Corporate governancereportSandvik AB has its head office in Stockholm and is the Parent
Company of the Sandvik Group, with subsidiaries in about 70
countries. The Group has about 41,000 employees and revenues
in about 170 countries. Sandvik AB is a public company with
its shares listed on Nasdaq Stockholm.

the external rules previously mentioned
and also sets out the internal rules andprinciples for governance that apply
specifically within Sandvik. It is based on
three segments, as set forth in the model
below, and describes how common ways
of working have been imple­mented
throughout the entire organization.

Corporate governance within Sandvik isbased on external rules such as theSwedish Companies Act, the Nordic Main
Market Rulebook for Issuers of Shares,
the Swedish Code of Corporate
Governance (the "Code") and otherrelevant laws and regulations. The Code isavailable at corporategovernance­board.
se. In 2023, Sandvik applied the Code
without deviating from any of its
regulations.

Governance structureThis segment outlines how the Sandvik
Group is led and governed. The Board of
Directors, elected at the Shareholders’Meeting, sets the strategic direction for
the Group. The President carries this out

The
SandvikWay
The Sandvik
Way
Sandvik’s corporate governanceframework, The Sandvik Way, implements

through the Group Executive Management
whose members manage and oversee theoperations of the Group. The main
operational responsibility in the Group
lies with the business areas and divisions,whereas the Group functions are
responsible for functional policies andprocesses supporting the business.
The Sandvik Way is implemented in therespective business areas, with additional
requirements cascaded down in theoperational structure of each businessarea.

The Sandvik Way interface & framework
Governancestructure

The Sandvik Way

Shareholders’ Meeting
and Board of Directors

Operations

Sandvik strategy
Risk Management

President
and Executive
Management

Objectives
and Key Results
Policies andprocedures

Business areas

DivisionsGroup functions

Finance
forecastingand scenario
planning

External
reporting

Performance
management
Compliance andSpeak Up

Business units, distribution
centers, production units,
sales areas, sales units

Internal
controlInternal audit
External audit

Corporate
cultureContinuous improvements

PurposeCore values

Code of conduct

Leadership model47

Sandvik Annual Report 2023 – Directors' report

Corporate governance model
Nomination Committee

Shareholders’ Meeting

External Auditor

Audit Committee

Board of Directors

Remuneration Committee

President and Group Executive Management

Acquisitions andDivestitures Committee

Internal Audit

Speak Up and Business
EthicsBusiness areas

Group functions

DivisionsOperations
The detailed controls and risk frameworks
common across the Group are detailed inthis segment. This includes many aspects
such as strategy and risk management,
policies, financial forecasting andscenario planning, as well as compliance,internal controls and audits. Performance
management, controls and continuous
improvements provide a solid basis for
our ways of working.
Corporate culture
This segment sets the foundation for how
we all shape our culture in the company
and enable a customer-oriented andresponsible business. Our operational
controls and risk frameworks aresupported by the ambitions and requirements of our purpose, core values, Codeof Conduct and leadership model.
Ownership structure
As of December 31, 2023, Sandvik’s
share capital amounted to SEK
1,505,263,107.60 represented by
1,254,385,923 shares. At year-end,
Sandvik had about 138,000 shareholders
and AB Industrivärden was the largest
owner with about 14.1 percent of theshare capital. Of the total share capital at
year-end, about 40 percent was owned byinvestors outside Sweden.

48

Shareholders’ meeting
The General Meeting of Shareholders is
the highest decision-­making body. At theAnnual General Meeting, the shareholders
are given the possibility to exercise theirvoting rights in relation to, for example,
the Annual Report, dividends, election of
the Board and appointment of auditor,and other matters stipulated in the
Companies Act, the Articles of
Association and, where applicable, theCode.
All shareholders who have beenentered in the share register and haveinformed the company of their participation within the time limit stated in thenotice of the General Meeting are entitledto participate at the General Meeting andvote according to the number of shares
held. Shareholders are also entitled to be
represented by a proxy at a General
Meeting. According to the Articles of
Association, the Board may also decide toallow shareholders to exercise theirvoting rights through postal voting before
the General Meeting.
All shares in Sandvik carry equal voting
rights with one vote per share.
2023 Annual General Meeting
Shareholders representing 60.1 percentof the share capital and votes participated at the Annual General Meeting heldon April 27, 2023. Resolutions included
the following:– Dividend of SEK 5.00 per share

Ten largest shareholders,
December 31, 2023, %AB Industrivärden

14.1

Alecta Pension Insurance

4.5

Swedbank Robur Funds

4.3

Vanguard

3.2

Lundbergföretagen AB

2.9

BlackRock2.9

Handelsbanken Funds

2.4

SEB Funds

1.9

Norges Bank

1.7

Fidelity International (FIL)

1.4

Source: Monitor by Modular Finance AB– Re-election of Board members Jennifer
Allerton, Claes ­Boustedt, Marika
Fredriksson, Johan Molin, Andreas
Nordbrandt, Helena Stjernholm, Stefan
Widing and Kai Wärn as well as
re-election of Johan Molin as Chairmanof the Board– Re-election of Pricewaterhouse­­
Coopers AB as auditor– Approval of the Board’s remuneration
report– Adoption of a long-term incentive
program in the form of a performance
share program for about 350 senior
executives and key employees in theGroup– Authorization for the Board to decideon acquisition of the c­ ompany’s own
shares up to a maximum of 10 percent
of all the shares in the company

The 2023 Annual General Meeting was held at the Göransson Arena in Sandviken, Sweden.

For additional information about theAnnual General Meeting, including theminutes, visit: home.sandvik.
2024 Annual General Meeting
The next Annual General Meeting will beheld in Sandviken, Sweden, on April 29,
2024. More information can be found in
the notice convening the General Meeting
and at: home.sandvik.
Nomination Committee
The Nomination Committee is a preparatory body that prepares proposals for,among other things, the election of theBoard, the Chairman of the Board andauditors as well as fees for adoption at
the General Meeting. The Annual General
Meeting has adopted instructions for the
Nomination Committee, which include

Nomination Committee’s tasks aheadof the 2024 Annual General Meeting— Proposal concerning the Chairman
		of the Meeting—	Proposal concerning the number ofBoard members— Proposal concerning remuneration
		of each Board member— Proposal concerning the Board and 		Chairman of the Board— Proposal concerning auditor and 		
remuneration of the auditor— If deemed necessary, proposal for 		changes to the Nomination
		 Committee’s instruction concerning 		the procedure for appointment of theNomination Committee for the forth		coming Annual General Meeting and 		
its assignment

procedures for appointing the Nomination
Committee, valid until the General
Meeting resolves on a change. In
accordance with these instructions, theNomination Committee shall consist ofmembers appointed by each of the fourlargest shareholders in terms of thenumber of votes on the final business day
in August plus the Chairman of the Board(convener).
Nomination Committee for 2024 AGM
For the 2024 Annual General Meeting, theNomination Committee consists of Fredrik
Lundberg, Chairman (Industri­värden),Daniel Kristiansson (Alecta), Marianne
Nilsson (­Swedbank Robur Funds), Lars
Pettersson (Lundbergs) and Johan Molin(Sandvik’s Chairman of the Board).
Up to the date of this Annual Report,
the Nomination Committee met on threeoccasions. The Nomination Committee
was informed of the results of theBoard’s own evaluation. The Committee
met with the President and CEO and theGroup CFO who presented the company’s
strategy. The Nomination Committee
discussed the general criteria that Board
members should fulfill, including theindependence requirement, and reviewed
the number of Board assignments thateach Board member has in othercompanies. The Nomination Committee
applied rule 4.1 of the Code as thediversity policy. This rule states that theBoard shall have an appropriatecomposition in view of the company’s
operations, phase of development andother relevant circumstances, display
diversity and breadth in terms of

qualifications, experience and background of the Board members elected by
the General Meeting and that thecompany shall strive for gender balance.
Board of Directors
The Board is responsible for thecompany’s organization and the management of the company’s business. The
Board is required to continuously monitor
the company’s and the Group’s financial
position.
The Board is to ensure that thecompany’s organization is designed in a
way that ensures that the financial
statements, the management of assets
and the company’s financial condition in
general are controlled in a satisfactorymanner. The Board also adopts thestrategy for the Group and monitors theperformance and compliance with
relevant rules and strategic plans.
The President is appointed by the
Board and is responsible for the daily
operations pursuant to guidelines andinstructions issued by the Board. The
distribution of responsibilities between
the Board and the President is laid downin the Board’s Procedural Guidelines
which are reviewed and adopted eachyear. The review is based on such aspects
as the Board’s evaluation of the individualand collective work that the Board
performs.
In addition to financial reporting andthe monitoring and follow-up of daily
operations and profit trend, Board
meetings address the goals and strategies for the operations, significant
acquisitions and investments, as well as
49

Sandvik Annual Report 2023 – Directors' report

matters relating to the capital structure.
Senior executives report business plans
and strategic issues to the Board on an
ongoing basis.

company and its executive management.
The other five Board members elected by
the General Meeting are all independent
in relation to Sandvik and its executive
management, as well as the company’s
major shareholders. Accordingly, thecomposition of the Board complies with
the independence requirements of theCode. The President is the only executive
member of the Board.

Composition
As of December 31, 2023, Sandvik’s
Board consisted of eight members
elected by the Annual General Meeting.
The Nomination Committee communicated before the 2023 Annual General
Meeting that the Nomination Committee
had applied rule 4.1 of the Code as thediversity policy. The current Board
composition is the result of the work of
the Nomination Committee prior to that
General Meeting. The Board consists ofmembers with experience from different
geographic areas and different industry
sectors. Excluding the President, 43
percent of the Board members elected by
the General Meeting are women. No
Board member represents any under-represented social groups.
Pursuant to Swedish legislation, tradeunions are entitled to representation on
the Board and they have appointed two
members and two deputies.
The Board members are presented on
pages 54–55.

