Status Update

Oct 25, 2019

Press Release

Executive Vice President of Assa Broi and President of the division, HIV Global. For those of you that do not know that division, it's a technical division that do the high-tech stuff for Assa Abloy. So he's very, very savvy in that area. We have had the health in Assa Abloy also the platform shared technology company, which is a platform company for technology and also other operations within Aftabrooy Group. And before that, he was with Saab Aerospace. He has 13 years of experience within Alfa Abroad and has made a very quick career within the company. And as I mentioned, Stefan has both engineering background, but also business administration. So he has a dual degree from university in Munich, Sweden. During his times, I should also mention that he has worked abroad in the USA. It has been I'm sure there was quite a challenging situation because it was a company that needed quite some change. And we have improved has proven within Assa Abloy that we could really we need to change process as function. He has a leadership style that we are very happy with in the sense that he's very much working in a decentralized way with very including a way of working with employees and collaborators and also strong performance management of all of activities. He is also an appreciative leader as such. The time for Stefan to come to us Sandvik, sorry, my husband won't answer Sandvik is in April at the latest next year. He has given his notice today. So we will know soon how long of the period they will be. And apart from that, there will be no internal changes within Sandvik. We will keep Sandvik as is. And as we also mentioned during the process, several that also were evaluated. But at the end, our choice went to Smercam, who we think will add quite some knowledge to the company. First words, I open up then for Q Our first question comes from the line of Martin Lindgren from Athens Industry. Please go ahead. Your line is now open. Our next question comes from the line of Erik Wiekschroun from Kepler Cheuvreux. Please go ahead. Your line is now open for your question. All right. I will do that from now on then. Please, could you rephrase, take the question once again? Yeah. My question is, is Stefan more of a developer or administrator? Well, I would say, you need to work. Stefan has but Stefan has, of course, strategic direction that we are very interested in. He has a very deep knowledge about industrial structure and but also technology knowledge. And as you know, Sandvik is standing in front of automatization, electrification within the mining side, digitalization like in all other companies and intelligent tooling as well as super alloy on the FMC side. So I think we are still from a hidden knowledge of technology, of course, we can add quite some knowledge and leadership in this area. The divisions are the ones that lead the business. So it's not a matter of centralizing. It's really a matter of reinforcing the digitalization that we run presently. And before you have announced that you will decrease the employees by 3,000 approximately. Do you have any other measures to meet the in Swedish? Well, certainly, we are adopting the organization. That is something all companies need to do when you have weakening situation in the marketplace. But that has nothing to do with the long term direction, which is very solid and still focused on the future in the areas like I mentioned. I think Sandvik has a great future. And I know that Stefan is sharing the same idea that it is going to be very exciting and Sandvik is a fantastic company. So I think we've shown that in the last few years as well. Sandvik, you don't understand the leadership of Bjorn has developed very well, but I still think there is even more that we can do together with the business in the company to really make Sanddish a very great company, which is already is, but feeling greater. Okay. Okay, thanks. We have a follow-up question from the line of Martin Lindgren from Dragons Industry. Go ahead. Your line is now open. Okay. Thank you. I'll take it to English now. Stefan is just 42 years old. Do you think he is experienced enough and has enough gravitas for this position? The answer, yes. Otherwise, we will not have chosen him. Stefan has and he has both experience within acquisitions. He has experience within change within industries, so meaning we have a closure and move of facilities, and he has the technical knowledge. He's a very mature person for his age. Age is not always old. I think you will also see that when he comes into position that he's also very accepted leader and he's a natural leader in a way. And I think that will also help him very much. But he has a very good idea over where the business should go. And he really believes that Sandvik has a fantastic direction and will continue in the same direction as such. You mentioned his skills in turning around HIG. What is the single most important improvement that he needs to do with Sandvik? I think we have a lot of plans when it comes to decentralization, but also to make success out of the optimization of the mines, which are extremely interesting for the mining companies. Electrification of the machine is so that you don't need high pollution within the mines, but also from a compliance point of view. We need in terms of tools that can be more, give less, which is extremely important for the machinery in the SMS business. We have a number of tools already launched in the market, and we have several more on their way. And we believe that, that is very important for the future. And as I mentioned, also this super alloy that you have new materials that can do even more than the ones