CAPITAL MARKETS DAY20072007

Anders ThelinPresident

Sandvik Tooling

Tanya FrattoP id tPresident

Diamond Innovations

Agendag

Update

B i d lBusiness model

Growth leversGrowth leversStrategic acquisitions

Market leadership

Capacity and productivityCapacity and productivity

Future opportunitiespp

Sandvik Tooling

Agendag

Update

B i d lBusiness model

Growth leversGrowth leversStrategic acquisitions

Market leadership

Capacity and productivityCapacity and productivity

Future opportunitiespp

Sandvik Tooling

Sandvik Tooling

Tools and tooling systems for metalworkingW t d b i tWear parts and superabrasive components

Solutions using products in cemented carbide, high-speed steel, synthetic diamond cubic boron nitride and special ceramics

2006

synthetic diamond, cubic boron nitride and special ceramics

Sales SEK 22,500 M

EBIT SEK 5,191 M, 23.1%

ROCE 34.4%

15,100 employees

Sandvik Tooling

Financial objectives

SandvikSandvik

Mi i dSandvikM t i lSandvik

ToolingMining and

ConstructionMaterials

Technology

Growth 7% 9% 8%ROCE 30% 25% 20%ROCE 30% 25% 20%

Sandvik Tooling

Sandvik Tooling Q2 2007Q2 2007

EBIT- margin*Invoiced sales

Continued strong growth7 000 35%

EBIT marginROCE 12-months*

Invoiced salesSEK M, Quarter

Invoiced sales +12%Organic growth +9%5 000

6 000

25%

30%

EBIT +19%, 24.8% of salesSEK 1,568 M

4 000

5 000

20%

25%*

Currency effect SEK -90 M

Insurance comp. >+1% unit2 000

3 000

10%

15%

Diamond Innovations -1% unit

ROCE 33.8% (32.9%)1 000 5%

Diamond Innovations -1.5% unit0

03 04 05 06 070%

Adjusted to IFRS from 2004

Sandvik Tooling

* Excluding one-offs in PTD in Q4 2003

Sales by customer segment 2006Small Part Machining Aerospace

Pump & Valve

Automotive

Mechanical engineering

Die & Mould

Heavy Equipment

Oil & GasMedical Machine

Tool Makers

q p

Sandvik Tooling

Sales by customer segment 2006Small Part Machining Aerospace

Pump & Valve

Automotive

Mechanical engineering

Die & Mould

Heavy Equipment

Oil & GasMedical Machine

Tool Makers

q p

Sandvik Tooling

Sales by region 2006Australia, New

Zealand Eastern EuropeAsia

Africa, Middle East

South AmericaSouth America

Western Europe

NAFTA

Sandvik Tooling

Profitable growth

SEK M25 000

45%

50%

20 000

35%

40%

15 000

25%

30%InvoicingROCE

10 000

15%

20%EBIT-marginROCE target

5 000

5%

10%

02003 2004 2005 2006

0%

Sandvik Tooling

Profitable growth

SEK M25 000 25%

20 000 20%

15 000 15%InvoicingOrganic growth

10 000 10%Organic growthGrowth target

5 000 5%

02003 2004 2005 2006

0%

Sandvik Tooling

Agendag

Update

B i d lBusiness model

Growth leversGrowth leversStrategic acquisitions

Market leadership

Capacity and productivityCapacity and productivity

Future opportunitiespp

Sandvik Tooling

Customer offerCustomer offer

Sandvik Tooling

Creating customer value

Sandvik Tooling

Business model

SEK 2 900 B2 500 000 MSEKSEK 116 B2.500.000 MSEKSEK 116 B

WorkpieceMaterial

Machinery & Equipment

Operators OverheadTools

4 5%4-5%

Sandvik Tooling

Productivity leverage

C t d ti C t d tiCost reductionper component: -1%

Cost reduction per component: -15%Free capacity

Sandvik Tooling

p y

Utilization

8 760 h8 760 h

Sandvik Tooling

Platform for superior growthp g

Multibrand strategy

Multibrand strategy >7%

Global presence

Global presence

Sales and MarketingSales and Marketing Sandvik

ToolingProduction and

distributionProduction and

distribution

Tooling growth premium

Research and DevelopmentResearch and Development

Market growthMarket growth ~4 %

Sandvik Tooling

Agendag

Update

B i d lBusiness model

Growth leversGrowth leversStrategic acquisitions

Market leadership

Capacity and productivityCapacity and productivity

Future opportunitiespp

Sandvik Tooling

Diamond

Cubic Boron Nitride

Diamond

Cubic Boron Nitride(CBN)

