STS Group AG publishes preliminary figures for financial year 2019 - forecast for revenues and earnings achieved

- Revenues down 9.6% to 362.8 mEUR (2018: 401.2 mEUR)

- EBITDA up 22.7% to 14.6 mEUR year-on-year (2018: 11.9 mEUR); adjusted EBITDA below previous year at 17.6 mEUR (2018: 23.7 mEUR)

- Revised outlook for revenues and adjusted EBITDA achieved

- China segment with strong Q4 (revenues growth 30.5% to 17.1 mEUR; adjusted EBITDA margin 25.7%)

- Net debt (including leasing) reduced to 39.1 mEUR as of December 31, 2019 (September 30, 2019: 56.2 mEUR)

Hallbergmoos/Munich, March 10, 2020. STS Group AG (ISIN: DE000A1TNU68), a global system supplier to the automotive industry, listed in the Prime Standard of the Frankfurt Stock Exchange, today published its preliminary and unaudited figures for the financial year 2019.

Andreas Becker, CEO of the STS Group AG: "The past 2019 financial year posed major challenges for us. Developments in both global passenger car markets as well as commercial vehicle sector declined significantly and had a corresponding impact on our business. In China, however, STS Group significantly strengthened its position in the financial year 2019 and was even able to slightly increase its local revenues. At the same time, we achieved key strategic milestones of our growth strategy in 2019. These include the capacity expansion in China, the market entry in the USA and the establishment of our product group for electric vehicles."

Revenues and earnings performance
STS Group AG has achieved its full-year outlook for revenues and adjusted EBITDA, revised in August 2019. In the reporting year 2019, revenues of STS Group declined by 9.6% to 362.8 mEUR (2018: 401.2 mEUR) according to preliminary calculations. One of the reasons for the decline in Group revenues was the shrinking automobile production in the relevant Italian passenger car market, leading to a decrease in revenues of 9.9% in the Acoustics segment. The strongest decline in revenues was recorded in the Plastics segment with minus 14.9%. Here, besides the scheduled phase-out of a major order in the second half of 2018, particularly the significant decline in the European market for commercial vehicles in the second half of 2019 was a contributing factor. Even though the Chinese automotive market performed poorly in financial year 2019, the China segment achieved growth of around 3.7% for the year as a whole compared with the same period of the previous year. The increase in revenues was particularly driven by the start-up of new projects towards the end of the year, as well as a market recovery in Q4.

Despite a decline in revenues, adjusted EBITDA in the Acoustics segment improved. In particular, this was the result of measures to align cost structures as well as efficiency improvements at the Polish plant. Also, in the Plastics segment, the initiated efficiency measures had a positive impact on adjusted EBITDA. The China segment managed to increase adjusted EBITDA to 9.0 mEUR and consequently achieve an adjusted EBITDA margin of 17.9% (2018: 14.7%). The start-up costs for the new plant were thus more than compensated.

Preliminary operating result (EBITDA) before interest, taxes, depreciation and amortization of the Group amounted to 14.6 mEUR in the reporting period, thus exceeding the previous year by 22.7% (2018: 11.9 mEUR), despite the significant decline in revenues.

In the financial year 2019, extraordinary expenses amounted to 3.0 mEUR (2018: 11.8 mEUR). EBITDA adjusted for one-off effects decreased from 23.7 mEUR to 17.6 mEUR. The adjusted EBITDA margin amounted to 4.9% (2018: 5.9%). The decline in adjusted EBITDA is mainly attributable to the lower business volume. The efficiency improvements achieved in the production could only partially offset the volume-related negative earnings effects.

Depreciation and amortization amounted to 21.1 mEUR (2018: 13.2 mEUR), including on-off write-downs of 1.5 mEUR (2018: 1.1 mEUR). Moreover, the increase is mainly due to the first-time application of IFRS 16. After depreciation, amortization, interest and taxes, the consolidated net income for the financial year 2019 amounts to minus 12.1 mEUR (2018: minus 4.8 mEUR).

In financial year 2019, net cash flow from operating activities of 36.6 mEUR was generated. Investing activities resulted in a net cash flow of minus 15.0 mEUR.

