Sandvik orders beat forecast, confirms SMT listing

Sweden’s Sandvik reported a third-quarter order intake that exceeded market expectations on Monday and said it was planning to list its specialty steel business on Nasdaq Stockholm next year.

The metal-cutting tools and mining gear maker was helped by strong demand in the mining and infrastructure segments, while supply chain bottlenecks and component shortages remained a challenge.

Demand from the automotive industry in China slowed somewhat in the quarter, as the global semiconductor shortage kept pressuring the sector.

“We think it will gradually improve but I don’t think we will see a material improvement in Q4”, Chief Executive Stefan Widing told a news conference.

Sandvik, seen as a good gauge of industrial demand given its broad customer base, said like-for-like order intake grew 21% to 26.29 billion crowns ($3.04 billion), helped by a robust increase in its mining unit, beating analysts’ expectations of 25.27 billion.

Having risen roughly 5% this year by Friday’s close, shares in the Swedish engineering group – one of the first major Nordic industrial firms to report third-quarter earnings – were up 2.2% in late morning trading.

Sandvik confirmed earlier on Monday that it plans to separately list its Materials Technology (SMT) business on Nasdaq Stockholm and said it was targeting the second or third quarter 2022.

The SMT business, which makes seamless tubes and different strip steel products, represents the original core of 159-year old Sandvik.

Sandvik, which competes with the likes of Epiroc and Kennametal, said adjusted operating profit rose to 4.37 billion crowns from 3.49 billion a year earlier, above a 4.30 billion mean forecast in a Refinitiv poll.

The mining sector accounts for almost 40% of Sandvik’s sales, while engineering and automotive industries make up roughly a third.