The ratings on Sweden-based tool and mining equipment manufacturer Sandvik AB are supported by our view of the company's satisfactory business risk profile, which reflects its world-leading position as a cemented-carbide tool supplier to the metalworking industry. The company also has strong positions in other niches, such as tooling systems for metalworking applications, products for rock-excavation operations, and special steel products. Sandvik has good pricing power, and broad geographic and customer segment diversification, which we believe somewhat mitigate the company's exposure to cyclical demand and high operating leverage as a result of a significant vertical integrated production process. We view Sandvik's financial risk profile as intermediate. This reflects its good underlying operating cash generation, which is balanced by volatility of
