SANDVIKTO ACQUIRE UNDERGROUND SAFETY
SOLUTIONS COMPANY DSI UNDERGROUNDSAFETY FIRST
Sandvik’s objective is zero harm to ourpeople, the environment we work in,
our customers and our suppliers.
PROTECTIVE
EQUIPMENTFIRST AID
KIT

ALARM

EMERGENCYNUMBEREMERGENCY
EXIT

ASSEMBLYPOINT

PSYCHOLOGICALSAFETY

2HEALTH &WELL-BEINGA BUSINESS GEARED FOR GROWTHFORECASTED MARKET GROWTH 2019-2025, CAGR

~3%

2.5-3%

~2%

>10%

≥5%

Through an economiccycle organic and M&A

SANDVIK MINING &ROCK SOLUTIONSSANDVIK ROCKPROCESSING SOLUTIONSSANDVIK MANUFACTURING & MACHININGSOLUTIONSSANDVIK MACHINING
SOLUTIONS

3SANDVIK MANUFACTURING
SOLUTIONSSTRENGTHENING OUR POSITION AS
WORLD-LEADER IN UNDERGROUND MINING
ROCK EXTRACTIONEXPLORE& PLAN

DRILL & BLAST

ROCK PROCESSING

MATERIALS
HAULAGESANDVIK MINING AND
ROCK SOLUTIONS (SMR)

4CRUSHINGSANDVIK ROCKPROCESSING
SOLUTIONS (SRP)

GRINDINGPOTENTIAL
EXPANSIONSEPARATIONSMR SETTING UP FORGROWTHFocus on fast growing commodities
Grow share in core
Expand aftermarket offering
Lead automation, digitalization andelectrification
Accelerate Mergers and Acquisitions

Sandvik DS422i is a rock support drill specialized
for cable-bolt installation in underground mines andtunnels

DSI UNDERGROUNDUNDERGROUND DEVELOPMENT

Bolts, plates, bars
Mesh Sheets

DEVELOPMENT AND
PRODUCTIONDRILLING

CHARGE, BLAST,VENTILATE

MATERIAL LOADING
AND HAULINGGROUND SUPPORTINSTALLATION

7WHAT IS GROUND SUPPORT?
Ground support is mission-critical safetysystems in mines and tunnels that keep
rock stable and prevent potentially lethal
rockfall or collapse

TOWARDS A FULL-SERVICE PROVIDER UNDERGROUNDCUSTOMER
DEVELOPMENTCYCLE TIME*Drilling

Charge, Blast, Ventilate

Ground support installation

Material loading and hauling~20-25%

~25%

~30%

~20-25%EXAMPLE DSI UNDERGROUND’s PRODUCTS
SMR OFFERINGBOLTS

CHEMICALS

Friction, cable, inflatable, mechanical, self-drilling, fiberglass

Resin capsules, injection chemicals, accessories

OTHER SUPPORTSERVICES

Umbrella systems, plates, bars, mesh, installation accessories

Digital / monitoring, technical support, training

CURRENT
MAIN SCOPE
FuDSI
SCOPE
NOT IN
CURRENTSCOPE

8* Average UG mine

DSI UNDERGROUND: #1 GROUND SUPPORT SUPPLIER
FULL YEAR 2020FSALES*EBIT MARGIN

EMPLOYEES (incl. JV:s)

518 MEUR 12-13% ~2,000
SALES BY MARKET AREAAMERICAS

31%

PRODUCTION FACILITIES(incl. JV:s)

22

COMPANY OVERVIEW• Leading supplier of ground support andreinforcement products, systems andsolutions• Leading profitability among peers

EMEA

21%

• Reliable, local and rapid supply chain

ASIA PACIFIC

48%

9• Broadest offering in segment withunique application know-how• High safety standards• Long standing client relationships withglobal mining and tunneling companies* 518 MEUR sales is for DSI Underground standalone, not consolidated with JV:sJOINT VENTURES

COUNTRIES

470SALES BY END MARKET
OtherTunneling andinfrastructure

4%

21%

Soft rock mining

10%

Hard rock mining

65%

CLOSE PROXIMITY TO CUSTOMERSDSI UNDERGROUND GEOGRAPHIC PRESENCESUPPLY CHAIN• DSI Underground recognized bycustomers as having best in classservice levels• Local presence gives high reliability
and supply security• Relatively low share of products tiedup on long transportation routes keep
net working capital down
• Proximity of production andcustomers enable rapid productcustomization• Further opportunities to streamline
logistics and globalize products

Office10Production

Warehouse

Joint Venture

DSI UNDERGROUND IS A GOOD STRATEGIC FIT
1COMPLEMENTARY
OFFERING

2 STRONG PERFORMANCE

Leading profitability vs. peers. Stronger EBITDA margin and sales growth vs.
competition with favourable exposure to faster growing commodities and applications

3 100% AFTERMARKET

Consumables business. 100% of DSI Underground’s sales is ground support systems
required for mining and tunneling operations

4 THE MARKET LEADER#1 provider of Ground Support within HR and Tunnelling. Leading market share forground support systems in Hard Rock and Tunneling

5 UNIQUE TECHNOLOGY

Sandvik uniquely positioned to develop integrated automated bolting.
Combining the global leader in bolter equipment (Sandvik) with the leading
consumables supplier (DSI Underground) creates a unique platform for developing
automated and digitalized ground support solutions

PLATFORM

11Drive safety and productivity across the full underground mining cycle. Leverage
combination of equipment and consumables to improve customer safety andproductivity

SMR VISION AND STRATEGIC FOCUS AREAS
To be the preferred solutions partner in our customers’ journey to performance leadership

SAFE ANDSUSTAINABLEDELIVERCUSTOMER VALUEDSI UNDERGROUNDOFFERING12SHAPE THE INDUSTRYECOSYSTEMAGILE EXECUTION WITH
EXCEPTIONAL PEOPLEGROUND SUPPORTAUTOMATION AND
DIGITALIZATIONR&D AND PRODUCTMANAGEMENT UPLIFTEVOLVE PORTFOLIO
AND PARTNERSHIPSCONTINUEDGROWTH

TRANSACTION OVERVIEW& FINANCIAL IMPACT

TRANSACTION OVERVIEW
TRANSACTIONCONSIDERATIONS• Enterprise value: 943 million EUR.
• Sellers: Triton Partners.
• Estimated closing: Mid-2021, subject to customary regulatory approvals.

IMPACT ON KEYMETRICS

IMPACT ON P&L• Funding: Cash deal. No need to increase gross debt.
• Group gearing by Q3 was 0.05 and net debt/EBITDA was not measurable.
The deal will increase the gearing with around 15 bps but we will still be way
below our financial target of 0.5. Net debt/EBITDA will also be well below 1.5.
• EPS: estimated to be slightly positive to EPS including PPA amortization.
• EBIT margin: pro-forma 2020 EBIT margin dilutive with approximately 50
bps to Sandvik Group and <200 bps to SMR.
• Strong synergy case going forward.

1414

SUMMARYIMPORTANT STEP IN OUR GROWTH AMBITION

Strong strategic
fit with acomplementaryoffering

16

Adding a solid
aftermarket
businessStrengthens ourworld leading
position inundergroundminingQUESTIONS & ANSWERS