SinterCast outlook positive, building on record series production and new installation opportunities
First Quarter 2012
* Revenue for period: SEK 11.7 million (SEK 9.1 million)
* Operating result: SEK 1.3 million (SEK 0.7 million)
* Operating margin: 11% (8%)
* Earnings/share: SEK 0.24 per share (SEK 0.16 per share)
* Cashflow from operations: SEK -0.3 million (SEK 4.6 million)
* Series production at end of period*: 1.6 million Engine Equivalents (1.3
million)
* Installed Base: 18 fully automated process control systems and 12 Mini-
Systems installed in Europe, Asia and the Americas
Series Production*
For graph, see Press Release PDF
SinterCast has posted 13 consecutive quarters of growth, building on new
installations, new series
production launches and market recovery
* Annualised production of Engine Equivalents (1 Engine Equivalent = 50 Kg)
CEO Comments
Increased Series Production and Revenue
The first quarter of 2012 saw annualised series production grow to 1.6 million
Engine Equivalents, resulting in the thirteenth consecutive quarter with
increased series production and providing a 19% year-on-year increase in
annualised Engine Equivalent shipments. While the Engine Equivalent volume grew
by 19%, the year-on-year revenue from series production increased by 37% due to
a combination of increased volume, increased consumable shipments and price
increases secured at key accounts.
Positive Trends in the Overall Market Development
Following consistent growth during much of 2011, October and November Engine
Equivalent shipments showed a strong increase while December 2011 shipments
declined. Although seasonal reductions are common, the decline in December was
larger than in previous years. Shipments again increased in January, followed
by a slight decline in February. It is not yet possible to determine if the
recent monthly fluctuations are due to overall market conditions, or simply due
to order and shipment timing. Despite the recent fluctuations, the overall
trend remains positive.
SinterCast continues to support product development programmes for passenger
vehicle, commercial vehicle and industrial power applications in Europe, Asia
and the Americas, including some high volume applications beyond the current
high volume domains of passenger vehicle V-diesel cylinder blocks and commercial
vehicle cylinder blocks and heads. It is estimated that the combined potential
of the current series production programmes and the programmes under development
represents a market opportunity of approximately 4.6 million Engine Equivalents
per year within SinterCast's five year planning horizon.
Following the record year of six new installation commitments in 2011, there
were no new installation orders during the first quarter of 2012. However,
several installation discussions are ongoing and new installation commitments
are expected during 2012, providing further increases in the installed base.
New Product Development
The ongoing development of the thermal analysis process control technology for
ductile iron progressed during the first quarter, with the first field trial
being conducted at a major international foundry located in North America and
with the recruitment of new staff that allows increased resources to be
allocated to the project. The product development phase is expected to continue
throughout 2012, both with in-house development and external trials, to further
define the potential technical benefits and the commercial application. These
steps are an integral part of the development and must be conducted before a
final decision can be made regarding the launch of a commercial product. The
proposed thermal analysis control technology is intended to provide a net cost-
benefit in ductile production by reducing magnesium consumption, improving mould
yield and reducing casting defects in the foundry, and by improving
machinability.
Financial Summary
Revenue
The revenue for the SinterCast Group relates primarily to income from equipment,
series production and engineering service.
Revenue Breakdown January-March January-December
(Amounts in SEK million if not 2012 2011 2011 2010
otherwise stated)
-------------------------------------------------------------------------------
Number of Sampling Cups 36,800 27,400 138,200 102,650
shipped
Equipment (1) 0.3 0.9 7.9 6.8
Series Production (2) 11.2 8.1 39.0 30.9
Engineering Service( 3) 0.2 0.1 2.0 1.3
Other 0.0 0.0 0.1 0.4
-------------------------------------------------------------------------------
Total 11.7 9.1 49.0 39.4
-------------------------------------------------------------------------------
Notes: 1. Includes revenue from system sales and leases and sales of
spare parts
2. Includes revenue from production fees, consumables and
software licence fees
3. Includes revenue from technical support, on-site trials and
sales of test pieces
The January-March 2012 revenue amounted to SEK 11.7 million (SEK 9.1 million).
