Sandvik provides an update on cost measures and savings

SANDVIKEN, Sweden, Dec. 21, 2020 /PRNewswire/ -- As previously announced Sandvik initiated measures across the Group to mitigate effects from the Covid-19 pandemic, with actions supporting savings both short-term and long-term. Today, Sandvik provides an update on the current status of the long-term cost measures and savings for the 2021 program.

Apart from the temporary short-term actions that were initiated at the outbreak of the covid-19 pandemic, Sandvik also announced long-term measures that will generate SEK 1.3 billion in annual savings with majority impacting 2021. Previously communicated implied cost for this program was SEK 2.3 billion.

The final cost for this program totals SEK 2.8 billion, of which SEK 1.7 billion was charged to the operating profit in the first and second quarter 2020 and the remaining SEK 1.1 billion will be charged in the fourth quarter and reported as items affecting comparability. The higher cost estimation is a consequence of a shift to initiatives that will be more structural in nature and includes consolidation of production units, site closures and downsizing. 

"The savings initiative is progressing well and will support our ambition to be resilient through the cycle and continuously improve operational efficiency," says Stefan Widing, President and CEO of Sandvik.

Estimation of the total cost and savings (initiated during 2020 with effects starting 2021) per Business Area are split accordingly:

Of the total SEK 2.8 billion SEK, approximately SEK 700 million are non-cash items and the remaining SEK 2.1 billion SEK mainly refers to redundancies of some 1 800 employees.

For further information, contact:

Louise Tjeder
Vice President Investor Relations
phone: +46 (0) 70 782 63 74 

Edvard Bergström
Vice President Communications Relations and Productions
+46 (0) 70 993 83 11.

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SOURCE Sandvik