Investor Presentation

Investor Presentation February 2009

Cautionary Statement Some statements herein are forward-looking and the actual outcome could be materially different. In addition to the factors explicitly commented upon, the actual outcome could be materially effected by other factors like for example, the effect of economic conditions, exchange-rate and interest-rate movements, political risks, impact of competing products and their pricing, product development, commercialisation and technological difficulties, supply disturbances, and the major customer credit losses. Sandvik investor presentation 2009 Page 2

Agenda Company Overview Strategy Financial Review Summary Sandvik investor presentation 2009 Page 3

Sandvik A global industry leader Sandvik is a high-technology, engineering group with advanced products based on a unique competence in materials technology since 1862 Leading global market position in all areas Well diversified customer base Cyclical resilience through high share of aftermarket revenue Highly focused on customer driven R&D Conservative financial management and strong credit profile Experienced management team Göran Fredrik Göransson Sandvik s founder World-leading position in the three core areas Cemented-carbide and high-speed steel tools for metalworking applications Machinery, equipment and tools for rock-excavation Stainless and high-alloy steels, special metals, resistance materials and process systems 2008 Sales of SEK93bn ( 8.5bn) 50,000 employees in 130 countries Headquarters in Sandviken, Sweden Listed on the Stockholm Stock Exchange Market Cap of SEK58bn, 31 Dec '08 ( 5.3bn) Note:EURSEK: 10.963 as per 31 December 2008 Sandvik investor presentation 2009 Page 4

Consistent performance 100,000,000 10,000,000 Profit after financial items 1,000,000 100,000 in TSEK 10,000 1,000 100 10 1 1868 1878 1888 1898 1908 1918 1928 1938 1948 1958 1968 1978 1988 1998 2008 Year 1983: -SEK179m 1873-1896 Recession 1914-1918 1 st World War 1929-1934 Recession 1939-1945 2 nd World War 1973 Oil crisis Since 1868 the Sandvik Group has only had one year of negative profit (1983) Sandvik investor presentation 2009 Page 5

Sandvik s business areas Sandvik Tooling Sandvik Mining and Construction Sandvik Materials Technology Sales SEK25,975m ( 2,369m) SEK38,651m ( 3,526m) SEK21,480m ( 1,959m) EBIT SEK5,461m ( 498m) SEK4,996m ( 456m) SEK1,187m ( 108m) ROCE 27.0% 24.2% 6.3% Tools and tooling systems for metal cutting, wear parts and super-abrasive components Solutions using products in cemented carbide, high-speed steel, synthetic diamond, cubic boron nitride and special ceramics Equipment and solutions for mineral exploration, underground mining in hard and soft formations, surface mining and bulk materials handling Also for specific areas of the construction industry, such as quarrying, tunnelling, demolition and recycling, and other civil engineering applications Producer of high technology stainless steels, special alloy materials and advanced valueadded products Sandvik Materials Technology consists of six product areas: Tube, Strip, Wire, Kanthal, Process Systems and Sandvik MedTech The Sandvik Group also includes, since 1974, the independent, publicly listed Seco Tools group Note: 2008 FY results EURSEK: 10.963 as per 31 December 2008 Sandvik investor presentation 2009 Page 6

Sandvik Tooling Key figures 2008 Sales by end market 2008 Business strategy through costumer productivity Quarterly invoiced sales (SEK m) 17,000 employees 2008 Sales SEK25,975m (28%)* 2008 EBIT SEK5,461m (43%)* 10% 15% 5% 5% 30% 35% Engineering Automotive Consumer related Aerospace Energy Other Increased cutting speed 20% Cost reduction per component: -15% Free capacity Increased tool life 50% Cost reduction per component: -1% 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 04 05 06 07 08 35% 30% 25% 20% 15% 10% 5% 0% EBIT- margin (RHS) ROCE 12-months (RHS) Note: * Percent of Group total Sandvik investor presentation 2009 Page 7

