After slow start, March delivers third highest month on record

First Quarter 2023
•Revenue for Period: SEK 26.4 million (SEK 28.1 million)
•Operating Result: SEK 6.5 million (SEK 8.0 million)
•Earnings per Share: SEK 0.89 per share (SEK 1.12 per share)
•Cashflow from Operations: SEK 8.8 million (SEK -1.4 million)
•Highest first quarter on record; 3.3 million Engine Equivalents
•Five consecutive quarters of record production
•Increase in new product development and long-term growth opportunities
•Upturn in installation discussions; positive installation outlook for 2023-2025
•Installed Base: 57 (54) installations, (25 (24) fully automated systems, 25 (24) mini-systems and seven (six) tracking systems) in 13 (14) countries

CEO Message

Slow start behind; positive outlook ahead
While the first quarter marked the fifth consecutive quarter with record series production, it also provided a disappointing start to the year. Following annualised production of 3.1 million Engine Equivalents in January due to new year shutdowns and 3.0 million in February due to holiday periods for some of our key customers, series production increased to 3.8 million Engine Equivalents in March, marking the third highest month on record. The strong production in March boosted the first quarter volume to 3.3 million Engine Equivalents, providing a 3% year-on-year increase, and a positive step toward the four million Engine Equivalent milestone.

The lower production in January and February was exacerbated by a 33% decrease in year-on-year first quarter Sampling Cup shipments, from 48,800 in 2022 to 32,900 in 2023. The reduction is not related to future production demand, but rather to order timing and customer efforts to re-establish minimum stock levels following the normalisation of global supply chains. Together, the increase in production and the decrease in Sampling Cup shipments resulted in a 6% reduction in year-on-year revenue and a corresponding reduction in the year-on-year operating result.

With lower than expected series production in the first quarter, the target to reach the monthly four million Engine Equivalent has been further delayed and it is likely that the goal to reach the monthly five million Engine Equivalent milestone before the end of 2024 will also be delayed. Despite these delays, we remain confident in continuing to deliver double-digit growth rates and in reaching the five million milestone, with growth beyond. Indeed, new product development opportunities have intensified over the past year. With new development activities in each of the passenger vehicle, commercial vehicle and off-road industrial power sectors, we also target the seven million Engine Equivalent milestone, with continued growth through 2030.

The near-term outlook for series production is positive. In our home market in Sweden, the ramp-up of the new Scania 13 litre cylinder block and head provided new contributions during the first quarter and continued growth is expected throughout the rest of the year. Deliveries to Navistar started during the first quarter and the production will continue to ramp up during 2024 and 2025 as the volumes increase and as remaining Traton Group companies introduce the engine, ultimately providing one million incremental Engine Equivalents when full volume is reached. The outlook in the US, our largest end-user market, is also positive with the start of sales of the remodelled Ford super-duty pick-up during the first quarter, improving semi-conductor supply and an 8% year-on-year improvement in year-to-date new vehicle sales. The outlook in China also continues to improve as Scania proceeds with the construction of its new manufacturing facility and as First Automobile Works (FAW) proceeds with the development of new 11 litre and 13 litre engines. With heavy duty production on par with the entire European or American markets, the development of new SinterCast-CGI heavy duty engines at FAW provides the opportunity for more than one million incremental Engine Equivalents.

Upturn in installation planning provides positive outlook
The near-term outlook for installation revenue continues to improve, as several discussions for new CGI process control systems and capacity and functionality upgrades are ongoing. The current opportunities include the previously announced System 4000 installation at the Dongfeng Auto foundry in China which is now expected to be commissioned during the third quarter. Although the timing of the potential new installations is not yet defined, it is expected that the current opportunities will enable the average installation revenue during the 2023 to 2025 period to return the historical level of approximately SEK 8 million per year.

In parallel with the current installation discussions, SinterCast will also participate at the GIFA World Foundry Trade Fair, 12-16 June 2023. The largest foundry trade fair in the world, held every four years in Düsseldorf, GIFA 2023 provides the opportunity for SinterCast to showcase its process control and traceability solutions to the global foundry industry.

SinterCast is the world’s leading supplier of process control technology for the reliable high volume production of Compacted Graphite Iron (CGI). The properties of CGI enable improved transport solutions, increasing efficiency and reducing carbon emissions in passenger vehicle, commercial vehicle and industrial power applications. As a specialist supplier of precision measurement and process control solutions to the metals industry, SinterCast also supplies the SinterCast Ladle Tracker® and SinterCast Cast Tracker® technologies, to improve production efficiency and Industry 4.0 traceability in a variety of applications. With 57 installations in 13 countries, 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

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
CIN: 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 26 April 2023.