STS Group AG publishes figures for the third quarter 2020 - Recovery in Europe and strong growth in China

• Successful completion of the sale of the Acoustics business segment in October;
• After resumption of production: market recovery in Europe and strong growth in China;
• Sales decrease by 20.9% to 218.5 mEUR (9M/2019: 276.3 mEUR), third quarter at 82.5 mEUR on prior year's level (Q3/2019: 82.5 mEUR);
• Adjusted EBITDA for the nine-month period falls to 1.9 mEUR year-on-year (9M/2019: 14.1 mEUR); third quarter at 4.1 mEUR on previous year's level (9M/2019: 4.0 mEUR);
• Special effects of 6.0 mEUR for severance payments related to restructuring of the headquarter and one-time effects in connection with the sale of BU Acoustics;
• Net financial debt (incl. leasing) increased to 48.9 mEUR as of September 30, 2020 compared to December 31, 2019 (39.1 mEUR).

Hallbergmoos/Munich, November 4, 2020. STS Group AG (ISIN: DE000A1TNU68), a global system supplier to the automotive industry, listed in the General Standard of the Frankfurt Stock Exchange, today publishes its voluntary press release on the first nine months of fiscal year 2020.

Mathieu Purrey, CEO of STS Group AG: "The ongoing COVID-19 pandemic is presenting us with major challenges in the current financial year, particularly in Europe. Nevertheless, we were able to implement various measures to position the company well for the future. With the completed sale of the Acoustics business segment we can further focus on our vertical integrated plastic and composite technologies. The disposal of the Acoustics business segment in combination with the restructuring of our Group headquarter will lead to a significantly improved profitability. As an automotive system supplier, the STS Group is excellently positioned to tackle the megatrends."

Sales development
STS Group generated sales revenues of 218.5 mEUR in the period January 1 to September 30, 2020, compared to 276.3 mEUR (minus 20.9%) in the same period of the previous year. The COVID 19 pandemic had an impact on STS Group's market environment in Europe especially in the second quarter. After the reopening of the European plants, the third quarter saw an increasing recovery of the customer call-offs to the previous year's level. Following the plant closures in February, the Chinese market recorded strong growth even above the previous year's level. The China segment thus recorded sales increase of +79.9% in the first nine months. Strong growth in China also almost compensated for declines in the other segments in the third quarter. With STS Group's third-quarter sales of 82.5 mEUR again at the previous year's level (Q3/2019: 82.5 mEUR).

Development of earnings
Earnings before interest, taxes, depreciation and amortization (EBITDA) fell to minus 4.1 mEUR in the first nine months of 2020 (9M/2019: 13.2 mEUR). In the reporting period, extraordinary expenses for reorganization measures and in connection with the sale of Acoustics business segment in the total amount of 6.0 mEUR were incurred. Thereof 1.5 mEUR relates to the closure of the Group headquarter in Hallbergmoos and the related layoffs of employees. They also include costs in connection with the departure of former members of the Executive Board. In the prior-year period, extraordinary expenses of 0.9 mEUR were incurred.

The adjusted operating result (Adjusted EBITDA) decreased to 1.9 mEUR in the reporting period, compared to 14.1 mEUR in the prior-year period. The decrease in Adjusted EBITDA is mainly due to the decrease of sales in connection with the plant closures in the first half of the year. The STS Group took numerous countermeasures to reduce costs, but these only partially offset the volume-related negative earnings effects. At 4.1 mEUR, however, Adjusted EBITDA in the third quarter was already back at the previous year's level.

Net loss for the reporting period was minus 35.3 mEUR (9M/2019: minus 4.9 mEUR). In addition to the operational effects described above, increased depreciation and amortization of 25.8 mEUR (9M/2019: 13.9 mEUR) had a negative impact on earnings. The increase is mainly due to an extraordinary impairment loss of 11.0 mEUR recognized in the first half of the year.

Financial and asset position
The Group's net financial debt increased by 9.8 mEUR to 48.9 mEUR as of September 30, 2020 (December 31, 2019: 39.1 mEUR). The increase is mainly due to the raising of government-guaranteed loans in France and Italy, the latter will continue to be account until deconsolidation in the fourth quarter of the financial year. This is partially offset by an increase in unrestricted cash and cash equivalents as of September 30, 2020 (31.8 mEUR) compared to December 31, 2019 (17.2 mEUR).

Total assets as at September 30, 2020, increased by 12.2 mEUR to 268.7 mEUR when compared to December 31, 2019 (256.5 mEUR).

Total equity at September 30, 2020, decreased by 35.9 mEUR to 32.7 mEUR compared to December 31, 2019, (68.6 mEUR). The main factor reducing equity was the net income, which was strongly burdened by the COVID 19 pandemic. The capital increase of 1.5 mEUR, which was resolved on September 10, 2020, and subsequently implemented, had an opposite effect. The capital increase from partial utilization of the Authorized Capital 2018/I was implemented solely by Mutares SE & Co. KGaA.

The equity ratio as at September 30, 2020, decreased to 12.2% (December 31, 2019: 26.8%).

Outlook for 2020
In view of the development of the general market environment in the third quarter, STS Group also expects an increasingly positive development for the rest of the year. This statement assumes that no further COVID-19 related significant restrictions on the general business development will occur.

The Management Board expects a significant decrease in revenues for the 2020 fiscal year compared to the previous year and a corresponding lower Adjusted EBITDA margin. Following the deconsolidation of the Acoustics division, the Management Board is currently planning to publish an updated forecast for fiscal year 2020 in the coming weeks.

Financial figures for the third quarter of 2020

About STS Group:
STS Group AG ("STS") is a leading system supplier to the automotive industry. It employs more than 1,600 people worldwide and generated revenues of 362.8 mEUR in the financial year 2019. STS produces and develops at its 12 plants and three development centers in France, Germany, Mexico, China and, in the future, also in the USA plastic injection moulding and components made of composite materials (Sheet Molding Compound - SMC), such as solid and flexible vehicle and aerodynamic trim, entire interior systems, as well as lightweight construction and battery components for electric vehicles. STS is considered as a technology leader in the manufacture of plastic injection moulding and components made of composite materials. STS has a large global footprint with plants in three 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