Board proceedings during 2023
During the year, the Board held 14
meetings. The Board addressed mattersrelated to the Group strategy, the new
Sandvik brand, financial targets and cash
management, sustainability reporting,succession planning and talent manage-

ment, investments and operational
restructuring and review of previously
made investments.
The Presidents of all business areas
presented their goals and strategies andthe Board also reviewed the strategies
and results from a number of thedivisions. Further, the Board handled
matters relating to the acquisitions of
Buffalo Tungsten, Inc., MCB Services andMinerals, Premier Machine Tools Ltd andNorgalv Ltd.
The Remuneration Committee, Audit
Committee and the Acquisitions andDivestitures Committee reported fromtheir respective meetings. With respect to
the Audit Committee, reported matters
included accounting principles, financial

Attendance at Board and Committee meetings in 2023

Board

Audit
Committee

Total number of meetings

14

5

Jennifer Allerton

14

Thomas Andersson

14

Claes Boustedt

14

Marika Fredriksson

13

Fredrik Håf

14Erik Knebel

14

Thomas Lilja

13

Johan Molin

14

Andreas Nordbrandt

14

Helena Stjernholm

14

Stefan Widing

14

Kai Wärn

14

MemberIndependence
Marika Fredriksson and Helena
Stjernholm are not regarded as independent in relation to major shareholders in
the company and Stefan Widing is notregarded as independent in relation to theAcquisitions
Remuneration and Divestitures
Committee
Committee
3

5

1

1

5

3

1

5

3

1

3

Composition of the Board as of December 31, 2023

FunctionIndependentin acc. with
the Code

Shareholding,number1)
Dec 31, 2023

ElectedJennifer Allerton

MemberYes

10,0002015

Thomas Andersson

Member2)0

2012

Claes Boustedt

MemberYes

50,0002015

Marika Fredriksson

Member

No

2,500

2017

Fredrik Håf

Deputy2)22022

Erik Knebel

2)

Deputy1

2021

Thomas Lilja

Member2)

4,840

2016

Johan Molin

Chairman

950,0002015

Andreas Nordbrandt

Member

Yes

0

2021

Helena Stjernholm

Member

No3)

5,000

2016

Stefan Widing

Member3)

No65,464

2020

Kai Wärn

MemberYes

12,000

2020

Name

3)

Yes

Audit
Committee

Remuneration
Committee

ChairmanAcquisitions
and Divestitures
Committee

MemberMemberChairman

ChairmanMemberMemberMemberMember1) Pertains to own and closely related persons’ shareholdings in Sandvik AB.
2) Employee representatives (both members and deputy members participate in Board meetings). Thomas Lilja (member) and Erik Knebel (deputy) represent Unionen/Ledarna/Swedish Association of Graduate Engineers. Thomas
Andersson (member) and Fredrik Håf (deputy) represent IF Metall.
3) Marika Fredriksson and Helena Stjernholm are not regarded as independent in relation to major shareholders in the company and Stefan Widing is not regarded as independent in relation to the company and its executive management.

50

outcome, ERM, compliance, Speak Up andCode of Conduct, internal control andinternal audit as well as the result of theexternal audit. The Committees also
submitted matters for resolution by the
Board and the minutes and reports fromthese meetings were made available to
the Board members.
In the autumn of 2023, the Board
traveled to Canada to visit Sandvik’s
operations in Winnipeg and a customer
mine where Sandvik's Battery Electric
Vehicles are being used.
Remuneration of the Board
As resolved at the 2023 Annual ­General
Meeting, the fee to the ­Chairman of theBoard was SEK 2,875,000 and the fee toeach of the non-executive Board
members elected by the General Meeting
was SEK 770,000.
In addition, SEK 338,000 was paid to
the Chairman of the Audit Committee and
SEK 192,000 to each of the otherCommittee members, in total SEK
722,000. The Chairman of theRemuneration Committee was paid SEK
161,000 and each of the other Committee
members SEK 127,000, in total SEK
415,000. The Chairman of theAcquisitions and Divestitures Committee
was paid SEK 218,000 and each of theother Committee members SEK 161,000,
in total SEK 540,000.
For more detailed information on
remuneration of the Board members, seenote G4.
Evaluation of the work of the Board
To ensure the quality of the work of theBoard, optimize the work processes andidentify the possible need for further
expertise and experience, the work of theBoard and its members is evaluatedannually. In 2023, the evaluation was led
by the Chairman of the Board, without the
involvement of an independent third
party, and was carried out by way of each
Board member responding anonymously
to an online questionnaire. The Chairman
also held separate evaluation discussions
with all Board members. The compiled
results of the evaluations were analyzed
and subsequently presented to the Board
as well as to the Nomination Committee.

Board Committees
The tasks of the Committees and theirwork procedures are stipulated in written
instructions issued by the Board. The
Committees’ primary task is to prepare
issues and present them to the Board for
resolution.
The members of each Committee,
including the Committee Chairman, areappointed annually by the Board at its
constituent meeting held after the Annual
General Meeting.
Remuneration Committee
During 2023 the members of theRemuneration Committee were Johan
Molin (Chairman of the Committee),
Helena Stjernholm and Kai Wärn. The
tasks of the Remuneration Committee
are, among others, those prescribed by
the Code, which include preparing
proposals regarding guidelines forremuneration of senior executives andlong-term incentive programs for senior
executives.
The Remuneration Committee decides
on the remuneration to be paid to theGroup Executive Management. Based on
the recommendations of the Remuneration
Committee, the Board decides the
remuneration and terms of employment for
the President.
For guidelines, remuneration and otherbenefits payable to the Group Executive
Management, refer to the Guidelines forthe remuneration of senior executives on
pages 42–43 and note G4.
During 2023 the Remuneration
Committee held three meetings.
Audit Committee
During 2023 the members of the Audit
Committee were Claes Boustedt(Chairman of the Committee), Johan Molinand Helena Stjernholm. Areas addressedby the Audit Committee mainly related to:– Monitoring the financial reporting andensuring its reliability– Effectiveness of the system of internal
control and internal audit– Planning, scope and follow-up of theinternal and external audit for the year
– Assistance to the Nomination
Committee with regards to proposal for
auditor– Monitoring of the external auditor’s
independence and objectivity vis-à-vis
the company, including the extent towhich the auditor provides otherservices than auditing services to thecompany– The Group’s systematic processes foroverall corporate risk management, as
well as more detailed risk management
matters including legal disputes,
compliance, corporate investigations, IT
security, Group Digital Security
Improvement, accounting procedures,taxation, treasury, finance operations,insurance coverage and pension issues– The development and effectiveness ofcompliance processes, with special
focus on ensuring operational stabilityof the compliance program– Sandvik’s Code of Conduct, Sandvik’s
global whistleblowing system, somespecific cases managed through Speak
Up as well as the overall effectivenessof the system– Sandvik’s sustainable businessstrategy and materiality analysis
During 2023 the Audit Committee held
five meetings at which Sandvik’s external
auditor and representatives of thecompany’s management were present.
Acquisitions and Divestitures Committee
During 2023 the members of theAcquisitions and Divestitures Committee
were Johan Molin (Chairman of theCommittee), Claes Boustedt and Helena
Stjernholm. The purpose of theCommittee is to prepare matters relating
to major or strategically importantacquisitions and divestitures for Board
decisions. The Committee meets on an ad
hoc basis, at the request of the President
and CEO in consultation with the
Chairman of the Board.
During 2023 the Acquisitions andDivestitures Committee held one meeting,during which the Committee reviewed
matters related to a proposed acquisition.

51

Sandvik Annual Report 2023 – Directors' report

President and Group
Executive Management
The President is accountable for Groupdecision-making in all areas delegated by
the Board. In order to ensure a full Group
perspective in these matters, thePresident has appointed the Group
Executive Management as an advisory
forum, focusing on how to achieve Grouptargets, strategies, structure andorganization. The Group Executive
Management meets each month and its
members are accountable for implementing the President’s decisions.
In 2023, the Group Executive
Management consisted of:– Stefan Widing, President and CEO, andPresident of Sandvik Manufacturingand Machining Solutions– Cecilia Felton, Executive Vice President
and Chief Financial Officer– Mats Eriksson, President of Sandvik
Mining and Rock Solutions– Richard Harris, President of Sandvik
Rock Processing Solutions– Nadine Crauwels, President of the
Sandvik Machining Solutions businessarea segment– Christophe Sut, President of the
Sandvik Manufacturing Solutions
business area segment (up until May 7,
2023)– Mattias Nilsson, President of the
Sandvik Manufacturing Solutions
business area segment (as of May 8,
2023)– Jessica Alm, Executive Vice President
and Head of Group Communications
and Sustainability (up until April 30,
2023)– Björn Roodzant, Executive Vice
President and Head of Group
Communications and Sustainability (asof May 1, 2023)– Johan Kerstell, Executive Vice
President and Head of Human
Resources– Sofia Sirvell, Executive Vice President
and Chief Digital Officer (as of March 1,2023)– Åsa Thunman, Executive Vice President
and General Counsel

52

The members of the Group Executive
Management are presented further on
pages 56–57.
Business areas
The Sandvik organizational model isbased on a decentralized business model.
There are three separate business areas– Sandvik Mining and Rock Solutions,
Sandvik Rock Processing Solutions andSandvik Manufacturing and Machining
Solutions – each based on distinct
product offerings. Each business area
has full responsibility and accountability
for its respective business results.
Sandvik Manufacturing and Machining
Solutions is divided into two businessarea segments – Sandvik Machining
Solutions and Sandvik Manufacturing
Solutions. Further, each of the threebusiness areas is organized in a numberof divisions based on product offering or
brand. The division is the highest
operational level in the Sandvik organizational structure. Certain divisions that are
based on a product offering are divided
into business units representing a definedpart of the product offering.
For an overview of Sandvik’s organizational model, refer to page 2 and visit
home.sandvik for more detailed information relating to the Group’s businessactivities and product portfolios.
Group functions
There are five Group functions within
Sandvik: Communications andSustainability, Finance, HR, IT and Legal.
Group functions specifically focus on
setting the appropriate enabling
structures and processes that arecommon for the Group or cover a specificarea for which the Group is responsible.
External auditor
At the 2023 Annual General Meeting, theaudit firm PricewaterhouseCoopers AB
was re-elected auditor of Sandvik AB for
the period until the 2024 Annual General
Meeting. Peter Nyllinge is theauditor-in-charge.
The auditor continuously audits andmonitors the company’s generalaccounting and the execution by the
Board and the President of theirrespective responsibilities.
The progress of the audit is reported
regularly during the year to the management teams of individual companies andthe business areas, the Audit Committee
and the Board. The auditor meets with theBoard at least once a year without the
President or any other member of theGroup Executive Management attending.
The independence of the external
auditor is guaranteed by the Audit
Committee having determined theprinciples for allowing non-audit services
to be provided by the auditor and, in somecases, pre-approving non-audit services.
Audit fees are paid continuously overthe period in office on an approved
current account basis. For detailed
information on fees paid to the auditor,
see note G5.
Internal control over financial reporting
The Sandvik organization manages awell-established financial reporting
process aimed at ensuring a high level ofinternal control.
The internal control system aligns withthe conceptual framework of COSO, which
is based on five key components thatprovide an effective framework fordescribing and designing the internal
control system implemented in theorganization. The five components areControl Environment, Risk Assessment,
Control Activities, Information andCommunication, and Monitoring andFollow-up. The application of the COSO
framework is described below.
Sandvik’s Board is ultimately responsible for the governance of risk management including internal control overfinancial reporting.
Control environment
Sandvik internal control over financial
reporting forms an integral part of theoperations, described in The Sandvik Way,
which also includes risk assessments,
policies, procedures and compliance.
The Sandvik Financial Reporting
Policies and Procedures govern control

over financial reporting. These documents
contain detailed instructions regarding
accounting policies and financial
reporting procedures to be applied by all
Sandvik reporting entities.
A Sandvik Financial Internal Control
Framework has been developed andincludes key components such as
well-defined roles and responsibilities,
internal control procedures and the risk
and control matrix which defines amandatory minimum of control activities
that contribute to the mitigation of risks
to acceptable levels. Internal control
implementation projects managed byGroup Internal Controls were completed
during the year. Future implementations(including new acquisitions) will be
managed and implemented by therespective business area.
Risk assessment and risk management
The Enterprise Risk Management (ERM)
process at Sandvik includes the area offinancial reporting. Read more about the
ERM program on page 58.
Key risks noted in local assessments
and observations made by Internal andExternal Audit are also taken into
consideration to ensure that adequate
controls exist to mitigate these risks.
Control activities
Mandatory control activities include
business process controls, IT controls
and corporate governance controls
focusing on compliance with policies andprocedures. Internal controls are tailored
per each operational entity based on risks
and applicability. Entity management andprocess owners are responsible for

ensuring that internal controls areoperated as per agreed design.
At Group level, Group Control manages
the reporting process to ensure thecompleteness and accuracy of financial
reporting and compliance with IFRS
requirements.
Controllers in the divisions andbusiness areas perform analytical reviews
and investigations, conduct businesstrend analyses and update forecasts.
Information and communication
Policies and procedures related tofinancial reporting are updated andcommunicated on a regular basis to all
entities.
Results of monitoring and status of
improvement activities related to internal
controls are included in the CFO reportwhich is part of the agenda for the Audit
Committee meetings.
Quarterly interim reports are publishedexternally and are supplemented byinvestor meetings attended by membersof the Group Executive Management.
Monitoring and follow-up
Entity management as well as local andglobal process owners are responsible fortesting the effective­ness of internal
controls through self-assessments every
six months and according to therequirements in the Sandvik Internal
Control Framework. Results of theself-assessment testing of controls
including test evidence are reported andconsolidated in a Governance, Risk andCompliance IT tool. The tool also requires
reporting of action plans with the purpose
to remediate ineffective controls.

