* Q2 in line, with automotive market and FX posing headwinds
* Some uncertainty about targets, but very minor impact on estimates
* Strong installations & ramps ahead, but near-term market weakness
Q2 headwinds in line with our expectations
The Q2 numbers were broadly in line with our expectations. Engine equivalents and sampling cups were both pre-announced shortly after we released our preview in July, coming in at 3.4m (4.0m) and 58.0k (56.7k), respectively. This constituted a 15% decline in EEs y-o-y, with the stoppage programme contributing -13%, the weak automotive market contributing -9%, and other series production ramps contributing +7%. Sales were down 12% y-o-y, likely mainly driven by a negative FX contribution due to the USD/SEK. Equipment sales were SEK 2.1m (1.3m), a bit below our estimate. The EBIT margin was 36.3% (37.2%), benefitting from a 3.9pp (0.6pp) positive FX effect.
Some uncertainty on targets, but estimate impact limited
Due to continued weakness in the automotive market and the uncertainty imposed by the shifting US tariff landscape, management expressed some caution regarding the feasibility of the 5m EEs by '26 and the y-o-y installation growth targets, but the underlying pipeline for installations and production ramps remains strong, with discussions comprising SEK 20m of installations ongoing. We cut '25e sales and EBIT by 2% and 5% respectively, but only fine-tune '26e-'27e by ~1%, driven by increased caution on the EE recovery, due to the continued weakness in the automotive sector, and the shifting forward of some equipment sales. We still forecast strong equipment sales of SEK 10.8m for '25e, significantly above the historical average of SEK 8m.
Near-term weakness, but long-term story unchanged
While SinterCast's market is seeing some near-term weakness, our long-term view of the company remains unchanged. On our updated estimates, the share is currently trading at a P/E of 24x, in line with its historical median of 23x, and we reiterate our fair value range of SEK 100-120.
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