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STS Group AG prepares IPO for 2018

- Leading supplier of commercial vehicle systems for the automotive industry plans listing on the Prime Standard of the Frankfurt Stock Exchange.

- The STS Group is considered a technological leader in plastic injection moulding, special acoustic products and the material SMC, which is used particularly in lightweight construction, and has a comprehensive customer portfolio of international commercial vehicle and automobile manufacturers.

- The STS Group benefits from the dynamic growth market for vehicles with alternative drivetrains (e.g. e-mobility) and sees significant growth potential, particularly in China and North America.

- To implement its growth strategy, STS Group AG intends a capital increase with gross issue proceeds of around EUR 50 million.

- In addition, a secondary sale of shares held by the sole pre-IPO shareholder Mutares AG is planned to enable a sufficient free float. Mutares AG will remain the majority shareholder of STS Group after the IPO.

- In the 2017 financial year, which was characterized in particular by strong external growth due to the acquisition of the Plastic Omnium Group heavy commercial vehicles business and the acquisition of the Autoneum Group's production facility in Brazil, STS Group generated on the basis of preliminary, unaudited figures pro forma revenue of approximately EUR 425 million and adjusted EBITDA of around EUR 24 million.
 

Hallbergmoos/Munich, April 23, 2018. STS Group AG (www.sts.group), a leading global supplier of soft and hard trim components to the automotive industry, is preparing for its IPO on the Regulated Market (Prime Standard) of the Frankfurt Stock Exchange in 2018.

The company, headquartered in Hallbergmoos, is a subsidiary of the Munich-based investment company Mutares AG. The STS Group develops, produces and sells plastic components and systems as well as acoustic parts, primarily for light and heavy commercial vehicles and passenger cars. The company's customers include the leading commercial vehicle manufacturers and major international automobile manufacturers (OEMs). The group, which was created in 2013, has 16 production sites in seven countries, with large production sites in Europe, China, North America and South America, including the NAFTA market. The business of the STS Group is divided into three segments: STS Acoustics (Soft Trim Products), STS Plastics (Hard Trim Products) and STS Materials (Mixed Composite Recycling Products).

In order to further expand its strong market position in the global automotive market and to meet the growing demand, the company is creating the framework conditions for its future growth with the IPO.

Business model and competitive advantage

The STS Group is considered a technological leader in the production of plastic injection moulding, special acoustic products and SMC. For example, key components of the truck cabin such as the roof, stairs, fenders, vehicle front, noise absorption parts, storage and interior trim systems are manufactured. The STS Group is also well positioned in the dynamic growth market for vehicles with alternative drivetrains (e.g. e-mobility) and for autonomous mobility systems with growing demand for STS technologies and products.

Thanks to an innovative concept, the company produces on a focused, demand-oriented basis, directly in the vicinity of its customers' production facilities, which are usually supplied "just in sequence" directly to the assembly line. The customer portfolio includes the world's leading truck and automobile manufacturers. STS Group develops its products and semi-finished products in four research centers. The comprehensive product portfolio of the vertically integrated system supplier includes, among others, ready-to-install painted bumpers, exterior and engine compartment trims, vehicle-wide storage boxes and complete interior trims, which consist for example of SMC (Sheet Molding Compound). SMC, a semi-finished product manufactured by the STS Group itself, consists of thermosetting reactive resins and glass fibers, which are used to produce fiber-plastic composites with distinct advantages over conventional metal parts: They are lighter, stronger and at the same time cheaper than metal parts and the STS Group believes will increasingly replace them in the entire vehicle construction.

Overall, the STS Group has a strong position in the market for heavy and light commercial vehicles and competitive advantages over many other international automotive suppliers. STS is one of the few global suppliers in this field and also has a local engineering center in the People's Republic of China. Thanks to its already established position in the important Chinese market, the STS Group benefits from significant growth potential and improved distribution opportunities for its products. The STS Group already produces in two plants in China and currently serves 7 of the 10 largest Chinese commercial vehicle manufacturers. In addition, a further plant was recently rented in China to further increase production capacity.​

Strong business development

STS Group AG can look back on a very successful 2017 financial year, which was characterized by strong growth following a buy and build strategy and the achievement of several milestones, leading to a comprehensive expansion of its product and customer portfolio on a global level: The STS Group successfully completed three strategic add-on acquisitions with the successful integration of the Mecaplast Group acquired at the end of financial year 2016, the acquisition of the commercial vehicle supplier business of the Plastic Omnium Group, and the acquisition of a Brazilian plant of the Autoneum Group. With the acquisition of the Truck Business of the Plastic Omnium Group and Mecaplast Group, including production facilities in China, Mexico, France and Germany, STS expanded its product portfolio of Duroplast, exterior parts and modules for truck cabins and light commercial vehicles. In addition, the STS Group expanded its business further, to South America, by acquiring the Brazilian production facility of Autoneum Group. The full integration of the new plants should generate synergies this year and next year.