Business areas and divisions are tomonitor the remediation of ineffective
controls. The Audit Committee monitors
the effectiveness of internal controls
related to financial reporting presented
by management with potential deficiencies and suggested actions.
The Board reviews all quarterly interim
reports as well as the Annual Report prior
to publishing. The Audit Committee
reports to the Board regarding internal
control matters including matters forresolution. Minutes from Audit Committee
meetings are made available to Board
members.
Internal audit

Internal Audit is subordinated to the Audit
Committee and the Vice President ofInternal Audit reports to the Audit
Committee.
Internal audits include, as a basis, theGroup’s policies for corporate governance, risk management and internal
control regarding areas such as financial
reporting, compliance with the Code of
Conduct and IT.
The outputs of the audits include actionplans and programs for improvement.
Findings are reported to the businessarea management and to the Audit
Committee.
Internal Audit interacts with External
Audit on a periodic basis to discuss andshare audit plans and audit results.

53

Sandvik Annual Report 2023 – Directors' report

Board of Directors

Johan Molin

Jennifer Allerton

Claes Boustedt

Born 1959. Chairman of the Board since 2015.
Chairman of the Remuneration Committee andthe Acquisitions and Divestitures Committee
and member of the Audit Committee.

Born 1951. Board member since 2015.

Born 1962. Board member since 2015. Chairman of the Audit Committee and m­ ember of theAcquisitions and Divestitures Committee.

Education and business experience:
M.Sc. in Business and Economics, Stockholm
School of Economics. President and CEO of
Assa Abloy 2005–2018. President and CEO of
Nilfisk-Advance 2001–2005. Various positions
within Atlas Copco 1983–2001.

Education and business experience:
M.Sc. in Physics and B.Sc. in Mathematics,
Physical Sciences and Geosciences. Chief
Information Officer at F. Hoffmann-La Roche
Ltd 2002–2012. Technology Director at
Barclaycard 1999–2002. Various positions at
ServiceNet, USA, BOC (now Linde), Cable &Wireless Business Networks and Unilever plc.

Education and business experience:
M.Sc. in Business and Economics, Stockholm
School of Economics. Executive Vice President of L E Lundbergföretagen AB since 1997.
President of L E Lundberg Kapitalför­valtning
AB since 1995.

Current board assignments:
Board member of Iron Mountain Inc. and­Barclays Bank Ireland plc.

Current board assignments:
Board member of Hufvudstaden AB,­Förvaltnings AB Lunden and Alleima AB.

Shareholding in Sandvik (own and closely
related persons): 10,000.

Shareholding in Sandvik (own and closely
related persons): 50,000.

Marika Fredriksson

Andreas Nordbrandt

Helena Stjernholm

Born 1963. Board member since 2017.

Born 1971. Board member since 2021.

Education and business experience:
Master of Business Administration. CFO andGroup Executive Vice President of Vestas Wind
Systems A/S 2013– 2022. CFO of Gambro AB
2009–2012. CFO of Autoliv Inc. 2008–2009.
Various positions within Volvo 1996–2008,
including CFO and Senior Vice President
Finance and Strategy at Volvo Construction
Equipment Corporation.

Education and business experience:
M.Sc. in Mechanical Engineering and Hydraulics. President of the Underground Rock Excavation Division within the Epiroc Group 2018.
Various positions within the Atlas Copco Group
1995–2018, including President of the Underground Rock Excavation Division, President of
the Rocktec Division, Vice President Service
Oper­ations and Operations Manager BusinessLine Manager, Service Division, Atlas Copco
Mining and Rock Excavation Australia.

Born 1970. Board member since 2016. Memberof the Audit Committee, the Remuneration
Committee and the Acquisitions and Divestitures Committee.

Current board assignments: –Shareholding in Sandvik (own and closely
related persons): 950,000.

Current board assignments:
Chairman of the board of Emagine A/S andboard member of AB Industrivärden, A.P.
Møller-Mærsk A/S., KONE Oyj and Ecolean AB.
Shareholding in Sandvik (own and closely
related persons): 2,500.

Current board assignments:
Chairman of the board of Alleima AB.
Shareholding in Sandvik (own and closely
related persons): 1,375 (acquired February 1,2024).

Information regarding Board assignments and holdings of shares as of December 31, 2023.
Current Board assignments refer to assign­ments in companies or organizations outside the Sandvik Group.

54

Education and business experience:
M.Sc. in Business and Economics, Stockholm
School of Economics. President and CEO of AB
Industrivärden since 2015. Investment manager and subsequently partner at IK Investment Partners 1998–2015. Consultant at Bain
& Company 1997–1998.
Current board assignments:
Board member of AB Industrivärden, Telefon­
aktie­bolaget LM Ericsson and AB Volvo.
Shareholding in Sandvik (own and closely
related persons): 5,000.

Employee representatives

Stefan Widing

Thomas Andersson

Thomas Lilja

Born 1977. Board member since 2020.

Born 1962. Board member since 2022, deputy
Board member 2012–2022 (employee representative, IF Metall).

Born 1975. Board member since 2016
(employee representative, Unionen/Ledarna/
Swedish Association of Graduate Engineers).

Education and business experience:
Chairman of the Union Committee, Metal­Workers’ Union, Sandvik Coromant, Gimo.
Various operator positions at Gimoverken,
Sandvik C­ oromant, since 1984. Construction
firm Anders Diös 1980–1984.

Education and business experience:
Technical College Graduate, MechanicalEngineering. Chairman Trade Union, Unionen
Sandvik Sweden and Unionen Coromant and­Machining Solutions. Various purchasing positions within Sandvik 2000–2010 and ­various
production and logistics positions within
Scania 1995–2000.

Education and business experience:
M.Sc. Applied Physics and Electrical Engineering and Bachelor of Business Administration. President and CEO, Sandvik AB, andPresident of the Sandvik Manufacturing andMachining Solutions business area since 2020.
­Various positions within the Assa Abloy Group
2006–2020, including Executive Vice President
HID Global division 2015–2020, Director of
Product Management and General Manager of
Shared Technologies Unit. Various positions in
the Saab Group 2001–2006.

Current board assignments: –Shareholding in Sandvik (own and closely
related persons): 0.

Current board assignments: Board member of
the Swedish Association of Industrial Employers (Industriarbetsgivarna).

Current board assignments: –Shareholding in Sandvik (own and closely
related persons): 4,840.

Shareholding in Sandvik (own and closely
related persons): 65,464.

Kai Wärn

Fredrik Håf

Erik Knebel

Born 1959. Board member since 2020. Memberof the Remuneration Committee.

Born 1983. Deputy board member since 2022
(employee r­ epresentative, IF Metall).

Education and business experience:
M.Sc. in Mechanical Engineering, the RoyalInstitute of Technology, Stockholm. President
and CEO of Husqvarna AB 2013–2020. Operations partner at IK Investment Partners Norden
AB 2011–2013. President and CEO of Seco
Tools AB 2004–2010. Various positions within
ABB 1985–2004.
Current board assignments:
Chairman of the board of Electrolux Professional AB and SunStreet Energy AB.
Shareholding in Sandvik (own and closely
related persons): 12,000.

Education and business experience:
Chairman of the Union Committee, Metal
Workers’ Union, division Rock Tools, Sandviken,
Sweden. Various operator positions at division
Rock Tools, since 2002.

Born 1965. Deputy Board member since 2021
(employee representative, Unionen/Ledarna/
Swedish Association of Graduate Engineers).

HONORARY CHAIRMAN

BOARD SECRETARY

AUDITOR

Percy Barnevik

Åsa Thunman

PricewaterhouseCoopers AB

Born 1941. Chairman of the Board of Sandvik
AB 1983–2002.

Current board assignments: –Shareholding in Sandvik (own and closely
related persons): 2.

Education and business experience:
Technical College Graduate, Mechanical &Automation. Chairman of the Swedish Association of Graduate Engineers Sandvik Sweden
and Sandvik Coromant Gimo. Various positions
within Sandvik Coromant and Sandvik Machining Solutions since 1990; Production, IT and
Quality.
Current board assignments: –Shareholding in Sandvik (own and closely
related persons): 1.

Born 1969. Executive Vice President andGeneral Counsel, S­ andvik AB, since 2014.

Auditor-in-charge:
Peter Nyllinge, Authorized Public Accountant.
Other auditing assignments:
Saab AB, Getinge AB and AB Electrolux.
55

Sandvik Annual Report 2023 – Directors' report

Group Executive Management

Stefan Widing

Nadine Crauwels

Mats Eriksson

Born 1977. President and CEO, Sandvik AB,
President of the Sandvik Manufacturing andMachining Solutions business area since 2020.

Born 1971. President of the Sandvik ­Machining
Solutions business area segment since 2020.

Born 1962. President of the Sandvik Mining
and Rock Solutions business area since ­2022.

Education and business experience:
M.Sc. in Mechanical Engineering. President of
Sandvik Coromant 2017–2020. Various otherpositions within Sandvik Coromant since 2000,
including Vice President Customized Solutions
and Strategic Relations, and Sandvik Coromant
Manager Switzerland. Project Engineer andConsultant for the metal cutting industry at
WTCM (today Sirris) 1995–2000.

Education and business experience:
B.Sc. in Computer Science. President of the
Load and Haul division 2016–2022. President
and CEO of Cencorp Oyj 2010–2012 andSalcomp Oyj 1998–2006 as well as leading
positions for several other companies.

Current board assignments: Board member of
Alfa Laval AB.

Shareholding in Sandvik (own and closely
related persons): 4,866.

Education and business experience:
M.Sc. Applied Physics and Electrical Engineering and Bachelor of Business Administration.
Various positions within the Assa Abloy Group
2006–2020, including Executive Vice President
HID Global division 2015–2020, Director of
Product Management and General Manager of
Shared Technologies Unit. Various positions in
the Saab Group 2001–2006.
Current board assignments: Board member of
the Swedish Association of Industrial Employers (Industriarbetsgivarna).
Shareholding in Sandvik (own and closely
related persons): 65,464.

