The ratings on Sweden-based engineering group Sandvik AB are supported by Standard&Poor's Ratings Services' 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 and services for rock-excavation operations, and special steel products. Good pricing power and broad geographic and customer segment diversification further support the ratings. The ratings on Sandvik also take into account its exposure to cyclical demand and relatively high vertical integration, resulting in significant volatility of operating margins. Our assessment of Sandvik's "intermediate" financial risk profile reflects the company's good underlying cash generation, which is
