Report on the first quarter 2011

President's comment:

Increasing demand

"The business climate developed favorably during the first quarter, and order intake and invoiced sales grew significantly, in all business areas, compared with the preceding year. Order intake continued to increase in most markets. Demand was strongest in the mining, energy and automotive sectors," says Sandvik's President and CEO, Olof Faxander.

"The order intake amounted to nearly SEK 25 billion and invoiced sales to slightly more than SEK 22 billion, which were 19% and 27% respectively higher than last year at fixed exchange rates. The operating margin and operating profit improved substantially and amounted to 15% and SEK 3.3 billion, respectively. A higher operating margin resulted in an improved return on capital employed."

"Lower levels of project activity and a certain amount of seasonal slowdown in Asia and Australia led to a decline in order intake and invoiced sales compared with the previous quarter."

"We are greatly relieved to be able to state that our colleagues, their families and our units located in Japan all survived unscathed from the disaster that struck the country and its inhabitants during the quarter. The first quarter performance was unaffected. The long-term global consequences of the events that unfolded are still too early to assess."

The Group Executive Management has gained two new members; Anna Vikström Persson, Senior Vice President Human Resources and Jonas Gustavsson, President of Sandvik Materials Technology.

"I am convinced they will make a significant contribution to Sandvik's continued success with their skills and experience," says Olof Faxander.