Report on the second quarter 2012

CEO's comment:

Good progress and strong demand

"Overall demand remained favorable also in the second quarter of the year for the majority of Sandvik's customer segments. Order intake remained strong at 26.2 billion SEK and invoiced sales reached 25.9 billion SEK, an increase of 8% in price and volume. Although high on an overall level, the demand fluctuated between various markets. Europe weakened slightly while the scenario in North and South America remained strong. Demand from Asia was strong albeit with significant variations between segments. Similar to previous quarters, both Sandvik Mining and Sandvik Machining Solutions noted high demand, while the other business areas all faced a more challenging market situation", says Sandvik's President and CEO Olof Faxander.

"Healthy demand and progress ahead of plan regarding our cost savings resulted in an improved operating profit of 4.2 billion SEK, or 16.2% of invoiced sales. An area of strategic importance where challenges remain is capital efficiency, in which Sandvik has tangible improvement potentials."

"As the quarter progressed, the macro-economic conditions became increasingly uncertain, predominantly in Europe. We therefore enter the seasonally weaker third quarter with an elevated amount of caution. On the back of this, it is particularly satisfying to note that the implementation of the strategy established in September last year continued to yield results ahead of plan in the second quarter."

Stockholm, 19 July 2012
Sandvik Aktiebolag (publ)