Surface Transforms PLC Contract award from German OEM 5 (5991F)
16 Luglio 2019 - 8:00AM
UK Regulatory
TIDMSCE
RNS Number : 5991F
Surface Transforms PLC
16 July 2019
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
16 July 2019
Surface Transforms plc
("Surface Transforms" or the "Company")
Contract Award from German OEM 5
Surface Transforms (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 to a major German automotive company -
previously described by Surface Transforms as "OEM 5".
Pursuant to this selection, Surface Transforms has received an
order for the production tooling. The final stage of the selection
process is the signing of a master purchase agreement (the
"Agreement") which is anticipated to take approximately 4-8 weeks
to finalise. However, the principal commercial terms are already
agreed.
Specifically, the selection is for Surface Transforms to be the
sole supplier of the carbon ceramic brake disc option on one axle
of a new edition of an existing well-known model of German OEM 5.
The existing model already uses carbon ceramic discs as an option
and therefore the forecast production volumes reflect this
experience. The lifetime revenue on this specific car model
contract is estimated to be approximately EUR11.8m commencing in
October 2021. Annual revenue is estimated to be approximately
EUR2.0m per year before tapering off during 2026.
In addition, whilst this selection is the first with German OEM
5, the commercial understanding embraces the opportunity to be
selected for further multiple vehicle platforms in the customer's
portfolio over time. These potential awards could generate revenues
of many times the value of this first contract. Following entering
into the Agreement, the ceramic brake disc product will be part of
German OEM 5's approved product list and whilst there will always
be testing on new models, these tests are more about sizing and
system integration than product evaluation. Moreover pricing has
been agreed across the potential range of platforms providing a
link between increasing volumes and reduced product pricing. The
customer has stated that the potential for further model-by-model
awards will reflect their experience of Surface Transforms' supply
chain and quality performance.
Kevin Johnson, CEO commented: "This award is the culmination of
fifteen years of technical innovation and shareholder support. We
are delighted with the news and want to thank both our employees
for their efforts during this period and our shareholders for their
support through the ups and downs of that journey.
"We also want to thank the customer for their professionalism
throughout the whole evaluation process, the outcome of which has
validated our claims of technical superiority. We fully understand
their decision to issue further contracts on a model by model basis
as their facelifted or new model cars go into production. We are
confident that Surface Transforms' supply chain and quality
performance in the intervening period, combined with the already
agreed competitive pricing, will make their decision an easy
one.
"This is a very good day for Surface Transforms and we look
forward to further extending our relationship with this major new
customer."
For enquiries, please contact
Surface Transforms plc +44 151 356 2141
Kevin Johnson, CEO
Michael Cunningham, CFO
David Bundred, Chairman
Cantor Fitzgerald Europe (Nomad & Joint Broker) +44 20 7894 7000
David Foreman/ Michael Boot (Corporate Finance)
Caspar Shand Kydd/ Maisie Atkinson (Sales)
finnCap Ltd (Joint Broker) +44 20 7220 0500
Ed Frisby/Giles Rolls (Corporate Finance)
Richard Chambers (ECM)
For further Company details, visit www.surfacetransforms.com
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END
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