Shareholding in Sandvik (own and closely
related persons): 10,925.

Current board assignments:
Board member of Sandvik Pension Fund in
Finland.

Cecilia Felton

Richard Harris

Johan Kerstell

Born 1984. Executive Vice President and Chief
Financial Officer, Sandvik AB, since 2022.

Born 1970. President of the Sandvik Rock
­Processing Solutions business area since2022.

Born 1970. Executive Vice President and Headof Human Resources, Sandvik AB, since 2016.

Education and business experience:
B.Sc. Environmental Policy with Economics.
Various positions within Sandvik since 2013,
including acting Chief Financial Officer, Vice
President Group Control and Director Group
M&A and Investments, and Director Group
Business Control. Various positions within
Ernst & Young, Operational Transaction Services, London, 2007–2013.
Current board assignments: –Shareholding in Sandvik (own and closely
related persons): 4,999.

56

Education and business experience:
Bachelor of Engineering and Chartered
Engineer. Various positions within Sandvik
since 2002, including President of the Walter
division 2019–2022, President of the Wolfram
division 2016–2019 and different Supply andProduction Director roles. Previously various
positions within manufacturing companies,
including Production Manager at Land Roverand Plant Manager at Keiper UK Ltd.
Current board assignments: –Shareholding in Sandvik (own and closely
related persons): 5,772

Education and business experience:
M.Sc. in Business and Economics. Various
positions in Human Resources within Sandvik
since 2004. Consultant at Cap Gemini
1999–2003.
Current board assignments: –Shareholding in Sandvik (own and closely
related persons): 31,779.

Mattias Nilsson

Björn Roodzant

Born 1972. President of the Sandvik­Manufacturing Solutions business area
­segment since May 2023.
Education and business experience:
B.Sc. in Business Administration, Finance andAccounting. Various positions within Sandvik
since 2007 including Vice President Offer
Management and R&D at Sandvik Coromant
2021−2023.

Born 1969. Head of Group Communications andSustainability, Sandvik AB, since May 2023.
Education and business experience:
M.Sc. in Economics, Strategy and Marketing.
Various positions within Sandvik since 2004,
including Vice President Marketing and Communications at Sandvik Coromant.

Current board assignments: –Shareholding in Sandvik (own and closely
related persons): 3,522.

Current board assignments: –Shareholding in Sandvik (own and closely
related persons): 3,873.

Sofia Sirvell

Åsa Thunman

Born 1974. Executive Vice President and Chief
Digital Officer (CDO), Sandvik AB, since March
2023.

Born 1969. Executive Vice President and General Counsel, Sandvik AB, since 2014.
Education and business experience:
Master of Laws (LL.M), Sweden and the Netherlands. Various positions within Securitas
2009–2014, including General Counsel, Elekta
AB 1999–2009, including General Counsel, andLagerlöf & Leman law firm 1996–1999.
Current board assignments:
Board member of the Swedish Association of
Listed Companies (Aktiemarknadsbolagens
förening).
Shareholding in Sandvik (own and closely
related persons): 5,497

Education and business experience:
M.Sc. in Industrial Engineering. Various positions within H&M 2006–2021 including Deputy
Chief Technical Officer 2020–2021 and Headof Strategy IT 2019–2020.
Current board assignments: –Shareholding in Sandvik (own and closely
related persons): 1,450.

Changes in the Group Executive
Management
Jessica Alm, Head of Group Communications and Sustainability, left Sandvik andwas succeeded by Björn Roodzant in May
2023. Christophe Sut, President Sandvik
Manufacturing Solutions, left Sandvik andwas succeeded by Mattias Nilsson in May
2023. Sofia Sirvell was appointed Chief
Digital Officer and member of the Group
Executive Management as of March 2023.
Information regarding board assignments andholdings of shares as of December 31, 2023.
Current board assignments refer to assign­ments in c
­ ompanies or organizations outside the
Sandvik Group.

57

Sandvik Annual Report 2023 – Directors' report

Risk management
The Sandvik risk management process aims to support
our business in managing and mitigating critical risks which
may impact our ability to achieve our financial targets andstrategic objectives.

ERM – a part of our strategic work
To effectively identify and manage risk is
an important element of businesssuccess for all parts of the Sandvik
business.
Sandvik has implemented an Enterprise
Risk Management (ERM) program thatcovers all business areas, divisions, andfunctions within the Group. The Sandvik
Board of Directors is ultimately responsible for the governance of risk management and Sandvik’s Group Executive
Management ensures there is a commonand efficient process in place. All
management teams are responsible for
their own risk management. The teams
must follow the minimum requirements
outlined in The Sandvik Way, which
requires reviewing the strategic andoperational risks at least annually. The
ERM methodology is also used as a toolfor decision-making, operationally andwithin projects, as well as in the strategy
process in various levels of the Group.
Sandvik Group key risks
Since 2022, we have complemented thebottom-up process with a strategic
analysis at the Group Executive
Management level to more specifically
identify key risk areas that are tied to ourability to execute on our Make the Shift
Strategy on the Group level. The purpose
is to get a more focused and concrete risklandscape for the Group to enable goodfollow-up of the different risk-mitigating
activities in relation to the strategic goals.
The Sandvik Key Risk map is presented on
page 17.
An ERM report, summarizing key risks
and mitigating activities across ourbusiness, was provided to Sandvik’s Audit

58

Committee and Board of Directors in
December 2023. The Board of Directors’
and the Audit Committee’s involvement in
the ERM process is further described on
pages 51–52.

people, to the environment, and tominimize damage to Sandvik’s business,
as well as ensuring a swift return tonormal activities and safeguarding thecompany brands.

Insurance as a risk management tool
Sandvik has tailored insurance programs
that transfer the risks associated with,amongst others, the Group’s property,
cargo, and liability exposures. Insurable
risks are continuously evaluated andactions are taken to reduce theseinsurable risks, as part of Sandvik’s
loss-prevention strategy. During 2023, aTechnology Errors and Omissions
insurance was procured to meetcustomer expectations within oursoftware business. Supported by ourloss-prevention procedure and guidelines,
risk evaluations highlight opportunities toreduce the potential for businessinterruption and to ensure the Group’s
ability to deliver to its customers. In orderto ensure cost efficient and tailoredinsurance solutions, selected risks arereinsured through the Group’s captive
insurance company.

Internal audit and internal control in
Sandvik’s risk work
The internal audit function regularly
follows up the implementation of different
risk management programs such as ERM,
business continuity, crisis management
and the insurance programs. Sandvik
applies group-wide internal controls tomonitor risk mitigations. Read more about
the internal controls program at Sandvik
on pages 52–53.

Business continuity and crisis­management
The Global Risk Management Policy andrelated procedures for business
continuity and crisis management set therequirements for local management
teams to ensure their ability to successfully respond to disruptive events andcontinue their business operations on an
acceptable level when faced withchallenges. Once a risk materializes, ourcrisis and business continuity management priorities are to minimize harm to

Sandvik Group risk profile
The Sandvik Group risk profile is based on
the bottom-up ERM process where thedivisions, business areas and functions
first make their assessment and theGroup Risk Management Council makes
recommendations for a new Group risk
profile based on the outcome of theseassessments. The ERM process iscomplemented with a strategic analysis at
the Group Executive Management level tocreate the Group Key Risk map. The map
is also coupled with a follow-up model for
tracking the different initiatives that lead
to better risk mitigation, which the Group
Executive Management team review anddiscuss every quarter, thus creating amore dynamic and strategically relevantrisk management discussion at thehighest levels of the company.
The outcome of these two processes ispresented in the table on page 60,
together with examples of what theidentified risks mean for Sandvik inIn risk management, there are many crossroads to navigate.

different parts of the organization and themitigating activities taken to manage
them.
Sustainability and climate change
Assessment and management ofsustainability risks, including climatechange, are integrated parts of the ERM
program and are set out in the Sandvik
Key Risks map and Risk Profiles indifferent parts of the organization. During2022 we conducted an assessment of
current and future natural and climatechange-related hazards for Sandvik
locations covering 285 individual sites
and 94 percent of the overall Total
Insured Value (TIV). The assessment
reflects the current situation and models
the evolution of Natural Hazards under

different climate change scenarios and atdifferent future time horizons.
The goals with the assessment were toprovide an overview of the physicalclimate risks facing the portfolio of sites
at different time horizons and under
different climate change scenarios and toestablish a ranking of locations from highto low climate risk based on climate dataand insured values. The assessment isused to support in the identification andprioritization of management actions,which may include in-depth assessmentsof sites and investments in resiliencemeasures, as upcoming steps in Sandvik’s
climate resilience journey.

Read more about the strategic risk landscapeon page 17.

59

Sandvik Annual Report 2023 – Directors' report

Strategic objective

Key risk

What does this mean?

Examples of what do we do (mitigation)

Shift to growth

Geopolitical development

Trends towards regionalization or nationalization andtrade wars

Reviewing regional strategies and footprint
distribution and supply chain

Disruptive events (natural disasters, pandemic)

Securing key supply

Potential resource constraints around supply ofbattery cells and minerals

Different initiatives around sourcing and business
continuity planning

Acquisition value creation

Business case delivery

M&A Tracker/review process and score cards

Ensure efficient administrative integration

Integration follow-up processes with business reviews

Electrification of the mine

Performance management and execution of thestrategy for M&A, product development and the six
moves for enabling the digital shift

Businesstransformation

Closed loop manufacturing
Execution of the digital shift and data-driven
productivity

Digital shift

Inventory build-up/
cash conversion

Access to cash

Digital disruption

Cyber security

M&A agenda realization

Information security

Inventory management projects in all business areas
and divisions

Cyber security improvement program and the six steps
Sandvik has identified to enable the digital shift

Disruption by digital players

Sustainability shift

Being compliant

Ensuring an ethical culture
Increased regulatory complexity
Stricter financing requirements

Changing regulatory
requirements

Learning and workshop initiatives across theorganization, digital journey and a new Third Party
Management policy and process

Trade sanctions

CSRD preparation project

Product/safety requirements

Compliance digital journey to increase agility

Change to data-driven processes

Agile through cycle

Managing inflation

Price management
Leverage procurement capabilities

Ongoing price management efforts and price/volume
growth tracking
Different sourcing initiatives to increase flexibility/agility

Managing downturnMeeting target EBITA range
Timely execution of contingency plans
Margin volatility

Customer’s 1st
choiceUnderstand changing­customer needs

Customer centricity
Timely adjustment to market transformation
Ensuring customer value

Employer of Choice

Key talent ­attraction
and retention

New talent (digital, electrification, sustainability)
Re-skill existing workforce

Contingency plans, strong performance management
and agile decision process with decentralized approachfor each part of the business

Customer satisfaction measurement, with divisions,business units and sales areas taking necessary actions
close to the customers

Talent attraction and development projects in all partsof the businessGroup common employer branding initiatives targetingnew competence areas

60

Sustainability governance
The sustainability governance of the Sandvik Group is grounded in its business strategy, businessmodel, and international frameworks. Relevant goals are established to address material areas andeffectively manage associated impacts, risks, and opportunities. Policies and management systems
have been set to ensure financial, environmental and social compliance.

