STS Group AG publishes figures for the first nine months - Outlook for 2019 confirmed - Trend in third quarter in line with management expectations

- Positive order development, especially in China and promising performance in the e-mobility sector

- Reduction in revenues to 276.3 mEUR in the nine months period (9M/2018: 309.2 mEUR). Reduction of 10.6% due to ongoing weaker automotive markets ; EBITDA increases by 29.4% to 13.2 mEUR compared to previous year (9M/2018: 10.2 mEUR); Adjusted EBITDA below previous year at 14.1 mEUR

- Conclusion of a contract for the sale of receivables on a "non-recourse basis", leading to a reduction in net financial debt in the medium term

- Outlook confirmed: revenue and the profit margin will lie in the lower range of the communicated bandwidth

Hallbergmoos/Munich, November 6, 2019. STS Group AG (ISIN: DE000A1TNU68), a global system supplier to the automotive industry, listed in the Prime Standard of the Frankfurt Stock Exchange, today publishes its interim statement for the first nine months of financial year 2019.

Andreas Becker, CEO of the STS Group AG: "The current 2019 financial year brings major challenges for the automotive sector. At present, the entire industry is experiencing a rapid transformation, in order to meet changing requirements such as emission regulations. In addition, general economic uncertainties are affecting our business on a global scale. Extensive know-how combined with a high vertical integration make STS Group the ideal system supplier for mobility solutions of today and tomorrow - regardless of the respective powertrain. The interest shown by customers in our solutions and the positive development of order intake as well in the innovative e-mobility sector prove that STS Group is well positioned both strategically and operationally. We will master the challenges and look to the future with optimism."

Revenue Performance
STS Group generated revenues of 276.3 mEUR in the period from January 1 to September 30, 2019, compared with 309.2 mEUR (-10.6%) in the same period of the previous year. In the Acoustics segment, the main driver of the Group's decline in revenues was a reduction in customer call-offs in the relevant passenger car market in Italy, despite in the third quarter the year-on-year decline could be reduced. The Plastics segment continued to perform downward due to a generally weak European automotive market and the planned expiry of a major order in 2018. Although the Chinese automotive market was also weak recently, the China segment achieved growth of around 8% year-on-year in the third quarter. The positive order trend and the planned new production start-ups, especially in China, give confidence for the future development.

Earnings Performance
Despite the revenue decrease in the first nine months and mainly due to the absence of negative extraordinary expenses from the previous year as well as due to the positive effect of IFRS 16 (9M/2019: 3.6 mEUR), EBITDA increased by 3.0 mEUR to 13.2 mEUR (9M/2018: 10.2 mEUR). In the reporting period, extraordinary expenses of 0.9 mEUR were incurred for reorganization measures (9M/2018: 10.9 mEUR). Adjusted EBITDA of 14.1 mEUR was lower than in the previous year (9M/2018: 21.1 mEUR) due to the decreased business volume. The efficiency improvements achieved in production by adjusting the cost of materials and personnel could only partially offset the revenue-related negative earnings effects. In the Acoustics segment, the earnings situation at the plant in Poland improved further in the third quarter of 2019 as a result of the measures introduced to increase cost efficiency. In the first nine months of the current financial year, the China segment was burdened not only by lower revenues but also by start-up costs for the new production site in Shiyan. Consolidated net income amounted to -4.9 mEUR in the reporting period (9M/2018: -2.9 mEUR).
 

Net Financial Debt:
The Group's net financial debt increased by 2.9 mEUR to 30.8 mEUR as of September 30, 2019 (December 31, 2018: 27.9 mEUR), but was lower than as of March 31, 2019 (33.3 mEUR) and June 30, 2019 (33.4 mEUR). As of September 30, 2019, net financial debt consisted of bank and third party financial liabilities of 21.9 mEUR and factoring liabilities of 30.4 mEUR less cash and cash equivalents of 21.5 mEUR. Due to the conclusion of a contract for the sale of receivables on a non-recourse basis, financial liabilities from factoring and thus the net financial debt in the Group will decrease in the future.

Outlook 2019
As communicated on August 2, 2019, the company continues to expect a decrease in revenues of 4.5 to 9.5%, and an adjusted EBITDA margin of between 4.6 and 5.3% for the 2019 financial year. Given the currently challenging situation in the European commercial vehicle market and a related reduction in customer call-offs, the STS Group anticipates that both revenue and the profit margin will lie at the lower range of the aforementioned bandwidth.

STS Group AG's interim report for the first nine months of 2019 is available for download at ir.sts.group. The 9-month figures do not require an auditor's review and are therefore unaudited.

Conference Call on November 6, 2019
STS Group AG will hold a conference call in English for interested investors and press representatives today, 6 November 2019 at 14:00 hrs. To register, please send an email to [email protected].

About STS Group:
STS Group AG, www.sts.group (ISIN: DE000A1TNU68), is a leading system supplier to the automotive industry for soft and hard trim. The Group, which has a history of tradition and expertise dating back to 1934, employs more than 2,500 people and generated revenue of 401,2 mEUR in the 2018 financial year. At its 17 plants in total in France, Italy, Germany, Poland, Mexico, Brazil and China, the STS Group ("STS") produces plastic and acoustic components, such as solid and flexible vehicle trim, noise and vibration-damping materials and entire interior and exterior trim systems. STS is considered a technology leader in the manufacture of plastic injection molding, specialty acoustic products and components from sheet molding compounds (SMC). STS has a strong footprint with plants in China, Europe, Mexico and Brazil. The customer portfolio comprises leading international commercial vehicle and automotive manufacturers.

STS Group AG
Stefan Hummel
Head of Investor Relations
Zeppelinstrasse 4
85399 Hallbergmoos
+49 811 1244 9412
[email protected]
www.sts.group

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