Cemented

Ceramics

High Speed

Cemented Carbide

g pSteel

Stainless SteelSteel

Diamond & CBNGrowth potential 10%Growth potential 10%

Fully integrated value chain

Sandvik Tooling

Sandvik Tooling

Sandvik Tooling

Sandvik Tooling

Sales by region 2006Diamond Innovations

Sandvik Tooling

Sandvik Tooling

Polycrystalline products

Granular products

Sandvik Tooling

Macroeconomic trends

DemandsDemandsSmaller, stronger, lighter products

Stricter environmental regulations

Material Offer

Composite materialsMachining compactMachining compact graphite iron Efficient aluminum

hi imachining

Sandvik Tooling

Successful combination

Sandvik Tooling Diamond InnovationsSandvik ToolingCemented carbide technology Know-how

Superhard material technology Know-how

Diamond Innovations

Know how cemented carbidemetal-cutting applications

Know how diamond & CBNsuperabrasive applicationsg pp

Strong R&D culturep pp

Strong R&D culture

Sandvik Tooling

Sandvik and Diamond InnovationsSuccessful combinations

Future applications Oil & Gas Exploration drilling

Sandvik Tooling

Diamond Innovations

Sales 2006 SEK >1 000 M Global presenceSales 2006 SEK >1,000 M 600 employees Main units in US & Ireland

Global presenceComplementary business

Sandvik Tooling

Agendag

Update

B i d lBusiness model

Growth leversGrowth leversStrategic acquisitions

Market leadership

Capacity and productivityCapacity and productivity

Future opportunitiespp

Sandvik Tooling

Market leader in major industrial marketsmarkets…

25%

% share of global production, 2006

20%

25%

15%

10%

5%

0%

USA China Japan * Germany Eastern Europe

UK Italy

Sandvik Tooling*Note: Market leadership among non-Asian manufacturers Source: Economist Intelligence Unit

…and in fast growing markets…g g

18%

Actual production growth, 2006

14%

16%

18%

10%

12%

14%

6%

8%

10%

2%

4%

6%

0%

2%

China South Korea * India Eastern Europe Germany USA Japan *

Sandvik Tooling*Note: Market leadership among non-Asian manufacturers Source: Economist Intelligence Unit

…and where the absolute growth isg

Production growth 2006,Production growth 2006, in SEK B

Sandvik Tooling*Note: Market leadership among non-Asian manufacturers Source: Economist Intelligence Unit

Sandvik Tooling in ChinagIndex,100=2001

400

300

200

100100

02001 2002 2003 2004 2005 2006

Sandvik Tooling

Sandvik Tooling in IndiagIndex,100=2001

250

100=2001

200

150

100

50

02001 2002 2003 2004 2005 2006

Sandvik Tooling

Sandvik Tooling in RussiagIndex,100=2001

400

100 2001

300

200

100100

02001 2002 2003 2004 2005 2006

Sandvik Tooling

Agendag

Update

B i d lBusiness model

Growth leversGrowth leversStrategic acquisitions

Market leadership

Capacity and productivityCapacity and productivity

Future opportunitiespp

Sandvik Tooling

Consolidation of productionp

2002200281

2004200466

200747 + 4 Diamond Innovations

Sandvik Tooling

Westminster South Carolina, USA

Sandvik Tooling

São Paulo B ilBrazil

Sandvik Tooling

Sandvik Hard MaterialsBarcelona, Spain

Sandvik Tooling

ChiplunpIndia

Sandvik Tooling

Walter Tübingen, GermanyTübingen, Germany

Sandvik Tooling

W ltWalter, MünsingenWalter

Münsingen, Germany

Sandvik Tooling

SchmalkaldenGermany

Sandvik Tooling

Improved productivity

46% growth

2004

200281

200466

200747 + 4 Diamond Innovations

Sandvik Tooling

Resources to the front line

Index,,100=2002

11525 000

105

110

20 000

25 000

95

10015 000

Invoicing, SEK M

Administration

90

95

10 000Sales and marketing

80

855 000

752002 2003 2004 2005 2006

Sandvik Tooling

Agendag

Update

B i d lBusiness model

Growth leversGrowth leversStrategic acquisitions

Market leadership

Capacity and productivityCapacity and productivity

Future opportunitiespp

Sandvik Tooling

Growth activities 2007-2010Growth activities 2007 2010

Multibrand strategy

Multibrand strategy Brand positioning

Global presence

Global presence Strategic acquisitions

Sales and MarketingSales and Marketing Expansion of sales force

Production and distribution

Production and distribution Continued consolidation & rationalization

Research andResearch and

R i f d l d hi i hi h th k t

Research and DevelopmentResearch and Development Increased New Sales Ratio

Market growthMarket growth Reinforced leadership in high-growth marketsMarket growthMarket growth

Sandvik Tooling

Sandvik Toolingreinforcedreinforced

with diamonds

Sandvik Tooling