Positive installation activity boosts full-year outlook
Third Quarter 2024
· Revenue for Period: SEK 32.6 million (SEK 40.3 million). Recurring revenue accounted for 92.3% of the revenue
· Operating Result: SEK 13.2 million (SEK 14.3 million), yielding 40.4% (35.5%) operating margin
· Earnings per Share: SEK 1.45 per share (SEK 2.00 per share)
· Cashflow from Operations: SEK 14.6 million (SEK 12.2 million), up 20%
· Strong installation outlook: July to October order intake exceeds SEK 9 million, surpassing historical full-year average for installation revenue
Year-to-Date 2024
· Revenue for Period: SEK 99.8 million (SEK 98.5 million), up 1.4% year-on-year. Recurring revenue accounted for 94.5% of the revenue
· Operating Result: SEK 33.7 million (SEK 27.1 million), yielding 33.8% (27.5%) operating margin
· Earnings per Share: SEK 3.80 per share (SEK 3.76 per share)
· Cashflow from Operations: SEK 46.4 million (SEK 34.7 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. Second instalment to be paid on 12 November with record date 7 November
· Installed Base: 57 (56) installations, 26 (25) fully automated systems, 23 (24) mini-systems and eight (seven) tracking systems in 12 (13) countries
CEO Message
Near-term reduction in series production; positive growth outlook ahead
Annualised series production in the third quarter finished at 3.5 million Engine Equivalents, approximately 17% below strong comparables of 4.2 million Engine Equivalents in the year-ago quarter. The third quarter volume was affected by the combined effects of the previously announced stoppage of a high volume programme in September, prolonged summer shutdowns at most of the Western customers, and softening of demand for commercial vehicles in Europe and North America. While the stoppage programme and the softening of the market will continue to affect the production volume in the nearest quarters, the growth outlook is positive. Benefitting from the continued ramp of the Traton Group 13 litre engine in 2025, and the start of production of a new 13 litre cylinder block for First Automotive Works in China, it is expected that the production volume will increase from the current run rate of approximately 3.5 million Engine Equivalents to reach the annualised five million Engine Equivalent milestone before the end of 2026.
The lower volume in the third quarter translated into a 19% decrease in year-on-year revenue, to SEK 32.6 million (SEK 40.3 million). However, proactive reductions in operating costs implemented during second half of 2023 and early-2024 resulted in a 40.4% operating margin for the third quarter, providing a considerable improvement over the year ago quarter (35.5%) and exceeding the published long-term target of 38%.
Annualised series production for the January to September period finished at 3.8 million Engine Equivalents, providing a 2.7% year-on-year increase. Together with increases in consumables shipments and installation revenue, the year-to-date revenue finished at SEK 99.8 million. Recurring revenue from production royalties, consumables and software licence fees accounted for 94.5% of the total revenue. Benefitting from reduced operating costs, the operating result for the year-to-date period was up 24% at SEK 33.7 million (SEK 27.1 million), providing an operating margin of 33.8% (27.5%).
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 2.5 million tonnes of CO2 during the third quarter. This increases our cumulative contribution to more than 66 million tonnes, keeping us on pace to meet our goal of 100 million tonnes of CO2 reduction by 2028.
Installation activity near all-time high
With order intake of more than SEK 9 million during the July to October period, the outlook for new installation revenue took another positive step forward. Field activities are currently near an all-time high, with emphasis on completing as many of the installations as possible before year-end to maximise full-year revenue. While it is not yet possible to determine how many of the installations will be commissioned before year end, it is clear that the combined installation revenue in 2024 and 2025 will solidly exceed the historical average of approximately SEK 8 million per year.
For more information:
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
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 57 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