The revenue increase of 29% is a result of continued increases in series
production and Sampling Cup shipments. The revenue from series production
increased by 37% to SEK 11.2 million (SEK 8.1 million), due to the record
production at an annualised rate of 1.6 million (1.3 million) Engine
Equivalents, the shipment of 36,800 (27,400) Sampling Cups, and price increases
that took effect as of 1 January 2012. No Installations were invoiced during
the period. Equipment revenue amounted to SEK 0.3 million (SEK 0.9 million).
Results
The business activities of SinterCast are best reflected by the Operating
Result. This is because the 'Result for the period' and the 'Result after tax
per share' are influenced by the financial income and costs and by the
revaluation of tax assets.
Results Summary January-March January-December
(Amounts in SEK million if not otherwise 2012 2011 2011 2010
stated)
-------------------------------------------------------------------------------
Operating Result 1.3 0.7 11.6 7.2
Result for the period 1.7 1.1 14.5 16.5
Result after tax per share (SEK) 0.24 0.16 2.07 2.51
-------------------------------------------------------------------------------
The January-March 2012 Operating Result of SEK 1.3 million (SEK 0.7 million),
increased as a result of higher gross results of SEK 2.2 million but decreased
as a result of higher operational expenses of SEK 1.6 million, of which SEK 1.1
million was related to recruiting and salary expenses incurred in order to
position the Company for further growth.
The Result after tax for January-March 2012 amounted to SEK 1.7 million (SEK
1.1 million).
Cashflow, Liquidity and Investments
Cashflow Summary January-March January-December
(Amounts in SEK million if not otherwise 2012 2011 2011 2010
stated)
-------------------------------------------------------------------------------
Cashflow from operations -0.3 4.6 14.5 3.0
Cashflow from investment activities -0.1 -0.1 -0.4 -0.5
Cashflow from financing activities - -3.0 -6.8 13.0
-------------------------------------------------------------------------------
Cashflow total -0.4 1.5 7.3 15.5
Liquidity 47.2 41.8 47.6 40.3
-------------------------------------------------------------------------------
The January-March 2012 cashflow result was SEK -0.4 million (SEK 1.5 million).
The negative cashflow result during the period resulted from increased accounts
receivables, the timing of payments for installations, and paid out accrued
expenses of a one-time character. Investments amounted to SEK 0.2 million (SEK
0.6 million) during the period.
Employee Stock Option Program
As of 31 March 2012, the total cost of the employee stock option program
2009-2013 was SEK 3.2 million (SEK 3.2 million), based on a closing share price
of SEK 57.5 (SEK 56.5). Thus far during 2012, SEK 0.2 million (SEK 0.3 million)
has been accounted for as costs related to the option program.
Risks and Uncertainty Factors
The main uncertainty factor for SinterCast continues to be the overall timing of
the CGI market ramp-up. This primarily depends on OEM decisions for new CGI
engines and other components, the global economy for new vehicle sales and the
individual sales success of vehicles equipped with SinterCast-CGI components.
SinterCast's diversification between V-diesel engines for passenger vehicles,
commercial vehicle engine components, and other applications such as exhaust
components and industrial power engines, combined with its presence in Europe,
Asia and the Americas, reduces the dependence on individual product applications
and geographical regions.
SinterCast enjoys global brand recognition and respect as the CGI technology
leader and is welcomed by the industry as a reliable and trustworthy partner.
However, virtually every company encounters competition, and SinterCast is no
exception. SinterCast judges that its technology and engineering know-how
provides the most reliable and cost-effective solution for series production of
high quality CGI.
New powertrain technologies, such as vehicle electrification (hybrids and plug-
in vehicles) and fuel cells attract significant media attention; however, the
development and implementation of these technologies remain a long-term prospect
and SinterCast does not expect these technologies to have a significant effect
on the Company's competitive position for the foreseeable future.
For full risk and uncertainty factor information, please see note 26 on p.39 in
SinterCast's Annual Report 2011
Organisation
With successful high volume CGI production in foundries located in Europe, Asia
and the Americas, SinterCast has established a global organisation with
employees and representatives in Sweden, the United Kingdom, the United States,
China, Korea, Japan, India and Australia. During the first quarter, new
recruitments were made to strengthen the organisation and to improve the future
growth prospects, including a new General Manager in China with direct sales
responsibility for the Chinese market, one Senior Research Engineer, and one
Software Engineer. Following the recruitment over the past 15 months, the
Company is now well positioned to support global market activities and to drive
the next phase of SinterCast's growth. As of 31 March 2012, the Group had 20
(15) employees, three (three) of whom were female.