Sandvik Mining and Construction Key figures 2008 Sales by end market 2008 Business strategy through customer productivity Quarterly invoiced sales (SEK m) 16,800 employees 2008 Sales SEK38,651m (42%)* 2008 EBIT SEK4,996m (39%)* 15% 50% 35% Mining Construction Materials handling Mobile mining equipment capex account for < 3% of total mining cost but influences 40% of the total mining cost Mobile equipment (CapEx) Labor Spare parts Tires Fuel Other Op. Exp. Overheads & Distribution 10,000 8,000 6,000 4,000 2,000 0 04 05 06 07 08 50% 40% 30% 20% 10% 0% EBIT- margin (RHS) ROCE 12-months (RHS) Note: * Percent of Group total Sandvik investor presentation 2009 Page 8

Sandvik Materials Technology Key figures 2008 Sales by end market 2008 Business strategy transformation of the product program Quarterly invoiced sales (SEK m) 9,300 employees 2008 Sales SEK21,480m (23%)* 2008 EBIT SEK1,187m (9%)* 10% 10% 5% 5% 5% 25% 15% 25% Energy Engineering Consumer related Chemical Construction Automotive Medical Mining High alloy/ advanced materials Lower alloy materials Materials Semi-finished products Applications Integrated solutions Closures Divestments Acquisitions / New technologies 6,000 5,000 4,000 3,000 2,000 1,000 0 04 05 06 07 08 30% 25% 20% 15% 10% 5% 0% EBIT- margin (RHS) ROCE 12-months (RHS) Note: * Percent of Group total Sandvik investor presentation 2009 Page 9

Global presence 16% -6% 44% -7% 9% 16% -6% 6% +28% +20% 9% +11% % Sales 2008, part of Group total % Change compared with preceding year Sandvik investor presentation 2009 Page 10

Experienced management team Years service: 30 Years service: 33 Lars Pettersson President and CEO President and Chief Executive Officer of Sandvik AB since 2002 Group Executive Vice President and President of Sandvik Specialty Steels business area 2000 2002 Various positions within production and management in Sandvik 1978 1999 Anders Thelin President Sandvik Tooling President of Sandvik Tooling business area since 2000 Various positions within research and development and the management group of Sandvik Coromant 1976 2000 Years service: 5 Years service: 5 Per Nordberg EVP and CFO Executive Vice President and CFO of Sandvik AB since 2004 CFO, OMX 2002 2004 Group Treasurer, AstraZeneca Plc 1999 2002 Group Treasurer, Astra 1995 1999 Lars Josefsson President Sandvik Mining and Construction President of Sandvik Mining and Construction business area since 2003 President, ABB STAL/ALSTOM 1998 2003 Years service: 15 Years service: 8 Peter Larson EVP, Head of HR and IT Executive Vice President of Sandvik AB since 2002, head of IT since 2004, and head of HR since December 2007 Executive Vice President and head of IT, Sandvik AB 2004 2007 Executive VP and CFO, Sandvik AB 2000 2004 Peter Gossas President Sandvik Materials Technology President of Sandvik Materials Technology business area since 2001 Avesta Polarit 1986 2001 SSAB 1974-1986 Sandvik investor presentation 2009 Page 11

Sandvik s strategy Organic growth Focus on new application areas Conservative financial position Continued Research & Development excellence Excel through costumer productivity and profitability enhancement Market leadership in all business areas Strategic acquisitions Sandvik investor presentation 2009 Page 13

Growth in organic invoicing Change in invoicing y-o-y, at fixed exchange rates for comparable units 25% 20% 15% 10% 5% 25% 20% 15% 10% Target 8% 5% 0% 0% -5% 2004 2005 2006 2007 2008-5% Target 2008 Ave. 5-yr Organic growth +8% +5% +13% ROCE 25%* 20% 24% Sandvik investor presentation 2009 Page 14

