Sintercast - EBIT deviation from delayed installations - ABG

Q2: EBIT of SEK 7.2m (-43% vs. ABGSCe at 12.6m)
’21e EBIT -14% on Q2 numbers, -3% for ’22e-’23e
Fair value range of SEK 132-240 (137-248) per share

SinterCast reported Q2 sales of SEK 28.2m (-16% vs. ABGSCe at 33.6m), up 51% y-o-y. The deviation was mainly from equipment sales of SEK 0.2m (ABGSCe 3.3m), as travel restrictions caused installations to be delayed until H2’21. However, management says full-year installation revenues should still be in line with past averages. Series production sales were strong, but at SEK 27.8m were slightly below our estimate of SEK 29.7m. EBIT was SEK 7.2m (-43% vs ABGSCe at 12.6m), for a margin of 26% (ABGSCe 37%). In absolute terms, the deviation on the EBIT level is roughly the same as on the top line, meaning the main reason for the miss was lower sales, which had a high drop-through. The EBIT margin was also hurt by a lower gross margin, but in absolute terms, this effect was negligible. Management mentioned that series production volumes, although strong, are still being held back by customers facing component shortages and therefore not producing at normal levels.

On our estimates, the share is trading at 18x ’22e EV/EBIT. We lower our fair value range to SEK 132-240 (137-248) per share based on our estimate cuts. As the company has a history of paying out ~100% of EPS as dividends, we derive our fair value range by discounting future dividends, assuming a range of 8-12% for the cost of equity.

Länk till analysen i sin helhet: https://www.introduce.se/foretag/sintercast/Equity-research/2021/8/sintercast---ebit-deviation-from-delayed-installations/