JPM | European Industrials Conference: Sandvik CEO - Spec Quick Notes

Research evidence excerpt

JPM | European Industrials Conference: Sandvik CEO - Spec Quick Notes

mines. Electrification of mines is much slower - because mines are operating at high levels

and are therefore less willing to try a new, potentially riskier technology. Electrical infrastructure doesn't seem to be the

bottleneck. There’s always a battery charging at relatively low energy usage. It is easier to put electric equipment into a

greenfield mine - because you can design the mine to take advantage of the characteristics of the electrical equipment. Electric

equipment has more torque so you can design steeper inclines to improve productivity - and the mine itself has lower

ventilation requirements - so the economics make more sense. The location of the mine (and proximity to cheap energy) also

matters. Southern Canada, for e.g. where there is hydro power is better than Northern Canda where you’d be using a diesel

genset for electricity.

• Aftermarket - targeting HSD growth - how will you achieve this? A growing fleet helps + some pricing. More advanced

machines also have more aftermarket. They are more sophisticated so it’s easier to capture the aftermarket.

• Aftermarket business model - why do you not target more service contracts? Do offer service contracts but it’s not a strategic

target because the Company wants to supply the customer wherever they are. Some customers want to buy over the counter.

Focus very much where they can add the most value - and will take full service responsibility if the customer wants. On

margins there are different levels on different tyoes of service - but only disclose that service is margin accretive to the group.

MACHINING AND POWDER

• Tungsten prices - any concerns on lower prices in China? No - China has become more restrictive on Tungsten exports. The