Contract Award from OEM 5

RNS Number : 4646K

Surface Transforms PLC

02 September 2021

 

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (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 announceme§nt, this inside information is now considered to be in the public domain.

2 September 2021

Surface Transforms plc ("Surface Transforms" or the "Company")

Contract Award from OEM 5

Surface Transforms (AIM:SCE), manufacturers of carbon fibre reinforced ceramic brake discs, is pleased to announce that it has been notified of its selection as a tier one supplier of a carbon ceramic brake disc to its existing mainstream customer described previously as OEM 5. Prototype orders have been received and are being fulfilled. All terms and conditions have been carried over from the master purchase agreement with this customer signed in mid 2019.

The car is a facelift to an existing internal combustion engine model with start of production in Q1 2024 and the Company's brake discs will be fitted as an option to the front axle. The lifetime value of the contract is expected to be approximately €5 million spread over the 5 years from 2024 to 2028.

The contract will not have a significant impact on Surface Transforms production capacity and was part of the expectations outlined during the February 2021 fund raising. However, separately, the Company has been reviewing its manufacturing capacity strategy with a view to both reducing timescales and costs and a separate announcement is being made today on that subject.

Kevin Johnson, CEO, commented:

"The significance of this relatively small contract lies in it being the first example of the implementation of the multi-year "carry over" agreement concluded with OEM 5 at the time of the initial contract award in July 2019. This envisaged further awards, of varying sizes, over several years. A further award in 2020 did not happen because of a Covid induced programme cancellation by the customer. It is good to be now back on track. The engineers in both companies are now working on the next vehicle brake disc that is available for award over the next year. We are greatly enjoying working with this customer and look forward to further deepening our relationship."

For enquiries, please contact:

Surface Transforms plc.   [phone]

David Bundred, Chairman

Kevin Johnson, CEO

Michael Cunningham, CFO

Zeus Capital Limited (Nominated Adviser and Joint Broker)  + 44 203 829 5000  

David Foreman / Dan Bate / Jordan Warburton (Corporate Finance)

Dominic King (Corporate Broking)

finnCap Limited (Joint Broker)   [phone]  

Ed Frisby / Abigail Kelly (Corporate Finance)

Richard Chambers / Barney Hayward (ECM)

About Surface Transforms

Surface Transforms plc. (AIM:SCE) develops and produces 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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