Parent Company
SinterCast AB (publ) is the Parent Company of the SinterCast Group, with its
registered office located in Stockholm, Sweden. The Parent Company has 17 (11)
employees. The majority of the operations are conducted by the Parent Company,
including responsibility for the representative office in China and sales
representatives in Australia, India, Japan and Korea. Operations in the UK and
the USA are managed by the local companies. The information given for the Group
in this report corresponds in all material respects to the Parent Company.
Accounting Principles
The information provided on behalf of the Group in this interim report has been
prepared in accordance with Sweden's Annual Accounts Act and IAS 34 Interim
Financial Reporting. The reporting for the Parent Company has been prepared in
accordance with Sweden's Annual Accounts Act and RFR 2. The accounting policies
that have been applied for the Group and for the Parent Company are in agreement
with the accounting policies used in the preparation of the Company's latest
annual report.
No material transactions have taken place between SinterCast and the Board or
the Management during the period.
Events after the Balance Sheet Date
There have been no significant events since the balance sheet date of 31 March
2012 that could materially change these financial statements.
Information
The Interim Report April-June 2012 will be published on 22 August 2012
The Interim Report July-September 2012 will be published on 7 November 2012
The Interim Report October- December and Full Year Results 2012 will be
published on 20 February 2013
The Interim Report January-March 2013 will be published on 23 April 2013
Annual Report 2011
The Annual Report 2011 was published on the SinterCast website on 4 April 2012.
In consideration of cost efficiency and environmental concern, the Annual Report
2011 was only issued in electronic format, as a PDF file.
Annual General Meeting
The Annual General Meeting 2012 will be held at 17:00 on 24 May 2012 at The
Royal Swedish Academy of Engineering Sciences (IVA), Grev Turegatan 16,
Stockholm. The notice to the Annual General Meeting was published on 23 April
2012 and is available on the Company's website.
The Board of Directors propose the following dates for the Annual General
Meeting and for entitlement to receive dividends:
18 May 2012 Shareholders who wish to participate in the AGM must be recorded
in the share register maintained by Euroclear on this date, in
their own names, and notify SinterCast of their attendance.
24 May 2012 Shares traded on this date are eligible for dividend.
24 May 2012 AGM: The Annual Meeting is held at 17:00.
25 May 2012 Shares traded on this date are not eligible for dividend.
29 May 2012 Record Date: The record date for entitlement to receive dividends
is three bank days after the AGM.
1 June 2012 Payment: Dividend is paid three bank days after the record date
for entitlement to receive dividends.
This report has not been reviewed by the Company's Auditors.
The Interim Report has been issued on 25 April 2012 by the President & CEO Steve
Dawson by proxy from the Board of Directors
For further information please contact:
Dr. Steve Dawson
President & CEO
SinterCast AB (publ)
Office: +46 8 660 7750
Mobile: +44 771 002 6342
e-mail: steve.dawson@sintercast.com
website: www.sintercast.com
SinterCast is the world's leading supplier of process control technology for the
reliable high volume production of Compacted Graphite Iron (CGI). With at least
75% higher tensile strength, 45% higher stiffness and approximately double the
fatigue strength of conventional grey cast iron and aluminium, CGI allows engine
designers to improve performance, fuel economy and durability while reducing
engine weight, noise and emissions. The SinterCast technology is used for the
production of more than 50 CGI components, ranging from 2 kg to 17 tonnes, all
using the same proven process control technology. The end-users of SinterCast-
CGI components include Aston Martin, Audi, Cameron Compression, Caterpillar,
Chrysler, DAF Trucks, Ford, Ford-Otosan, General Electric Transportation
Systems, General Motors, Hyundai, Jaguar, Jeep, Kia, Lancia, Land Rover, MAN,
Navistar, Porsche, PSA Peugeot-Citroën, Renault, Rolls-Royce Power Engineering,
Scania, Toyota, VM Motori, Volkswagen, Volvo and Waukesha Engine. The SinterCast
share is quoted on the Small Cap segment of the NASDAQ OMX stock exchange
(Stockholmsbörsen: SINT). For more information: www.sintercast.com
