SANDVIK TO ACQUIRE LEADING CAM COMPANY
CNC SOFTWARE – CREATORS OF MASTERCAM
AND NEW SMF OJBECTIVES1A BUSINESS GEARED FOR GROWTH
HIGH GROWTH RATES EXPECTED IN SANDVIK MANUFACTURING SOLUTIONSFORECASTED 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 & MACHINING
SOLUTIONSSANDVIK MACHININGSOLUTIONSSANDVIK MANUFACTURINGSOLUTIONSSANDVIK MANUFACTURING SOLUTIONS– OUR THREE DIVISIONSDIVISION

ADDITIVE
MANUFACTURINGDIVISIONMETROLOGY

Addressablemarket

Serviceablemarket

CAGR
Serviceablemarket

Design &Planning

26B

26B

7%Additive
Manufacturing

46B

11B *120%

100B

12B *212%SEKDIVISIONDESIGN & PLANNING
AUTOMATION
3Industrial
Metrology*1 Additive printers excluded*2 Software and in-line metrology included

STEPPING UP THE DIGITAL SHIFTMASTERCAM STRENGHTENS OUR MANUFACTURING SOLUTIONS OFFERING

With DWFritz Automation, Sandvik
will take a leading position in highspeed, non-contact, in-linemetrology and precision
automation
SIGNING ANNOUNCED JULY 12, 2021
CLOSING EXPECTED DURING SECOND HALF OF 2021

A leading company with an end-toend portfolio in CAD/CAM software
for manufacturing industries.
SIGNING ANNOUNCED JULY 1, 2021
CLOSING EXPECTED DURING SECOND HALF OF 2021

4CNC Software is a leading provider of CAD/CAM software solutions
and the company behind Mastercam, the most widely used CAMbrand in the industry.
SIGNING ANNOUNCED AUGUST 25, 2021
CLOSING EXPECTED DURING Q4 2021

DESIGN & PLANNING
AUTOMATION AND CAM

5DESIGN & PLANNING AUTOMATION DIVISIONMISSION• Automate the manufacturing value chain for small and mid-sized
manufacturing companies – and deliver competitive point solutions
for large OEMs
• Deliver products that are open and agnostic, thus simplifying
integration with installed base
• Generate recurring revenues through strong position in Computer
Aided Manufacturing (CAM), Design for Manufacturability andProduction logistics
MACHINING

THE MANUFACTURING
VALUE CHAIN:PRODUCT
PREPARATIONVERIFICATIONCOMPONENTDESIGN

6DESIGN & PLANNING AUTOMATION DIVISIONSTRATEGY TO CREATE A STRONG POSITION IN THE CAM MARKET• To build an offering around Computer Aided Manufacturing (CAM),
Design for Manufacturability and Production logistics – formanufacturing processes such as machining, additive
manufacturing, metal forming, injection and robotic welding• The CAM market has been identified as the most important toenter, due to attractive growth rates – and its proximity to Sandvik
Manufacturing and Machining Solutions’ core business• CAM is a vital component to create an offer of automated solutions
from component design to machining

COMPONENT DESIGN PRODUCTION PREPARATIONCOMPONENTDESIGN

7MACHININGPRODUCT
MACHINING
PREPARATIONVERIFICATIONVERIFICATION

WHY CAM?
WILL PLAY A VITAL ROLE IN OUR DIGITAL MANUFACTURING SOLUTIONS

1Complements premium
tooling business• Tool selection and productivity
improvements are often made here
• The CAM market is consolidating
quickly• Cross-selling tools through CAM
position2

CAM software
market opportunity• Growing into attractive software
segment with higher share ofrecurring revenues• CAM: Tooling market 1:8 ratio,
very good leverage on a strong
software position• Gain a cost-efficient digital reach tothe SME market through CAM• Software logic to use size and scaleof installed base for SaaS transition
and tech scalability

83

Improve customers’ productivity
through digital manufacturing• CAM is a center piece in data
capture and data use position• Use and offer best data-base, toachieve productivity and quality
gains for the customers, and forSandvik• Automated processes for customers
will improve customer intimacy andthe position for productivity sales(pay-per-part model)

CNC SOFTWARE, INC.
/MASTERCAM

9CNC SOFTWARE IN BRIEFOVERVIEWCOMPANY PROFILE 2020

• CNC Software Inc. is a leading provider of CAD/CAM
software solutions for manufacturing industries and thecompany behind Mastercam.

Geographic location:• Mastercam is the most widely used CAM brand in
the industry, with an installed base of around 270,000
licenses/users – and the largest market reseller
network.
• Strong market position in CAM, and particularly forsmall and medium-sized manufacturing enterprises(SME’s).

Headquarters:

MAIN CUSTOMER
INDUSTRIESWorldwide
Connecticut, USA• Aerospace & Defense• Automotive

CEO:

Megan West• Consumer Goods

Revenues:​ ~60 MUSD

• Energy

Employees:~220

Sales by region:

Americas 57%
EMEA 19%
APAC 21%• Heavy Industry• Motorsport• Education• Etc.

• Well-established partnerships with leading machinemakers ​and tooling companies globally.
• An independent, family-owned company founded in
1983, which has become synonymous with theirCAM-software suite Mastercam.

