#Sweden #Restructuring #Stockholm #Sandvik #Machining

Sandvik Restructuring Initiatives in Machining

On May 20, 2025, Sandvik, a major player in the engineering and manufacturing sector, revealed a comprehensive restructuring plan aimed at enhancing its Machining business area. The restructuring is slated to unfold between 2025 and 2030, with key objectives focused on driving operational efficiency, resilience in profit margins, and capitalizing on growth opportunities.

Initial Implementation Phase

As of June 24, 2025, Sandvik has commenced the first phase of these restructuring initiatives. The overarching strategy involves optimizing the organizational structure while consolidating production units to streamline operations. This approach is designed to not only reduce costs but also foster a more agile and responsive manufacturing environment.

Financial Implications

The financial outlook from these restructuring initiatives is promising. Sandvik anticipates annual savings of roughly SEK 380 million as a direct result of the optimization measures. Notably, it is expected that around 40% of these savings will be realized by the end of 2025, with the target set to achieve 90% of the projected savings by the close of 2026. However, the company will incur restructuring costs amounting to SEK 570 million, scheduled to be categorized as non-recurring costs affecting comparability in EBITA for the second quarter of 2025.

Out of this total, approximately SEK 20 million will consist of non-cash items, with the remaining costs primarily associated with the anticipated redundancies impacting around 350 employees. Such layoffs, while challenging, are deemed necessary for the company's long-term strategic goals.

Strategic Vision Beyond 2025

Looking ahead, Sandvik’s restructuring efforts in the Machining sector are a vital component of its broader vision. The initiatives are intended to position the company for sustainable growth and competitiveness in an evolving global market. By enhancing operational efficiencies and reducing unnecessary costs, Sandvik aims to strengthen its market presence and provide better value to its stakeholders.

The company recognizes that the successful execution of these plans hinges on clear communication and support for its workforce during this transitional phase. Sandvik is committed to ensuring that affected employees are treated with respect and fairness during the restructuring process.

Conclusion

In summary, Sandvik's implementation of the initial phase of its restructuring initiatives signifies a crucial step towards refining its Machining operations. With a focus on efficiency and growth, Sandvik is poised to navigate future challenges while bolstering its economic resilience. This strategic overhaul reflects the company’s dedication to operational excellence and its responsiveness to market dynamics. For more insights or inquiries, please contact Louise Tjeder, VP of Investor Relations, or Johannes Hellström, Press and Media Relations Manager, at the provided contact numbers.