Surface Transforms selected as a tier one supplier to its existing mainstream customer OEM 5

Surface Transforms plc (LON:SCE), manufacturers of carbon fibre reinforced ceramic brake discs, has announced that it has been notified of its selection as a tier one supplier of a carbon ceramic brake disc to its existing mainstream customer described previously as OEM 5. Prototype orders have been received and are being fulfilled. All terms and conditions have been carried over from the master purchase agreement with this customer signed in mid 2019.

The car is a facelift to an existing internal combustion engine model with start of production in Q1 2024 and the Company’s brake discs will be fitted as an option to the front axle. The lifetime value of the contract is expected to be approximately €5 million spread over the 5 years from 2024 to 2028.

The contract will not have a significant impact on Surface Transforms production capacity and was part of the expectations outlined during the February 2021 fund raising. However, separately, the Company has been reviewing its manufacturing capacity strategy with a view to both reducing timescales and costs and a separate announcement is being made today on that subject.

Kevin Johnson, CEO, commented:

“The significance of this relatively small contract lies in it being the first example of the implementation of the multi-year “carry over” agreement concluded with OEM 5 at the time of the initial contract award in July 2019. This envisaged further awards, of varying sizes, over several years. A further award in 2020 did not happen because of a Covid induced programme cancellation by the customer. It is good to be now back on track. The engineers in both companies are now working on the next vehicle brake disc that is available for award over the next year. We are greatly enjoying working with this customer and look forward to further deepening our relationship.”

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Surface Transforms Plc

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