuations of own Other adjustments 92 15
shares issued in conjunction with acquisi- Tax effects of US GAAP adjustments 14 -11
tions are less prescriptive than corre- Approximate net profit according to US GAAP 3 564 1 848
sponding US principles. Because of such
differences, the acquisition value of the Approximate earnings per share
according to US GAAP, SEK 13.80 7.10
CTT group is reported at a higher amount
under US GAAP. Shareholders’ equity according to
consolidated balance sheet 20 109 18 621
Increase/decrease in
Revaluation of assets
Deferred tax 47 313
As permitted under Swedish GAAP,
Acquisitions 53 57
certain fixed assets have been reported at
Revaluations of assets -285 -336
values in excess of acquisition cost. Such
Capitalization of interest 132 137
revaluation of assets is not permitted Foreign exchange -19 -119
under US GAAP. Pensions 43 54
Other adjustments 294 197
Capitalization of interest Tax effects of US GAAP adjustments -53 -67
In accordance with Swedish GAAP, inter- Approximate shareholders’ equity according to US GAAP 20 321 18 857
est expenses incurred to finance new
buildings, machinery and equipment are Approximate equity per share
charged against earnings. according to US GAAP, SEK 78.60 72.90

US GAAP INFORMATION ● 51
Notes to
the accounts
Notes to the Consolidated and Parent Company accounts
(Amounts in SEK million, unless otherwise stated)

Note 1. Personnel information and remunerations to management and auditors

1.1 Average number of employees

Group Parent Company

1999 1998 1999 1998
women women women women
Total % Total % Total % Total %
Sweden 10 402 20 11 048 20 7 694 18 7 995 19
EU (excl. Sweden) 10 691 17 11 367 18 74 16 136 15
Rest of Europe 1 624 35 1 424 36 31 29 32 19
Total, Europe 22 717 20 23 839 20 7 799 19 8 163 19

NAFTA region 6 452 22 7 124 23 - - - -

South America 1 541 12 1 891 11 4 43 3 40
Africa, Middle East 996 14 929 14 3 60 2 50
Asia, Australia 3 989 16 4 180 14 24 35 37 36
Total 35 695 19 37 963 19 7 830 19 8 205 19

1.2 Wages, salaries, other remunerations and social costs 1.3 Wages, salaries and other remunerations
by market area*
Group Parent Company
Group Parent Company
1999 1998 1999 1998
1999 1998 1999 1998
Wages, salaries and
other remunerations 9 488 9 950 2 133 2 202 Sweden 2 984 2 975 2 118 2 157
Social costs 3 187 3 186 964 989 EU (excl. Sweden) 3 356 3 466 3 30
(of which, pension costs) (740) (715) (229) (233) Rest of Europe 168 174 6 6
Employee profit sharing 150 150 120 122 Total, Europe 6 508 6 615 2 127 2 193
Total 12 825 13 286 3 217 3 313
NAFTA region 1 951 2 170 - -
Of pension costs, SEK 36 M and SEK 1 M relate to the Board of Directors South America 181 284 0 0
and the President in the Group and Parent Company, respectively. Africa, Middle East 132 115 1 1
The outstanding pension commitment to these persons amounted to Asia, Australia 716 766 5 8
SEK 112 M at the Group level and SEK 21 M in the Parent Company
Total 9 488 9 950 2 133 2 202

of which, to Boards of Directors and Presidents:

Group Parent Company

1999 1998 1999 1998
Salaries and of which, Salaries and of which, Salaries and of which, Salaries and of which,
remunerations bonus remunerations bonus remunerations bonus remunerations bonus
Total 312 93 252 24 17 9 10 4

* Including provisions for bonuses to senior executives, see Note 1.4

52 ● NOTES TO THE ACCOUNTS

1.4 Information on benefits to senior executives in 1999 Note 2. Invoiced sales by business area**
The Chairman of the Board, Percy Barnevik, received a fixed fee of SEK 1999 1998 Change
450,000 and no other benefits were paid. SEK M SEK M % *
Chief Executive Officer and President Clas Åke Hedström received Sandvik Tooling 13 177 13 576 -3 -5
fixed salary, portion of long-term bonus and fees, the value of free resi- Sandvik Mining
dence and company car totaling SEK 3,450,367. Bonus paid was SEK and Construction 8 808 9 379 -6 -9
2,415,000. Sandvik Specialty Steels 11 971 13 579 -12 -16
There is a reciprocal 12-month notice of termination for the Sandvik Saws and Tools 2 153 2 694 -20 1
President. Should notice be served by the Company, or by the President Seco Tools 3 128 3 151 -1 -4
in the event that significant structural changes have occurred, an annual
Group activities 63 21 / /
pension of 75% of total average remunerations paid during the three most
recent years is paid up to age 63 (that is, a maximum of two years). From Group total 39 300 42 400 -7 -8
age 63, an annual pension of 55% of pension-based salary is paid. * Change excluding currency effects and company acquisitions.
There are agreements on reciprocal rights to request early retire- ** Values in 1998 adjusted to apply to new business area organization.

ment at age 62 for a few other senior executives. The reciprocal notifi-
cation period for these persons varies between 6 and 12 months. From
Parent Company sales and purchases
age 62, they will receive lifetime pension benefits corresponding to the
amounts that would have been paid if employed until ordinary pension Sales to Group companies from the Parent Company amounted to SEK
age. An agreement was reached with other senior executives covering 7,235 M (8,683), or 69% (70) of total sales to Group companies. The
payment of severance pay in the event of notification of termination share of exports was 83% (83). Parent Company purchases from Group
from the company. The severance pay amounts to 6-18 months of sal- companies amounted to SEK 808 M (865), 14% (11) of total purchases.
ary in addition to the notification period.
There was the possibility of a long-term bonus for Group manage-
ment and approximately 250 other senior executives in Sweden and Note 3. Invoiced sales by market area
abroad based on price development for Sandvik B shares during the 1999 Share 1998 Change
period 1995-1999. It was paid at the end of 1999 or in early 2000. SEK M % SEK M % *
The bonus was based on multiplying 10% of one-two month’s salary
EU, excl. Sweden 15 271 39 16 777 -9 -7
(1994 level) by the difference between market price of the B share at
Sweden 2 249 6 2 375 -5 -3
year-end 1999, plus addition of declared dividends during 1995-1999,
and a base price of SEK 144. The market price in September to Rest of Europe 2 146 5 2 401 -11 -12
November 1999 averaged SEK 223 and yielded a total bonus of SEK Total, Europe 19 666 50 21 553 -9 -7
209 M. Through hedging of the bonus amount’s changes in recent
years, the actual cost of the Group was SEK 136 M, distributed among NAFTA region 9 952 25 10 626 -6 -9
the years 1995-1999. South America 1 548 4 1 978 -22 -21
Sandvik’s Board of Directors decided in 1999 to establish a stock
Africa, Middle East 1 606 4 1 916 -16 -11
option plan for senior executives in Sweden and abroad, which replaces
Asia, Australia 6 528 17 6 327 3 -5
a five-year incentive program concluded during the year. The option
plan provides the possibility of an annual allocation of so-called per- Group total 39 300 100 42 400 -7 -8
sonnel options on Sandvik shares with a lifetime of five years and the
* Change compared with preceding year excluding currency effects and company acquisitions.
right to exercise after three years, conditional upon continued employ-
ment. The allocation, which is consideration-free, is based on Sandvik’s
return on net assets in the preceding year.
The program is based on existing shares. Accordingly there is no
Note 4. Noncomparable items
dilution effect for the current shareholders. The option plan is secured
financially so that future increases in the price of the Sandvik share will Group Parent Company
not affect the Company’s costs. The Board decided in February 2000 to 1999 1998 1999 1998
allocate 1.4 million options to 300 senior executives in the Group, of
Capitals gains from sales
which 42,000 options to the President. The option has an exercise price of shares and companies 1 625 54 5 59
of SEK 289.
Write-downs of shares - - -29 -17
1 625 54 -24 42
1.5 Auditor fees

During 1999, Sandvik paid fees to the Group’s auditors as follows:

Group Parent Company
Auditing Other Auditing Other
services services
KPMG 12.1 3.7 4.2 0.4
Arthur Andersen & Co 19.7 10.9 0.2 2.3
Other auditors at
Group companies 4.4 1.1 - -
Total 36.2 15.7 4.4 2.7

NOTES TO THE ACCOUNTS ● 53

Note 5. Research, development and quality assurance Note 8. Operating profit by business area
Group Parent Company 1999 1998
1999 1998 1999 1998 % of % of
sales sales
Costs for
research and development 1 114 1 070 602 588 Sandvik Tooling 2 597 20 2 724 20
quality assurance 479 498 217 197 Sandvik Mining and
Construction 674 8 340 4
Total 1 593 1 568 819 785
Sandvik Specialty Steels 633 5 902 7
Sandvik Saws and Tools 153 7 205 8
All research, development and quality assurance costs are expensed as Seco Tools 572 18 677 21
incurred. The costs are shown among Cost of goods sold.
Group activities -204 / -253 /
Operating profit 4 425 * 11 4 595 11

Note 6. Depreciation of tangible and * Excluding capital gain

intangible fixed assets
Group Parent Company
1999 1998 1999 1998 Note 9. Parent Company income
Scheduled depreciation from Group companies
Goodwill -329 -285 - - 1999 1998
Other intangible assets -19 -20 -2 -3 Dividends 1 665 1 125
Land and buildings -200 -186 -19 -19 Gains from sale of shares 5 5
Plant and machinery -1 363 -1 247 -361 -295 Write-downs -29 -10
Equipment, tools, fixtures 1 641 1 120
and fittings -362 -361 -78 -85
-2 273 -2 099 -460 -402

Note 10. Parent Company income

from associated companies
Note 7. Leasing costs for operational leasing 1999 1998

Group Parent Company Dividends 308 399

1999 1998 1999 1998 Gains from sale of participations - -2

Leasing costs 204 224 9 11 308 397

Contracted future leasing fees

due thereafter Note 11. Income from securities and loans
2000 174 113 5 4 held as fixed assets
2001 124 70 5 2 Group Parent Company
2002 74 45 0 - 1999 1998 1999 1998
2003 44 30 - -
Interest income, Group companies - - 39 19
2004 and later 144 68 - -
Other interest income 3 - - -
Total 560 326 10 6 Dividends 1 4 - 1
Exchange rate differences - 6 - -
Gains from sale of shares - - - 56
Other income 2 7 - -6
6 17 39 70

54 ● NOTES TO THE ACCOUNTS

Note 12. Other interest income and expense Note 13. Other appropriations
Group Parent Company Parent Company
1999 1998 1999 1998 1999 1998

I nterest income, Accelerated depreciation -99 -114

Group companies - - 177 139 Appropriation to tax allocation reserve -61 -43
Other interest income 95 113 15 8 Reversal of tax equalization reserve 54 53
Translation differences -102 - - - Change in foreign exchange reserve - 12
Total interest income -7 113 192 147 Change in other untaxed reserves -3 9
-109 -83
Interest expenses,
Group companies - - -329 -281
Other interest expenses -532 -676 -128 -166
Translation differences -9 -69 - -
Bank charges -44 -44 -6 -8
Other expenses 1 -1 - -
Total interest expense -584 -790 -463 -455

