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TWST: Can we begin with an introduction to Sandvik (Stockholm: SAND.ST), including a brief historical sketch?

Mr. Pettersson: Sandvik was founded in 1862, based on the successful implementation of the Bessemer process. The Company transformed very rapidly from being a raw material supplier to become a producer of semi-finished products. During the early part of the 20th-century, the Company transformed into a stainless steel producer, focusing more on tube, wire and strip products. And in the late 1940s, we entered into the cemented-carbide cutting tool field. At the same time, we also started to develop mining products, which, for more than30 years, were sold together with Atlas Copco’s machines. However, as that relationship was discontinued in the late 1980s, Sandvik gradually developed a new marketing channel for those products, which eventually led to the full acquisition of the Tamrock company in Finland in 1997, which consequently formed the third business area in Sandvik today -- mining and construction business. Therefore, today we have three business areas: Tooling, based on the cemented-carbide cutting tool technology. They are the world leader for carbide cutting tools and for high speed steel products. We have the mining and construction area, which is the worldwide market leader for mining equipment, underground loaders, drill-rigs, drilling tools, etc. And, finally, we have the materials technology company, which today is comprised of stainless steel tubing, strip, wire materials supplemented with process equipment, and electric heating systems through the Kanthal company, also acquired in 1997.

TWST: Can we move on and take a look at market conditions across the Group? What have been the key characteristics of your markets over the last few quarters and what is your sense of conditions now?

Mr. Pettersson: We are very cautious about commenting on this quarter, especially since we're so close to the end, but if I can take you back to the end of the second quarter, we said that we had been experiencing a flat market for roughly four quarters. However, despite that background, Sandvik managed to grow organically over those four quarters across all business areas. Demand on a global basis had been flat, but we did see some diversification with regards to the customer groups. The automotive sector, for example, had certainly been weak, but other areas, such as oil and gas, had been stronger. There was also some geographical differences in demand. For example, there was strong market demand in Asia at that time, Europe was slightly more indecisive in its position, and the US was showing some signs of improvement.

TWST: Do you have a well-diversified customer base that helps weather downturns?

Mr. Pettersson: Very much so. That is one of the leading strengths of Sandvik. We have the geographical diversity, which is certainly a benefit, but we also have a very well-balanced mix of industrial engineering companies, consumer products companies, and mining and construction companies.

TWST: You mentioned that the overall business concept is to improve the productivity and profitability of these customers. Can you talk about what that involves and how you work with the customer to meet their demands?

Mr. Pettersson: Sandvik has had a tradition that dates back to the foundation of the Company 140 years ago to work in direct contact with our customers. It doesn't mean we do not sell to agents or distributors where appropriate, but when we do so, we are 100% focused on retaining the contact with the end-user customer. There are two simple reasons for this approach. One is that it enables us to ensure that the customer gets the maximum value out of our products and services. But, as importantly, this close proximity to the customer serves as a foundation for our understanding of the present and future product and service needs on the customer’s behalf. And that, in turn, becomes the foundation for our very broad and extensive research and development efforts, which, I would say, are the highest in the industry in every area we operate.

TWST: What are the three or four best points about Sandvik that you would like to leave investors with?

Mr. Pettersson: First, you have to look at our capability to generate profitable growth. We have a strong ability to grow profitably and we have a track record that should give us some credibility going forward. We have shown the capability to integrate acquisitions with a high degree of success rate. We have an industry high return on capital employed, free cash flow, and dividends. And, we provide the best technology in the world to the market.