Sandvik''s Q2 results came in on the weak side as cash flow and profitability disappointed at the same time as Mining and Rock Solutions missed Infront consensus expectations on both organic order growth and margins. Sandvik''s comments on demand in June and July has increased uncertainty, even though the company said that it has not seen a change in underlying demand. On the positive side, Sandvik''s CEO expects improvement in cash flow generation and organic leverage for H2. Relatively small deviations on a group level As can be seen in the deviation table on page 2, Sandvik''s Q2 results were not far from consensus and our estimates. Adjusted EBITA missed consensus by 1% explained by a weaker than expected margin, to large extent driven by cost inflation, and that is something that should start to ease on a net basis according to the company. Sandvik''s book-to-bill remained above 1x. We make only minor changes to our estimates We lowered our 2023-2024 earnings estimates in our Q2 preview and see no reason to lower them further at his point. We forecast 2023 organic revenue growth of -1% for the group, with relative weakness in SMM partly offset by strength in Sandvik''s mining and infrastructure businesses. FX will continue to give good support in the near term and Sandvik guides for a positive EBITA impact of SEK 1,050 in Q3, which would correspond to 20% EBITA increase y/y. Performance and valuation We maintain our target price of SEK 235, which corresponds to 14x EV/EBITA 2023e. We see ~40% upside in the share and reiterate our Outperform recommendation, but we expect near term volatility. Sandvik remains committed to spin off Alleima in August, even though a final decision will be taken in a few weeks. We expect mid-term structural growth in mining, which is Sandvik''s largest end market. Automotive, which is another important end-market for Sandvik, is already at low production levels and a recovery is expected in 2023.