Note 14. Taxes

Group Parent Company
1999 1998 1999 1998

Income tax expense

Current taxes -1 050 -1 358 -142 -126
Tax effect of Group contributions, net -113 -208
Estimated future taxes -634 -304 - -
Share in taxes of associated companies -4 -13 - -
Total -1 688 -1 675 -255 -334

Tax liabilities
Provisions for deferred taxes:
– Untaxed reserves reported by Group companies 2 128 2 158 - -
– Future taxes due to losses in partly owned limited partnerships 79 172 - -
– Other Group reporting adjustments, loss carryforwards, internal profits, etc. -444 -631 - -
Total 1 763 1 699 - -

Other tax provisions 671 537 175 175

Total provisions 2 434 2 236 175 175

Income tax liabilities 426 560 25 164

Prepaid income tax -100 -89 - -
Net 326 471 25 164

Total tax liabilities 2 760 2 707 200 339

NOTES TO THE ACCOUNTS ● 55

Note 15. Consolidated intangible and tangible assets

Patents, licenses Buildings Equipment Construction

trademarks Goodwill and land Machinery and tools in progress Total

Cost
At beginning of the year 277 5 412 6 410 17 702 3 318 1 172 34 291
Additions 20 2 120 646 252 886 1 926
Acquisitions of subsidiaries 32 168 56 70 18 7 351
Divestments and disposals -38 -11 -269 -693 -389 - -1 400
Divestment of subsidiaries -2 -84 -295 -829 -122 -85 -1 417
Reclassifications 3 -3 217 1 001 66 -1 289 -5
Advances paid during the year - - - - - 8 8
Translation differences -7 -1 -32 12 -36 6 -58
285 5 483 6 207 17 909 3 107 705 33 696
Accumulated amortization/ depreciation
At beginning of the year 137 950 2 556 10 057 2 183 15 883
Acquisitions of subsidiaries - - 3 23 6 32
Divestments and disposals -37 -46 -101 -609 -356 -1 149
Divestment of subsidiaries -2 -22 -94 -508 -71 -697
Reclassifications - 26 35 -17 3 47
Amortization/depreciation for the year 19 329 200 1 363 362 2 273
Translation differences -7 3 -24 -23 -23 -74
110 1 240 2 575 10 286 2 104 16 315
Accumulated revaluations
At beginning of the year 325 11 336
Divestment of subsidiaries -34 -11 -45
Translation differences during the year -5 -1 -6
286 -1 285
Planned residual value at the end of the year 175 4 243 3 918 7 622 1 003 705 17 666

Fixed assets held under

financial lease agreements are
included in the
following amounts:

Cost 44 13 9
Accumulated revaluations 2 4 4

Rateable values, buildings (in Sweden) 1 020

Rateable values, land (in Sweden) 155

56 ● NOTES TO THE ACCOUNTS

Note 16. Parent Company intangible and tangible assets

Patents, licenses Buildings Equipment Construction

trademarks and land Machinery and tools in progress Total
Cost
At beginning of the year 21 549 5 521 807 763 7 661
Purchases - 1 2 18 477 498
Divestments and disposals - -3 -276 -105 -138 -522
Reclassifications - 24 682 17 -723 0
21 571 5 929 737 379 7 637
Accumulated amortization/depreciation
At beginning of the year 15 224 3 105 541 - 3 885
Divestments and disposals - -1 -193 -100 - -294
Depreciation for the year 2 19 361 78 - 460
17 242 3 273 519 - 4 051
Accumulated revaluations
At beginning of the year - 51 - - - 51
Divestments and disposals - -11 - - - -11
- 40 - - - 40
Planned residual value at the end of the year 4 369 2 656 218 379 3 626

Rateable values, buildings 212

Rateable values, land 36

Note 17. Shares in subsidiaries

Parent Company
Cost
At beginning of the year 6 408
Purchases 2
Capital contributions 164
New capital stock issues 37
Disposals -7
6 604
Accumulated write-downs
At beginning of the year -10
Write-downs during the year -29
-39
Book value at end of the year 6 565

NOTES TO THE ACCOUNTS ● 57

Sandvik AB’s holdings of shares and participations in subsidiaries
Direct shareholdings Book
No. of Holding, value
According to Balance Sheet of 31 December 1999, company, location Corp. ID no. shares % 2) SEK ‘000
SWEDEN Dormer Tools AB, Halmstad 556240-8210 80 000 100 25 145
Ecocat AB, Sandviken 556272-9680 6 840 100 1 800
Edmeston AB, Göteborg 556238-7554 40 000 100 3 000
Fragoso AB, Sandviken 556337-3710 1 000 100 160 850
Guldsmedshytte Bruks AB, Lindesberg 556040-0854 100 000 100 11 950
Gusab Holding AB, Sandviken 556001-9290 1 831 319 100 53 474
Gusab Stainless AB, Mjölby 556012-1138 200 000 100 34 019
AB Sandvik Antenn, Sandviken 1) 556350-7895 1 000 100 100
AB Sandvik Calamo, Molkom 556190-2569 50 000 100 5 000
AB Sandvik Coromant, Sandviken 1) 556234-6865 1 000 100 50
Sandvik Coromant Norden AB, Stockholm 1) 556350-7846 1 000 100 100
AB Sandvik Falken, Sandviken 556330-7791 1 000 100 100
AB Sandvik Hard Materials, Stockholm 1) 556234-6857 1 000 100 50
Sandvik Hard Materials Norden AB, Stockholm 1) 556069-1619 1 000 100 50
AB Sandvik Information Systems, Sandviken 1) 556235-3838 1 000 100 50
AB Sandvik International, Sandviken 1) 556147-2977 1 000 100 50
Sandvik Invest AB, Sandviken 556020-6517 1 772 068 100 181 654
AB Sandvik Process Systems, Sandviken 1) 556312-2992 1 000 100 100
AB Sandvik Service, Sandviken 1) 556234-8010 1 000 100 50
AB Sandvik Skogsfastigheter, Sandviken 556579-5464 1 000 100 100
AB Sandvik Steel, Sandviken 1) 556234-6832 1 000 100 50
Sandvik Stål Försäljnings AB, Stockholm 1) 556251-5386 1 000 100 50
Sandvik Tamrock AB, Sandviken 1) 556288-9443 1 000 100 50
AB Sandvik Tamrock Tools, Sandviken 1) 556234-7343 1 000 100 50
AB Sandvik Teknik, Sandviken 556350-7929 30 000 100 10 000
AB Sandvik Tranan, Sandviken 556330-7817 1 000 100 100
AB Sandvik Västberga Service, Stockholm 1) 556356-6933 1 000 100 100
Sandvik Örebro AB, Sandviken 556232-7949 10 000 100 306
AB Sandvik Örnen, Sandviken 556330-7783 1 000 100 100
BELARUS ZP Sandvik - 100 137
BRAZIL Dormer Tools S.A. 2 137 623 140 100 200 000
Sandvik do Brasil S.A. 1 894 797 190 100 46 072
BULGARIA Sandvik Bulgaria Ltd. - 100 0
CHINA Sandvik China Ltd. - 100 120 776
Sandvik International Trading (Shanghai) Co. Ltd. - 100 17 466
Sandvik Process Systems (Shanghai) Ltd. - 100 1 633
COLOMBIA Sandvik Colombia S.A. 30 958 94 3) 0
CZECH REPUBLIC Sandvik CZ s.r.o. - 100 0
GERMANY Sandvik GmbH - 1 3) 1 486
Sandvik Holding GmbH - 1 3) 367
GREECE Sandvik A.E. Tools and Materials 5 599 100 1 567
HUNGARY Sandvik KFT - 100 3 258
INDIA Sandvik Asia Ltd. 1 359 715 73 135 325
Sandvik Choksi Ltd. 15 810 000 51 58 844
ITALY CML Handling Technology S.p.A. 28 571 10 3) 13 907
JAPAN Sandvik K.K. 2 600 000 100 180 000
KENYA Sandvik Kenya Ltd. 35 000 96 0
KOREA Sandvik Korea Ltd. 752 730 100 46 856
MEXICO Sandvik Méxicana S.A. de C.V. 406 642 873 90 3) 71 000
MOROCCO Sandvik Maroc S.A. 940 94 1 825

58 ● NOTES TO THE ACCOUNTS

Direct shareholdings Book
No. of Holding, value
According to Balance Sheet of 31 December 1999, company, location shares % 2) SEK ‘000
NETHERLANDS CTT Cutting Tool Technology B.V. 220 000 100 122 216
Sandvik Benelux B.V. 20 000 100 27 496
Sandvik Finance B.V. 18 786 100 4 896 433
PERU Sandvik del Perú S.A. 777 718 100 1 425
POLAND Sandvik Baildonit S.A. 148 100 100 93 140
Sandvik Polska Sp.z o.o. 3 211 100 57
PORTUGAL Sandvik Portuguesa Lda 199 600 100 0
SLOVAKIA Sandvik Slovakia s.r.o. - 100 1 378
SPAIN Minas y Metalurgia Española S.A. 59 999 50 3) 3 700
TURKEY Sandvik Endüstriyel Mamüller Sanayi ve Ticaret A.S. 125 154 588 100 3 200
ZIMBABWE Sandvik (Private) Ltd. 233 677 100 3 269
Other companies and dormant companies, wholly owned 23 681
6 565 012
1) Subsidiaries conducting business on behalf of the Parent Company.
2) Pertains to share of votes, which also corresponds to share of capital.
3) Remaining shares are held by other Group companies.

