STS  Group AG publishes half-year report 2022 - Positive development in Europe overshadowed by corona-related decline in China

• Sales revenue down to 117.4 mEUR (H1/2021: 134.8 mEUR) in a still challenging market environment
• Corona-related sales revenue decline in China of around 70.6% in H1/2022 cannot be fully compensated by sales revenue growth in Europe (plus 25.0%)
• EBITDA falls to 2.9 mEUR (H1/2021: 13.8 mEUR)
• Cash and cash equivalents increased to 30.5 mEUR (31 December 2021: 28.3 mEUR)
• Forecast 2022 still characterised by generally difficult-to-predict market development

Hagen, 8 August 2022 - STS Group AG (ISIN: DE000A1TNU68), a global systems supplier for the automotive industry listed on the General Standard of the Frankfurt Stock Exchange, today publishes its half-year report 2022.

Alberto Buniato, CEO of STS Group AG: "The business development of STS Group in the first half of 2022 was characterised by a corona-related stop in demand in the core market China. In contrast, the Plastics and Materials business in Europe developed positively with an increase in sales revenue of around 25%. In addition, we were able to create synergies for our business in Mexico together with our new strategic investor, the Adler Pelzer Group. Despite the imponderables of a market environment that is currently difficult to predict, we remain optimistic about our long-term strategic growth trend. Despite the temporary setback, we are fundamentally positive about China and in the reporting period we have kept our structures in place for the expected market ramp-up of the customer call-offs in the second half year in order to be able to quickly adjust capacities. We are also continuing to work with high intensity on the expansion of the business in the North American market, which will also offer our Group clear potential for future growth."

Revenue development

STS Group AG generated sales revenue of 117.4 mEUR in the period from 1 January to 30 June 2022, down from 134.8 mEUR in the same period of the previous year. The decrease of 12.9% is mainly due to the drastic stop in demand in China in the first half of the year due to the ongoing zero-COVID policy and the associated lockdowns. The decline in sales revenue in the China segment amounted to 70.6% in the reporting period. However, sales revenue growth in the Plastics and Materials segments could not fully compensate for this decline.  Nevertheless, the activities in Europe and at the site in Mexico were able to gain new demand momentum after the COVID-related slumps in the 2020 financial year. In addition, sales revenue of the European business activities were back at the pre-crisis level of 2019 for the first time.

Earnings development

Due to the omission of the earnings contribution from China, the Group's earnings before interest, taxes, depreciation and amortisation (EBITDA) fell to 2.9 mEUR in the first half-year, compared to 13.8 mEUR in the same period of the previous year. In addition, the improved margins in the Plastic and Materials segments were offset by rising material costs, which could not yet be fully compensated for and thus burdened profitability in the reporting period. Adjusted for restructuring-related special effects, adjusted EBITDA fell to 3.1 mEUR in the first half of the year (H1/2021: 13.9 mEUR). STS Group AG reported a consolidated result of -6.3 mEUR in the first half 2022 (H1/2021: 3.8 mEUR).

Balance sheet

Due to the negative consolidated result, equity decreased to 53.7 mEUR as of 30 June 2022, compared to 58.3 mEUR as of the 2021 balance sheet date. This corresponds to an equity ratio of 24.0% (31 December 2021: 29.2%). Cash and cash equivalents increased to 30.5 mEUR as at 30 June 2022 (31 December 2021: 28.3 mEUR). In the half year under review, STS Group generated a positive net cash flow from operating activities of 7.4 mEUR compared to 17.1 mEUR in the previous year. The decline in the development of the operating cash flow compared to the same period of the previous year is mainly characterised by the negative consolidated result and the change in net working capital. The change in net working capital is due to the build-up of inventories to secure price quality and delivery dates on the procurement side. The Group's net financial debt increased slightly by 3.0 mEUR to 15.2 mEUR as at 30 June 2022 (31 December 2021: 12.2 mEUR). The increase in this item is mainly due to new bank borrowings in China. On the other hand, the increase in cash and cash equivalents as of 30 June 2022 had a positive effect.

Forecast 2022

The business development of the STS Group in the first half of the year is largely in line with expectations with regard to the targets for 2022 communicated in the annual report. The development in the further course of the year continues to be characterised by a market environment that is generally difficult to forecast. The forecast communicated in the 2021 annual report therefore remains unchanged. If there is no dramatic intensification and expansion of the war and no cessation of raw material deliveries, the Executive Board expects a slight decline in sales revenue for fiscal 2022 compared to the previous year. If the situation worsens, the decline may be more pronounced. Minor special charges are expected for fiscal 2022, so adjusted EBITDA will be roughly in line with EBITDA.

The STS Group AG half-year report 2022 is available for download at https://www.sts.group/investor-relations/publications.

Key figures in the first half-year 2022

About STS Group:

STS Group AG, www.sts.group (ISIN: DE000A1TNU68), is a leading system supplier to the automotive industry. It employs more than 1,500 people worldwide and generated sales of 242.0 mEUR in the financial year 2021. STS Group ("STS") produces and develops at its twelve 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 manufacturers of commercial vehicles, passenger cars and electric vehicles.

STS Group AG
Investor Relations
Kabeler Str.
458099 Hagen
ir@sts.group
www.sts.group