Record production, revenue and operating result
(Thomson Reuters ONE) -
Fourth Quarter 2015
* Revenue for Period: SEK 17.2 million (SEK 15.6 million)
* Operating Result: SEK 4.4 million (SEK 3.5 million)
* Earnings per Share from Operations: SEK 0.6 per share (SEK 0.5 per share)
* Earnings per Share: SEK 1.3 per share (SEK 0.5 per share)
* Cashflow from Operations: SEK 4.6 million (SEK 3.2 million)
* Ram EcoDiesel captures third consecutive Wards 10 Best Engine award
* First CGI aviation engine begins FAA approval process in United States
Full Year 2015
* Revenue for Period: SEK 72.4 million (SEK 54.5 million)
* Operating Result: SEK 20.3 million (SEK 10.2 million)
* Earnings per Share from Operations: SEK 2.9 per share (SEK 1.4 per share)
* Earnings per Share: SEK 3.6 per share (SEK 1.7 per share)
* Cashflow from Operations: SEK 20.4 million (SEK 6.7 million)
* Dividend: Proposed ordinary dividend of SEK 2.0 per share (SEK 1.5 per
share) plus an extraordinary dividend of SEK 1.5 per share (SEK 0.7 per
share)
* Six installation commitments equals record for new installations
* Installed Base: 24 fully automated systems and 20 mini-systems in Europe,
Asia and the Americas
Series Production*
For graph, please see Press Release PDF
Annualised series production increased to 2.1 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
Record results in all operational areas
The progress of 2015 provided record results in all of SinterCast's key
metrics. Full year series production finished at the record level 2.1 million
Engine Equivalents, providing 18% growth compared to 2014. The increased series
production also led toward record Sampling Cup shipments of 152,700,
representing an increase of 15% above the previous record established in 2014.
Beyond series production, the growing awareness and demand for CGI resulted in
new installation commitments in Europe, Asia and the Americas. Six new
installation commitments were secured, equalling the previous one-year high.
Combined with favourable exchange rates, the improvements in production,
Sampling Cups and installations resulted in record revenue of SEK 72.4 million
and almost 100% increase in the full year operating result.
Series production was primarily buoyed by strong growth in passenger vehicle
applications, benefitting from the ramp up of the Ford petrol engine and from
continued strong sales of the 3.0 litre V6 diesel engines for Audi, FCA and
Ford. The outlook for passenger vehicles remains positive with new vehicle
applications being announced for the Ford petrol engine and with the start of
sales of the 5.0 litre V8 diesel in the all-new Nissan Titan pick up in the US.
The Nissan Titan is exclusively available with the SinterCast-CGI diesel engine,
so all sales provide incremental growth. The Ram 1500 continues to be the
flagship for SinterCast's promotion of diesel engines in the important US pick
up market. With the best fuel economy rating in the full size light duty pick-
up sector, the 3.0 litre V6 diesel engine won a third consecutive Wards 10 Best
Engines award. The CGI diesel was the only winner to receive a third
consecutive award; one of only two repeat winners; and, was the only diesel
among the ten winning engines. The success of the Ram diesel has validated
SinterCast's longstanding belief in diesel engines in pick up applications and
has established a competitive benchmark in the segment.
Beyond passenger vehicles, the production of cylinder blocks and heads for
commercial vehicle applications and of components for industrial power
applications also increased during 2015. While the industrial power sector is
primarily regarded as large off-road components for agricultural, construction,
marine, locomotive and stationary power applications, a new application was
announced during the fourth quarter. Engineered Propulsion Systems (EPS)
announced that it has specified Compacted Graphite Iron (CGI) for the cylinder
block of its new aviation diesel engine. Currently undergoing Federal Aviation
Authority (FAA) approvals in the United States, the use of CGI enabled EPS to
engineer a clean sheet Aviation Diesel engine that is setting new standards in
weight, size, reliability, and most importantly, fuel consumption. Initial
testing of the pre-production engine has demonstrated specific power of 105
horsepower per litre (77 kw/l), resulting in an output of 450 horsepower (332
kW). The installed wet weight of the 450 horsepower diesel engine package is
within 45 pounds (20 kg) of alternative 350 horsepower (257 kW) air-cooled
turbocharged engines currently used in aero applications.
Installation Commitments in Europe, Asia and the Americas
Building on the increased awareness and demand for CGI, 2015 was a strong year
for new installation commitments, with two installations commissioned in China,
one in Japan, one in Korea, one in Portugal and a year-end order for a System
3000 Plus installation at the Teksid foundry in Brazil. The Teksid do Brasil
installation is planned to be commissioned during the second quarter of 2016.