Indirect holdings in significant operating Group companies

Group holding, % 1) Group holding, % 1)
SWEDEN Kanthal AB 100 COLOMBIA Sandvik Colombia S.A. 100
Kanthal Machinery AB 100 CZECH REPUBLIC Sandvik Chomutov Precision Tubes s.r.o. 100
KOPO AB 90 DENMARK Sandvik A/S 100
Rammer Svenska AB 100 FINLAND Bet-Mec Oy 100
Roxon AB 100 Roxon Oy 100
Seco Tools AB 61 2) Suomen Sandvik Oy 100
ARGENTINA Sandvik Argentina S.A. 100 Tamrock Oy 100
AUSTRALIA Driver Harris Australia Pty. Ltd. 100 FRANCE Cermep S.A. 51
Kanthal Australia Pty. Ltd. 100 Dormer Tools S.A. 100
Prok Group Ltd. 100 Gunther S.A. 100
Roxon Pty. Ltd. 100 Gunther Tools S.A. 100
Sandvik Australia Pty. Ltd. 100 Kanthal S.A. 100
Sandvik Hard Materials Pty. Ltd. 100 Prototyp S.A. 100
Tamrock Coal Australia Pty. Ltd. 100 Safety S.A. 100
Tamrock Pty. Ltd. 100 Sandvik Aciers S.N.C. 100
AUSTRIA Günther & Co. Ges.m.b.H. 100 Sandvik Coromant S.N.C. 100
Sandvik in Austria Ges.m.b.H. 100 Sandvik Hard Materials S.A. 100
Tamrock Voest Alpine Sandvik Précitube S.A. 100
Bergtechnik Ges.m.b.H. 100
Sandvik Process Systems S.A. 100
BELGIUM Dormer Tools N.V./S.A. 100
Sandvik Rock Tools S.A. 100
BOLIVIA Tamrock Bolivia S.R.L. 100
Sandvik S.A. 100
BRAZIL Kanthal Brasil Ltda. 100
Sandvik Tamrock S.A. 100
CANADA Dormer Tools Inc. 100
Sandvik Tamrock Secoma S.A. 100
Prok Int. Canada Inc. 100
Sandvik Tobler S.A. 100
Sandvik Canada Inc. 100
GERMANY Alpine Westfalia GmbH 100
Tamrock Canada Ltd. 100
CTT Management GmbH 100
Tamrock Loaders Inc. 100
Dormer Tools GmbH 100
CHILE Sandvik Chile S.A. 100
Edmeston GmbH 100
Tamrock Chile S.A. 100
Gurtec GmbH 100
CHINA Qingdao Sandvik
Günther & Co. GmbH 100
Die Cutting Systems Co. Ltd. 80
Kanthal GmbH 99
Tamrock Louyang Machinery Co. Ltd. 60

NOTES TO THE ACCOUNTS ● 59

 Group holding, % 1) Group holding, % 1)
GERMANY Prototyp-Werke GmbH 100 SPAIN Safety Iberica Metal Duro S.A. 100
Sandvik GmbH 100 Sandvik Española S.A. 100
Sandvik Kosta GmbH 100 SWITZERLAND Sandvik AG 100
Sandvik P&P GmbH 100 Santrade Ltd. 100
Sandvik Process Systems GmbH 100 TAIWAN Sandvik Hard Materials Taiwan Pty. Ltd. 100
Tamrock GmbH 100 Sandvik Taiwan Ltd. 100
TOP Präzisionswerkzeuge GmbH 100 TANZANIA Sandvik Tamrock Tanzania Ltd. 100
GHANA Tamrock Ghana Ltd. 100 THAILAND Sandvik Thailand Ltd. 100
HONG KONG Kanthal Electroheat HK Ltd. 100 UK Dormer Tools Ltd. 100
Sandvik Hongkong Ltd. 100 Dormer Tools (Sheffield) Ltd. 100
Tamrock Far East Ltd. 100 Eimco Great Britain Ltd. 100
INDIA Kanthal India Ltd. 57 Kanthal Ltd. 100
Titex India Pvt. Ltd. 100 Kanthal Ribbon Ltd. 100
INDONESIA PT Prok Indonesia 70 Osprey Metals Ltd. 100
IRELAND Sandvik Ireland Ltd. 100 Resist Alloy Intern. Ltd. 100
ITALY CML Handling Technology S.p.A. 100 RGB Stainless Ltd. 100
Dormer Tools S.p.A. 100 Safety Cutting Tools UK Ltd. 100
Driver-Harris S.p.A. 100 Sandvik Ltd. 100
Impero S.p.A. 100 Sandvik Metinox Ltd. 100
Master Tools S.p.A. 100 Sandvik Process Systems Ltd. 100
Prototyp SRL 100 Sandvik Rock Tools Ltd. 100
Sandvik Italia S.p.A. 100 Saxon Blades Ltd. 100
Sandvik Process Systems S.p.A. 100 Sterling Tubes Ltd. 100
Società Italiana Kanthal S.p.A. 100 Titex Tools Ltd. 100
JAPAN Kanthal K.K. 100 USA Dormer Tools Inc. 100
Sandvik Sorting Systems K.K. 100 Driltech Mission LLC 100
KAZAKHSTAN Tamservice Ltd. 100 Eimco LLC 100
KOREA Kanthal Korea Ltd. 100 H. P. Reid Co. Inc. 100
Suh Jun Trading Co. 70 The Kanthal Corporation 100
Tamrock Service Korea Ltd. 100 Kanthal Globar Inc. 100
LUXEMBOURG Sansafe S.A. 100 MRL Industries Inc. 100
MALAYSIA Sandvik Malaysia Sdn. Bhd. 100 Pennsylvania Extruded Tube Co. 70
MEXICO Sandvik de México S.A. de C.V. 100 Precision Twist Drill Co. 100
Tamrock de México S.A. de C.V. 100 Sandvik Inc. 100
NETHERLANDS Dormer Tools B.V. 100 Sandvik Milford Corp. 100
Sandvik Process Systems B.V. 100 Sandvik Process Systems Inc. 100
NEW ZEALAND Kanthal Trading Australasia Ltd. 100 Sandvik Sorting Systems Inc. 100
Sandvik New Zealand Ltd. 100 Sandvik Special Metals Corp. 100
NORWAY Sandvik Norge A/S 100 Sandvik Tamrock LLC 100
Tamrock Norge A/S 100 Union Butterfield Corp. 100
PERU Sandvik Forestal S.A. 100 VENEZUELA Sandvik Venezuela C.A. 100
Sandvik Tamrock del Perú 100 ZAMBIA Tamrock Zambia Ltd. 60
PHILIPPINES Sandvik Philippines Inc. 100 ZIMBABWE Tamrock Zimbabwe (Pvt.) Ltd. 100
Tamrock Philippines Inc. 100
1) Pertains to share capital, which also corresponds to share of votes unless otherwise stated.
POLAND Voest Alpine Technika Tunelowa
2) Percentage of voting rights, 90%.
i Górnicza Sp. z o.o. 100
ROMANIA Sandvik SRL 100
RUSSIA Moskovskij Kombinat Tverdih Splavov 98
ZAO Sandvik 100
SINGAPORE Kanthal Electroheat Pte. Ltd. 100
Sandvik South East Asia Pte. Ltd. 100
Sandvik Treasury (Far East) Pte. Ltd. 100
SOUTH AFRICA Sandvik (Pty) Ltd. 100
Tamrock Africa (Pty) Ltd. 100
Voest-Alpine Mining & Tunneling Pty. Ltd. 100

60 ● NOTES TO THE ACCOUNTS

Note 18. Participations in associated companies
Group

Accumulated participations
At beginning of the year 371
Reclassifications -1
Divestments -35
Share in profits after net financial items of associated companies 0
Share in taxes of associated companies -4
Less dividends received -12
Translation differences -8
Participations in equity at end of the year 311

Specification of Parent Company and Group holdings of shares and participations in associated companies
Associated companies
Group
proportion Book
Number of Holding, of equity, value,
According to the Balance Sheet of 31 December 1999 Corp. ID no. shares % 1) SEK SEK ‘000

Owned directly by Sandvik AB

SWEDEN Balzers Sandvik Coating AB, Stockholm 556098-1333 56 840 49 19.7 3 819
Fasttrack Sweden Uthyrnings AB, Stockholm 556530-1180 940 48.5 2)
0.1 94
G-Drill AB, Stockholm 556331-8566 6 000 30 2.3 4 000
Procera-Sandvik AB, Stockholm 556350-7879 5 000 50 - 3) 600
QR Uthyrnings AB, Stockholm 556330-7775 4 700 48.5 2)
0.5 470
FRANCE Eurotungstène Poudre S.A. 112 353 49 82.7 7 737
105.3 16 720
Owned indirectly by Sandvik AB
SWEDEN Avesta Sandvik Tube AB, Fagersta 556057-8592 150 000 25 59.6
Fagersta Stainless AB, Fagersta 556051-6881 400 000 50 129.7
G-Drill AB, Stockholm 556331-8566 3 000 15 1.1
Associated companies owned by Seco Tools 3.4
FINLAND Caterpillar Impact Products Ltd. 400 40 11.6

205.4
TOTAL 310.7

1) Pertains to share of votes, which also corresponds to share of capital unless otherwise stated
2) Share of capital 90.4%
3) Consolidated in accordance with the proportional method

NOTES TO THE ACCOUNTS ● 61

Note 19. Other investments held as fixed assets Note 21. Liquid assets and short-term investments
Other companies
Group Parent Company
According to the Balance Sheet Holding, Book value
of 31 December 1999 as % SEK M 1999 1998 1999 1998

Owned directly Cash and bank balances 1 832 1 555 166 100
Other shares and participations 12 Short-term investments 537 188 266 -
12 Bonds with longer maturity
than one year - 57 - -
Owned indirectly
Amstek Inc. 48 7 Total 2 369 1 800 432 100

Eimco Elecon (India) Ltd. 25 4

Harvest Ventures 30 14
Shougang Kanthal CL 50 2 Note 22. Share capital
Thermia AB 5 4 1999 1998

Other shares and participations abroad 11 A shares 189 450 259 189 450 259

42 B shares 69 245 741 69 245 741

Total 54 Total number of shares

at SEK 6 par value 258 696 000 258 696 000

Note 20. Inventories

Group Parent Company A shares each carry one vote, whereas B shares carry one-tenth of a vote.
1999 1998 1999 1998 All shares carry equal rights to participate in the profits and net assets of
the Company.
Raw materials and consumables 2 449 2 430 638 591
The Sandvik share is listed on the OM Stockholm Exchange. Shares
Work in progress 2 258 1 820 920 765 can also be traded in the US as American Depositary Receipts (ADR).
Finished goods 5 333 6 100 1 007 1 033
10 040 10 350 2 565 2 389

Note 23. Changes in shareholders’ equity

Group Share Restricted Unrestricted Consolidated
capital reserves reserves net profit Total
Reported at the end of 1998 1 552 9 436 5 538 2 095 18 621
Changes due to changed currency rates 1999 - - -252 - -252
Appropriations of 1998 net profit - - 2 095 -2 095 -
Dividend paid - - -1 811 - -1 811
Transfer of retained earnings of
associated companies - -10 10 - -
Other movements between unrestricted and restricted
shareholders’ equity - -361 361 - -
Translation differences for the year - - -69 - -69
Net profit for the year - - - 3 620 3 620
Reported at the end of 1999 1 552 9 065 5 872 3 620 20 109

Restricted reserves include profits retained in associated companies amounting to SEK 218 M.
Appropriations to restricted reserves, as proposed by subsidiary boards, reduce unrestricted Group equity by SEK 32 M.

