SinterCast Results October-December 2017

Series production and consumables improve

to provide positive outlook for 2018

Fourth Quarter 2017

• Revenue for Period: SEK 17.8 million (SEK 17.2 million)
• Operating Result: SEK 5.4 million (SEK 4.8 million)
• Earnings per Share: SEK 0.8 per share (SEK 0.7 per share)
•  Cashflow from Operations: SEK 8.5 million (SEK 11.0 million)
• Series production equals record high of 2.2 million Engine Equivalents
• Three best-selling vehicles in North America promote new diesel engine options
• Wards 10 Best Engines award for Ford F-150 with 2.7 litre SinterCast-CGI petrol engine

Full Year 2017

• Revenue for Period: SEK 65.6 million (SEK 75.4 million)
• Operating Result: SEK 17.7 million (SEK 26.4 million)
• Earnings per Share: SEK 2.6 per share (SEK 3.8 per share)
• Cashflow from Operations: SEK 16.9 million (SEK 25.4 million)
• Dividend: Proposed ordinary dividend of SEK 2.75 per share (SEK 2.50 per share) with no extraordinary dividend (SEK 1.5 per share), equivalent to SEK 19.5 million
• Installed Base: 24 fully automated systems and 20 mini-systems in Europe, Asia and the Americas

Series Production*

Annualised series production equalled the all-time high of 2.2 million Engine Equivalents in the fourth quarter, despite lower shipments in December due to year-end shutdowns.

* Annualised average production of Engine Equivalents during the quarter (1 Engine Equivalent = 50 kg)

CEO Comments

Series production and Sampling Cup shipments improve in fourth quarter

After facing headwinds throughout much of 2017, the fourth quarter provided continued improvements and established a stable, profitable platform for growth in 2018. Following significant reductions in three high volume programmes during the first half of 2017, series production improved throughout the year, both due to new programmes ramping up and due to the recovery of two of the three affected programmes. The fourth quarter production equalled the all-time high of 2.2 million Engine Equivalents, effectively returning the full-year production to the same level as 2016 and providing three consecutive years above the 2.0 million engine equivalent threshold. Demand for many of our engines is increasing, as foundry production of the 3.0 litre V6 diesel engine used in the Ram 1500 pick-up is poised to increase, and as new programmes come on-stream during the year.

Sampling Cup shipments also exerted pressure on the results during the first half of the year, due to reduced production volume and inventory adjustments at key customer sites. The Sampling Cup deficit peaked in the second quarter, 26% below the 2016 shipments. However, Sampling Cup shipments increased in each quarter of the year, with the third and fourth quarters of 2017 both in the all-time top-5 quarters, and with the fourth quarter outpacing the previous year for the first time in 2017. The inventory correction appears complete and the trend in Sampling Cup shipments provides a positive outlook for growth in 2018.

The last of the 2017 headwinds relates to installations where the equipment revenue of SEK 3.7 million was significantly below the previous five-year average of SEK 7.8 million. The primary reason for the reduced installation revenue is the absence of new system sales during the year, with the 2017 installation revenue being derived from capacity upgrades and spare parts for existing installations. Installation discussions are ongoing for CGI process control systems and for the new Tracking Technologies, for. grey and ductile iron foundries, and for other metal processing applications. As production references become established, the suite of Tracking Technologies will begin to contribute to the total installation revenue. In addition to the new tracking opportunities, SinterCast is also investigating the development of other unique technologies – within and beyond the scope of thermal analysis – to improve quality and production efficiency in the metals industry.

The North American International Auto Show (NAIAS), held in Detroit in January, reinforced the positive outlook for SinterCast, with Ford, GM and Ram all promoting new diesel engine options for the three best-selling vehicles in North America. The Ford F-150 pick-up, America’s best-selling truck for 41 consecutive years and the 2018 Motor Trend Truck of the Year, became the first full size pick-up to offer 30 mpg fuel economy (7.8 litres / 100 km) with the new SinterCast-CGI 3.0 litre V6 turbo diesel. Ford confirmed that diesel sales will begin in the model year 2019 F-150 during the Spring of 2018. The Ford F-150 diesel fuel economy of 30 mpg eclipses the previous best fuel economy of 29 mpg set by the 2018 Ram 1500. In introducing the all-new model year 2019 Ram 1500, Ram stated that the 3.0 litre V6 SinterCast-CGI diesel engine currently offered in the model year 2018 pick-up will be available in the all-new Ram 1500 in early 2019. Ram vowed to regain the pick-up titles for fuel economy, performance, payload, towing and driving range. Also in the Ford F-150, the SinterCast-CGI 2.7 litre V6 petrol engine won a coveted Wards 10 Best Engines award at the auto show – the only pick-up engine to receive a Wards 10 Best award in 2018.

Also at NAIAS, Achates Power revealed its opposed-piston gasoline compression ignition engine based on a compacted graphite iron cylinder block. Installed in a Ford F-150 demonstration pick-up truck, the engine is estimated to achieve 37 mpg (6.4 litres/100 km), nearly five miles per gallon above the 2025 requirements for full-size pick-ups. Achates stated that the 2.7 litre opposed-piston engine is 30-50% more fuel efficient than comparable gasoline or diesel engines and that the technology will be available for customers in the near future. SinterCast has supported the initial cylinder block development at Achates. 

Information

Stockholm 21 February 2018

For further information please contact:

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

This press release contains information SinterCast AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. This information was submitted for publication, through the agency of the President & CEO Dr. Steve Dawson, at 08:00 CET on 21 February 2018. 

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 size, weight, noise and emissions. The SinterCast technology, with 44 installations in 13 countries, is primarily used for the production of petrol and diesel engine cylinder blocks and exhaust components for passenger vehicles, medium-duty and heavy-duty cylinder blocks and heads for commercial vehicles, and industrial power engine components for marine, rail, off-road and stationary engine applications. SinterCast supports the series production of components ranging from 2 kg to 9 tonnes, all using the same proven process control technology.  As a specialist supplier of precision measurement and process control solutions to the metals industry, SinterCast also supplies a suite of tracking technologies, including the SinterCast Ladle Tracker®, Cast Tracker™ and Operator Tracker™, to improve process control, productivity and traceability in a variety of applications.  The SinterCast share is quoted on the Small Cap segment of the Nasdaq Stockholm stock exchange (SINT). For more information: www.sintercast.com

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