10

MEGHAN WEST

CEOCNC Software, Inc.

THE HEADQUARTER IN TOLLAND,CONNECTICUT, USA

CNC SOFTWAREINVESTMENT HIGHLIGHTS

123411

Leading brand within the CAM market (Mastercam), themost widely used CAM-software in the industry – withthe largest installed base and reseller network
Above market growth, with especially strong market position
in CAM and for SME’s
Very large and well-diversified customer base – and theworld’s largest CAM community
Compelling financial model: 100% software revenues ofwhich ~60% recurring revenues with very good retention

5

Extensive public beta-testing. Mastercam’s mission is“to create software and services that solve the world’smanufacturing challenges”

6

Own educational programs in “Mastercam University”

7

Well-established partnerships with leading machine makers
and tooling companies globally

8Strong values and an employee engagement-level of 88%

CNC SOFTWAREA STRONG STRATEGIC FIT

01020304

05

Access to world-class
CAM brand andlarge customer base,particularly SME’s

Gaining sizeable
market share on highgrowth CAM-market

Complements Sandvik’s
leading know-how inmachining, creating aunique market position

Gaining digital reach tothe SME market throughCAM – to cross-sell tools

Compelling financial
model with ~60%
recurring revenues

MASTERCAM WILL PLAY A VITAL ROLE IN OUR DIGITAL MANUFACTURING SOLUTIONS,ENABLING NEW AND INNOVATIVE SOLUTIONS IN AUTOMATED DESIGN FOR MANUFACTURING.

12SYNERGIES EVOLVING POST ACQUISITIONLOOKING AT THE OVERALL SANDVIK OFFERING• Connecting the “art to part” value chain on a common “manufacturingcentric” platform, unlocking great value for the customer• Cross-selling opportunities – and access to SME’s• Shared R&D resources and efficiency gains• Applied machining strategies and data earlier in the value chain• Further integrating additive and subtractive manufacturing expertise

132Quotation

Process Engineering

Design for manufacturingrecommendations

Subtractive vs additive
process planning

Production Engineering

Market leading integrated
CAM, Simulation, andOptimization Portfolio

54

Shop Floor Logistics

Data extraction oflogistical assets

Shop Floor / Machining

Subtractive vs additive
process planning

6

Verification

Data extraction andcompleting the information feedback loop

13
*Note: The acquisitions of Cambrio, DWFritz Automation and Mastercam are expected to close before the end of 2021, subject to customary regulatory approvals.

TRANSACTION OVERVIEWAND FINANCIAL IMPACT

14TRANSACTION OVERVIEWCNC SOFTWARE, INC.
TRANSACTIONCONSIDERATIONS• Enterprise value: Not disclosed

FINANCIALIMPACT• Financial profile: Underlying EBITA margin is expected to be accretive to Sandvik Manufacturingand Machining Solutions. However, the first year after closing, revenues will be impacted bydeferred revenue accounting adjustments and hence EBITA margin slightly dilutive to SMM’smargin.

• Estimated closing: Expected to close Q4 2021, subject to customary regulatory approvals• EPS impact: Slightly dilutive to Sandvik Group• Impact on the Group balance sheet: Group gearing at 30 June was 0.06 and netdebt/EBITDA was not measurable. The deal will have an impact on the debt KPI:s as it is a100% cash deal. The credit rating KPI:s remain well under control after the closure of thistransaction.

15

SUMMARY

16

MASTERCAM – A STRONG STRATEGIC FITPLAYING A VITAL ROLE IN THE DIGITAL MANUFACTURING PROCESS• CAM plays a vital role in the digital manufacturing process,enabling new and innovative solutions in automated design formanufacturing.
• The CAM market has been identified as the most important toenter, due to attractive growth rates – and its proximity toSandvik Manufacturing and Machining Solutions’ core business.

Strongstrategic fit
Software close
to component
manufacturing• Mastercam is the most widely used CAM-software in theindustry – with the largest installed base and reseller network.
• An acquisition of CNC Software and the Mastercam portfolio,
will make Sandvik a leader in the overall CAM market measured
in installed base.
• CNC Software has a strong market position in CAM, andparticularly for SME’s*, which will give Sandvik an instantdigital reach to the SME market – also to cross-sell tools.
*Small and Medium-sized manufacturing Enterprises
17

Another steptowards
industry 4.0

NEW OBJECTIVES 2025
FOR SMF18

NEW OBJECTIVES 2025
SANDVIK MANUFACTURING SOLUTIONSWith the acquisition (subject for closing) of Cambrio, DWFritz Automation
and CNC Software (Mastercam), Sandvik Manufacturing Solutions havebuilt a portfolio which together with the organic growth of the current
business will exceed the earlier communicated revenue objectives.

• Revenue objectives for 2025 is increased from 4 BSEK to 6 BSEK

6,000

REVENUESMSEK• EBITA margin objective for 2025 of 20%

x7growth(vs. 2019)

6BSEK

2,600

2025
20%
EBITA marginin revenues(contributing c.2% total annual growth to SMM during the period)
19800
2019

2020*

2025

*Including revenues of approximately SEK 1.8
billion from Cambrio, DWFritz and CNC Software/Mastercam (subject to closing and based on 2020
revenues)QUESTIONS & ANSWERS

20