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Mid-term Planning

Mid-term Planning. KA/Group Business Control. Document Information. Title: Mid-term Planning Description: Responsible: KA/Robert Burning Valid as of: 1 September 2010 Reviewed: 1 September 2012. Purpose. A more structured process for mid-term planning on Group level

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Mid-term Planning

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  1. Mid-term Planning KA/Group Business Control

  2. Document Information • Title: Mid-term Planning • Description: • Responsible: KA/Robert Burning • Valid as of: 1 September 2010 • Reviewed: 1 September 2012

  3. Purpose • A more structured process for mid-term planning on Group level • Three year planning (3YP) on Group level, based on consolidated Business Area figures • Illustrate how the 3YP connects to forecasting • Provide framework for mid-term planning processes within Business Areas (BA) and Product Areas (PA)

  4. Background • Need for a structured mid-term planning process • Simplified and more transparent Budget (FC0) process • Three levels of strategic planning on Business Area and Group level • Financial Objectives (long-term) • Three Year Plan (mid-term) • Forecasting (short-term) 3YP Year 1 3YP Year 2 3YP Year 3 Financial Objectives Entity reporting of definitive Budget Definitive Budget 3YP = Three Year Plan

  5. 3YP Process • Clear process with fixed reporting dates • 3YP to be part of the standard reporting time table • Process initiated annually by GEM-meeting in May and finalized and presented to the Board in December along with the Budget • Multiple scenarios when requested by GEM • Synchronization of planning processes • First year in 3YP to match Budget • BA’s responsible for an efficient interface between Group and BA processes • Preliminary Budget • No entity reporting of preliminary Budget required by Group • KA/Group Business Control to coordinate processes, including consolidation and summary reports on BA and Group level

  6. Yearly Work Flow 3. FC0* and 3YP presented to Sandvik AB Board in January/February 2. Preliminary FC0* to be discussed and agreed upon atBusiness Area Board meetings in November 1. GEM-strategy meeting (May/June), initiation 3YP. Previous 3YP base for discussion Q1 Q2 Q3 Q4 Q1 Forecasting current year Forecast 1 (FC1) Forecast 2 (FC2) Forecast 3 (FC3) Forecasting coming year Prel. FC0 Budget Three Year Planning 3YP Completion phase Deliveries * Budget = FC0

  7. Process DetailsYearly Work Flow • 3YP to be initiated annually at Group Executive Management (GEM) strategy meeting in May/June • Latest 3YP input for discussion • Outcome to become base for 3YP and Budget for coming year • “Handshake” on required BA ambitions • Preliminary Budget to be discussed and ambitions agreed upon at internal Business Area Board meetings in November • “Handshake” on required BA ambitions • Definitive Budget and 3YP presented to the Sandvik AB Board in December

  8. Group BA PA Appendix Group versus BA 3YP-processes • 3YP process to be viewed as framework • BA’s responsible for an efficient interface between Group and BA processes • BA’s responsible to define processes on BA and PA levels

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