Invitation: Presentation of Sandvik’s report of the fourth quarter 2025

Sandvik will publish its fourth-quarter 2025 results on Tuesday, January 27, 2026 at approximately 08:00 CET, with a combined webcast and conference call for investors at 10:00 CET hosted by CEO Stefan Widing and CFO Cecilia Felton; presentation slides will be posted from about 09:30 CET. The notice reiterates group scale (about 41,000 employees and roughly 123 billion SEK revenue in 2024); hedge funds should listen for quarter results and any updated guidance or commentary that could influence the stock following the release.

Analysis

Market structure: Sandvik (SAND.ST) is a structural beneficiary if Q4 shows resilient order intake in mining and aftermarket tools — winners would be specialist OEMs and service-heavy industrials (Sandvik, Epiroc EPI-A.ST) while raw-material exposed miners and commodity services firms are neutral/losers if guidance is cut. Competitive dynamics favor players with digital/service mixes; a beat would strengthen Sandvik’s pricing power in cutting tools and aftermarket services versus Atlas Copco (ATCO-B.ST), shifting margin mix toward recurring revenue over capex sales. Cross-asset: a strong print would tighten credit spreads for Nordic industrials, strengthen SEK modestly (1–2% knee‑jerk) and lower copper/steel volatility through demand-stability signaling.

Risk assessment: Tail risks include a sudden mining capex freeze (commodity shock, >15% ore price drop) or supply-chain disruption for high-tech components that could cut FY26 EBIT by >10%. Immediate (days) volatility will be earnings-driven; short-term (weeks) hinge on guidance and order intake; long-term (quarters) depends on digital adoption and aftermarket growth sustaining 200–300 bps margin expansion. Hidden dependencies: backlog conversion rates, SEK/Fx translation, and inventory normalization at large OEM customers — monitor order backlog/backlog aging and FX-adjusted revenue. Catalysts: Jan 27 webcast details on order intake, pricing, and service mix; commodity price moves and peer releases in the following 2–4 weeks can amplify moves.

Trade implications: Direct: establish a tactical 1.5–3% long in SAND.ST ahead of Jan 27 if risk budget allows, hedge with tight puts; or wait and buy dips post-print if market overreacts >4% down. Pair: long SAND vs short ATCO-B (equal notional) for a 3-month horizon to play services/digital outperformance; exit if spread compresses >5% or after 90 days. Options: prefer limited-loss structures — buy a 60-day call spread (buy ATM, sell 8–12% OTM) sized 1–2% portfolio if IV is reasonable, or buy protective 30‑day 3% OTM puts as downside insurance. Sector rotation: shift 2–4% from raw-material cyclicals into Nordic industrials with high after‑market exposure.

Contrarian angles: Consensus will focus on headline revenue — miss or beat may be overinterpreted; the market may underprice structural recurring revenue growth and digital tooling margins, creating a 6–12 month asymmetric upside if services grow >5pp of revenue. Reaction risk: post-earnings selloffs could be overdone if guidance is conservative but backlog remains healthy; conversely, an upbeat guide with weak cash conversion is a trap. Historical parallel: prior Sandvik beats that emphasized services produced multi-quarter outperformance; look for margin expansion >100 bps and backlog conversion >60% as confirmation; unintended consequence: strong guidance could attract multiple re-rating but also invite short-term profit-taking in cyclical windows.

Key Decisions for Investors

• Establish a 2% long position in Sandvik (SAND.ST) ahead of the Jan 27 webcast; simultaneously buy 30‑day 3% OTM puts sized to limit downside to ~1% portfolio loss (protective hedge).
• If you prefer lower event risk, buy a 60‑day call spread on SAND.ST (buy ATM, sell 8–12% OTM) sized 1–2% portfolio to play upside while capping premium; enter if implied vol < historical 90‑day avg or premium <1.5% notional.
• Initiate a 1.5% long SAND.ST / 1.5% short ATCO‑B.ST pair trade for a 90‑day horizon to exploit services/digital execution differences; close the pair if spread narrows >5% or after 90 days.
• Use the webcast as a trigger: if order intake growth (fx‑adjusted) >+5% q/q AND operating margin expands >100 bps, add to SAND position up to 4% portfolio. Conversely, if order intake declines >3% q/q or management cuts FY guidance >5%, reduce SAND exposure to zero within 48 hours.