Governance structure
The Sandvik Board of Directors holds
primary responsibility for sustainability
oversight within Sandvik and the Audit
Committee monitors the sustainability
reporting. Implementation is delegated to
the President and CEO of Sandvik.
The Group Executive Management
bears the overarching responsibility for
the Sandvik sustainability strategy andagenda. Implementation and follow-up,
however, are the responsibilities of theGroup functions, business areas anddivisions. Additionally, the business areas
are tasked with assessing and managing
sustainability risks in their operations.
The coordination within the Group is
managed by the Group Communications
and Sustainability function. Key performance indicators (KPIs) are consolidated
and reported to track goals at both Groupand business area levels. Annually, we
assess our performance, establish
targets, and outline focus actions for theupcoming year.
The Sustainability Council serves as acollaborative forum for cooperation andbest practice sharing across Sandvik,
with representation from both businessareas and Group functions. Group
Sustainability coordinates the sustainability agenda together with the businessareas and Group functions.
Board’s sustainability competence
The Board consists of members withexperience from different geographic
areas and different industry sectors. All
Board members have long experiencefrom managing different positions in
global, industrial companies in different

functions, which includes the topics
generally covered by the sustainability
concept. Many of the Board members areformer CEOs or senior managers of otherglobal, industrial companies and as such,
have extensive experience from managing
environmental, social, and governancerelated impacts of the business in allparts of its value chain.

appropriate, considering the overallbalance of the different interests. For
example, after input from stakeholders,the Remuneration Committee hasrequested management to investigate
potential Environmental, Social,
Governance (ESG) targets for one orseveral of the existing incentive programs
during 2024.

Board’s role in overseeing managementof sustainability impacts
The Board oversees the due diligence andother processes to manage the impact
Sandvik has on the economy, environment
and people through many different
processes, managed through the Board's
Procedural Guidelines and the policies
and procedures in The Sandvik Way. The
normal Board processes include regular
reports to the Board and its Committees
on risk management, human resource
management, sustainable suppliermanagement, compliance and environment, and health and safety reporting.
Key KPIs within the areas are tracked andreported to the Board on a quarterly
basis, both through the interim reports
and the Key Objectives tracking. The
Audit Committee supports the Board inreviewing performance in these areas.
Stakeholder engagement is managed
through the operational structure. This
includes Investor Relation meetings withkey shareholders, dialogues with theBoard union representatives as well as
considering external analyst andshareholder reports.
The Board uses this information in thestrategic planning for the Group andupdates the guidance to management as

Evaluation and reporting
The effectiveness of the processes
described above is evaluated using, forexample, the internal controls framework,
internal and external audits in different
parts of the value chain (including
supplier audits), as well as the feedback
from the Speak Up system and investigations conducted as part of that process.
Sustainability is an integrated part of
the reports submitted to the Audit
Committee and sustainability reports arealso made available to the Board on atleast a quarterly basis. These reports
include stakeholder engagement andresults of the evaluation of the effectiveness of processes.
In 2023, the Board of Directors also
received updates on the new sustainability strategy and the Corporate
Sustainability Reporting Directive (CSRD)
project. The Communication andSustainability function informed the Audit
Committee of relevant sustainability
matters and communicated progress
throughout the year. Both the Audit
Committee and the Board of Directors
proactively sought information andengaged in discussions on related topics,
including CSRD.

61

Sandvik Annual Report 2023 – Sustainability governanceMateriality assessment
Sandvik has performed a double
materiality assessment to determinematerial topics. The double materiality
assessment was performed supported by
the topics included in the CSRD and GRI
as well as the dependence on natural,social, and human resources. The
outcome of the assessment results inmaterial impacts, risks, and opportunities,
and forms the basis of this year’s GRI
reporting. The impact assessment
includes positive, negative, actual, andpotential impacts. The mapping andunderstanding of impacts were primarily
centered on the value chains where
impacts were deemed most likely tooccur. Upstream, this included transportation of products and sourcing ofminerals and metals from high-riskcountries, as well as sourcing of conflictminerals and cobalt. Downstream, focus
was on transportation of products andpeople, the mining sites in high-risk areas,
and the end-of-life of our business areas’
products.
Impacts were evaluated using scale,scope and irremediability determining theseverity of an impact as well as likelihoodfor potential impacts. The evaluation of
positive and negative impacts relied oninternal expertise within different areas
such as supplier management, environment, human resources, health andsafety, community involvement and law.
The participants came from different
business areas, functions, and geogra-

62

phies within Sandvik, which brought
different perspectives and experience on
Environmental, Social and Governance(ESG) topics in the value chain. The
assessment also considered externalreports, legislation, and frameworks.
These sources included the OECD Due
Diligence Guidance for Responsible
Supply Chains of Minerals from ConflictAffected and High-Risk Areas, the OECD
Due Diligence Guidance for Responsible
Mineral Supply Chains, as well as supplierrisk screening through EcoVadis andsupplier audits. The process involved
workshops and interviews.
In the financial materiality assessment,risks and opportunities were assessed by
the magnitude of the financial consequence as well as likelihood. The financial
materiality assessment was based on ashort-term perspective which highlighted
the most urgent topics. In the coming
year, the medium perspective will befurther investigated and included in theanalysis. Based on the input collected, athreshold value for the topics was
defined, above which the topics weredeemed material and as such a basis forour reporting.
Sandvik has a multitude of interactions
across the value chain: suppliers,
customers, and our own operations andinteractions related to the end-of-life
process. Our supply chain and geographical footprint are examples of factors that
affect the value chain and our impacts,
risks, and opportunities.

Material topics– Affected communities– Biodiversity and ecosystems– Business conduct– Climate change– Equal treatment and opportunities
for all– Health and safety– Pollution & air pollution– Recycled input materials– Reconditioning and refurbishment– Waste– Water and marine resources– Workers in the value chain
A topic is material if the company
has an actual or potential significant
impact on people or the environment
connected to the topic. A topic is alsomaterial if it triggers financial effects
on the company that are likely to influ­
ence its future cash flow. The changes
in material topics from last year include
the addition of biodiversity and ecosys­
tems, water and marine resources, aswell as pollution and air pollution.

Examples of contributions to the Sustainable Development Goals
Sandvik contributes to achieving the Sustainable Development Goals according to the UN's 2030 Agenda. By integrating the sustainability goals, also known as the Sustainable Development Goals (SDGs), into our operations and strategy, we work to create a positive
impact on society and the environment.

Upstream (sourcing)

Own operations

Downstream (customers)

SDG

SDG

SDG

SDG 3
Good health and well-being
Our battery-electric underground offering
reduces heat and emissions, thereby
improving working conditions andlowering mining customers’ ventilation
costs. Our AutoMine® technology enables
24/7 automated loading and haulingoperations at Boliden's Renström mine in
Sweden, leading to improved productivity
and a safer work environment for
operators who can monitor machines
remotely. Additionally, Sandvik has healthand well-being programs for employees at
its various locations.

SDG 7
Affordable and clean energy
Sandvik has signed agreements to
procure fossil-free energy across various
markets. We are continually increasing
our use of renewable energy at our sites,
and implementing numerous environmental improvement projects. We havedeveloped an internal policy document topromote the use of renewable electricity
through local procurement.

Sandvik is digitalizing its buyback
program process to make carbide
recycling easier, quicker, and moretransparent. Customers can easily
request a price for used material,
automatically book a shipment, track therecycled material, and receive data on
saved GHG emissions. This new digitalized process was successfullylaunched in Sweden and Germany, withplans to extend it to more markets.
Our patented "charging while drilling"technology for underground battery-electric drilling equipment utilizes the drilling
cycle to simultaneously charge thebattery. This innovation reduces
downtime, GHG emissions, heat, andnoise.
Powder-based net-shape technologies,
such as additive manufacturing, enable
the merging of several components into
one, reducing assembly steps andthereby energy consumption. Additive
manufacturing also reduces waste andoften minimizes the use of lubricants andcleaning fluids.

SDG 5
Gender equality
Sandvik is aiming to have women
representing one-third of its managerial
positions by 2030. We have formed
partnerships with organizations such as
Female Leader Engineer and International
Women in Mining. In Pune, India, Sandvik
Coromant has taken proactive measures
to encourage greater participation of
women in the manufacturing workforce.
The results are encouraging, with female
employees escalating from 4 percent in2019 to 20.5 percent in 2023. To ensure
the safety of female nightshift workers,
Sandvik provides secure transportation,
GPS tracking, CCTV cameras, and a
dedicated security guard.
SDG 6
Clean water and sanitation
In 2023, we inaugurated a fourthwastewater treatment plant in Pune, India.
This facility focuses on increasing therecycling and reuse of water, thereby
contributing to sustainable water
management in the region.

SDG 8
Decent work and economic growth
For the past 23 years, Sandvik
Apprenticeship Program has been
dedicated to nurturing technical skills for
trackless mining in southern Africa.
Operated through the Sandvik Southern
Africa Academy in South Africa, theprogram has trained over 1,000 apprentices in the mining equipment tradeacross Zambia, Botswana, Zimbabwe,
Tanzania, and South Africa.
We are committed to achieving zero
harm to people. Our mining automation
solutions offer the potential for remote
work and contribute to a safer andhealthier work environment.
SDG 9
Industry, innovation, and infrastructure
Digitalized manufacturing enables aclosed-loop production system that yields
increased productivity, minimized waste,
and enhanced quality. Sandvik has rapidly
expanded its digital offering to automate
and connect the entire component
manufacturing value chain, from design
and planning, to production and verification. Our goal is to establish an end-toend digital offering that is agnostic andautomates the machining process.

SDG 12
Responsible consumption andproduction
Every year, we produce tens of millions ofinserts. Our transition to a more circularbusiness model includes aiming to buyback 90 percent of the inserts from
customers and reusing the recycledmaterial in new tools. This approachsignificantly reduces the need forresource mining, leading to a 70 percent
reduction in energy usage and a 64
percent reduction in CO2 emissions.
In 2023, Sandvik launched anindustry-first "opt-out" customer
recycling program for carbide drill bits,
contributing to secure sourcing of scarce
63

Sandvik Annual Report 2023 – Sustainability governanceminerals, reduced environmental impact,
and minimizing waste generation. The"opt-out" program implies that customers
are automatically enrolled in the recycling
initiative unless they choose to decline or"opt-out" of participation. The initiative
contributes to a circular system for
cemented carbide.
Our division Wolfram started thedevelopment of tools using our Bergla®
tungsten carbide powder, made entirely ofrecycled material, this year. It is produced
from 100 percent recycled tungsten raw
material in a manufacturing process that
requires less than 10 percent energy
compared to standard recycling methods,
with 90 percent of the energy utilized
being renewable. The advantage of theprocess is it combination of an existing

technology at Wolfram with the full
integration of circularity, reusing wastematerial.
In 2023, Sandvik announced thestrategic acquisition of tungsten powder
manufacturer Buffalo Tungsten. The
acquisition offers synergy potential, by
optimizing materials sourcing andincreasing the rate of locally produced
tungsten metal powder through its facility
in Depew, New York, US.
Waste circularity is a focal point in our2030 targets. In May, the Seco division
introduced product packaging made from100 percent recycled materials, sourced
from discarded household plastic
packaging. The increased use of recycledplastic not only aids in reducing GHG
emissions but also promotes circularity.

