The Sandvik share
Sandvik strives to generate an attractive return and value growth for investors in the Sandvik share. Communication with players in the financial market in 2012 mostly related to Sandvik's new strategy and the results it has generated to date.
Share performance in 2012
Sandvik's share price increased 23%, while the OMXS index on NASDAQ OMX Stockholm rose 12%. At year-end 2012, the Sandvik share was quoted at SEK 103.50.
The Group's market capitalization increased 30 billion SEK during the year to 130 billion SEK (100), ranking Sandvik as the 9th (9) largest company on NASDAQ OMX Stockholm. During the year, Sandvik shares were traded for a total value of SEK 118 billion (146), making it the 5th (6) most actively traded share.
Total shareholder return and Sandvik's new strategy
The term "total shareholder return" shows the real development of a stock investment and consists of the change in share price, including reinvested dividends. During 2012, the total shareholder return for the Sandvik share was +27%. Over the past five years, the total shareholder return has averaged 2% annually.
The new strategy was formulated in the autumn of 2011 aimed at enhancing value generation through an increased and clearer focus on core operations. Much of 2012 was devoted to work on implementing and communicating the strategy.
Reliable information to investors, analysts and the media
Sandvik's goal is to ensure that the value of the company's share is always assessed on the basis of relevant, correct and current information. Realization of this goal requires a clear strategy for financial communication, creating confidence in information and regular contacts with the various stakeholders in the financial markets.
Aside from daily communication, focused contacts with the financial markets are carried out in the form of presentations in conjunction with interim reports and meetings with analysts, investors and journalists on capital market days, conferences and seminars, as well as visits to various Sandvik sites. Communication is coordinated by Sandvik's Investor Relations (IR) Group staff function.
The need for financial communication increases in times of particular financial uncertainty or an economic slowdown. While Sandvik's vertically integrated business model has proven highly successful over the years, it has also shown to be slightly sensitive to economic fluctuations. In such times, IR invests considerable time and effort into explaining Sandvik's business model, strategy and how the company can be affected in the event of various scenarios.
IR focus in 2012
In 2012, a large number of meetings were arranged throughout the world to give Sandvik's various stakeholders in the financial markets the opportunity to have personal contact and to receive responses to questions about the Group's business and future. Work was, to a certain extent, characterized by Sandvik's 150th anniversary with a wide range of activities for major players in the capital market and private shareholders, among others.
Many of the questions at the beginning of the year surrounded Sandvik's new strategy and the direction it has brought about. As the year progressed, questions successively moved on to the world economy and Sandvik's position in various markets.
Share trading and listing
Sandvik's share is listed on NASDAQ OMX Stockholm and is one of the stock exchange's oldest companies, with a listing dating back to 1901. The Sandvik share can be traded in the US in the form of American Depositary Receipts (ADR).
Sandvik is included in FTSE4Good Series, an international index for global companies that assume social responsibility.
In 2012, the number of shareholders declined to a total of about 111,000 (113,000). Sandvik has shareholders in more than 90 countries.
At 31 December 2012, members of Sandvik's Group Executive Management owned a total of 68,009 shares in Sandvik. Members of the Board of Sandvik owned a total of 6,094,241 shares in Sandvik, corresponding to 0.5% of the capital and voting rights.
Long-term goal and dividend proposal
Sandvik endeavors to ensure that the Sandvik share generates an attractive return and value growth for the owners. The goal is that the dividend will amount to 50% of earnings per share.
The Board has decided to propose a dividend of 3.50 SEK (3.25) per share for 2012 to the 2013 Annual General Meeting, corresponding to approximately 4.4 billion SEK and a dividend yield of 3.4% based on the share price at year-end.
Over the past five years, Sandvik's dividend has averaged 2.78 SEK per year. During the same period, an average of approximately 67% of earnings per share has been distributed to the shareholders.
Investor Relations on the Internet
At www.sandvik.com/ir you will find further information about the Sandvik share and IR activities.