Surface Transforms Share Discussion Threads

[graham1ty] 13/9/2021 07:51

Have now seen Zeus and FinnCap notes. No change to 2022 or 2023 revenue forecasts until contracts signed. So, nothing more included for any new ( or at least upgraded) OEM8 contract.

ORM8 was already in the forecasts for £8m. What is “greatly exceeded” ? Or “significantly higher capacity” ? Let us hope the discussions on the performance pack and the new capacity commitments do not take too long. Presumably OEM8 wants to be able to start delivering the performance pack to customers as soon as it can ? So, it should be weeks rather than months ?

I hope that later this year we get more concrete guidance on 2022 volumes for OEM8 on the back of a new contract that SCE can announce

[longshanks] 13/9/2021 07:43

Not surprised that OEM8 is experiencing higher sales than forecast. I saw this recently about a similar situation playing out with the Porsche Taycan: hTTps://carbuzz.com/news/porsche-taycan-demand-higher-than-anyone-expectedI note too that OEM8 appear to be now looking to offer CC brakes for all customers of this model as a performance pack.

[ps56] 13/9/2021 07:43

"whilst we are delighted that we continue to win contracts on internal combustion engine ("ICE") vehicles it is likely that by 2025 this EV segment will dominate our sales because it is currently dominating our project activity."

[rivaldo] 13/9/2021 07:38

I also like "Good progress on both commercial discussions and ongoing successful product testing with several other new and existing customers". And SCW are "working on a significant number of unannounced projects".

Schedules in the short term for the OEM8 model may slip a little - and OEM9 has delayed SOP by a year - but this is hugely outweighed by "the customer's (OEM8's) higher than originally forecast order book".

Hopefully lots more news flow still to come this year.

[longshanks] 13/9/2021 07:26

Fair point G1TY: explains the recent decision to change the manufacturing process to bring on greater capacity sooner.Wonder just how big the needs of OEM8 might prove if they need £50m capacity by 2023

[graham1ty] 13/9/2021 07:19

Meant to say: no wonder the last RNS talking of a need to streamline production, and bring it on stream faster. We now know a bit more of why.

[graham1ty] 13/9/2021 07:17

Wowee, look at the comments on OEM8. Demand has “greatly exceeded expectations” leading to “higher volumes for SCE”.....̶1;significantly higher capacity commitments”.

OEM8 was already an enormous contract (£27.5m) and down for £8m per annum once up and running. How much bigger might “greatly exceeded” be ???? ( all subject to contract !!).

It all fits together now with that last RNS: SCE expecting to fill the factory by 2024 a year early. If ( big if, or getting a much smaller if) they get to £75m revenue in just three years time........wowee !!!

[fillspectre] 12/9/2021 18:52

pinkfoot2 is there a platform PIs can hear that on? Fils

[pinkfoot2] 12/9/2021 11:56

Investor call on Tuesday-I’m hoping to hear about momentum

[ps56] 12/9/2021 11:39

I wonder, with all the recent good news and possibly some more - collated together with financial results tomorrow, will we see another re-rating of the sp?

[cheese666] 10/9/2021 09:26

"Next will be modified Plaid with added aero surfaces, Carbon Brakes and track tires (all things that can be done without Tesla being in the loop)"

This is the full text from Elon which includes this part in brackets "(all things that can be done without Tesla being in the loop)"

I'm not sure exactly what he would have meant by this? If it means people can retro fit the package I don't understand why Tesla wouldn't be in the loop as assumedly you buy the package from Tesla?

[longshanks] 10/9/2021 08:42

Let's hope he means carbon ceramic rather than carbon.For racing carbon is best, but for road use (and longevity) carbon ceramic is best whilst working pretty damn well on the race track

[jollygreengiant] 10/9/2021 07:49

Elon Musk at 1104pm last night “Next will be modified Plaid with added aero surfaces, Carbon Brakes and track tires!!!! Could it be!? We shall see!

[ps56] 09/9/2021 22:25

So, this is what Craig Couzens was up to back in July



The 40-year-old, who is business development manager at Surface Transforms in Liverpool, was in Germany to discuss distribution deals for the high-performance brake discs the company makes for supercars such as Ferrari and Lamborghini.

[cheese666] 09/9/2021 22:13

There's always something to be learned from a larger, more successful competitor. In this instance I'd suggest that some of Brembo's marketing panache would serve us well.

