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Series Production*

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Annualised production in the fourth quarter decreased to 3.1 million Engine Equivalents due to planned year-end shutdowns.  Year-on-year series production increased by 19% while full-year series production increased by approximately 30%.

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

CEO Comments

Record results across the board; positive outlook
With new programmes coming on stream and existing programmes ramping up during the year, series production grew by approximately 30% in 2019.  This marks the second consecutive year of strong growth, following a 19% increase in series production in 2018.  The strong series production resulted in a 33% increase in full-year revenue, a 36% increase in operating result, a 48% increase in earnings per share, and a 52% increase in cashflow from operations.  Sampling Cup revenue also increased by 5% on the back of price increases and positive currency mix, despite a 4% decrease in Sampling Cup shipments caused by reduced exhaust component production in China.  Within series production, the growth was accounted for by a 54% increase in passenger vehicles - primarily due to continued strong demand for pick-ups and SUVs in North America - and by a 15% increase in commercial vehicle volume.  The fourth quarter volume decreased from the mid-year run-rate of approximately 3.5 million Engine Equivalents to 3.1 million Engine Equivalents due to planned year-end shutdowns at some foundries and OEMs.  Despite the shutdowns, year-on-year volume for the fourth quarter was up 19%, benefitting from new production of commercial vehicle components at the Teksid foundry in Brazil and industrial power components at the Teksid foundry in Mexico. The full-year production split provided a balance of approximately 60% passenger vehicle, 35% commercial vehicle, and 5% `other' components, with future growth opportunities in each sector.

Installation activity was particularly strong during 2019.  With ten separate installations and upgrades during the year, 2019 provided SEK 11.9 million in installation revenue, outpacing the historical average of approximately SEK 7 million and surpassing the previous record of SEK 10.1 million set in 2013.  The installations included four system and capacity upgrades, three new CGI installations and three new Tracking Technology installations.  The installations and upgrades provide the basis for the positive growth outlook for the future.

Strong installation outlook
Building upon orders received in 2019 for System 4000 Plus installations at the new Scania foundry in Sweden and at the First Automobile Works (FAW) foundry in China, plus the ongoing trial of a full System 4000 installation at the WHB foundry in Brazil with a purchase option in the second quarter, SinterCast is poised to set a second consecutive year of record installation revenue.  Additional installations will also be realised during the year, leading to an installation outlook of more than SEK 15 million for 2020.

The Scania installation is scheduled for mid-2020 with initial production of commercial vehicle engine components beginning before year-end.  The production is forecast to ramp-up over a three-to-five year period, potentially providing incremental revenue of SEK 20 million.  The FAW installation is also scheduled for mid-2020 with start of production of heavy duty cylinder blocks before year-end.  As the largest commercial vehicle manufacturer in China, accounting for 23.7% of the domestic heavy duty vehicle market in 2019, the FAW production has the potential to provide high volume contributions to the SinterCast production base throughout the planning horizon. 

Several other installation discussions are ongoing for CGI process control systems, capacity upgrades, and Tracking Technologies installations in grey iron, CGI and ductile iron foundries.  In addition to the current installation 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, and to broaden our product portfolio and our production base.

Information

Interim Reports   Publication Date
January-March 2020   21 April 2020
April-June 2020   19 August 2020
July-September 2020   28 October 2020
October-December 2020 and Full Year Results 2020   10 February 2021
     
Annual Report 2019   Publication Date
The Annual Report of SinterCast AB (publ)   2 April 2020
     
Annual General Meeting 2020   Date
The Annual General Meeting of SinterCast AB (publ)   19 May 2020

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