Announcement of contract wins with OEM 6

RNS Number : 8106V

Surface Transforms PLC

16 December 2021

 

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018.  Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

16 December 2021

Surface Transforms plc

("Surface Transforms" or the "Company")

Announcement of contract wins with OEM 6

Surface Transforms plc (AIM:SCE) is pleased to announce that it has been notified of its selection as a tier one supplier of a carbon ceramic brake disc on the forthcoming launches of  three cars of its existing customer, previously described as OEM 6.

The carbon ceramic disc will be fitted as standard to both axles on all three cars. The lifetime value of these contract wins is more than £45m - bringing the overall Company order book to in excess of £115m.

These contract wins are in addition to the previously notified vehicle selection with this customer. The first car is a limited-edition special model with start of production (SOP) in late 2023 with a short series production period. The second two models (the base car and a derivative) have an SOP of mid 2024 and will be in production for at least six years. In total, these three new selections by OEM 6 are expected to generate approximately £0.5m of sales in 2023, increasing to approximately £4m in 2024 and to approximately £7m in 2025 and thereafter.

These wins were anticipated in our recent capacity and cash flow planning scenarios and were included within the "prospective carry-over" projections described during the February 2021 fund raising. However, consistent with our policy that we only forecast contract wins, they were not included in any previous market guidance or analyst forecasts and can therefore now be added to these projections. "Carry-over" in the automotive industry is the use of existing product approvals with existing OEM customers on their future models.

Kevin Johnson (CEO) said "We are delighted to be deepening our relationship with OEM 6 including moving from tier 2 to tier 1. We also note that this is now the third example of demonstrating our ability to win carry-over contracts after having won the first award. We expect to win further contracts in the new financial year across our range of existing and new customers in parallel to moving into profit and operational cash generation in 2022."

For enquiries, please contact:

Surface Transforms plc	[phone]
David Bundred, Chairman Kevin Johnson, CEO  Michael Cunningham CFO
Zeus Capital Limited (Nominated Advisor and Joint Broker)	[phone]
David Foreman / Dan Bate / Jordan Warburton (Corporate Finance) Dominic King (Corporate Broking)
finnCap Ltd (Joint Broker)	[phone]
Ed Frisby/Abigail Kelly (Corporate Finance) Richard Chambers/Barney Hayward (ECM)

About Surface Transforms

Surface Transforms plc. (AIM:SCE) develop and produce carbon ‐ ceramic material automotive brake discs. The Company is the UK's only manufacturer of carbon ‐ ceramic brake discs, and only one of two mainstream carbon ceramic brake disc companies in the world, serving customers that include major OEMs in the global automotive markets.

The Company utilises its proprietary next generation Carbon Ceramic Technology to create lightweight brake discs for high ‐ performance road and track applications for both internal combustion engine and electric vehicles. While competitor carbon ‐ ceramic brake discs use discontinuous chopped carbon fibre, Surface Transforms interweaves continuous carbon fibre to form a 3D matrix, producing a stronger and more durable product with improved heat conductivity compared to competitor products; this reduces the brake system operating temperature, resulting in lighter and longer life components with superior brake performance. These benefits are in addition to the benefits of all carbon ‐ ceramic brake discs vs. iron brake discs: weight savings of up to 70%, longer product life, consistent performance, reduced brake pad dust and corrosion free.

For additional information please visit www.surfacetransforms.com

 

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