Sandvik Q2 Earnings: Record Revenue, Margin Jumps to 22.6%

Sandvik delivered record revenue and profit in the second quarter, with organic order intake rising 17% and organic revenue climbing 23% from a year earlier, the Swedish engineering group said Thursday.

Adjusted EBITDA reached SEK 8.3 billion, up from SEK 5.6 billion in the same period last year. The margin widened to 22.6% from 19%. Adjusted profit for the period came in at SEK 5.8 billion, compared with SEK 3.7 billion a year ago. The rolling 12-month adjusted EBITDA margin now stands at 20.4%.

"It was a very strong quarter with record revenues and profits," CEO Stefan Widing said on the earnings call. "We see strong momentum across key regions and segments as well as also good price realization, which is, of course, very important in the current environment."

Total order intake grew 17% and total revenue increased 24%. Organic growth drove most of the gain. Price realization remained a key contributor to margin expansion, Widing said.

The company supplies mining and industrial tools. Demand held up across its main markets, with no signs of softening in the second quarter. The margin improvement came from a mix of higher volumes, better pricing, and cost control.

CFO Cecilia Felton joined the call alongside Widing and Head of Investor Relations Louise Tjeder. The prepared remarks did not include a specific free operating cash flow figure. The full earnings release will contain the complete financial statements.

Analysts on the call included representatives from JPMorgan, Bank of America, Deutsche Bank, Goldman Sachs, RBC Capital Markets, Morgan Stanley, Rothschild & Co Redburn, and Barclays. Questions are expected to focus on the sustainability of the margin improvement, pricing power across segments, and the outlook for mining and industrial demand in the second half.

Sandvik reports its next quarterly results in October. The order backlog and the pace of organic growth will be the key metrics to watch then.