The ratings on Sweden-based tool and mining equipment manufacturer Sandvik AB are supported by company's strong business risk profile, which reflects Sandvik's world-leading position as a cemented-carbide tool supplier to the metalworking industry. It also has strong positions in other niches, such as tooling systems for metalworking applications, products for rock-excavation operations, and special steel products. Good pricing power and broad geographic and customer segment diversification further support the ratings. The ratings also take into account exposure to cyclical demand and susceptibility to raw material price fluctuations. The intermediate financial risk profile reflects the generally strong cash generation, which is balanced by some volatility in free operating cash flow generation, relatively high adjusted debt levels, and a fairly generous shareholder
