Surface Transforms Plc · LSE:SCE
Surface Transforms — Investor Presentation (January 2021)
17 slides from Surface Transforms's investor presentation, January 2021
Slide 1: Investor Presentation January 2021
Investor Presentation January 2021
Slide 2: Presentation team
Presentation team 2 David Bundred, Non Executive Chairman David has industrial experience at senior management levels in the UK, Germany and the US and is now an active investor with “a hands on" focus in a small number of high growth companies. He previously had a 24 year long career until 1999 at
Slide 3: Surface Transforms
Surface Transforms Developer and manufacturer of carbon ceramic automotive brake discs 3 PROJECT SPARK ▪ Proposed £20m fundraise: ▪ £13m manufacturing capex ▪ £5m growth working capital ▪ £2m open offer proceeds ▪ To support expected contract awards from existing and new OEM customers About Surface
Slide 4: Introduction
Introduction Automotive disc brakes 4 ▪ Brakes used to slow and stop the vehicle ▪ Activated by the driver’s foot ▪ Brake components installed on all four wheels of the car ▪ Key safety and performance feature of the Brake disc Caliper Brake pads vehicle ▪ Braking achieved by the caliper pressing th
Slide 5: Automotive market drivers
Automotive market drivers Compelling drivers are growing the use of carbon ceramic (CC) brakes 5 Environment Manufacturers using ▪ Decrease in CO2 emissions ▪ Reduction in brake pad dust pollution carbon ceramic brakes Technology ▪ Braking demands exceeding iron disc capabilities Lifetime & TCO ▪ Li
Slide 6: ST – OEM customers
ST – OEM customers 6 Engaged with significant number of OEMs Contracts with 5 OEMs OEM 1 British performance car manufacturer OEM 3 (covers 2 & 4) German group with performance car manufacturer as lead OEM 5 German car manufacturer OEM 6 British performance car manufacturer OEM 7 Swedish performance
Slide 7: Customer & shareholder value
Customer & shareholder value Strategy - be a world class, profitable manufacturing and engineering company of CC brakes 7 Price Shareholder value & is competitive Investment proposition with good * margins Product has superior technology in Capacity terms of heat management has circa £20m/yr install
Slide 8: ST manufacturing facilities & capacity capability
ST manufacturing facilities & capacity capability 8 Office Space 13,000 ft2 Expected capacity revenue (SVP) Small Volume Production 5,000 ft2 OEM cell 1 7,000 ft2 Additional OEM cells 30,000 ft2 55,000 ft2 facility OEM Cell 2 OEM Cell 3 SVP Cell OEM Cell 1 OEM Cell 4 OEM Cell 5
Slide 9: Capacity planning
Capacity planning 9 Capacity planning assumptions ▪ Customer capacity agreed as part of contract award ▪ Time between contract award and SOP longer than building and demonstrating manufacturing capacity OEM 1-7 work to this principle ▪ Timeline between contract award and SOP circa 2 years Building a
Slide 10: Disruptive OEM 8 & 9
Disruptive OEM 8 & 9* 10 Disruptive OEM behaviour ▪ Minimise future engineering costs & time by ‘carrying over’ approved parts to new models ▪ Compress timeline between contract award and SOP – reduced to circa 12-15 months ▪ Customer requirement - capacity will be available to their timeline OEM 8
Slide 11: ST capacity requirements
ST capacity requirements Current contracts, carry over & OEM 9 12 2021 2022 2023 2024 Valkyrie OEM 7 Jesko Gemera OEM 5 * 1st Model 2nd & 3rd Model OEM 8 * 1st Model 2nd Model 3rd Model OEM 9 * 1st & 2nd Models Revenue at customer forecast demand – contract + carry over + OEM 9 £35 £30 £25 millions
Slide 12: 2024 capacity – prospective contract pipeline
2024 capacity – prospective contract pipeline 13 2021 2022 2023 2024 2025 2026 OEM 6 OEM 1 OEM 3 (covering OEM 4) New OEM customer New OEM customer New OEM customer Capacity revenue by year – All projects £100 £90 £80 £70 millions £60 £50 £40 £30 £20 £10 £0 2021 2022 2023 2024 2025 2026 Current cont
Slide 13: Capacity plan – OEM Cell 2
Capacity plan – OEM Cell 2 14 Delivers required £35m/yr capacity revenue during 2022 OEM Cell 2 available for customer “off tool off process” end of ‘22/23 Construction cost circa £10m Payback – circa 15 months (at full capacity) Spring ‘21 Autumn ‘21 Spring ‘22 Complete sourcing of Commence Install
Slide 14: Fundraise – use of proceeds
Fundraise – use of proceeds Build capacity and support revenue growth 15 Investment £m Manufacturing capacity (Cell 1) 0.7 Manufacturing capacity (Cell 2) 9.2 Manufacturing resilience & development equipment 3.1 Capital expenditure (capacity & resilience) 13 Working capital (supporting rapid revenue
Slide 15: Trading update
Trading update 16 Revenues in line with expectations at £2m Cash £1.1m with £0.6m R&D tax credit in 2021 and borrowing of £0.5m OEM contracts progressing to plan OEM Cell 1 capacity on track for OEM series supply in 2021
Slide 16: Investment summary
Investment summary 17 Multiyear recurring OEM contracts in place ▪ Contracts valued at £43m from 4 OEMs in last 18 months ▪ Growing revenues with good margins leading to profitability and positive EBIT ▪ Prospective project pipeline in excess of £75m/yr within the next 5 years Trading in line with e
Slide 17: Disclaimer
Disclaimer 18 The information contained in these slides and any accompanying verbal presentation, any question and answer session and any document or material distributed at or in connection with the verbal presentation (together, the “Presentation”) have not been approved by an authorised person wi
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