The ratings on Sweden-based tool and mining equipment manufacturer Sandvik AB are supported by 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. Good pricing power and broad geographic and customer segment diversification further support the ratings. Standard&Poor's Ratings Services' ratings on Sandvik also take into account its exposure to cyclical demand, and a relatively high vertical integration resulting in significant volatility in operating margins. The intermediate financial risk profile reflects the good underlying cash generation, which is balanced by volatility in free