Parent Company Share Share premium Legal Profit brought Net

capital reserve reserve forward profit Total
Reported at the end of 1998 1 552 20 297 708 2 044 4 621
Appropriations of 1998 net profit - - - 2 044 -2 044 0
Dividends - - - -1 811 - -1 811
Group contributions paid - - - -403 - -403
Tax effect of Group contributions paid - - - 113 - 113
Net profit for the year - - - - 2 286 2 286
Reported at the end 1999 1 552 20 297 651 2 286 4 806

62 ● NOTES TO THE ACCOUNTS

Note 24. Parent Company accelerated depreciation
Plant Equipment Patents
Land and and tools, fittings and similar
buildings machinery and fixtures rights Total
Reported at the end of 1998 17 1 276 181 2 1 476
Accelerated depreciation for the year -8 99 8 - 99
Reported at the end of 1999 9 1 375 189 2 1 575

Note 25. Parent Company other untaxed reserves Note 27. Other provisions
Tax Tax Other Group Parent Company
equalization allocation untaxed 1999 1998 1999 1998
reserve reserve reserves
Restructuring provisions 338 516 - -
Reported at the end of 1998 107 1 605 36
Guarantees 132 198 22 24
Change during the year -54 61 3
Personnel-related provisions 81 283 - 16
Reported at the end of 1999 53 1 666 39 Other provisions 699 652 9 9
1 250 1 649 31 49

Note 26. Provision for pensions

At 31 December 1999, the Group’s provisions for restructuring, in
Group Parent Company conjunction with the major acquisitions in 1997, were as follows:
1999 1998 1999 1998 Pertaining to Tamrock 126
Swedish PRI pension plan 916 1 223 730 955 Pertaining to Kanthal 9
Other pensions 1 372 1 240 54 74 Pertaining to Precision Twist Drill 18
Total 2 288 2 463 784 1 029 Total 153

Note 28. Interest-bearing liabilities

Maturity after balance sheet date
Group Parent Company
Within After Within After
one year 2-5 yrs five years Total one year 2-5 yrs five years Total
Financial institutions 3 474 897 216 4 587 27 485 163 675
Group companies - - - - 7 328 30 691 8 049
Convertible debenture loan - 1 024 - 1 024 - 955 - 955
Other liabilities 338 86 59 483 - - - -
3 812 2 007 275 6 094 7 355 1 470 854 9 679

In addition, there is a long-term (maturity in 2004) credit facility amounting to SEK 5,500 M, which at year-end was unutilized. SEK 1,274 M of
the available commercial paper program of SEK 4,100 M was utilized at year-end. The Group’s liabilities related to financing lease agreements
amount to SEK 55 M. Payments due in 2000 of SEK 2 M are reported with current liabilities. Subsequent payments amount to SEK 5 M in 2001,
SEK 9 M in 2002 and SEK 7 M in 2003.

Assets pledged for liabilities to financial institutions

Group Parent Company

1999 1998 1999 1998

Real-estate mortgages 101 546 2 4

Chattel mortgages 219 146 - -
320 692 2 4

NOTES TO THE ACCOUNTS ● 63

Note 29. Non-interest-bearing liabilities Note 33. Supplementary information
Maturity after balance sheet date to the Group’s cash-flow statement
Group Parent Company Group
Within one year 6 947 2 293 Interest payments
Within 2-5 years 139 - Interest payments included in cash flow
from operating activities
After five years 47 -
Interest income 102
7 133 2 293 Interest expense -622

Acquisition and divestment of subsidiaries

Note 30. Accrued expenses Purchase consideration (paid in the form of liquid funds)
and prepaid income Acquired subsidiaries 342
Group Parent Company Divested subsidiaries 3 321
1999 1998 1999 1998
Liquid funds
Personnel related 1 551 1 617 722 715
Acquired subsidiaries 14
Other 1 289 1 484 244 161
Divested subsidiaries 127
Total 2 840 3 101 966 876
Other more significant assets and liabilities
Acquired Divested
Note 31. Contingent liabilities subsidiaries subsidiaries

Group Parent Company Fixed assets 192 760

1999 1998 1999 1998 Inventories 78 602
Operating receivables 44 841
Bills discounted 96 84 - -
Other surety undertakings
and contingent liabilities 533 782 3 078 3 304 Provisions 11 128
Operating liabilities 46 1 376
Total 629 866 3 078 3 304
Other liabilities 52 137
of which, for subsidiaries 2 979 3 111

Note 32. Translation differences and flow hedging

Group

Translation differences in earnings

Translation differences in operating profit -37
Translation differences in financial items -111
Total -148

Translation differences charged directly to shareholders’ equity

Accumulated translation differences for each foreign operation were not
registered previously, nor was it considered practically possible to produce
them retroactively. Accordingly, accumulated translation differences
pertain to currency movements from and including the 1999 fiscal year.

Translation differences in 1999 charged

directly to shareholder’ equity -321

Flow hedging
Through buying and selling currencies forward, the Group to an extent
hedges the value of future payments in foreign currencies. Depending
on the currency, hedging corresponds to 1-4 months of net flows. For
specific orders with long delivery times, the hedging period was longer.
Gains and losses on forward contracts are reported in the same
period as the corresponding flow arises. At year-end 1999, unrealized
currency losses amounted to SEK 90 M, of which SEK 71 M was attrib-
utable to contracted orders.

64 ● NOTES TO THE ACCOUNTS

Proposed appropriation
of profits
The Board of Directors and President propose that
the surplus brought forward from the preceding year 651 008 471
and the profit for the year 2 285 738 761
SEK 2 936 747 232

be appropriated as follows:
a dividend of SEK 8.00 per share 2 069 568 000
carried forward 867 179 232
SEK 2 936 747 232

Sandviken, 17 February 2000

Percy Barnevik
Chairman

Bo Boström Georg Ehrnrooth Per-Olof Eriksson

Göran Lindstedt Arne Mårtensson Lars Nyberg

Clas Reuterskiöld Mauritz Sahlin Clas Åke Hedström

President

Our Audit Report was submitted on 8 March 2000

Bernhard Öhrn Lars Svantemark

Authorized Public Accountant Authorized Public Accountant

Auditors’ Report
To the Annual General Meeting of consolidated accounts are free of material Act or the Articles of Association. We believe
Sandvik Aktiebolag; (publ) misstatement. An audit includes examining, that our audit provides a reasonable basis for
Corporate identity number 556000-3468 on a test basis, evidence supporting the our opinion set out below.
amounts and disclosures in the accounts. An The annual accounts and the consolidated
We have audited the annual accounts and the audit also includes assessing the accounting accounts have been prepared in accordance
consolidated accounts, the accounting records principles used and their application by the with the Annual Accounts Act, and, thereby,
and the administration of the Board of Directors Board of Directors and the President, as well give a true and fair view of the Company’s
and the President of Sandvik Aktiebolag for the as evaluating the overall presentation of infor- and the Group’s financial position and results
year 1999. These accounts and the adminis- mation in the annual accounts and consolida- of operations in accordance with generally
tration of the company are the responsibility ted accounts. As a basis for our opinion accepted accounting principles in Sweden.
of the Board of Directors and the President. regarding discharge from liability, we examined We recommend to the Annual General
Our responsibility is to express an opinion on significant decisions, actions taken and cir- Meeting of shareholders that the income state-
the financial statements and the administra- cumstances of the company in order to be ments and the balance sheets of the Parent
tion based on our audit. able to determine the possible liability to the Company and the Group be adopted, that the
We conducted our audit in accordance company of any Board member or the profit of the Parent Company be dealt with in
with generally accepted auditing standards in President. We also examined whether any accordance with the proposal in the Board of
Sweden. Those standards require that we plan Board member or the President has, in any Directors' report and that the members of the
and perform the audit to obtain reasonable other way, acted in contravention of the Board of Directors and the President be
assurance that the annual accounts and the Swedish Companies Act, the Annual Accounts discharged from liability for the financial year.

Sandviken, 8 March 2000

Bernhard Öhrn Lars Svantemark

Authorized Public Accountant Authorized Public Accountant

PROPOSED APPROPRIATION OF PROFITS AND AUDITORS’ REPORT ● 65

 Directors
and Auditors

Georg Ehrnrooth Clas Reuterskiöld Per-Olof Eriksson Percy Barnevik Clas Åke Hedström Mauritz Sahlin

DIRECTORS Mauritz Sahlin, Georg Ehrnrooth,

Gothenburg, b. 1935. Helsinki, b. 1940.
Percy Barnevik, Chairman of Chairman of the Board of Air President and Chief Executive Officer
the Board, London, b. 1941. Liquide AB, CHAMPS, FlexLink AB, of Metra Oyj Abp. Chairman of the
Chairman of the Board of Investor AB, IMEGO AB, IRO AB, Korsvägen AB, Board of Assa Abloy AB, Sanitec Oyj
ABB Ltd. and AstraZeneca Plc. Novare Kapital AB and the Chamber Abp and Pensionsförsäkringsbolaget
Director of General Motors, U SA. of Commerce of Western Sweden. Varma-Sampo.
Chairman of the Board of Director of Chalmers AB, Investor Director of Försäkringsaktiebolaget
Sandvik AB since 1983. AB, BILLES AB and the Federation Sampo and Oy Karl Fazer Ab.
Sandvik shares: 150,000 A. of Swedish Industries. Director of Sandvik AB since 1997.
Director of Sandvik AB since 1993. Sandvik shares: 6,000 B.
Per-Olof Eriksson, Sandvik shares: 3,000 A.
Sandviken, b. 1938. Clas Reuterskiöld,
Chairman of the Board of Swedish Clas Åke Hedström, Stocksund, b. 1939.
National Grid, Thermia AB and Sandviken, b. 1939. President and member of the Board of
Odlander, Fredrikson & Co. President and Chief Executive Officer AB Industrivärden.
Director of Svenska Handelsbanken, of Sandvik AB. Director of Scania AB, Director of Telefon AB LM Ericsson,
Preem Petroleum AB, SSAB Svenskt the Federation of Swedish Industries Svenska Handelsbanken, Skanska AB
Stål AB, AB SKF, AB Volvo, AB and the Association of Swedish and SCA.
Custos, Skanska AB, the Royal Engineering Industries. Director of Sandvik AB since 1997.
Institute of Technology, Assa Abloy Director of Sandvik AB since 1994. Sandvik shares: 2,000 A.
AB and the Federation of Swedish Sandvik shares: 382 A, 18,154 B,
Industries. Member of the Royal convertible debentures corresponding
Academy of Engineering Sciences (IVA). to 750 B.
Director of Sandvik AB since 1984.
Sandvik shares: 100,000 B.

66 ● DIRECTORS AND AUDITORS

Lars Nyberg Arne Mårtensson Birgitta Karlsson Göran Lindstedt Bo Westin Bo Boström

Arne Mårtensson, Göran Lindstedt, AUDITORS

Djursholm, b. 1951. Sandviken, b. 1942.
President and CEO of Svenska Chairman, Sandvik AB Union Bernhard Öhrn, Stockholm
Handelsbanken. Deputy Chairman Committee, Industrial Salaried Authorized Public Accountant
of the Board of the Swedish Bank Employees’ Association.
Association and KSSS. Director of Director of Sandvik AB since 1989. Lars Svantemark, Stockholm
Svenska Handelsbanken, Mo och (Employee representative) Authorized Public Accountant
Domsjö AB, V&S Vin & Sprit AB, Sandvik shares: 193 A, convertible
OM Gruppen AB, Swedish ICC, debentures corresponding to 750 B. Deputies
Industry and Commerce Stock
Exchange Committee and Council of Åke Näsman, Stockholm,
World Economic Forum. Deputy Directors Authorized Public Accountant
Director of Sandvik AB since 1999.
Sandvik shares: 500 A. Birgitta Karlsson, Peter Markborn, Stockholm
Stocksund, b. 1952. Authorized Public Accountant
Lars Nyberg, Union Committee, Association of
Dayton, Ohio, b 1951. Graduate Engineers, Sandvik
Chairman of the Board and Västberga, Stockholm.
President of NCR Corporation, USA. Director of Sandvik AB since 1998.
Director of Sandvik AB since 1999. (Employee representative)
Sandvik shares: 1,000 B. Sandvik shares: 401 A, 169 B,
convertible debentures correspond-
ing to 750 B.
Bo Boström, Åshammar, b. 1949.
Chairman, AB Sandvik Steel Union Bo Westin, Köping, b. 1950.
Committee, Metal Workers’ Union, Chairman Union Committee, Metal
Sandviken. Director of Sandvik AB Workers’ Union, Sandvik Tamrock
since 1988. (Employee representative) Tools, Köping. Director of Sandvik AB
Sandvik shares: 630 B, convertible since 1999. (Employee representative)
debentures corresponding to 500 B. Sandvik shares: convertible deben-
tures corresponding to 750 B.
DIRECTORS AND AUDITORS ● 67
Group Executive Management

