Sandvik is likely to face lower revenues in 2016 due to exposure to the mining industry, which currently is experiencing structurally weak demand. At the same time, we believe the group's profitability will improve over 2016, due to cost efficiencies realized in 2015. We are therefore affirming our 'BBB/A-2' ratings on Sandvik. The negative outlook reflects the likelihood of a downgrade if Sandvik's operating performance fails to demonstrate a clear path to recovery, with funds from operations to debt improving toward 30% over 2016. On March 11, 2016, Standard&Poor's Ratings Services affirmed its 'BBB/A-2' long- and short-term corporate credit ratings on Sweden-based engineering group Sandvik AB. The outlook remains negative. At the same time, we affirmed the 'K-2'
