Strong demand, disappointing margins Orders came in 9% ahead of Infront consensus as both Sandvik Mining and Rock Solutions (SMR) and Sandvik Manufacturing and Machining Solutions (SMM) delivered better-than-expected results. Sandvik remains positive about the demand situation and said that y/y growth rates for SMM were the strongest at the end of the quarter. One datapoint under the spotlight was the 160bp weaker-than-expected adjusted EBIT margin in SMM, explained by poor organic leverage. Sandvik attributed this to some specific items and was clear that a normalised drop-through in SMM should be around 40-50%. We anticipate better delivery in Q1. There is, however, a risk that cost inflation turns into an issue for Sandvik in 2022. Sandvik''s Q4 report included both positives and negatives, but overall we think the results were encouraging and support our Outperform rating. Increased estimates because of base effects and FX We keep our organic sales growth estimates for 2022-2023 relatively unchanged but increase our adjusted EBIT estimates by 5% to reflect stronger than expected 2021 results and favourable currency movements. For 2022, we forecast organic sales growth of 9% plus an additional 10% from MandA/FX, taking total sales growth to c20%. Adjusted EBITA should grow by close to 25%. Of course, it is important for the share price that the order intake continues to grow, which is our base case. We expect mining demand to trend higher, partly driven by the aftermarket business, and SMM should benefit from a recovery in the automotive segment. We maintain Outperform: the situation for 2022 looks promising Sandvik guided for an elevated capex level in 2022, but we think free cash flow (company definition) will exceed c.SEK16bn for the year, which corresponds to a yield of 5%. The SMT spin-off is on track and we believe Sandvik Mining and Rock Solutions'' performance justifies multiples close to Epiroc. We maintain our Outperform rating and...