Leif Sunnermalm Clas Åke Hedström Gunnar Björklund

Anders Ilstam Peter Larson Lars Pettersson

Clas Åke Hedström Peter Larson GROUP STAFFS AND

President and Executive Vice President SERVICE COMPANIES
Chief Executive Officer (from 1 May 2000)
b. 1939, M.Sc. Eng, b. 1949, MBA, Auditing and
employed since 1965 Special Projects: Anders Vrethem*
employed 1981-84, from 1997
Controller: Ulf Åhman*
Leif Sunnermalm Lars Pettersson Finance: Gunnar Båtelsson
Executive Vice President Executive Vice President
Information: Björn Jonson
(through 30 April 2000) (from 24 March 2000)
b. 1938, M.Sc. Econ., b. 1954, M.Sc. Eng., Intellectual Property: Lennart Tåquist
employed since 1971 employed since 1979 Investor Relations: Heléne Gunnarson
IT: Lars-Anders Nordqvist
Gunnar Björklund As of 1 May 2000, Executive
Legal Affairs: Malcolm Falkman
(through 30 September 2000) Management also includes
Executive Vice President Personnel: Rune Nyberg
b. 1935, M.Sc. Eng., Anders Ilstam Research and
employed since 1959 President of Sandvik Mining Development: Hans Mårtensson
and Construction Business Area Taxes and
Financial Projects: Thomas B. Hjelm
AB Sandvik
Information Systems: Peter Lundh
AB Sandvik Service: Björn Sköld

* From 1 March 2000

68 ● GROUP EXECUTIVE MANAGEMENT
Business units
Major operating business units are listed below:

EUROPE
Gunther Tools S.A., Dormer Tools GmbH, Düsseldorf
Soultz-sous-Fôrets Manager: Dick Geerlings
Austria Denmark Manager: Bernard Finantz Tel. 0211 95 09 00
Tel. 03 88 80 20 05 dick.geerlings@sandvik.com
Sandvik in Austria Ges.m.b.H., Sandvik A/S, Copenhagen
bernard.finantz@sandvik.com
Vienna Manager: Jens Aage Jensen
Tel. 43 46 51 00 Günther & Co. GmbH & Co.,
Manager: Helmut Stix
Prototyp S.A., Orléans Frankfurt/Main
(through 30 April 2000) jensaage.jensen@sandvik.com
Manager: Mats Christenson Manager: Klaus Scholl
Peter Putz (from 1 May 2000)
Tel. 02 38 41 46 50 Tel. 069 78 90 20
Tel. 1 277 37 Sandvik Hard Materials,
mats.christenson@sandvik.com klaus.scholl@sandvik.com
Espergaerde
Günther & Co. Ges.m.b.H., Vienna Manager: Peter Lorentzen
Sandvik Tobler S.A., Paris Prototyp-Werke GmbH,
Manager: Eckhard Planegger Tel. 49 17 49 00
Manager: Jean-Pierre Colombano Zell-Harmersbach
Tel. 1 270 60 70 peter.lorentzen@sandvik.com
Tel. 01 34 47 33 00 Manager: Mats Christenson
Tel. 07835 770
VA-Eimco, Zeltweg
Sandvik Hard Materials S.A., mats.christenson@prototyp.de
Manager: Ilkka Hakala
Epinouze
Tel: 03577 755 0 Finland
Manager: Björn von Malmborg Sandvik Hard Materials, Düsseldorf
ilkka.hakala@sandvik.com Suomen Sandvik Oy, Helsinki Tel. 04 75 31 38 00 Manager: Wit Horsten
Manager: Kalevi Hellstén bjorn.von-malmborg@sandvik.com Tel. 0211 502 75 57
Voest-Alpine Bergtechnik Tel. 09 87 06 61 germany.hardmaterials@sandvik.com
Ges.m.b.H., Zeltweg kalevi.hellsten@sandvik.com Sandvik Tamrock France S.A.,
Manager: Ilkka Hakala
Lyon Sandvik Tamrock GmbH, Essen
Tel. 03577 755 0 Sandvik Tamrock Oy, Tampere Manager: Gérard Dequet Market Area Central Europe
ilkka.hakala@sandvik.com Manager: Lasse Hakoaho Tel. 04 72 45 22 00 Manager: Walter Maier
Tel. 0205 44 121 gerard.dequet@sandvik.com Tel. 201 178 53 00
lasse.hakoaho@sandvik.com walter.maier@sandvik.com
Sandvik Tamrock, Lyon
Belgium Sandvik Tamrock Oy, Lahti Market Area Southern Europe and Gurtec GmbH, Schöppenstedt
Sandvik Benelux, Brussels Manager: Ilkka Järvinen Middle East Manager: Leif Tiensuu
Manager: Georges Verhoeven Tel. 0205 44 151 Manager: Arto Metsänen Tel. 05332 930 90
Tel. 02 702 98 00 ilkka.jarvinen@sandvik.com Tel: 04 72 45 22 00 leif.tiensuu@gurtec.de
george.verhoeven@sandvik.com arto.metsanen@sandvik.com
Sandvik Tamrock Oy, Turku Sandvik Steel, Düsseldorf
Dormer Tools N.V./S.A., Mortsel Manager: Olavi Rantala Sandvik Tamrock Secoma S.A., Manager: Udo Vogt
Manager: Ben Luyckx Tel. 0205 44 131 Lyon Tel. 0211 5027-0
Tel. 03 440 59 01 olavi.rantala@sandvik.com Manager: Gérard Bellement udo.vogt@sandvik.com
benoit.luyckx@sandvik.com Tel. 04 72 45 22 00
Sandvik Tamrock Oy, Tampere gerard.bellement@sandvik.com Sandvik P&P, Werther
Market Area CIS Manager: Henrich Strackerjahn
Manager: Veikko Heikkilä Sandvik MGT S.A., Viriat Tel. 05203 9109-0
Bosnia-Herzegovina Tel. 0205 44 121 Manager: Ezio Fogliata henrich.strackerjahn@sandvik.com
veikko.heikkila@sandvik.com Tel. 04 74 45 94 60
Sandvik D.O.O.
Representative Office, Sarajevo ezio.fogliata@sandvik.com Kanthal GmbH, Mörfelden-Walldorf
Sandvik Tamrock Oy, Tampere Manager: Hilmar Linder
Manager: Nihad Imamovic
Market Area Northern Europe Sandvik Aciers S.N.C., Orléans Tel. 06105 400 10
Tel. 71 20 52 61
Manager: Matti Heiniö Manager: Georges Verhoeven info.de@kanthal.com
Tel. 0205 44 121 Tel. 02 38 41 41 41
matti.heinio@sandvik.com george.verhoeven@sandvik.com Sandvik Process Systems GmbH,
Bulgaria Fellbach
Roxon Oy, Hollola Sandvik Précitube S.A., Charost Manager: Johann Taps
Sandvik Bulgaria Ltd., Sofia Manager: Jarmo Juntunen Manager: Patrick Champion Tel. 0711 510 50
Manager: Miroslav Markov Tel. 0205 44 181 Tel. 02 48 26 20 12 info.spsde@sandvik.com
Tel. 02 958 12 31 jarmo.juntunen@sandvik.com patrick.champion@sandvik.com
miroslav.markov@sandvik.com
Kanthal S.A., Paris
Manager: Franck Vilenstein
Greece
France Tel. 01 47 86 56 60
Croatia info.fr@kanthal.com Sandvik A.E., Athens
Sandvik S.A., Orléans
Sandvik D.O.O. Manager: Gunnar Anell
Manager: André Baron
Representative Office, Zagreb Sandvik Process Systems S.A., Tel. 1 682 36 04
Tel. 02 38 41 41 41
Manager: Boris Krizanec Orléans gunnar.anell@sandvik.com
fr.sandvik@omemo.sandvik.com
Tel: 01 61 88 450 Manager: André Baron
Tel. 02 38 41 41 41 Sandvik International
Sandvik Coromant S.N.C., Orléans
fr.process@omemo.sandvik.com Representative Office, Athens
Manager: Jean-Louis Macey
Manager: Robert Khouri
Tel. 02 38 41 41 41
Tel. 1 898 28 80
Czech Republic fr.coromant@sandvik.com
Sandvik CZ s.r.o., Prague
Manager: Helmut Stix Dormer Tools S.A., Orléans Germany
(from 1 May 2000) Manager: Philippe Benoist Sandvik GmbH, Düsseldorf
Tel. 02 24 25 33 11 Tel. 02 38 41 40 15 Manager: Ulrich Fezer
philippe.benoist@sandvik.com Hungary
helmut.stix@sandvik.com Tel. 0211 502 70
Sandvik in Hungary Ltd., Budapest
Sandvik Chomutov Precision Tubes Gunther S.A., Soultz-sous-Fôrets Sandvik Coromant, Düsseldorf Manager: Göran Wretås
s.r.o., Chomutov Manager: Claude Leray Manager: Mats Carlerös Tel. 1 431 27 00
Manager: Leif Johansson Tel. 03 88 80 20 00 Tel. 0211 502 70 goran.wretas@sandvik.com
Tel. 0396 615 111 claude.leray@sandvik.com mats.carleroes@sandvik.com
leif.johansson@sandvik.com
Sandvik Kosta GmbH, Renningen
Manager: Jens Orbanke
Tel. 07159 160 30