In the 2017 financial year STS Group generated on the basis of preliminary, unaudited pro forma figures, taking into account the acquisition of the Truck Business of the Plastic Omnium Group and the acquisition of the Autoneum Group's production facility in Brazil, revenue of approximately EUR 425 million and adjusted EBITDA of around EUR 24 million. STS Group currently employs approximately 2,500 employees and has an order backlog estimated at EUR 1.9 billion for the years 2018 to 2022.

"It was a year of dynamic growth. The acquisitions have taken us to the next level and transformed us from a European supplier to a global systems manufacturer for the entire industry. 2018 is a year of integration. We will improve processes, leverage potential in production and administration and bring innovative products to the market," says Andreas Becker, CEO of STS Group AG.​

IPO to support further growth

In connection with the IPO, the company expects proceeds from the placement of new shares in the amount of approximately EUR 50 million. The issue proceeds will be used to finance further organic and inorganic growth in the global automotive supply industry. It is planned to use the proceeds from the IPO in particular for further expansion in China and North America, the increasing expansion of production to Eastern Europe and the expansion of automation as well as for focusing on technological trends such as automotive driving and e-mobility.

CEO Andreas Becker explains the decision to go public: "In our industry we are known for our high-quality, reliable and innovative complete solutions. Our medium-term goal as STS Group is to become the leading global supplier in our segment of the automotive industry. To this end, we have set ourselves the goal of further growth and see significant growth potential for us, particularly in China and North America. With the IPO, we want to underpin our growth and also significantly increase our visibility in the market".

At the time of publication of this announcement, Mutares AG, Munich, holds 100 percent of the shares in STS Group AG. A secondary sale of shares held by Mutares AG is planned to enable a sufficient free float. Mutares AG will also provide additional shares as part of an over-allotment / greenshoe option. Mutares AG will remain the majority shareholder of STS Group AG after the IPO capital increase and the placement of old shares as well as in the event that the over-allotment option is exercised. STS Group AG and the existing shareholder have a lock-up period of 12 months each.

Further details on the planned IPO will be announced in the context of the publication of the securities prospectus.

Hauck & Aufhäuser Privatbankiers Aktiengesellschaft acts as sole global coordinator and joint bookrunner. MAINFIRST BANK AG acts as Joint Bookrunner.


STS GROUP AG
Zeppelinstrasse 4
85399 Hallbergmoos
Germany
www.sts.group

Investor relations and contact financial press
CROSS ALLIANCE communication GmbH
Susan Hoffmeister
Tel.: +49 (0)89 89827227
E-Mail: sh@crossalliance.com

DISCLAIMER

These materials do not constitute an offer of securities for sale or a solicitation of an offer to purchase securities (the "Securities") of STS Group AG (the "Company") in the United States, Australia, Canada or any other jurisdiction in which such offer or solicitation is unlawful. The Securities referred to herein may not be offered or sold in Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan subject to certain exceptions.

The Securities of the Company may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the "Securities Act"). The Securities of the Company have not been, and will not be, registered under the Securities Act. There will be no public offering of the securities in the United States. Any sale in the United States of the Securities mentioned in this communication will be made solely to "qualified institutional buyers" as defined in, and in reliance on, Rule 144A or another exemption under the Securities Act.

This publication constitutes neither an offer to sell nor a solicitation to buy securities of STS Group AG. The offer is being made solely by means of, and on the basis of, the published securities prospectus (including any amendments thereto, if any). An investment decision regarding the publicly offered securities of STS Group AG should only be made on the basis of the securities prospectus. Following the approval of the securities prospectus by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)), the prospectus will be available free of charge from STS Group AG, Zeppelinstrasse 4, 85399 Hallbergmoos, Germany, or on the STS Group AG website.

In the United Kingdom, this document is only being distributed to and is only directed at persons who (i) are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") or (ii) are persons falling within Article 49(2)(a) through (d) of the Order (high net worth companies, unincorporated associations, etc.) (all such persons together being referred to as "Relevant Persons"). This document is directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this document relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.

In connection with the placement of the offer shares Hauck & Aufhäuser Privatbankiers Aktiengesellschaft will act as the stabilization manager (the "Stabilization Manager") and may, as Stabilization Manager, and acting in accordance with legal requirements (Article 5 para. 4 and 5 of the Market Abuse Regulation (EU) No 596/2014 in conjunction with Articles 5 through 8 of the Commission Delegated Regulation (EU) 2016/1052), make over-allotments and take stabilization measures to support the market price of the Company's shares and thereby counteract any selling pressure.

The Stabilization Manager is under no obligation to take any stabilization measures. Therefore, stabilization may not necessarily occur and may cease at any time. Such measures may be taken on the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) from the date when trading in the shares of the Company is commenced on the regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) and must be terminated no later than 30 calendar days after this date (the "Stabilization Period"). Stabilization transactions aim at supporting the market price of the Company's shares during the Stabilization Period. These measures may result in the market price of the Company's shares being higher than would otherwise have been the case. Moreover, the market price may temporarily be at an unsustainable level.