SinterCast: Another decade of growth ahead - ABG

Enviable financials: 10% sales and 20% 10-year EPS CAGR
Shunned by funds, but ESG and electrification risks overblown
We forecast 8% sales and 13% EPS CAGR over coming decade


Enviable financials shunned by funds

Over the past ten years, SinterCast has grown sales at a CAGR of ~10%, expanded its EBIT margins from ~15% to ~35%, grown EPS at a CAGR of ~20%, and paid out ~100% of EPS as dividends to shareholders. Despite this, no actively managed Swedish funds are invested in the company. We think this may be due to SinterCast's exposure to the internal combustion engine, the associated ESG considerations, and the threat of electrification. We think these concerns have been overblown, and in the report below, we dive into SinterCast's future growth opportunities.