Strongly positioned through the cycle Structural measures Reducing product rates Closure of plants in Australia, Northern Ireland and Canada Utilizing time banks and temporary lay-offs Personnel reductions More than 1,000 temporary employees ~900 permanent employees Focus 2009 Continuous monitoring of the business environment Focus on cash flow Capitalizing on market opportunities Significantly reduced capex Adjustment of manufacturing capacity Sandvik is uniquely positioned High value added niche products Leader in selected areas Customer oriented R&D Own manufacturing Direct sales Effective logistics systems Financial strength Strong corporate culture Sandvik investor presentation 2009 Page 15

Focus on customer productivity In industrial operations, the cost of running the operation, e.g. for labour, raw material, equipment etc, is increasing at a faster rate than the price of the goods that are sold Sandvik aims to bridge this productivity gap for its customers by continuously increasing efficiency to achieve higher productivity. Cost development Productivity gap Price development Note: Graph is illustrative Sandvik shall develop, manufacture and market highly processed products, which contribute to improve the productivity and profitability of our customers. Operations are primarily concentrated on areas where Sandvik is or has the potential to become a world leader Sandvik investor presentation 2009 Page 16

Focus on customer driven R&D More than 3% of sales invested in R&D annually; ~ SEK3bn in 2008 More than 2,300 employees focused on R&D 4,800 active patents New products a pre-requisite for profitable growth Customer value Price development Cost reduction Patentability Portoflio rationalization R&D focus drives virtuous circle of growth, profitability and competitive advantage Sandvik investor presentation 2009 Page 17

Growth and prudent financial strategy Growth ambitions Organic growth Target of 8% since 2007 Over 8% annual growth over the last 20 years Growth equally attributable to organic expansion and acquisitions Expansion in emerging markets Focus on new application areas Energy Exploration drilling Medical implants and tools Invoicing MSEK % 100,000 50 80,000 40 60,000 30 40,000 20 20,000 10 0 0 88 90 92 94 96 98 00 02 04 06 08 Operating margin % ROCE % Conservative financial position Debt/equity ratio target 0.7-1.0 Robust liquidity position SEK5.0bn in cash and equivalents (FY 08) Undrawn EUR1.5bn RCF Strong credit rating A long-term rating by S&P Single A rating since 1997 AA- 4 A+ 3 2A A- 1 97 98 99 00 01 02 03 04 05 06 07 08 09 S&P long-term rating Sandvik investor presentation 2009 Page 18

Resilient business profile Well diversified customer base High share of aftermarket revenue 2008 Revenue Breakdown by End Market 2008 Revenue Breakdown by Product Type* Mining Construction Automotive Consumer related Engineering Energy Aerospace Materials handling Other Aftermarket / Industrial Consumables OEM / Capital Equipment Diversified end-market exposure reduces cyclicality 50%* of revenues from aftermarket / consumables consistent and predictable revenue stream Aftermarket typically comprised of higher margin products Note: * Company estimate Sandvik investor presentation 2009 Page 19

P&L summary MSEK 2008 2007 Change % Revenue 92,654 86,338 +7 Cost of goods sold -61,562-55,976 +10 Gross profit 31,092 30,362 +2 Admin, Sales and R&D costs -18,825-16,294 +16 Other op income and exp. +527 +326 +62 Operating profit 12,794 14,394-11 Net financial items -2,217-1,397 +59 Profit after Financial items 10,577 12,997-19 Profit for the period 7,836 9,594-18 Sandvik investor presentation 2009 Page 21

1,660 1,952 1,887 2,079 2,041 2,425 2,261 2,805 2,853 2,995 2,854 3,365 3,538 4,093 3,563 3,200 3,190 3,783 3,586 2,235 Robust financial performance Quarterly EBIT (SEK M) 5,000 4,000 3,000 2,000 1,000 0 2004 2005 2006 2007 2008 EBIT Excluding metal price effects Sandvik investor presentation 2009 Page 22 EBIT margin, % 20 16 12 8 4 0

Balance sheet summary SEK M 2008 2007 Change % Intangible fixed assets 12,472 11,425 +9 Tangible fixed assets 26,123 20,895 +25 Financial fixed assets 4,352 3,779 +15 Inventories 28,614 25,301 +13 Receivables 26,668 22,029 +21 Cash and cash equivalents 4,998 2,006 +149 Total assets 103,227 85,435 +21 Total equity 36,725 29,823 +23 Interest-bearing liabilities 39,863 31,946 +25 Non-interest-bearing liabilities 26,639 23,666 +13 Total equity and liabilities 103,227 85,435 +21 Sandvik investor presentation 2009 Page 23