BUSINESS UNITS ● 69
 Dormer Tools B.V., Veenendaal Sandvik Mining and Construction,
Manager: Ben Luyckx Sandviken
Ireland Tel. 0318 56 95 69 Slovakia Manager: Anders Ilstam
ben.luyckx@sandvik.com Tel. 026 26 51 00
Sandvik Ireland Ltd., Dublin Sandvik Slovakia s.r.o., Bratislava
anders.ilstam@sandvik.com
Manager: Mary Healy Manager: Otto Kames
Sandvik Process Systems B.V.,
Tel. 01 295 20 52 Tel. 07 544 24 97
Breda AB Sandvik Tamrock Tools,
Manager: Hans Mulders Sandviken
Sandvik Tamrock, Irish Branch,
Tel. 076 572 08 20 Manager: Anders Persson (Top
Kilkenny
info.spsnl@sandvik.com Hammer), Örjan Persson (Rotary)
Manager: Matti Heiniö Slovenia
Tel. 026 26 20 00
Tel. 358 0205 44 121 Sandvik d.o.o., Sencur anders.persson@sandvik.com
matti.heinio@sandvik.com Manager: Roland Setterberg orjan.persson@sandvik.com
Tel. 64 21 15 44
Norway
roland.setterberg@sandvik.com Sandvik Tamrock AB, Sandviken
Sandvik Norge A/S, Oslo
Manager: Svein K Eriksen Manager: Göran Carlbaum
Italy
Tel. 67 13 27 40 Tel. 026 26 20 00
Sandvik Italia S.p.A., Milan goran.carlbaum@sandvik.com
Manager: Marco Schirinzi Spain
Sandvik Tamrock Norge A/S, Oslo
Tel. 02 30 70 51 Sandvik Española S.A., Madrid KOPO AB, Haparanda
Manager: Hans Hanto
sandvik.italia@sandvik.com Manager: Björn von Malmborg Manager: Leif Tiensuu
Tel. 22 72 40 24
hans.hanto@sandvik.com Tel. 91 660 51 00 Tel. 0922 298 00
Sandvik Coromant, Milan sandvik.es@sandvik.com leif.tiensuu@kopo.se
Manager: Pietro Calegari
Tel. 02 30 70 51 Sandvik Hard Materials, Barcelona Roxon AB, Örebro
coromant.it@sandvik.com Manager: Björn von Malmborg Manager: Hans Sandqvist
Poland
Tel. 93 862 94 00 Tel. 019 12 41 10
Dormer Italia S.p.A., Milan Sandvik Polska Ltd., Warsaw hans.sandqvist@roxon.com
bjorn.von-malmborg@sandvik.com
Manager: Fabrizio Resmini Manager: Alfred Zachwiej
Tel. 02 38 04 51 Tel. 22 647 38 80 AB Sandvik Steel, Sandviken
Sandvik Tamrock Iberia, Madrid
fabrizio.resmini@sandvik.com alfred.zachwiej@sandvik.com Manager: Lars Pettersson
Manager: Luis Alvarez
Tel. 91 650 60 42 Tel. 026 26 30 00
Dormer Italia S.p.A., Rovereto Sandvik Baildonit S.A., Katowice lars.pettersson@sandvik.com
luis.alvarez@sandvik.com
Manager: Fabrizio Resmini Manager: Adam Ratuszny
Tel. 0464 48 28 00 Tel. 32 2571 061 Sandvik Stål Försäljnings AB, Kista
Kanthal SP S.A., Barcelona
fabrizio.resmini@sandvik.com sandvik.baildonit@sandvikbail- Manager: Björn Jonsson
Manager: Jan Setterberg
donit.pl Tel. 08 793 05 00
Tel. 93 680 28 24
Prototyp Srl, Milan info.es@kanthal.com bjorn.jonsson@sandvik.com
Manager: Elke Aurand Voest Alpine Technika Tunelowa i
Tel. 02 38 03 180 Gornicza Sp.z.o.o., AB Sandvik Calamo, Molkom
Katowice/Szopienice Manager: Göran Gustafsson
Sandvik Hard Materials, Milan Manager: Andrzey Jagiello Tel. 0553 313 00
Sweden
Manager: Osvaldo Rosello Tel. 32 256 80 20 goran.gustafsson@sandvik.com
Tel. 02 30 70 51 andrzey.jagiello@sandvik.com Sandvik AB, Sandviken
italy.hardmaterials@sandvik.com Group CEO: Clas Åke Hedström
Edmeston AB, Gothenburg
Tel. 026 26 00 00
Manager: Christer Andersson
Sandvik Tamrock Tools, Milan clasake.hedstrom@sandvik.com
Tel. 031 335 63 50
Manager: Mats Blacker Portugal christer.andersson@sandvik.com
Tel. 02 30 70 51 AB Sandvik Coromant, Sandviken
Sandvik Portuguesa Lda, Lisbon
mats.blacker@sandvik.com Manager: Anders Thelin
Manager: Nuno Batalha Guldsmedshytte Bruks AB,
Tel. 026 26 60 00
Tel. 01 424 54 00 Guldsmedshyttan
Sandvik Steel, Milan anders.thelin@sandvik.com
Manager: Åke Haglund
Manager: Pier Giorgio Martellozzo Tel. 0581 451 00
Tel. 02 30 70 51 Sandvik Coromant Norden AB,
info@guldsmedshyttebruk.se
pierre.martellozzo@sandvik.com Kista
Romania Manager: Lennart Lindgren
Gusab Stainless AB, Mjölby
Società Italiana Kanthal S.p.A., Sandvik Srl.,Bucharest Tel. 08 793 05 00
Manager: Lars Blomberg
Milan Manager: Miroslav Markov lennart.lindgren@sandvik.com
Tel. 0142 822 00
Manager: Lelio Segre Tel. 1 330 05 80
lars.blomberg@sandvik.com
Tel. 02 66 04 91 77 miroslav.markov@sandvik.com Sandvik CTT, Halmstad
info.it@kanthal.com Manager: Håkan Larsson
Kanthal AB, Hallstahammar
Tel. 035 16 53 00
Manager: Harry Furuberg
Sandvik Process Systems S.p.A., hakan.h.larsson@sandvik.com
Tel. 0220 210 00
Milan Russia info.se@kanthal.com
Manager: Giancarlo Tazzioli Sandvik, Moscow Dormer Tools AB, Halmstad
Tel. 02 38 01 06 00 Manager: Roland Setterberg Manager: Ingemar Broström
Kanthal Machinery AB,
Tel. 095 956 50 80 Tel. 035 16 52 00
Hallstahammar
CML Handling Technology S.p.A., roland.setterberg@sandvik.com ingemar.brostrom@sandvik.com
Manager: Magnus Bergman
Varese Tel. 0220 210 00
Manager: Giorgio Saranga Sandvik - MKTC OAO, Moscow AB Sandvik Hard Materials,
info.se@kanthal.com
Tel. 0331 66 51 11 Manager: Robert Hartinger Stockholm
cml@cml-ht.it Tel. 095 289 70 74 Manager: Lars Wahlqvist
Kanthal Norden AB,
Tel. 08 726 63 00
Hallstahammar
Sandvik Tamrock Representative info.hardmaterials@sandvik.com
Manager: Magnus Bergman
Office, Moscow Tel. 0220 21000
Netherlands Manager: Seppo Häyrynen Sandvik Hard Materials Norden
info.se@kanthal.com
Tel. 095 203 16 11 AB, Stockholm
Sandvik Benelux B.V., Schiedam
seppo.hayrynen@sandvik.com Manager: Johan Holm
Manager: Georges Verhoeven
Tel. 08 726 63 00
Tel. 010 208 02 08
norden.hardmaterials@sandvik.com
george.verhoeven@sandvik.com

70 ● BUSINESS UNITS
 NORTH AMERICA

AB Sandvik Process Systems, Titex Tools Ltd., Birmingham Driltech Mission LLC, Alachua, FL
Sandviken Manager: Frank Oak Manager: Olof Lundblad
Manager: Svante Lindholm Tel. 0121 504 20 00 Canada Tel. 904 462 4100
Tel. 026 26 56 00 frank.oak@titex.com Sandvik Canada, Inc., Mississauga, olof.lundblad@sandvik.com
info.sps@sandvik.com Ont.
Sandvik Hard Materials Sales U.K., Manager: James T. Baker Voest-Alpine Eimco, Bristol, VA
AB Sandvik International, Sandviken Coventry Tel. 905 826 8900 Manager: Tim Shean
Manager: Roland Setterberg Manager: Derek Stradling jim.baker@sandvik.com (Mineral Tools),
Tel. 026 26 26 00 Tel. 01203 85 69 00 Dale Whitman (Chemical Products)
roland.setterberg@sandvik.com uk.hardmaterials@sandvik.com Dormer Tools, Inc., Mississauga, Tel. 540 645 54 05
Ont. tim.shean@sandvik.com
AB Sandvik Service, Sandviken Sandvik Hard Materials Production Manager: Richard Tunstill dale.whitman@sandvik.com
Manager: Björn Sköld U.K., Coventry Tel. 905 542 3000
Tel. 026 26 11 00 Manager: Gunnar Frisk richard.tunstill@sandvik.com Eimco LLC, Bluefield, WV
bjorn.skold@sandvik.com Tel. 01203 85 69 00 Manager: Bill Reid
gunnar.frisk@sandvik.com Sandvik Tamrock Canada Inc., Tel. 304 327 02 60
AB Sandvik Information Systems, Lively, Ont. bill.reid@sandvik.com
Sandviken Eimco (Great Britain) Ltd., Market Area Canada
Manager: Peter Lundh Gateshead Manager: Thomas Söderqvist Sandvik Steel Company,
Tel. 026 26 17 00 Manager: John Hill Tel. 705 692 5881 Scranton, PA
peter.lundh@sandvik.com Tel. 0191 487 72 41 thomas.soderqvist@sandvik.com Manager: Edward R. Nuzzaci
john.hill@sandvik.com Tel. 570 585 75 00
Sandvik Tamrock Loaders Inc., ed.nuzzaci@sandvik.com
Sandvik Steel Ltd., Walsall Burlington, Ont.
Switzerland Manager. Nigel Haworth Manager: Lorne Massel Pennsylvania Extruded Tube Co.,
Sandvik AG, Spreitenbach Tel. 01922 72 87 01 Tel. 905 632 4940 (PEXCO), Scranton, PA
Manager: Lennart Ek nigel.haworth@sandvik.com lorne.massel@sandvik.com Manager: Örjan Blom
Tel. 056 417 61 11 Tel. 570 585 77 77
lennart.ek2@sandvik.com Sandvik Metinox Ltd., Sheffield Sandvik Steel Canada, Arnprior, orjan.blom@sandvik.com
Manager: Hugh C. Firth Ont.
Santrade Ltd., Lucerne Tel. 0114 263 31 00 Manager: Tom M. Moylan Sandvik Special Metals Corp.,
Manager: Lennart Ek hugh.firth@sandvik.com Tel. 613 623 6501 Kennewick, WA
Tel. 041 368 33 33 tom.moylan@sandvik.com Manager: Wayne W. Banko
lennart.ek2@sandvik.com RGB Stainless Ltd., Birmingham Tel. 509 586 41 31
Manager: Peter Rose Sandvik Process Systems Canada, wayne.banko@sandvik.com
Tel. 0121 565 70 00 Guelph, Ont.
peter.rose@rgbstainless.com Manager: Brian Spalding The Kanthal Corp., Bethel, CT
Tel. 519 836 4322 Manager: Jack Beagley
Turkey
Sterling Tubes Ltd., Walsall brian.spalding@sandvik.com Tel. 203 744 14 40
Sandvik Ticaret A.S., Istanbul Manager: Nigel Haworth
Manager: Piet-Heyn van Benthem Tel. 01922 72 8701 H.P. Reid Co. Inc., Palm Coast, FL
Tel. 216 309 15 15 nigel.haworth@sandvik.com Manager: Jack Beagley
piet-heyn.vanbenthem@sandvik.com
Tel. 904 445 20 00
United States
Saxon Blades Ltd., Rugby
Manager: Gerald Haseldine Sandvik, Inc., Fair Lawn, NJ Globar Inc., Niagara Falls, NY
Tel. 01788 54 23 80 Manager: James T. Baker Manager: Jack Beagley
Ukraine gerald.haseldine@sandvik.com Tel. 201 794 5000 Tel. 716 286 76 00
Sandvik, Kiev jim.baker@sandvik.com
Manager: Robert Hartinger Osprey Metals Ltd., Neath MRL Industries, Sonora, CA
Tel. 44 212 43 21 Manager: Gwyn Brooks Sandvik Coromant Company, Manager: Bill McEntire
Tel. 01639 63 41 21 Fair Lawn, NJ Tel. 209 533 1990
gwyn.brooks@sandvik.com Manager: James T. Baker
Tel. 201 794 5000 Sandvik Hard Materials Company,
Kanthal Ltd., Perth jim.baker@sandvik.com Troy, MI
United Kingdom
Manager: Richard Fareham Manager: Garry Davies
Sandvik Ltd., Birmingham Dormer Tools, Inc., Asheville, NC
Tel. 01738 49 33 00 Tel. 248 458 41 00
Manager: Kenneth Sundh Manager: Richard Tunstill
silicon.carbide@kanthal.se us.hardmaterials@sandvik.com
Tel. 0121 504 50 00 Tel. 828 274 6078
kenneth.sundh@sandvik.com richard.tunstill@sandvik.com
Kanthal Ltd., Stoke-on-trent Sandvik Milford Corp.,
Manager: Richard Fareham Branford, CT
Sandvik Coromant U.K., Union Butterfield Corporation,
Tel. 01782 22 48 00 Manager: William B. Lavelle Jr
Birmingham Asheville, NC
kanthal.ltd@kanthal.se Tel. 203 481 42 81
Manager: Kenneth Sundh Manager: Adrian Waple
Tel. 0121 504 54 00 Tel. 828 274 6070
Sandvik Process Systems Ltd., Sandvik Process Systems, Inc.,
kenneth.sundh@sandvik.com adrian.waple@sandvik.com
Birmingham Totowa, NJ
Manager: Gerald S. Garbett Manager: Walter Miller
Dormer Tools Ltd., Sheffield Precision Twist Drill Co.,
Tel. 0121 550 76 71 Tel. 973 790 16 00
Manager: Mike Walker Crystal Lake, IL
gerald.garbett@sandvik.com spsusa.info@sandvik.com
Tel. 0114 251 26 00 Manager: Tony Elfström
mike.walker@sandvik.com Tel. 815 459 2040 Sandvik Sorting Systems, Inc.,
tony.elfstrom@sandvik.com Louisville, KY
Dormer Tools (Sheffield) Ltd.,
Sheffield Yugoslavia Manager: Tom Barry
Sandvik Tamrock LLC, Tel: 502 636 14 14
Manager: Robert Hall AB Sandvik International Atlanta, GA
Tel. 0114 251 27 00 Representative Office, Belgrade tom.barry@sandvik.com
Market Area USA and Mexico
robert.hall@sandvik.com Manager: Dragan Kovacevic Manager: J-G Coulombe
Tel. 11 361 20 60 Tel. 404 589 3800
Dormer Tools International, Sheffield sandvik@eunet.yu jean-guy.coulombe@sandvik.com
Manager: Mike Walker
Tel. 0114 251 26 00
mike.walker@sandvik.com