We continually strive to improve ourpractices for recycling and reuse at all oursites.

Code of Conduct
Sandvik believes that ethical andsustainable business practices are a
crucial foundation for a successful
business.
Sandvik has a long history of working inaccordance with applicable laws andinternationally recognized principles, aswell as in partnership with our local
communities. Our Code of Conduct is built
on our internal core values and external
principles, such as the International Bill of
Human Rights, the International Labour
Organization’s Declaration on
Fundamental Principles and Rights at
Work, the Rio Declaration on Environmentand Development, and the United Nations
Convention against Corruption as outlinedin the ten principles of the United Nations
Global Compact.
We are also committed to adhering to
the OECD Guidelines for Multinational
Enterprises and the UN Guiding Principles
on Business and Human Rights.
The Code of Conduct is a vital
component in The Sandvik Way, ourgovernance framework. It shows us how
we need to act as individual employees,
as a company and what ethical standards
we should adhere to in our day-to-day
work, and it is an important enabler forachieving our 2030 Sustainability Goals.

Speak Up
Employees and external parties who
witness a violation of the Code of
Conduct, laws or our policies can reportthe violation, anonymously, through theglobal whistleblowing tool Speak Up. All
reports are assigned to an investigatorfrom the relevant business area that
conducts the investigation taking into
account the principle of independent andimpartial investigation. The Ethics Officeoversees the effectiveness of the Speak
Up process. Reports, investigations andremediations are recorded, monitored,
and included in reporting to the Audit
Committee.
No retaliation may be taken against an
employee or business partner who, ingood faith, voices their concern, as isoutlined in the Speak Up policy.
Our reporting tool, Speak Up, is publicly
and directly accessible by all stakeholders. They can raise concerns about theorganization’s negative impacts on them,including human rights concerns, and theprocess allows for grievances to be
identified and addressed. In addition,certain countries have local grievancemechanisms and other mechanisms to
support employees beyond legal
requirements, such as foundations thatprovide rehabilitation and financial
support in relation to health and wellbeing. The European Works Councils andrelevant local unions have been involved in

the setup of local whistleblowing channels
and appointments of investigators.

64

SDG 13 Climate action
In September 2023, our GHG reduction
targets received approval from the
Science Based Targets initiative (SBTi)(read more about this on page 13). We arecommitted to achieving net-zero GHG
emissions across the entire value chain
by no later than 2050. Our near-term
objectives include achieving a 50 percent
reduction in absolute scope 1 and 2 GHG
emissions by 2030, a 30 percent
reduction in absolute scope 3 emissions
and a 90 percent reduction in absolute
scope 1 and 2 GHG emissions by 2040. Alltargets have 2019 as the base year.

Compliance
The Sandvik Compliance System
encompasses four key areas: Anti-Bribery
and Corruption, Competition Law, Trade &Third-Party Management, and Data
Privacy. The purpose is to establish awell-functioning structure for effectively
managing primary compliance risks in all
countries where Sandvik operates. Group
Compliance sets the compliance program
requirements, including risk identification,
policies, relevant training and communication, monitoring and assurance,
reporting, and more. These requirements
are then implemented by each businessarea. The Group Compliance function
reports to the Sandvik Group GeneralCounsel, the Group Executive
Management and the Audit Committee.
For the purpose of coordinating efforts,
identifying synergies, and driving
continuous improvements, a Compliance
Functional Council has been established.
This council, comprising representatives
from both the Group and business areas,
has been operational for several years andtypically convenes on a quarterly basis.
Sandvik operates in countries andindustries with elevated corruption andsanctions risks, both directly andindirectly through business relationships.
This situation underscores the potential

significant impact the company could
have on the economy, people, and theenvironment. To address these challenges, Sandvik has instituted ananti-corruption compliance program
based on a zero-tolerance approach. Key
guiding documents shaping this program
include the Code of Conduct, an anticorruption policy, and procedures
governing commercial and administrativeintermediaries, gifts, hospitality, travel
and entertainment, and conflicts ofinterest. The commitment to identify andprevent corruption is not limited to these;
it is also integrated into other steering
documents such as the M&A procedureand the Community Involvement,
Sponsorship and Donations procedure.
Crucially, the Speak Up policy, along with
its underlying investigation procedure,
constitute vital components of the
program.
All operational entities within Sandvik
have a mandate to assess and collaboratively address their compliance risks
together with the compliance organization. The aim is to identify and prevent
potential negative impacts stemming fromcompliance-related issues. The actions
taken by these entities undergo scrutiny
from both internal and external audits.
Any perceived negative impacts andweaknesses can also be raised, andwhere relevant, remediated through the
Speak Up process. This process not only
allows for the identification of concerns
but also includes active engagement withindividuals reporting issues, where
possible. To measure and assess
progress, targets and indicators are
established annually through theCompliance Functional Council. Thesemay include self-assessments coveringvarious aspects, including anti-corruption,
sanctions, export control, data privacy,
and competition law efforts. Action plans
are then formulated based on identified
gaps, with a commitment to completingthem within specified deadlines. Thissystematic approach ensures ongoingevaluation and improvement in ourcompliance practices.
Human rights and fair labor conditions
Our commitment to human rights and fairlabor conditions is confirmed in both our
Code of Conduct and Supplier Code of
Conduct. These guiding documents
endorse key international frameworks,

including the International Bill of Human
Rights, the International Labour
Organization’s (ILO) Declaration on
Fundamental Principles and Rights at
Work, and the UN Guiding Principles on
Business and Human Rights. The Sandvik
Code of Conduct, aligned with our corevalues, serves as a guide in the identification, prevention, and mitigation of risks
associated with human rights and fairlabor conditions.
To mitigate risks related to humanrights, we continuously work to ensurecompliance with national legislation andinternationally agreed upon humanrights standards and regulations. We
regularly evaluate our processes andprocedures for identifying, preventing,and mitigating these risks in the Group’s
operations and in our value chain. The
double materiality analysis has taken
consideration of human rights acrossour value chain. Our work on humanrights and fair working terms is
integrated into our regular processes
and procedures in different ways, forexample, in our Sustainable SupplierManagement, our safety work and in our
diversity, equity and inclusion work. We
have zero tolerance for modern slavery
in all its forms, forced labor, slave labor
and/or child labor. We support children’s
rights and the right to education.
Every employee has the right to join aunion and be covered by a collective
agreement. Our commitment extends torejecting all forms of harassment orbullying. We firmly believe in fostering adiverse workforce and maintain azero-tolerance policy against discrimination based on sex, gender identity or
expression, sexual orientation, ethnicity,
national origin, age, disability, belief,
marital status, social group, or any othercharacteristics.
Speak Up is our grievance mechanismthat is available for employees andexternal partners for our entire value
chain.
Employees
Sandvik is dedicated to providing adiverse, equitable, and inclusive workplace, ensuring fair remuneration andworking terms that consider individual
needs. Our People policy underscores ourcommitment to employees, outlining ourapproach to attracting, developing, andretaining staff, and, when necessary,
managing their exit from the business.
Leadership development

Our managers play a crucial role infostering team growth and achieving
results. Through our leadership modeland global leadership programs, weestablish clear expectations for bothleadership capabilities and behaviors.
Young talentWith our Global Graduate Program, we
attract young professionals and offer
training across various segments of the
Sandvik organization. One of the
program's main objectives is to develop
and prepare graduates for future key
positions. Upon completion, participantstransition into different roles within ourbusiness.  
Diversity, Equity and Inclusion
Diversity, Equity, and Inclusion are vital
aspects of our people strategy, integral to
the 2030 Sustainability Goals andstipulated by our Code of Conduct andcore value, fair play.
The business is responsible for
implementing and communicating the2030 goals, ensuring resource allocation,and taking necessary measures for goal
achievement. Sandvik has established a
Diversity, Equity, and Inclusion forum
comprising representatives frombusiness areas and the Group. The forum
collaborates to cultivate a diverse
organization, an equitable workplace, anda culture of inclusion. Joint initiatives,
best practices, and experiences areshared among forum members.  
Environment, Health, and Safety (EHS)
Our Environmental, Health, and Safety(EHS) policy aligns with the principles of
the Code of Conduct and core values,
aiming to realize our vision of Zero Harm.
We have established Group EHS
procedures that focus on hazard
identification, operational risk management, incident reporting injury management, EHS performance measurement
and monitoring, and EHS training andcompetency. Each procedure clearly
defines roles, responsibilities, andperformance management indicators.
Regular internal and external audits are
conducted to review compliance withlegislation, policies, and procedures.
65

Sandvik Annual Report 2023 – Sustainability governance

Our EHS policy, along with Group EHS
objectives and the 2030 Sustainability
Goals, guides our health and safety
initiatives. Each business area develops
plans to meet these objectives, withannual targets set to drive performanceat all organizational levels toward the2030 goals. The scope of our EHS policy
extends beyond our internal operations toinclude the services provided by Sandvik
at customer locations.
The Sandvik EHS Council, comprising
representatives from all business areas,
serves as a key forum to facilitate
collaboration across the company,
advancing our progress toward our EHS
vision. While EHS activities are decentralized within the business areas, the EHS
Council identifies, reaches consensus on,
and implements common initiatives andprocedures. Additionally, the Council
drafts documents, including the EHS
policy and objectives, for consideration
and approval by the Group Executive
Management. The council also has theauthority to appoint working groups toaddress specific EHS issues, such asenvironmental working groups.  
Our EHS management systems are
based on ISO 14001 and ISO 45001. The
management of individual topics adheresto the criteria of established frameworks
but may extend beyond them. We
maintain a unified EHS policy for thecompany, along with Group procedures inareas where Sandvik aims to establish
standards exceeding the requirements ofour certified management systems. Sites
with a lower risk profile are not obligatedto undergo external certification.
Nevertheless, these sites must comply
with the requirements outlined in theGroup procedure for small sites andoffices.
For specific local issues, such aseffluent discharge limits or environmental
permits not addressed in legal requirements, certifications, or Group procedures, we implement local initiatives
tailored to the specific needs of eachproduction unit or business division. The
EHS management systems extend to
relationships beyond company boundaries, emphasizing our responsibility to
uphold high standards in environments
under the company’s control. This
involves actively identifying and mitigating risks to prevent work-related injuries
or occupational illnesses.
66

Environmental criteria are integrated
into the sustainable supplier management
process, while both environmental andsafety criteria are integral to the productdevelopment process.
Every Sandvik-controlled location will
establish and uphold formal systems andprocesses for conducting risk assessments. All employees are empowered andencouraged to report observed hazards.
The system facilitates the proper handlingof all hazards, ensuring a comprehensive
process from identification to resolution.
The most senior Sandvik manager at eachlocation bears responsibility for theproper management of registeredhazards.
Every business area/location operates
its Incident Reporting and Investigation
system, with the responsibility ofdisseminating the findings from incident
investigations throughout the organization. Each employee has access to acolleague within their immediate
workplace or organization who serves asa representative of the EHS function
within Sandvik.  
Health and safety committees areorganized based on the specific structureof the local organization and theprevailing issues within the region. These
committees typically include representatives from local management, employees,
and EHS professionals.
Training is incorporated into the
induction process for all employees, withmore in-depth training provided for EHS
professionals. Additionally, EHS issues
are integrated into training programs for
specific roles. Our training packages
encompass various formats, including
in-house classroom sessions, external
training, and self-learning opportunities,
such as e-learning.
Access to medical and healthcare
services is tailored to local needs, ranging
from on-site professional healthcare toexternal partnerships providing services
like vaccinations and health checks forour employees. We provide voluntary
health and well-being programs that are
adapted to local needs, covering various
aspects including fitness, nutrition,
mental health, and disease prevention.
Sustainable supplier management