All of the other 2015 installations have been successfully commissioned and
product development is proceeding according to schedule.
New product development
SinterCast is continuously investigating new concepts and developing new
technologies. At present, SinterCast is developing the application of its
thermal analysis know-how to the control of ductile iron production, including
the development of a bespoke ductile iron thermal analysis sampling device and
the optimisation of metallurgical correlations. SinterCast is also developing
other technologies - within and beyond the scope of thermal analysis - to
improve quality and production efficiency in the cast iron foundry industry.
Financial Summary
Revenue
The revenue for the SinterCast Group relates primarily to income from equipment,
series production and engineering service.
Revenue Breakdown October-December January-December
(Amounts in SEK million if 2015 2014 2015 2014
not otherwise stated)
-------------------------------------------------------------------------------
Number of Sampling Cups 40,700 38,200 152,700 133,000
shipped
Equipment (1) 0.4 1.1 7.7 4.9
Series Production (2) 16.6 13.9 63.6 47.8
Engineering Service( 3) 0.2 0.3 1.0 1.4
Other 0.0 0.3 0.1 0.4
-------------------------------------------------------------------------------
Total 17.2 15.6 72.4 54.5
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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 October-December 2015 revenue amounted to SEK 17.2 million (SEK 15.6
million). Revenue from series production increased by 19% to SEK 16.6 million
(SEK 13.9 million), due to increased annualised production of approximately 2.1
million (1.85 million) Engine Equivalents, the increased shipment of 40,700
(38,200) Sampling Cups and favourable exchange rates. Equipment revenue amounted
to SEK 0.4 million (SEK 1.1 million) following the sale of equipment to an
existing European customer to increase production capacity. Engineering Service
amounted to SEK 0.2 million (SEK 0.3 million) following support provided to
various customers globally and the sale of test pieces.
The January-December 2015 revenue amounted to SEK 72.4 million, surpassing the
full year revenue record of SEK 54.5 million established in 2014. The revenue
from series production increased by 33% to SEK 63.6 million (SEK 47.8 million)
due to an 18% increase in the full-year series production, a 15% increase in
Sampling Cup shipments, and favourable exchange rates. Equipment revenue
amounted to SEK 7.7 million (SEK 4.9 million), primarily derived from Mini-
System 3000 installations at Doosan Infracore in Korea, at an undisclosed
foundry in Japan, at Dongfeng in China, at Teksid in Portugal, and the System
3000 Plus installation at Asimco in China. Engineering Service amounted to SEK
1.0 million (SEK 1.4 million). The revenue from the leased installations is
accrued over the lease period.
Results
The business activities of SinterCast are best reflected by the Operating
Result. This is because the "Result for the period after tax" and the "Earnings
per Share" are influenced by the financial income and costs and by the
revaluation of tax assets.
Results Summary October-December January-December
(Amounts in SEK million if not otherwise 2015 2014 2015 2014
stated)
-------------------------------------------------------------------------------
Operating Result 4.4 3.5 20.3 10.2
Result for the period after tax* 9.0 3.7 25.2 12.3
Earnings per Share (SEK), from operations 0.6 0.5 2.9 1.4
Earnings per Share (SEK)* 1.3 0.5 3.6 1.7
-------------------------------------------------------------------------------
*During the fourth quarter, the parent company settled its debts toward its
subsidiaries in US and UK. To minimise cashflow effects, the settlement was made
by offsetting receivables against repayment of equity and shareholder
contribution. The parent company has reversed previous impairment losses related
to these investments. The reversal, including accumulated translation
differences related to these holdings, is disclosed in the income statement as
financial income (SEK 15.3 million). The reversed accumulated translation
differences have been reclassified from other comprehensive income (SEK -4.5
million) to financial income in the income statement for the Group (SEK +4.5
million).
The October-December 2015 operating result of SEK 4.4 million (SEK 3.5 million)
increased as a result of higher gross results of SEK 1.4 million primarily
derived from higher revenue, combined with higher operational expenses of SEK
0.5 million. The result for the period after tax amounted to SEK 9.0 million
(SEK 3.7 million). The increase of SEK 5.3 million is primarily related to the
parent company's settlement of debts toward its subsidiaries in US and UK. The
net effect of the settlement relates to translation gains that have been
accounted for as financial income amounting to SEK +4.5 million. This non-
cashflow effect is a one-time, non-recurring item. The remaining increase of SEK
0.8 million is primarily related to the increased operating result of SEK 0.9
million and the increased tax expense of SEK 0.1 million.
