Sandvik provides an update on cost measures and savings
05 January 2021
Sandvik has initiated measures across the Group to mitigate effects from the covid-19 pandemic, with actions supporting savings both short-term and long-term. Currently, Sandvik provides an update on the current status of the long-term cost measures and savings for the 2021 program.
Apart from the temporary short-term actions that were initiated at the outbreak of the covid-19 pandemic, Sandvik also announced long-term measures that will generate SEK 1.3bn in annual savings with majority impacting 2021. Previously communicated implied cost for this program was SEK 2.3bn.
The final cost for this program totals SEK 2.8bn, of which SEK 1.7bn was charged to the operating profit in the Q1 and Q2 of 2020 and the remaining SEK 1.1bn will be charged in the Q4 and reported as items affecting comparability. The higher cost estimation is a consequence of a shift to initiatives that will be more structural in nature and includes consolidation of production units, site closures, and downsizing.
Of the total SEK 2.8bn SEK, approximately SEK 700M are non-cash items and the remaining SEK 2.1bn mainly refers to redundancies of some 1800 employees.