Sandvik is committed to sustainableprocurement practices that minimize oursocial and environmental impacts,

mprove the sustainability performance of
our suppliers, and create value for thebusiness, our customers and society atlarge. It is important for us to partner with
suppliers who understand and embrace
our sustainability standards in areas suchas environment, labor, human rights,
anti-corruption, circularity of materials,
and carbon footprint. Our requirements
are part of our 2030 Sustainability Goals
and are outlined in our Supplier Code of
Conduct.
Community involvement

Sandvik engages in diverse community
relation projects worldwide with three
primary focus areas: 1) Sustainability
Shift: Organizations, projects andactivities related to climate change,
resources and waste management, or
the clean and sustainable developmentof communities. 2) Digital Shift:
Organizations, projects and activities
that build technical and digital skills,
support innovations that contribute to
global advancement, or introduce people
to new technologies. 3) Societal Impact:
Projects that support equality andinclusion, improve health and well-being,or contribute to positive development in
the local communities where we operate.
We view our community involvement
projects as investments, for which we
require contracts, clear target groups andobjectives with measurable results. We
have a Community Involvement,
Sponsorship and Donations procedure to
guide all Sandvik entities engaged incommunity relations projects. All
activities must comply with our Code of
Conduct, which means that we do not
engage in any activities of a political or
religious nature, or in projects that may beviewed as hazardous to health or theenvironment. All our partners must sign
the Sandvik Supplier Code of Conduct
and undergo the same screening process
as our suppliers. As part of our 2030
Sustainability Goals, we promote
employee engagement in community
initiatives that contribute positively tosociety. Our community involvement
activities will be governed via a digital toolthat allows for mapping, tracking andfollow-up. The app is in final testing andwill be launched broadly across the Groupduring the first half of 2024.   

Board statement on dividend proposal
Board statement in accordance with Chapter 18, Section 4 of theSwedish Companies Act.
The nature and extent of the company’s operations are stated in
the Articles of Association and issued annual reports. Such nature andextent do not entail risks over and above those inherent, or reasonably
to be expected, in the industry or otherwise inherent in business
operations. For information on significant events, reference is made to
the Directors’ Report.
The company’s financial position as of December 31, 2023, isapparent from this Annual Report. The proposed dividend does not
infringe on investments deemed to be required. In addition, the company’s main liquidity reserve is in the form of an unutilized revolving

credit facility amounting to SEK 11,000 million, which means thatthe company should reasonably be able to meet unexpected eventsand temporary fluctuations in cash flows of reasonable proportions.
The company’s financial position supports the assessment that thecompany will be able to continue its business and meet its obligations
in both the short and long term.
In view of the above and based on what the Board is ­otherwise
aware of, the proposed dividend in the Board’s ­opinion is justified
considering the requirements which the nature, extent and risks
associated with the operations place on the size of the equity of thecompany, and also ­taking into consideration the company’s need tostrengthen its balance sheet, liquidity and financial position in general.

Stockholm, March 11, 2024
Sandvik Aktiebolag (publ)
BOARD OF DIRECTORS

135

Sandvik annual report 2023 – Proposed appropriation of profits

Proposed appropriation of profits
The Board of Directors proposes that the profits at the disposal of theAnnual General Meeting:profits carried forward

20,736,818,564

and result for the year

5,396,307,174

SEK

26,133,125,738

be appropriated as follows:
a dividend of 5.50 SEK per share to the shareholders

6,899,122,577

profits carried forward

19,234,003,161

SEK

26,133,125,738

The proposed record date for dividends is Thursday, May 2, 2024.
The income statements and the balance sheets of the Group and of
the Parent Company are subject to adoption by the Annual General
Meeting on Monday, April 29, 2024.

The Board of Directors and the President hereby certify that theAnnual Report has been prepared in accordance with generally
accepted accounting principles in Sweden, and that the consolidated
financial statements have been prepared in accordance with theinternational financial reporting standards referred to in the regulation(EU) no. 1606/2002 of the European Parliament and Council dated
July 19, 2002, pertaining to the application of international financial
reporting standards. The Annual Report and the consolidated financial
statements give a true and fair view of the Parent Company’s and theGroup’s financial position and results. The Report of the Directors pertaining to the Parent Company and the Group gives a fair overview ofthe development of the Parent Company’s and the Group’s operations,financial position and results, and describes the significant risks anduncertainties facing the Parent Company and the companies includedin the Group.

Stockholm, March 11, 2024

Johan Molin
ChairmanJennifer Allerton
Board member

Thomas Andersson
Board member

Claes Boustedt
Board member

Marika Fredriksson
Board member

Thomas Lilja
Board member

Andreas Nordbrandt
Board member

Helena Stjernholm
Board member

Kai Wärn
Board member

Stefan Widing
Board member
President and CEO

Our auditors’ report was submitted on March 12, 2024
PricewaterhouseCoopers AB

Peter Nyllinge
Authorized Public Accountant
Partner in charge

136

Anna Rosendal
Authorized Public Accountant

Auditors’ report

Unofficial Translation

To the general meeting of the shareholders of Sandvik AB (publ),
corporate identity number 5560000-3468

Report on the annual accounts andconsolidated accounts
Opinions
We have audited the annual accounts and consolidated accountsof Sandvik AB (publ) for the year 2023.The annual accounts andconsolidated accounts of the company are included on pages 40–136
in this document.
In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material
respects, the financial position of parent company and the group asof 31 December 2023 and its financial performance and cash flow
for the year then ended in accordance with the Annual Accounts Act.
The consolidated accounts have been prepared in accordance with
the Annual Accounts Act and present fairly, in all material respects,
the financial position of the group as of 31 December 2023 andtheir financial performance and cash flow for the year then ended inaccordance with International Financial Reporting Standards (IFRS),
as adopted by the EU, and the Annual Accounts Act.
We therefore recommend that the general meeting of shareholders
adopts the income statement and balance sheet for the parent
company and the group.
Our opinions in this report on the annual accounts and consolidated
accounts are consistent with the content of the additional reportthat has been submitted to the parent company's audit committee inaccordance with the Audit Regulation (537/2014) Article 11.
Basis for Opinions
We conducted our audit in accordance with International Standards on
Auditing (ISA) and generally accepted auditing standards in Sweden.
Our responsibilities under those standards are further described in
the Auditor’s Responsibilities section. We are independent of theparent company and the group in accordance with professional ethics
for accountants in Sweden and have otherwise fulfilled our ethicalresponsibilities in accordance with these requirements. This includes
that, based on the best of our knowledge and belief, no prohibited
services referred to in the Audit Regulation (537/2014) Article 5.1
have been provided to the audited company or, where applicable, its
parent company or its controlled companies within the EU.
We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinions.
Our audit approach
Audit scope
We designed our audit by determining materiality and assessing
the risks of material misstatement in the consolidated financial
statements. In particular, we considered where management madesubjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering
future events that are inherently uncertain. As in all of our audits, we
also addressed the risk of management override of internal controls,
including among other matters consideration of whether there wasevidence of bias that represented a risk of material misstatement due
to fraud.

We tailored the scope of our audit in order to perform sufficient
work to enable us to provide an opinion on the consolidated financial
statements as a whole, taking into account the structure of the Group,
the accounting processes and controls, and the industry in which thegroup operates.
Our audit strategy is built on our knowledge and understandingof Sandvik’s operations, strategy, governance and overall control
environment. With this as a foundation, we tailor our Group audit
with a focus on the key audit matters and other risks with the
purpose of gaining audit comfort in order to express an opinion on
the consolidated Financial statements. Our business understanding,risk assessment and selection of entities to be included in the Groupaudit is a continuous process which is updated once a year during ourplanning phase.
We build our overall understanding of Sandvik for the purpose of
our Group audit, by interviewing Management for the Business Areas,
Divisions and Group Functions and by updating our process understanding and understanding of relevant controls and systems that
support the financial reporting. We also obtain and read management
reports, policies and procedures etc.
The Group audit team coordinate the Group audit by issuing Groupaudit instructions to component auditors of selected entities in scope.
We obtain and read reporting deliverables and conduct component
calls with selected teams in order to ensure adherence to the overall
Group audit strategy. The Group audit team is also responsible for
auditing the consolidation process, the parent company accounts andfor reporting to the Audit Committee and the Board of Directors (onceper year). The interim report for the third quarter is subject to an ISRE
2410 review. In addition, most legal entities in the Group are subject tostatutory audit requirements based on local regulations.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether
the financial statements are free from material misstatement.
Misstatements may arise due to fraud or error. They are consideredmaterial if individually or in aggregate, they could reasonably be
expected to influence the economic decisions of users taken on thebasis of the consolidated financial statements.
Based on our professional judgement, we determined certain
quantitative thresholds for materiality, including the overall groupmateriality for the consolidated financial statements as a whole. These,
together with qualitative considerations, helped us to determine thescope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individuallyand in aggregate on the financial statements as a whole.
Key audit matters
Key audit matters of the audit are those matters that, in our professional judgment, were of most significance in our audit of the annual
accounts and consolidated accounts of the current period. These
matters were addressed in the context of our audit of, and in forming
our opinion thereon, the annual accounts and consolidated accounts
as a whole, but we do not provide a separate opinion on these matters.

137

Sandvik annual report 2023 – Auditors’ report

Key Audit Matter

How our audit addressed the Key Audit Matter

Revenue recognition in the appropriate period
The Group manufactures and sells products and services to its
customers globally, mainly through its own distribution network. Sales
contracts contain various performance obligations and other terms
and the determination of when significant performance obligations
have been met varies albeit a specific point in time can often be
established. The Group has analyzed its various sales contracts andconcluded on the principles for deciding in which period or periods theGroup’s sales transactions should be recognized as revenue.
Disclosures in notes G2, G3 and P2 provide additional information
on how the Group accounts for its revenue.

Our audit included but was not limited to the following activities:– Mapped and evaluated selected systems and processes forrevenue recognition and tested a sample of key controls.
– Evaluated whether the Group accounting principles for revenue
recognition comply with IFRS.
– Tested a sample of sales transactions for compliance with theGroup accounting principles.
– Performed data analytical procedures to identify and evaluate asample of manual and automatic journal entries.
– Traced disclosure information to accounting records and othersupporting documentation.