we have today, where S and P already today is the leader that we still can develop it further. How high is the probability in your opinion that SMT will be listed within the nearest within the coming 2 years? What we still, as we have said, it is not decided. We are referring to the separation internally. And a decision might be taken later on. Of course, this has also to do with the business cycle. If you right now, it's about a week. We, of course, we would like to have a good solid business cycle as well. But I don't want to give any percentage or anything. The intention is to separate it first and then we will evaluate and we will contact them before the news. And will you be more engaged as a Chairman in Sanddres now that Jean Rosbergen is leading. What about, please? No. I will do. I'm engaged already today, but it is so that the CEO is the one that runs the company and implements the day to day strategy and directions. And the Board is here to evaluate the CEO and make sure that we have a good compliance within the company and support in Satya's question. So I will continue to do my work. As Stifel, we run the company together with this management team. All right. And one final question, if I may. What would be the salary of Stefan Rudin? That will be announced later on in the annual report. I don't want to talk about that with everybody on the line, but it is disclosed as normal way. Thank you. And our next question comes from the line of Lars from Barclays. Please go ahead. Your line is open. Oh, yes. Hi. Hey, Johan. Thanks for taking my question. I was I just joined, so maybe you just already answered it. But I was curious as to some of these bigger portfolio measures and bigger strategic steps, including the spin of SMT, which I understand was really down to the business cycle, if I understood your answer correctly. We've also perhaps seen slightly less larger M and A, I would argue, in SMS in the last year or 2, so perhaps you would expect it. Has it been important for you to get Stefan in the seat before we take the decisions around both S and C and sort of larger M and A within SMS? Well, the business is carrying on with the divisions as we have it today. So I see no dividend break. Bjorn is running till beginning of next year or end of this year, till the end of January to be exact. I don't see the S and T is only down to the business market. That could be a fact that will influence a possible decision. But we are not there yet. We are just doing internal separation so far. So I don't think there are we don't foresee any big changes. We don't foresee any big moves. We will continue to build the company in a structured and organized way. And Stephen will be the new leader, and we think he's very well placed to do this. Understood. Thanks. Thank you. And we have a follow-up question from the line of Erik Thank you. One last question from me. We talked earlier about the board's strategy. Can you break it down to to do list for Stefan? Top three things on the to do list. Certainly, but I will not do with our telephones. I think really the challenges we have is all the ones I mentioned initially here, the optimization, electrification, digitalization within the company, there are many opportunities there. The inherent in tooling within SMS and the Cipro lawyers to work on that as well on S and Ps. So there are successive new areas where I think Sandvik is very well placed today and be even better in the future. So I'm very upbeat and optimistic about the directions we have chosen. So those are the main attractions. The M and A division then, if you could move one step further down, we have even more detailed plans on these things and also additional things like digital printing and other stuff. But I don't think we should go too deep today on that. And we should also allow Stefan a little bit of time. Before we hang it with Stefan, he has also some time to learn and digest the company because he's, of course, going to be very new to him when he comes to us. And I don't expect him to have a full strategy day 1, but we are going to continue what we have today. And I'm sure he will appreciate the one that we have since us. Okay. Thank you very much. I'm good. Welcome, Erik. Thank you. Our next question comes from the line of Martin Lindgren. Please go ahead, Martin. Your line is open. Thank you for your patience with me. One last question, if I may. What, if you can lift one single achievement in Stefan Lindsink's career with NASA or at HIB, makes him most relevant for this position as CEO of Sandders? Well, there are many. I mean, he has long 13 years of experience. So he has done, in the recent years, 11 acquisitions. He has a very strong sales strategy. He is target driven. He is good in following up. He is working in a decentralized way. The space Sandvik wants to work. He has done many restructuring as well in where he's been, and he has proven a very strong result orientation. He's making EBITDA beyond 20%. And he's very good in the leadership, and has a listening style. And I think all those parameters are valuable to Sandvik and the people of Sandvik, even though no one is perfect. But I think, he fits very well with what we were looking for. Great. Thank you very much. You're welcome. Thank you. And as we have no more questions registered, I'll now hand back to our speakers for any closing comments. Thank you so much, everyone, for your questions. And Johan has gone, of course. And I'm sure both Martin, Afam, our Media Manager, and Anssi Nord for our Investor Relations are available if there are any follow-up questions as well connected to the announcement. So thank you much for so much for listening in. Thank you, everybody.