The January-December 2015 operating result of SEK 20.3 million (SEK 10.2
million), increased as a result of higher gross results of SEK 14.6 million,
primarily derived from higher revenue, combined with higher operational expenses
of SEK 2.8 million and decreased operating income (exchange losses) of SEK 1.7
million. The result for the period after tax amounted to SEK 25.2 million (SEK
12.3 million) The operational increase is SEK 8.4 million and relates primarily
to the increased operating result of SEK 10.1 million and a SEK 1.7 million
decrease in the financial net (primarily exchange losses). The remaining
increase of SEK 4.5 million relates to the parent company's settlement of debts
toward against its subsidiaries in US and UK.
Deferred Tax Asset
Tax for the period January-December 2015 amounted to SEK 0.8 million (SEK 0.9
million). The estimated future taxable profit and deferred tax asset calculation
is reassessed every quarter. As of 31 December 2015, SEK 137.8 million (SEK
133.3 million) of SinterCast's total carried-forward tax losses have been used
as the basis of the updated calculation, resulting in SEK 30.3 million (SEK
29.3 million) being capitalised as a deferred tax asset.
Cashflow, Liquidity and Investments
Cashflow Summary Full Year January-December Cashflow Changes
(Amounts in SEK million if not otherwise 2015 2014 2015 vs. 2014
stated)
-------------------------------------------------------------------------------
Cashflow from operations, before change in 21.3 10.9 10.4
working capital
Change in working capital -0.9 -4.2 3.3
-------------------------------------------------------------------------------
Cashflow from operations 20.4 6.7 13.7
Cashflow from investing activities -1.7 -1.3 -0.4
Cashflow from financing activities -15.6 -8.5 -7.1
-------------------------------------------------------------------------------
Exchange rate differences in cash and cash 0.0 0.2 -0.2
equivalents
-------------------------------------------------------------------------------
Cashflow total 3.1 -2.9 6.0
Liquidity 48.0 44.9
-------------------------------------------------------------------------------
The January-December 2015 cashflow from operations increased three-fold, by SEK
13.7 million, compared to the same period in 2014, primarily due to an increase
of SEK 10.4 million in cashflow from operations before changes in working
capital, plus changes in working capital (SEK 3.3 million), derived from changed
cashflow from inventory (SEK -1.3 million), receivables (SEK -1.5 million) and
operating liabilities (SEK 6.1 million).
The total cashflow increased by SEK 6.0 million after increased investments in
the amount of SEK 0.4 million, primarily related to increased activation of
products under development (SEK 0.6 million) and decreased patent investments
(SEK 0.2 million). Total investments amounted to SEK 1.7 million. Following the
dividend of SEK 15.6 million (SEK 8.5 million), the total cashflow amounted to
SEK 3.1 million (SEK -2.9 million). Liquidity on 31 December 2015 was SEK 48.0
million (SEK 44.9 million). SinterCast has no loans.
Risks and Uncertainty Factors
The main uncertainty factor for SinterCast continues to be the 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.
The economies have developed differently in Europe, Asia and the Americas over
the last several years. The European passenger vehicle, commercial vehicle, and
construction equipment markets have begun to show some recovery, but this growth
is from a relatively low level and uncertainty remains in the market. In Asia,
the dominant Chinese market is characterised by overcapacity in the commercial
vehicle and construction equipment sectors, which represent the primary
opportunity for CGI. This overcapacity, coupled with the current economic
uncertainty in China, influences product development cycles and production
volumes. In contrast, consumer confidence has increased in North America and
SinterCast has benefitted from increased vehicle sales. SinterCast's
geographical diversification helps to mitigate changing macroeconomic conditions
in the different regions. However, as manufacturing continues to grow in
developing countries, many of the future installation opportunities will be in
price sensitive markets and this can present a challenge for the SinterCast fee
structure and Business Model.
For full risk and uncertainty factor information, see Note 26 on pages 46 and
47 in SinterCast's Annual Report 2015
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 offices in Sweden, the United Kingdom, the United States, China
and Korea. As of 31 December 2015, the Group had 20 (19) employees, four (four)
of whom are female. The company is well positioned to support global market
activities and to drive SinterCast's future growth.
Parent Company
SinterCast AB (publ) is the Parent Company of the SinterCast Group, with its
registered office located in Stockholm, Sweden. On 31 December 2015, the Parent
Company had 15 (14) employees. The majority of the operations are managed by the
Parent Company while local operations in the United Kingdom, United States,
Korea and China are managed by the local companies. The information given for
the Group in this report corresponds in all material respects to the Parent
Company. However, the result for the period may differ between the Group and the
Parent Company due to intercompany transactions between the Parent Company and
its subsidiaries.