Measurement of goodwill and intangible assets with an ­indefinite life
including acquired intangible assets
The majority of Sandvik’s intangible assets have been acquired externally, mostly through acquiring businesses, and represent significant amounts. Assets with indefinite useful life such as goodwill are
not subject to yearly depreciation. Instead, an annual test will showwhether the carrying amount for the cash generating unit can still besupported. Sandvik has acquired several businesses containing intangible assets during 2023.
There are a number of instances where management’s judgment isdecisive for the accounting treatment, both in connection with acquiring businesses and in connection with annual impairment tests.
Note G13 contains additional information on the Group’s intangible
assets and the significant assumptions applied in the annual impairment tests. In note G31 there is additional information about businesscombinations, accounting principles and acquired intangible assets.

Our audit included but was not limited to the following activities:– Assessed the model used by the Group for impairment testing andevaluated the significant assumptions for establishing forecasted
cash flows and discount interest rates used for calculating thevalue-in-use of the cash generating units. In our evaluation, we
have compared with the historic business performance and theGroup’s forecasts and strategic planning as well as with external
data sources when possible and relevant.
– Evaluated whether the purchase price allocations of the Significant acquisitions made during the year meet the Requirementsof IFRS and have been prepared according to generally accepted
practices. Assessed that significant assumptions used to measurevalues of acquired assets are reasonable. We have involved valuation specialists when conducting our work.
– Traced disclosure information to accounting records and othersupporting documentation.

Measurement of inventory
Sandvik keep significant stock of raw materials, spare parts and workin-progress at its production units and stores of finished goods mostly
at its sales units and distribution centres. The inventory balance ismaterial and measurement of inventory is important for a fair presentation of gross margin. A due process is required to prepare accurate
reporting of the acquisition cost when procurement, production andlogistical processes are complex.
Establishing product costing requires many instances of management judgment with effect on the reported values. This includes assessing normal production levels, foreign currency, prices of raw materials
and allocation of other direct and indirect costs. For finished goods,
assessment is needed of obsolescence and how sellable the products
are. Finally, there is a complexity in monitoring and measuring volumes
particularly for some raw materials and work in progress as well as
eliminating effects from intra Group transactions.
Notes G18 and P14 provide information about the the Group’s
accounting principles for measuring inventory and additional information on the line item.

Our audit included but was not limited to the following activities:

138– Mapped and evaluated selected systems and processes for inventory and tested a sample of key controls for establishing cost.
– Tested, on a sample basis, stocks of raw materials to actual prices.
Assessed the reasonableness of the product costing for work inprogress and finished goods.
– Participated in stock takes at many locations and tested the cutoff of deliveries in or out of inventory.
– Obtained the Group’s monitoring controls of slow movers andassessments of obsolescence as well as net selling prices.
– Traced disclosure information to accounting records and othersupporting documentation.

Other Information than the annual accounts and consolidated
accounts
This document also contains other information than the annual
accounts and consolidated accounts and is found on pages 1–39 and
162–164, and the Statutory Sustainability Report and Sustainable
Business Report on pages 7–9, 13, 61–66 and 142–160.
The other information also contains the Remuneration report which
we expect to receive after the release of the Auditor’s Report.The
Board of Directors and the Managing Director are responsible for thisother information.
Our opinion on the annual accounts and consolidated accounts
does not cover this other information and we do not express any formof assurance conclusion regarding this other information.
In connection with our audit of the annual accounts and consolidated accounts, our responsibility is to read the information identified
above and consider whether the information is materially inconsistent
with the annual accounts and consolidated accounts. In this procedure
we also take into account our knowledge otherwise obtained in theaudit and assess whether the information otherwise appears to bematerially misstated.
If we, based on the work performed concerning this information,
conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report inthis regard.
Responsibilities of the Board of Directors and the Managing
Director
The Board of Directors and the Managing Director are responsible forthe preparation of the annual accounts and consolidated accounts
and that they give a fair presentation in accordance with the Annual
Accounts Act and, concerning the consolidated accounts, in accordance with IFRS as adopted by the EU. The Board of Directors andthe Managing Director are also responsible for such internal control
as they determine is necessary to enable the preparation of annual
accounts and consolidated accounts that are free from material
misstatement, whether due to fraud or error.
In preparing the annual accounts and consolidated accounts, The
Board of Directors and the Managing Director are responsible for theassessment of the company's and the group's ability to continue as agoing concern. They disclose, as applicable, matters related to going
concern and using the going concern basis of accounting. The going
concern basis of accounting is however not applied if the Board of
Directors and the Managing Director intend to liquidate the company,
to cease operations, or has no realistic alternative but to do so.
The Audit Committee shall, without prejudice to the Board of
Director’s responsibilities and tasks in general, among other things
oversee the company’s financial reporting process.
Auditor’s responsibility
Our objectives are to obtain reasonable assurance about whether theannual accounts and consolidated accounts as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue anauditor’s report that includes our opinions. Reasonable assurance is ahigh level of assurance, but is not a guarantee that an audit conductedin accordance with ISAs and generally accepted auditing standards
in Sweden will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on thebasis of these annual accounts and consolidated accounts.
A further description of our responsibility for the audit of
the annual accounts and consolidated accounts is available on

Revisorsinspektionen’s website: www.revisorsinspektionen.se/revisornsansvar. This description is part of the auditor´s report.

Report on other legal and regulatory requirements

The auditor’s examination of the administration of the company andthe proposed appropriations of the company’s profit or loss
Opinions
In addition to our audit of the annual accounts and consolidated
accounts, we have also audited the administration of the Board of
Director's and the Managing Director of Sandvik AB (publ) for the year
2023 and the proposed appropriations of the company’s profit or loss.
We recommend to the general meeting of shareholders that the
profit be appropriated in accordance with the proposal in the statutory
administration report and that the members of the Board of Director's
and the Managing Director be discharged from liability for the financial
year.
Basis for opinions
We conducted the audit in accordance with generally accepted
auditing standards in Sweden. Our responsibilities under thosestandards are further described in the Auditor’s Responsibilities
section. We are independent of the parent company and the group inaccordance with professional ethics for accountants in Sweden andhave otherwise fulfilled our ethical responsibilities in accordance withthese requirements.
We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinions.
Responsibilities of the Board of Directors and the Managing Director
The Board of Directors is responsible for the proposal for appropriations of the company’s profit or loss. At the proposal of a dividend,
this includes an assessment of whether the dividend is justifiableconsidering the requirements which the company's and the group's
type of operations, size and risks place on the size of the parent
company's and the group’ equity, consolidation requirements, liquidity
and position in general.
The Board of Directors is responsible for the company’s organization and the administration of the company’s affairs. This includes
among other things continuous assessment of the company's and thegroup's financial situation and ensuring that the company´s organization is designed so that the accounting, management of assets andthe company’s financial affairs otherwise are controlled in a reassuring
manner. The Managing Director shall manage the ongoing administration according to the Board of Directors’ guidelines and instructions
and among other matters take measures that are necessary to fulfill
the company’s accounting in accordance with law and handle themanagement of assets in a reassuring manner.
Auditor’s responsibility
Our objective concerning the audit of the administration, and thereby
our opinion about discharge from liability, is to obtain audit evidence
to assess with a reasonable degree of assurance whether any memberof the Board of Directors or the Managing Director in any material
respect:• has undertaken any action or been guilty of any omission which cangive rise to liability to the company, or• in any other way has acted in contravention of the Companies Act,
the Annual Accounts Act or the Articles of Association.
Our objective concerning the audit of the proposed appropriations of
the company’s profit or loss, and thereby our opinion about this, is toassess with reasonable degree of assurance whether the proposal isin accordance with the Companies Act.

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Sandvik annual report 2023 – Auditors’ report

Reasonable assurance is a high level of assurance, but is not aguarantee that an audit conducted in accordance with generally
accepted auditing standards in Sweden will always detect actions
or omissions that can give rise to liability to the company, or that the
proposed appropriations of the company’s profit or loss are not inaccordance with the Companies Act.
A further description of our responsibility for the audit of theadministration is available on Revisorsinspektionen’s website: www.
revisorsinspektionen.se/revisornsansvar. This description is part of theauditor’s report.
The auditor’s examination of the ESEF report
OpinionIn addition to our audit of the annual accounts and consolidated
accounts, we have also examined that the Board of Directors andthe Managing Director have prepared the annual accounts andconsolidated accounts in a format that enables uniform electronic
reporting (the Esef report) pursuant to Chapter 16, Section 4(a) of theSwedish Securities Market Act (2007:528) for Sandvik AB (publ) for
the financial year 2023.
Our examination and our opinion relate only to the statutory
requirements.
In our opinion, the Esef report has been prepared in a format that, inall material respects, enables uniform electronic reporting.
Basis for opinion
We have performed the examination in accordance with FAR’s recommendation RevR 18 Examination of the Esef report. Our responsibility
under this recommendation is described in more detail in the Auditors’
responsibility section. We are independent of Sandvik AB (publ) in
accordance with professional ethics for accountants in Sweden andhave otherwise fulfilled our ethical responsibilities in accordance withthese requirements.
We believe that the evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Responsibilities of the Board of Directors and the Managing Director
The Board of Directors and the Managing Director are responsible
for the preparation of Esef report in accordance with the Chapter 16,
Section 4(a) of the Swedish Securities Market Act (2007:528), andfor such internal control that the Board of Directors and the Managing
Director determine is necessary to prepare the Esef report withoutmaterial misstatements, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to obtain reasonable assurance whether the Esef
report is in all material respects prepared in a format that meets therequirements of Chapter 16, Section 4(a) of the Swedish Securities
Market Act (2007:528), based on the procedures performed.
RevR 18 requires us to plan and execute procedures to achievereasonable assurance that the Esef report is prepared in a format thatmeets these requirements.
Reasonable assurance is a high level of assurance, but it is not aguarantee that an engagement carried out according to RevR 18 andgenerally accepted auditing standards in Sweden will always detecta material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the ESEF report.
The firm applies International Standard on Quality Management 1,
which requires the firm to design, implement and operate a systemof quality management including policies or procedures regarding
compliance with ethical requirements, professional standards andapplicable legal and regulatory requirements.
The examination involves obtaining evidence, through various
procedures, that the Esef report has been prepared in a format thatenables uniform electronic reporting of the annual accounts andconsolidated accounts. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material
misstatement in the report, whether due to fraud or error. In carryingout this risk assessment, and in order to design audit procedures thatare appropriate in the circumstances, the auditor considers thoseelements of internal control that are relevant to the preparation of theEsef report by the Board of Directors and the Managing Director, but
not for the purpose of expressing an opinion on the effectiveness of
those internal controls. The examination also includes an evaluation of
the appropriateness and reasonableness of assumptions made by the
Board of Directors and the Managing Director.
The procedures mainly include a validation that the Esef report has
been prepared in a valid XHMTL format and a reconciliation of the Esef
report with the audited annual accounts and consolidated accounts.
Furthermore, the procedures also include an assessment of
whether the consolidated statement of financial performance, financial
position, changes in equity, cash flow and disclosures in the Esef
report have been marked with iXBRL in accordance with what follows
from the Esef regulation.

PricewaterhouseCoopers AB, Torsgatan 21, 113 97, Stockholm, wasappointed auditor of Sandvik AB (publ) by the general meeting of theshareholders on 27 April 2023 and has been the company’s auditor
since 27 April 2018.

Stockholm March 12, 2024
PricewaterhouseCoopers AB

Peter Nyllinge
Authorized Public Accountant
Auditor in charge

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Anna Rosendal
Authorized Public Accountant