Statement of financial position
Total assets decreased from 273.8 mEUR as of December 31, 2018, to 255.9 mEUR. Total equity amounted to 68.6 mEUR as of December 31, 2019, corresponding to an equity ratio of 26.8% (December 31, 2018: 30.1%). Cash and cash equivalents amounted to 17.2 mEUR and financial liabilities to 56.3 mEUR as of December 31, 2019, including bank liabilities of 12.4 mEUR, factoring liabilities of 12.1 mEUR and other loans of EUR 7.7 mEUR. Also included are leasing liabilities of 24.1 mEUR, which rose significantly in 2019 as a result of the transition in accounting to IFRS 16 (December 31, 2018: 3.2 mEUR).

Net debt as of 2019 balance sheet date merely increased to 39.1 mEUR (December 31, 2018: 31.1 mEUR) following the application of IFRS 16, despite the rise in lease liabilities by EUR 20.9 million. Compared to Q3 2019 (September 30, 2019: 56.2 mEUR) financial debt was trimmed significantly as a result of reduced liabilities to factoring companies.

Dr. Ulrich Hauck, CFO of STS Group AG: "The earnings performance in the financial year 2019 was not satisfactory due to the significant decline in business. In the past financial year, however, we significantly increased our net operating cash flow through strict working capital management. We are also working on various efficiency enhancement measures to improve our earnings on a sustainable basis."

Conference call on April 2, 2020
STS Group AG will publish detailed and final figures for financial year 2019 and the outlook for the current financial year on April 2, 2020.

Preliminary, unaudited figures for financial year 2019

in mEUR	2019	2018	Delta%
Revenues	362.8	401.2	-9.6%
Acoustics	112.1	124.4	-9.9%
Plastics	169.0	198.6	-14.9%
China	50.4	48.6	+3.7%
Materials	39.8	40.0	-0.5%
EBITDA	14.6	11.9	+22.7%
Acoustics	-0.4	-3.0	+86.7%
Plastics	11.4	11.4	+0.0%
China	8.7	6.5	+33.8%
Materials	2.2	1.7	+29.4%
Adjusted EBITDA	17.6	23,7	-25.7%
Acoustics	0.0	-1.2	+100.0%
Plastics	12.6	16.7	-24.6%
China	9.0	7.2	+25.0%
Materials	2.4	1.9	+26.3%
Adjusted EBITDA (as % of revenues)	4.9%	5.9%	-1.0%-points
in mEUR	2019	2018
Revenues	362.8	401.2
Increase or decrease of finished goods and work in progress	6.8	5.8
Other operating income	5.3	4.5
Material expenses	-209.3	-233.8
Personell expenses	-103.4	-103.9
Other operating expenses	-47.6	-61.9
EBITDA	14.6	11.9
Depreciation and amortization expenses	-21.1	-13.2
EBIT	-6.5	-1.3
Interest and similar income	0.1	0.1
Interest and similar expenses	-3.5	-2.1
Earning before income taxes	-9.9	-3.3
Income taxes	-2.2	-1.5
Net income	-12.1	-4.8
Net cash flow from operating activities	36.6	7.1
Net cash flow from investing activities	-15.0	-13.9
Net cash flow from financing activities	-35.6	22.1
Net increase/decrease in cash and cash equivalents	-13.9	15.3
in mEUR	2019	2018
Non-current assets	135.9	115.6
Current assets	120.0	158.2
Total assets	255.9	273.8
Total Equity	68.6	82.4
Non-current liabilities	54.4	39.2
Current liabilities	132.9	152.3
Total equity and liabilities	255.9	273.8

 

About STS Group:
STS Group AG, www.sts.group (ISIN: DE000A1TNU68), is a leading system supplier to the automotive industry with a focus on solutions in the acoustics, thermal and structural engineering sectors. It employs more than 2,500 people worldwide and generated revenues of 362.8 mEUR in the financial year 2019. The STS Group ("STS") produces and develops plastic and acoustic components such as solid and flexible vehicle and aerodynamic trim, noise and vibration-damping materials, entire interior and exterior trim systems, as well as lightweight construction and battery components for electric vehicles at its 17 plants and four development centres in France, Italy, Germany, Poland, Mexico, Brazil, China and, in the future, also in the USA. STS is considered as a technology leader in the manufacture of special acoustic products, plastic injection moulding and components made of composite materials (Sheet Molding Compound - SMC). STS has a large global footprint with plants in four continents. The customer portfolio comprises leading international manufacturer of commercial vehicles, passenger cars and electric vehicles.

STS Group AG
Stefan Hummel
Head of Investor Relations
Zeppelinstrasse 4
85399 Hallbergmoos
+49 811 1244 9412
ir@sts.group
www.sts.group

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