Patents
SinterCast currently holds 12 (12) patents, granted or pending, and maintains
69 (59) individual national phase patents worldwide. These patents address
SinterCast's metallurgical technology, thermal analysis, the Sampling Cup for
CGI and ductile iron, product applications and machining.
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 the Parent Company are in agreement
with the accounting policies used in the preparation of the company's latest
Annual Report. The implementation date of IFRS 15 has been changed from 1
January 2017 to 1 January 2018. IFRS 16 Leases. In January 2016, IASB issued a
new lease standard that will replace IAS 17 Leases and the related
interpretations IFRIC 4, SIC-15 and SIC-27. The standard requires assets and
liabilities arising from all leases, with some exceptions, to be recognized on
the balance sheet. This model reflects that, at the start of a lease, the lessee
obtains the right to use an asset for a period of time and has an obligation to
pay for that right. The accounting for lessors will in all material aspects be
unchanged. The standard is effective for annual periods beginning on or after 1
January 2019. Early adoption is permitted. EU has not yet adopted the standard.
The group has not yet assessed the impact of IFRS 16.
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
December 2015 that could materially change these financial statements. The
following press releases have been issued:
13 January 2016 - Recognition for SinterCast at North American International
Auto Show
Nomination Committee
The Nomination Committee, elected by the Annual General Meeting 2015, consists
of Karl-Arne Henriksson, Chairman, Hans-Erik Andersson, Chairman of the Board of
Directors, Ulla-Britt Fräjdin-Hellqvist and Andrea Fessler. Shareholders wishing
to provide input or proposals should provide written submissions to the
Nomination Committee (e-mail: nomination.committee(at)sintercast.com) before 25
March 2016.
Annual General Meeting 2016
The Annual General Meeting 2016 of SinterCast AB (publ) will be held on Thursday
19 May 2016.
Shareholders wishing to have a matter considered at the Annual General Meeting
should provide written submissions to agm.registration(at)sintercast.com or to the
company: SinterCast AB (publ), P.O. Box 10203, SE-100 55 Stockholm, Sweden, at
least seven weeks prior to the Annual General Meeting for the proposal to be
included in the notice of the meeting. Further details on how and when to
register will be published in advance of the Annual General Meeting.
Dividend 2015
The Annual General Meeting of SinterCast AB (publ) held on 20 May 2015 approved
an ordinary dividend for 2015 amounting to SEK 1.5 (1.2) per share and an
extraordinary dividend amounting to SEK 0.7 (0.0) per share. A total amount of
SEK 15.6 (8.5) million was transferred to the shareholders.
Proposed Dividend 2016
The Board's intention is to continue to provide an ordinary dividend to the
shareholders, based primarily on the cashflow from operations. In the event that
the Board considers that the liquidity exceeds the amount needed to support the
operational requirements and strategic objectives, the Board has the option to
propose an extraordinary dividend or a share buy-back to further adjust the
liquidity.
The Board of Directors propose an ordinary dividend of SEK 2.0 per share (SEK
1.5) plus an extraordinary dividend of SEK 1.5 (0.7) per share, representing a
transfer of SEK 24.8 million (SEK 15.6 million) to the shareholders of
SinterCast AB (publ). The Board proposes 23 May 2016 as the record date for
entitlement to receive dividends. In deciding the amount of the ordinary
dividend to be proposed to the AGM 2016, the Board considered cashflow from
operations, the financial position, investment requirements and other factors,
such as market outlook, growth strategy and the internal financial forecast for
the Group.
The Annual Report 2015
The Annual Report 2015 will be published on 7 April 2016.
Information
The Interim Report January-March 2016 will be published on 27 April 2016
The Interim Report April-June 2016 will be published on 24 August 2016
The Interim Report July-September 2016 will be published on 16 November 2016
The Interim Report October-December and Full Year Results 2016 will be published
on 22 February 2017
This report has not been reviewed by the company's Auditors.
Stockholm 17 February 2016
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(at)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 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's series production components range from 2 kg
to 9 tonnes, all using the same proven process control technology. The
SinterCast share is quoted on the Small Cap segment of the Stockholm NASDAQ OMX
stock exchange (Stockholmsbörsen: SINT). For more information:
www.sintercast.com
END
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Source: SinterCast via GlobeNewswire
[HUG#1986520]
Unternehmensinformation / Kurzprofil:
Datum: 17.02.2016 - 08:00 Uhr
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News-ID 451135
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contact information:
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