Liquidity and funding strategy Solid liquidity position SEK5.0 billion in cash and equivalents Undrawn 1.0bn (SEK11bn) committed syndicated credit facility maturing in 2013 Undrawn 500m (SEK 5bn) committed syndicated credit facility maturing in 2012 Funding strategy Loan portfolio Maximum 1/3 short term (maturity less than 1 year) Minimum 2/3 long term (maturity more than 1 year) Matching short term loans with operating cash flow Short term loans covered by Revolving Credit Facilities Extending maturity profile for volatile times Note:EURSEK: 10.963 as per 31 December 2008 Sandvik investor presentation 2009 Page 24

Key ratios and debt distribution Conservative Balance Sheet with low leverage and managed liability profile Key financial ratios development Debt maturity profile 31 Jan 2009 2.0x 12000 10000 1.6x 1.2x SEK m 8000 6000 4000 2000 0.8x 0 0.4x 1H 2009 2H 2009 2010 2011 2012 Debt 2013 2014 2015 2016 2017 2018 2019 2020 Undrawn credit facilities 2021 2022 2023 2024 0.0x 2004 2005 2006 2007 2008 Net Debt / Equity ratio Net Debt / EBITDA FFO / Net Debt Short-term debt covered by cash of SEK5.0bn and revolving Credit facilities of SEK16bn Short-term debt consist of SEK7.7bn Commercial paper Note: Net Debt = Short-term interest bearing liabilities + Long-term interest bearing liabilities + Provisions for pensions Liquid funds. Sandvik investor presentation 2009 Page 25

Cash flow summary SEK M 2008 2007 Cash flow from operations before NWC Change in inventories Change in current receivables Change in current operating liabilities Net cash flow from operations Net cash used in investing activities Net cash flow after investing activities Net cash used in financing activities Dividends paid/share buy backs Cash flow for the quarter +11,019-1,001-640 +293 +9,671-7,631 +2,040 +5,835-5,111 +2,764 +12,043-5,528-2,505 +1,466 +5,476-10,483-5,007 +9,393-4,207 +179 Sandvik investor presentation 2009 Page 26

SEKm 20,000 18,000 Consistent cash flow generation 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 8,323 3,394 1,875 8,663 4,476 2,087 8,550 5,093 2,627 8,453 7,190 2,357 7,690 6,421 3,153 10,074 5,322 2,967 12,194 7,266 3,665 14,844 8,170 4,801 17,433 5,476 5,399 16,275 9,671 7,169 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 EBITDA Cash Flow from Operations (pre capex) Capex (pre acquisitions) Note: EBITDA including non-recurring items; 1999: SEK +1,625m, 2000: SEK +660m, 2001: SEK +340m, 2003: SEK 600m. Sandvik investor presentation 2009 Page 27

Summary highlights Advanced technology based products Leading global market position in all areas Well-established global footprint and diversified customer base Highly focused on customer driven R&D Direct customer contact through own sales force Experienced management team Cyclical resilience through high share of aftermarket revenue Strong financial profile with a consistent A-category rating since 1997 Consistent cash flow generation with only one loss making year in history (1983) Sandvik investor presentation 2009 Page 29

Q&A 100,000,000 10,000,000 Profit after financial items 1,000,000 in TSEK 100,000 10,000 1,000 100 10 1 1868 1878 1888 1898 1908 1918 1928 1938 1948 1958 1968 1978 1988 1998 2008 Year 1983: -SEK179m 1873-1896 Recession 1914-1918 1 st World War 1929-1934 Recession 1939-1945 2 nd World War 1973 Oil crisis Since 1868 the Sandvik Group has only had one year of negative profit (1983) www.sandvik.com Sandvik investor presentation 2009 Page 30