Sandvik AB Q1 2023 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Andrew J. Wilson - JPMorgan Chase & Co, Research Division - Analyst : I've got 2 and they're different, so I'll take them one by one. On the comments on China very helpfully in terms of kind of Q2 versus Q1, and apologies for sort of diving into this again. But I'm interested in terms of whether you think this is a catch-up on a slow start to the year? Or you think it's genuine underlying strength. I appreciate the lead times are only so far and there's lots of different markets and customers. But could you get a sense of kind of the confidence around that continuing in China, at least not from the customer indications you've got at the moment? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 21, 2023 / 11:00AM, SAND.ST - Q1 2023 Sandvik AB Earnings Call

Question: Andrew J. Wilson - JPMorgan Chase & Co, Research Division - Analyst : That's very helpful. And then secondly, just on the aftermarket on the mining side. I mean it feels like every quarter, it's just a very, very good number. And again, it was in the Q1 here, particularly in SMR, I guess. I guess the same question that you've probably had a lot of recent quarters. To what degree do you think we can be sustaining those kinds of growth rates? Is there a little bit of seasonality in terms of the ordering? Is there a little bit of concern around customers having built big inventories potentially through last year? I mean, I know previously the commentary is still been pretty positive around aftermarket, but just some help around how to think about that? And if there's any signs at all that the levels that we've seen, could you either slow or I guess, to be fair, accelerate even further?

Question: Mattias Holmberg - DNB Markets, Research Division - Analyst : I'm going to follow-up a bit on Daniela's question here, and sorry to dwell on this topic. But when I look at the bridge for SMM and then consider the comment you made here that it was [27%] of the leverage for the cutting tools. It [basically ties] with the Manufacturing Solutions business, must have been quite dilutive in order for the numbers, which you add up for the division. So can you just comment or clarify on what's (inaudible).

Question: Mattias Holmberg - DNB Markets, Research Division - Analyst : And just to follow up, are you happy with where the sort of CAD and CAM business possibilities at this point?

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : First question is on SRP, where you had very strong revenue growth and where you say that like in the other divisions, you caught up with the cost development, so pricing caught up with cost. But if I run the numbers and I look at the 14.5% margin and I adjust for the 120 bps from SP and the 40 bps revaluation, I still only get to 16.1% margin. Last year, you had 15.9%. So that looks fine, but then this is supported by 230 bps currency. So to me, it seems that you caught up with cost but only with the help of currency. Is that correct? Or am I missing something here? That would be question number one.

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : So we then can expect an improvement in the coming quarters? Or this is a one-off now or...

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : Okay. Second question is on the BEV on the electric machinery. You now had a couple of follow-up orders and deliveries. Can you give us an idea whether the equipment is running at a similar margin to your ICE equipment? And then if the Battery as a Service business will give us a similar margin than conventional service business. So I just want to get an understanding of the margin impact longer term from BEV.