BUSINESS UNITS ● 71
LATIN AMERICA AFRICA

Argentina Chile Algeria Tanzania

Sandvik Argentina S.A., Sandvik Chile S.A., Santiago Sandvik International, Bureau de Sandvik Tamrock Tanzania Ltd,
Buenos Aires Manager: Jouni Salo Liaison, Algiers Dar es Salaam
Manager: José V. Parra Tel. 2 623 83 31 Manager: Cherif Lassouaoui Manager: John Martin
Tel. 01 918 34 96 jouni.salo@sandvik.com Tel. 2 60 75 17 Tel. 51 60 06 81
jose.parra@sandvik.com john.martin@cats-net.com

Colombia Ghana
Bolivia Sandvik Colombia S.A., Bogotá Sandvik Tamrock Ghana Ltd., Tunisia
Sandvik Tamrock Bolivia S.R.L., Manager: Alejandro Quintanilla Accra Sandvik International
La Paz Tel. 1 262 56 00 Manager: John Oberg Bureau de Liaison Tunisie,
Manager: Marcelo Clavijo alejandro.quintanilla@sandvik.com Tel. 021 76 58 02 La Marsa Saf Saf
Tel. 2 329 894 john.oberg@sandvik.com Manager: Youssef Ennaciri
marcelo.clavijo@sandvik.com Tel. 3-32 5316

Cuba
AB Sandvik International Kenya
Brazil Representative Office, Havana Sandvik Kenya Ltd., Nairobi Zambia
Sandvik do Brasil S.A., São Paulo Manager: José F. Recio Pando Manager: Aileen Nkiria Sandvik Tamrock Zambia Ltd.,
Manager: José V. Parra Tel. 7 24 74 00 Tel. 2 53 28 66 Kitwe
Tel. 011 525 26 11 sinhav@colombus.cu Manager: Gary Hughes
jose.parra@sandvik.com Tel. 02 21 03 55
gary.hughes@sandvik.com
Sandvik do Brasil S.A. Wire, Morocco
Mogi Guacu Mexico Sandvik Maroc S.A., Mohammédia
Manager: Flávio Benedini Sandvik de México S.A. de C.V., Manager: Youssef Ennaciri
Tel. 019 861 98 00 Mexico, D.F. Tel. 03 32 53 16 Zimbabwe
flavio.benedini@sandvik.com Manager: Åke Nyberg Sandvik Tamrock Zimbabwe (Pvt.)
Tel. 5 729 39 00 Ltd., Harare
Dormer Tools S.A., São Paulo ake.nyberg@sandvik.com Manager: Adrian Smith
Manager: Antonio Altobello Neto Tel. 04 66 19 43
South Africa
Tel. 011 56 60 30 00 Sandvik Tamrock de México S.A. adrian.z.smith@sandvik.com
antonio.altobello- Sandvik (Pty) Ltd., Benoni
de C.V., Tlaquepaque Manager: Göran Wijk
neto@sandvik.com Manager: Arrien Westhuis Tel. 011 914 34 00
Tel. 3 601 03 62 goran.wijk@sandvik.com
Kanthal Brasil Ltda., São Paulo arrien.westhuis@sandvik.com
Manager: Lars Ericsson
Tel. 011 445 38 11 Sandvik Tamrock, Johannesburg
kanthal@kanthal.com.br Market Area Africa
Manager: Chris Brindley
Peru Tel. 011 392 49 90
Sandvik del Perú S.A., Lima chris.brindley@sandvik.com
Manager: Jouni Salo
Tel. 1 221 75 60, 1 252 11 11 Sandvik Tamrock South Africa
jouni.salo@sandvik.com (Pty) Ltd., Johannesberg
Manager: Jim Tolley
Tel. 011 929 53 00
jim.tolley@sandvik.com

Voest-Alpine Mining & Tunneling

Pty Ltd, Delmas
Manager: Gerrie Vergeer
Tel. 013 66 510 75
gerrie.vergeer@sandvik.com

72 ● BUSINESS UNITS
 AUSTRALIA
ASIA NEW ZEALAND

China Japan Singapore Australia

Sandvik China Ltd., Beijing Sandvik K.K., Kobe Sandvik South East Asia Pte. Ltd., Sandvik Australia Pty. Ltd.,
Manager: Anders Hägglund Manager: Bo Zetterlund Singapore Sydney
Tel. 10 65 90 86 00 Tel. 078 992 09 92 Manager: Sven Flodmark Manager: John Armitage
Tel. 265 22 77 Tel. 02 98 28 05 00
Sandvik Tamrock (China) Ltd., Sandvik Tamrock Far East Ltd., sven.flodmark@sandvik.com
Beijing Yokohama Sandvik Hard Materials Pty. Ltd.,
Manager: Pekka Heikkilä Manager: Hiroshi Andoh Kanthal Electroheat (S.E.A.) Pte. Newcastle
Tel. 10 65 90 86 00 Tel. 045 476 41 11 Ltd., Singapore Manager: David MacDonald
pekka.heikkila@sandvik.com hiroshi.andoh@sandvik.com Manager: Rolf Berthelius Tel. 049 24 21 00
Tel. 778 55 33 australia.hardmaterials@sandvik.com
Sandvik Process Systems (Shanghai) Kanthal K.K., Tokyo kanthalsg@pacific.net.sg
Ltd., Shanghai Manager: Åke Nilsson Sandvik Tamrock Pty. Ltd.,
Manager: James Han Tel. 03 34 43 18 23 Brisbane Spring Hill
Tel. 21 58 46 64 23 salesadm@kanthal.co.jp Market Area Australia
Taiwan Manager: Jack Thomson
Sandvik Process Systems, Tel. 07 38 33 03 00
Sandvik Taiwan Ltd., Taipei
Nishinomiya jack.thomson@sandvik.com
Manager: Wendell Wang
Hong Kong, SAR Manager: Seiichiro Aoki Tel. 02 22 99 34 27
Tel. 0798 43 10 06 VA-Eimco Australia Pty. Limited,
Sandvik Hongkong Ltd., Hong wendell.wang@sandvik.com
Tomago
Kong
Sandvik Sorting Systems K.K., Manager: Dennis Pomfret
Manager: Rolf Berthelius Sandvik Hard Materials Taiwan Pty.
Nishinomiya Tel. 02 49 85 26 25
Tel. 2 743 33 31 Ltd., Chung Li
Manager: Goro Okada dennis.pomfret@sandvik.com
rolf.bert@hklink.net Manager: Rudy Lu
Tel. 0798 43 10 01 Tel. 03 452 31 72
goro.okada@sandvik.com Prok Group Ltd., Perth
Sandvik Tamrock (Far East) Ltd.,
Manager: Asko Kankaanpää
Hong Kong
Tel. 08 93 47 85 00
Manager: Björn Johansson
asko.kankaanpaa@sandvik.com
Tel. 852 37 634 221 Thailand
bjorn.johansson@sandvik.com Kazakhstan
Sandvik Thailand Ltd., Bangkok Kanthal Australia Pty. Ltd.,
Sandvik Tamrock Representative Manager: Keith Johnson Victoria
Kanthal Electroheat HK Ltd., Office, Almaty Tel. 02 643 81 21-29 Manager: Cesare Colaluca
Hong Kong Manager: Juha Sorjonen keith.johnson@sandvik.com Tel. 03 94 0112 22
Manager: Rolf Berthelius Tel. 3272 68 47 42
sales@kanthal.com.au
Tel. 2 735 09 33 juha.sorjonen@sandvik.com
kehk@hklink.net
United Arab Emirates
Sandvik Tamrock Representative
Korea
Office, Dubai New Zealand
India Sandvik Korea Ltd., Seoul Manager: Arto Metsänen Sandvik New Zealand Ltd.,
Sandvik Asia Ltd., Pune Manager: Sören Wikström Tel 4 331 83 00 Pakuranga
Manager: Hans Gass Tel. 02 785 17 61-8 arto.metsanen@sandvik.com Manager: Mark Thompson
Tel. 0212 79 64 91-3
Tel. 9 367 21 07
sandvik.asia@sandvik.com Suh Jun Trading Co. Ltd., Seoul
Manager: Dae-Rim Han
Sandvik Tamrock, Pune Tel. 02 557 60 30
Market Area India daerim.han@sandvik.com
Manager: George Koshy
Tel. 020 74 04 666 Kanthal Korea Ltd., Seoul
Manager: Rolf Berthelius
Titex India Pvt. Ltd., Pune Tel. 02 515 14 31
Manager: Werner Kräher kanthal@unitel.co.kr
Tel. 020 712 99 91
werner.kraher@sandvik.com

Sandvik Choksi Private Limited, Malaysia

Ahmedabad Sandvik Malaysia Sdn. Bhd.,
Manager: Patrick Henderson Kuala Lumpur
Tel. 027 648 33 13 Manager: Lawrence Kwok
patrick.henderson@sandvik.com Tel. 03 756 21 36
lawrence.kwok@sandvik.com
Kanthal India Ltd., Hosur
Manager: Per Gelang
Tel. 4344 760 45
kanthal.india@vsnl.com
Philippines
Sandvik Philippines, Inc., Manila
Manager: Emmanuel C. Malolos
Tel. 02 807 63 72-74

Sandvik Tamrock (Philippines Inc).,

Manila
Manager: Hannu Virtanen
Tel. 02 807 63 89
hannu.virtanen@sandvik.com

This data refers to March 2000.

