SinterCast Results April - June 2024

 Thirteen consecutive quarters of year-on-year growth

Second Quarter 2024

• Revenue for Period: SEK 35.1 million (SEK 31.7 million), up 11% year-on-year.  Recurring revenue increased by 9% to SEK 33.6 million (SEK 30.9 million), to account for 96% of the revenue
• Operating Result: SEK 13.1 million (SEK 6.3 million), up 110%, yielding 37.4% (19.7%) operating margin
• Earnings per Share: SEK 1.48 per share (SEK 0.87 per share), up 69%
• Cashflow from Operations: SEK 16.6 million (SEK 13.8 million), up 20%
• Dividend Payment: First instalment of SEK 3.05 per share (SEK 21.6 million) paid on 28 May 2024
• Record production of 4.0 million Engine Equivalents in second quarter
• Onset of previously announced temporary reduction in volume in September; long-term targets for five and seven million Engine Equivalents remain unchanged

 
Year-to-Date 2024

• Revenue for Period: SEK 67.3 million (SEK 58.1 million), up 16% year-on-year, benefitting from 13% production increase and strong consumables sales. Recurring revenue increased by 14% to SEK 64.2 million (SEK 56.4 million), to account for 96% of the revenue
• Operating Result: SEK 20.5 million (SEK 12.7 million), yielding 30.5% (21.9%) operating margin
• Earnings per Share: SEK 2.35 per share (SEK 1.76 per share), up 27%
• Cashflow from Operations: SEK 31.8 million (SEK 22.6 million), up 28% following improved operating results and reduced accounts receivables
• Dividend: Ordinary dividend of SEK 5.50 per share (SEK 5.00 per share) and extraordinary dividend of SEK 0.60 per share (SEK 0.50 per share), equivalent to SEK 43.1 million (SEK 39.0 million), to be paid in two equal instalments
• Installed Base: 56 (57) installations, 25 (25) fully automated systems, 24 (25) mini-systems and seven (seven) tracking systems in 12 (13) countries

CEO Message
 
Series production up 13% at the half; reduction expected in second half
Series production in the second quarter finished at 4.0 million Engine Equivalents, providing an 8% year-on-year increase and extending the string of year-on-year quarterly increases to thirteen consecutive quarters.  Following the highest first quarter on record, annualised series production for the first half of the year finished at 3.95 million Engine Equivalents, up 13%.
 
Sales of the consumable Sampling Cup were also strong during the second quarter, with 56,700 (49,700) units shipped. Together, the increases in series production and consumable shipments contributed toward total revenue of SEK 35.1 million for the quarter, providing an 11% year-on-year increase. Overall, Sampling Cup shipments for the first half of the year amounted to 101,300 units, marking a 23% year-on-year increase. Year-to-date revenue finished at SEK 67.3 million, up 23%.  In second quarter, and for the first half of the year, 96% of the total revenue was derived from recurring revenue related to the Production Fee levied for each Engine Equivalent, plus consumable sales and software licence fees.
 
During the quarter, more than 95% of the series production was accounted for by large vehicles, including commercial vehicles, pick-up trucks and off-road equipment. With our focus on large vehicles, we estimate that the improved fuel efficiency of the vehicles that use our technology saved approximately 2.6 million tonnes of CO2 during the second quarter.  This increases our cumulative contribution to more than 64 million tonnes, keeping us on pace to meet our goal of 100 million tonnes of CO2 reduction by 2028.
 
One year ago, in the 2Q23 interim report, we announced that one of our high volume programmes was expected to reach its end-of-life stage during mid-2024. It is now understood that the foundry production is planned to stop at the end of August. The planned stoppage will result in the reduction of approximately 500,000 Engine Equivalents per year, with September 2024 expected to be the first full month impacted by the stoppage. It is expected that the third and fourth quarters of 2024 will report year-on-year declines, and that the full-year 2024 volume may finish similar to the 2023 full-year volume of 3.7 million Engine Equivalents. Despite this temporary decrease in volume, it is expected that the five million Engine Equivalent milestone will be reached during 2026. SinterCast maintains the target to post double-digit compounded annual series production growth through 2030 and to reach the seven million Engine Equivalent milestone within the current five-year planning horizon.
 
… it is currently expected that the five million Engine Equivalent milestone will be reached during 2026. SinterCast maintains the target to post double-digit compounded annual series production growth through 2030 and to reach the seven million Engine Equivalent milestone within the current five-year planning horizon.
 
The development pipeline increased during the quarter. We are currently supporting ongoing SinterCast-CGI development programmes planned for launch through the 2028-2030 window.  We also continue to actively support the development of small passenger vehicle engines for hybrid and range extender applications, and for large commercial vehicle engines running on net-zero fuels and hydrogen.  These activities provide the opportunity for continued long-term growth, with an addressable market of approximately 15 million Engine Equivalents.

Positive outlook for installation revenue
The installation outlook for 2024 has improved throughout the first half of the year.  With revenue of SEK 1.3 million in the second quarter, year-to-date revenue reached SEK 2.4 million (SEK 1.0 million).  Experience shows that installation revenue is usually biased to the second half of the year, with the first half focussed on discussions and planning followed by pressures for commissioning before year end. This trend is clearly being repeated in 2024 and we look forward to a busy finish to the year.  Since 30 June, upgrades and extensions in the amount of SEK 2.2 million have already been received for the third and fourth quarters, and additional opportunities are at advanced stages of discussion.  Based on the current activity, we expect average installation revenue in 2024 and 2025 to exceed the historical average of SEK 8 million

SinterCast is the world’s leading supplier of process control technology for the reliable high volume production of Compacted Graphite Iron (CGI). Stronger, stiffer and more durable than conventional iron, CGI enables the development of smaller, lighter and more fuel efficient engines in passenger vehicle, commercial vehicle and industrial power applications. The use of SinterCast-CGI currently contributes to the reduction of approximately ten million tonnes of CO2 per year. With 56 installations in 12 countries, SinterCast provides sustainable solutions for manufacturing and transportation to the global foundry and automotive industries. SinterCast is a publicly traded company, quoted on the Small Cap segment of the Nasdaq Stockholm stock exchange (SINT). For more information: www.sintercast.com

Dr. Steve Dawson
President & CEO
SinterCast AB (publ)
Office: +46 150 794 40
Mobile: +44 771 002 6342
e-mail: steve.dawson@sintercast.com
website: www.sintercast.com
Corporate Identity Number: 556233-6494

This press release contains information SinterCast AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. This information was submitted for publication, through the agency of the President & CEO Dr. Steve Dawson, at 08:00 CET on 21 August 2024.