<a id="bm-comp-65c0ad4a-b676-4e2e-a198-ed130f568499" name="bm-comp-65c0ad4a-b676-4e2e-a198-ed130f568499" class="BMCustomAnchor"></a><table><tr><td bm-component-id="65c0ad4a-b676-4e2e-a198-ed130f568499" style="vertical-align: top; width:100.000000%;"><ul><li>Q1e: 2.8m EEs, -15% sales growth, 18% (37%) EBIT margin</li><li>FX headwinds to abate from Q2, market outlook improving</li><li>Growth outlook confirmed by incoming CEO in <a data-bm-trackable="false" href="https://www.youtube.com/watch?v=MLXmabMecwY" target="_blank">fireside chat</a></li></ul></td></tr></table><a id="bm-comp-e8e5408f-275b-4511-9f76-9ff59239a7a9" name="bm-comp-e8e5408f-275b-4511-9f76-9ff59239a7a9" class="BMCustomAnchor"></a><table><tr><td bm-component-id="e8e5408f-275b-4511-9f76-9ff59239a7a9" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Q1 expectations</h3><p>While the market outlook is improving for SinterCast, Q1 will likely still be a quarter of subdued earnings. We forecast engine equivalent production of 2.8m (3.1m) and limited equipment sales, due to seasonality, for total sales of SEK 23m, down 15% y-o-y, of which 12% FX. SinterCast's high operating leverage combined with likely negative FX revaluations therefore lead us to expect an adj. EBIT margin of 17.9% (37.4%).</p><h3 class="bm-h3">Estimate changes</h3><p>Q1 currently looks to be the last quarter with such a strong FX headwind, and improved FX rates since our Q4 comment are the primary driver of our estimate upgrades in this note.</p><h3 class="bm-h3">Outlook and valuation</h3><p>We recently hosted SinterCast's incoming CEO, Vítor Anjos, for a <a data-bm-trackable="false" href="https://www.youtube.com/watch?v=MLXmabMecwY" target="_blank">fireside chat</a>. Anjos, who is set to succeed Steve Dawson in May, outlined a strategy of continuity but with a new emphasis on inorganic growth, aiming to pursue M&A close to SinterCast's core expertise. He reiterated the updated production milestones of 6m EEs (peak monthly rate) by '29 and 8m by '31, noting that annual volumes typically land 0.2-0.4m below the peak achieved in a given year. Underpinning these targets are two new engine platforms launching over the next two years and a third programme in development for '31 — in some cases representing first-generation CGI engines for the respective OEM. He highlighted that CGI penetration in commercial vehicles is set to rise from 40% today to 80% by 2030, growing roughly five times faster than electrification in the segment. On capital allocation, Anjos signalled a balanced approach between reinvesting for growth and maintaining the dividend, emphasising SinterCast's scalability given its 90% recurring revenue base and lean cost structure. We maintain our view that SinterCast looks set for substantial growth as the commercial vehicle market recovers.</p></td></tr></table>