BUSINESS UNITS ● 73
Key Figures

43
39
30
25
18
17
6 5
1 5
Sweden EU excl. Rest of
NAFTA Sweden Europe Asia, Australia

4
1
4 Africa,
2
Middle East
South America

Invoiced sales, %
Production, %

INVOICED SALES PER BUSINESS AREA EARNINGS PER BUSINESS AREA NUMBER OF EMPLOYEES PER BUSINESS AREA

Seco Tools Seco Tools Seco Tools

Saws and Saws and
Tools* Tooling Tools* Tooling
Specialty
Steels Tooling Specialty
Specialty Steels
Steels

Mining and
Construction
Mining and Mining and
Construction Construction
*Sold 30 September 1999

NUMBER OF EMPLOYEES BY MARKET AREA INVOICED SALES BY CUSTOMER AREA

Civil engineering
Asia, Australia Other and construction
Africa, Middle East Household
Sweden appliances industry
South America Processing industry
Automotive industry
Aerospace industry
NAFTA
Power industry Mining
Electronics industry

Rest of Europe EU excl. Sweden

Engineering industry

74 ● KEY FIGURES
 1999 1998 1997 1996 1995 1994 1993
Invoiced sales, SEK M 39 300 42 400 34 119 28 265 29 700 25 285 21 770
Profit after financial items, SEK M 5 465 3 935 4 205 4 453 5 620 3 811 1 764
as % of invoicing 14 9 12 16 19 15 8
Net profit for the year, SEK M 3 620 2 095 2 725 3 114 3 727 2 436 1 069
Earnings per share, SEK 14.00 8.10 10.15 11.20 13.40 8.75 3.85
Dividend per share (1999: proposed), SEK 8.00 7.00 7.00 6.50 6.00 3.75 2.25
Pay-out ratio, % 57 86 69 58 45 40 58
Shareholders’ equity, SEK M 20 109 18 621 17 414 20 035 18 503 16 013 14 364
Equity ratio, % 52 47 47 64 64 59 60
Debt/equity ratio, times 0.4 0.5 0.5 0.2 0.1 0.2 0.2
Rate of capital turnover, % 95 104 96 86 101 95 89
Liquid assets, SEK M 2 369 1 800 2 494 5 557 6 893 6 591 5 171
Return on shareholders’ equity, % 12.4 11.9 14.3 16.2 21.6 16.0 7.7
Return on net assets, % 15.1** 16.3 17.7 20.2 28.0 21.7 12.0
Investment in property, plant and equipment, SEK M 1 875 2 811 2 353 2 486 2 050 1 229 886
Total investments, SEK M 2 233 3 202 6 644 4 414 2 092 1 575 964
Cash flow from operating activities, SEK M 3 394 * 3 919 * 4 984 3 866 984 1 400 2 441
Cash flow, SEK M 577 * -791 * -2 035 -1 682 164 1 215 1 142
Number of employees, 31 Dec. 33 870 37 520 38 406 30 362 29 946 29 450 26 869

* In accordance with new definition from 1998

** Excluding capital gain

Additional per-share data is presented in the section on the Sandvik share, page 8.

DEVELOPMENT BY BUSINESS AREA

Invoiced sales Operating profit

1999 1998 1997 1999 1998 1997
SEK M SEK M SEK M SEK M % SEK M % SEK M %
Sandvik Tooling 13 177 13 576 12 164 2 597 20 2 724 20 2 242 18
Sandvik Mining and Construction 8 808 9 379 3 582 674 8 340 4 234 7
Sandvik Specialty Steels 11 971 13 579 12 653 633 5 902 7 1 001 8
Sandvik Saws and Tools 2 153 2 694 2 787 153 7 205 8 239 9
Seco Tools 3 128 3 151 2 889 572 18 677 21 575 20

KEY FIGURES ● 75
Annual General Meeting
The Annual General Meeting will be not later than 3:00 p.m. on 27 20 April 2000 to establish their
held at Jernvallen in Sandviken on April 2000. In order to qualify for right to attend the Meeting.
Thursday, 4 May 2000, at 3:00 p.m. attendance, shareholders must also When making notification of
Shareholders wishing to attend have been entered in the Share intent to attend the Meeting,
the Meeting must notify the Board Register kept by the Securities please state your name, personal
either by letter addressed to Register Center (VPC AB) not later or organization number, address
Sandvik AB, Legal Affairs, than 20 April 2000. Shareholders and telephone number. If you plan
SE-811 81 Sandviken, or by whose shares are registered as held to be represented at the Meeting by
telefax +46(0)26-26 10 86, or by in trust must have them temporarily proxy, such notice must be made
telephone +46(0)26-26 10 81. re-registered with the VPC AB in known to Sandvik AB prior to the
Notification must reach Sandvik AB their own names not later than Meeting ●

Payment of dividend
The Board and the President recom- expected that dividends will be VPC AB. To facilitate the distribu-
mend that the Meeting declare a ready for remittance by 12 May tion, shareholders who have moved
dividend of SEK 8.00 per share 2000. Dividends will be sent to should report their change of
for 1999. those who, on the record date, are address to their bank in good time
The proposed record date is entered in the Share Register or on before the record day ●
9 May 2000. If this proposal is the separate List of Assignees, etc.
adopted by the Meeting, it is Dividends will be remitted from

Financial information 2000/2001

First-Quarter Report 4 May 2000
Semi-Annual Report 9 August 2000
Third-Quarter Report 2 November 2000
Report on Operations in 2000 16 February 2001 (proposed)
Annual Report for 2000 April 2001
Annual General Meeting 7 May 2001 (proposed)

Financial information can be ordered from

Sandvik AB, Group Information
SE-811 81 Sandviken, Sweden
Tel. +46 (0)26-26 10 47
Fax. +46 (0)26-26 10 43
info.group@sandvik.com
or from
Sandvik AB, Investor Relations,
SE-811 81 Sandviken, Sweden
Tel. +46 (0)26-26 10 25
Fax. +46 (0)26-26 10 45
info.ir@sandvik.com

www.sandvik.com

76 ●
 Sandvik
during the 1900s
Sandvik was founded in 1862 by Göran Fredrik Göransson, who was the first in the world to succeed in
producing steel on an industrial scale using the Bessemer method. Operations were focused at an early
stage on high quality, added value, investment in R&D, close contact with customers and export. This
was a successful strategy that has largely been the same throughout the years. The following is a selection
of the most significant Sandvik events during the past century.

1900 Founder Göran Fredrik Göransson died.

1901 Sandvik introduced on the Stockholm Stock Exchange as one of the first companies listed.
1902 Sandvik started to deliver steel conveyor belts.
1907 Production of hollow drill steel for rock-drilling applications was started.
1914 The first subsidiary established, in the UK.
1919 First subsidiary in the US established.
1921 First electric-arc furnace for production of steel. Production of stainless steel started.
1924 First seamless, stainless steel tubes sold.
1934 First pilger mill taken into operation in Sandviken.
1942 Coromant trademark established. Cemented-carbide tipped rock drills developed.
1943 First cemented-carbide tools for metalworking produced.
1947 Production of Bessemer steel discontinued in Sandviken.
1948 Plant opened in South Africa for the production of integral drill steels.
1951 Production of cemented-carbide products was started in Gimo, Sweden. Plant and offices inaugurated in the US.
1953 Cemented-carbide plant started at Västberga, Stockholm, Sweden.
1957 Insert holder T-max premiered in US.
1958 Indexable technique with exchangeable cemented-carbide inserts introduced in Europe.
1960 Comprehensive investment activity started in Sandviken.
1961 Plants opened in India and Mexico.
Cover
Sandvik – A knowledge-based company 1962 Plant inaugurated in Brazil and 100-year anniversary celebrated in Sandviken.
1968 Group’s annual sales passed SEK 1 billion and regional warehouse established in Singapore.
Sandvik’s advanced products are the result of 1969 First in the world with coated cemented-carbide inserts.
extensive expertise in many areas. More than
1,200 highly qualified specialists of various 1971 Plants opened in US and Canada.
nationalities are engaged in research, development 1972 The company name changed to Sandvik AB from Sandvikens Jernverks AB.
and quality assurance operations. The cover
illustration shows three representatives of the
1973 Sandvik acquired 65% of all shares in Seco Tools AB.
knowledge-based company Sandvik, from left: 1976 Production of cemented carbide started in Japan.
1980 First Rotoform equipment developed.
Rainer Beccu, 39, Ph.D in solid mechanics. Head
of research and development at Driltech Mission 1981 Open-hearth production discontinued in Sandviken, thereby also all ore-based steel production.
in the US, a business sector of Sandvik Mining and 1983 Percy Barnevik appointed new Chairman of the Board.
Construction. Employee of Sandvik since 1989.
1984 Incorporation and decentralized organization with independent business areas.
Anna-Lena Nyström, 36, M.Sc. in Physics and 1985 Representative office opened in Beijing, China.
Chemistry. Senior Project leader for product
development of stainless steels, tube products, at 1990 Acquisition of 25% of Tamrock, the Finnish producer of rock-drilling equipment.
Sandvik Steels’ R&D Center in Sandviken, Sweden. 1992 World’s largest producer of high-speed steel tools, CTT Tools, acquired.
Employee of Sandvik since 1989.
1994 Largest cemented-carbide plant in Russia acquired. Plant for cemented-carbide tools opened in China.
Daniel Duan, 36, head of technical support and 1997 Kanthal, all of Tamrock and the American high-speed steel producer Precision Twist Drill acquired.
training at Sandvik Coromant in China. Employee 1999 Sale of Saws and Tools business area and concentration to three core areas.
of Sandvik since 1989.
 Sandvik
Annual Report
1999

Sandvik Annual Report 1999

S A N D V I K A B S E - 8 1 1 8 1 S A N D V I K E N S W E D E N T E L + 4 6 2 6 - 2 6 0 0 0 0 F A X + 4 6 2 6 - 2 6 1 0 2 2 w w w . s a n d v i k . c o m