[fillspectre] 09/9/2021 22:12

Even before this latest news about AT-RS - I was thinking we may get news on Monday that retrofit revenues continue to grow quite nicely. Fils

[longshanks] 09/9/2021 20:34

Thanks Jerarnie. I will add them as a distributor in the header.Interesting comments from them in comparing ST to Brembo:"When it comes to carbon-ceramic brakes for high-performance motorsport vehicles or supercars for road traffic, two names cannot be avoided - Brembo and Surface Transforms. While the former is known to almost everyone through his intensive PR work, e.g. in Formula 1 motorsport, the latter is usually only known to real connoisseurs of the matter.But the products of Surface Transforms do not have to hide behind those of the Italian "global player", because they can not only keep up in terms of performance, but also outperform the products of the competition in many respects. Especially in terms of temperature management, durability and pedal feel, carbon-ceramic brake discs from Surface Transforms are the first choice! "

[jerarnie1] 09/9/2021 18:28

More interesting linkhttps://www.at-rs.de/beitrag/items/surface-transforms-karbon-keramik-kompetenz-aus-uk.html

[jerarnie1] 09/9/2021 18:21

https://www.at-rs.de/surface-transforms.html

[quemaster] 08/9/2021 21:34

Very possibly cheese666,I remember OEM 3&5 were very supportive and helped us on our early path to a suitable manufacturing facility as they were keen to have another credible supplier in the market. They also wanted their own certification of the facility which took longer than the industry standard TS 16949.

OEMs have been helpful and demanding in the past even getting us to change our computer system so it was more compatible with theirs.

[cheese666] 08/9/2021 20:23

This sounds like a company that knows it needs to advance its capacity. I also wonder if they were advised to review their production line process by a potential oem customer.

[ps56] 08/9/2021 20:17

What caught my eye is that the capacity they thought they would need for 2025 could be required much earlier - in 2014. Hence increased revenue coming earlier.

[cheese666] 08/9/2021 19:34

'together with increasingly encouraging test results have not only lifted our confidence in this view" an oem 3 reference if ever I saw one 😀

[ps56] 08/9/2021 18:33

With one analyst raising their target share price to 85p, I believe much of the recent good news is not yet factored in to the current share price

For anyone tuning in to see what SCE are looking like going forward, this RNS from 2 September bears repeating here. Absorb the full implications of their manufacturing strategy in the short term. Amazing growth potential. Note Kevin Johnson's comment in the last paragraph on their requirement for capacity.

New Manufacturing Strategy

Surface Transforms (AIM:SCE), manufacturers of carbon fibre reinforced ceramic brake discs, is pleased to announce that, following internal analysis and extensive discussions with its furnace supplier partners, it is updating its manufacturing strategy which will have the effect of:

-- saving approximately GBP10 million in equipping the entire Knowsley factory

-- increasing 2023 sales capacity by GBP15 million p.a. from GBP35 million p.a. to GBP50 million p.a. with no new capital equipment cash requirement

-- reducing implementation time for equipping the entire factory by approximately 18 months

-- significantly increasing capacity implementation flexibility beyond 2022 as the business grows over the next 2 to 3 years

-- reducing Surface Transforms' projected carbon footprint using more environmentally friendly furnace technology

By way of background, the Company has until now, had the strategy of equipping the Knowsley factory in a series of five modular, relatively independent but identical production cells, being built at one cell roughly every 18 months at a cost of approximately GBP10 million per cell. Cell One is complete. The Company raised GBP20 million in February 2021 to equip Cell Two and to provide additional working capital enabling site capacity for GBP35 million sales when complete in early 2023.

Following the fund raise, the Company and its furnace supplier partners examined the options for building not just Cell Two but also ensuring that the factory will have the required level of equipment over the next few years. The Board subsequently concluded that improvements could be made to the previous manufacturing strategy, noting that:

-- The primary objective remains to ultimately provide a factory with sales capacity of GBP75 million p.a.

-- However, the Company will no longer build separate production cells but approach the project as a plant-wide "single production line" project

-- This includes seeing the procurement of the furnaces (about two thirds of the cost and all the lead time) as being very different from that of the machine tools and other equipment

-- Following advice from the furnace suppliers and internal evaluation the Company will now procure a smaller number of larger furnaces to support the sales capacity target for the Knowsley factory of GBP75 million p.a.

-- The immediate effect is to raise the 2023 capacity availability from the fundraising projection of GBP35 million p.a. sales to GBP50 million p.a. sales with no impact on the 2022 cash requirement

-- The procurement of the other machine tools is now in "buckets" of circa GBP5 million p.a. capacity (previously circa GBP15 million p.a.) giving the Company shorter lead times and greater flexibility to deal with shorter lead time customer requests that we have seen more recently from some customers. It should also be possible to asset finance a large proportion of the machine tool purchases as the Company moves into profitability

-- The nearer term additional production capacity that this new strategy provides means the Company can await contract awards before needing to buy further furnaces to increase sales from GBP50 million to GBP75 million

-- During the fund raise the Company stated that it expected it would cost approximately GBP50 million to provide sales capacity of GBP75 million p.a. of which GBP10 million had been spent and the fund raise included GBP10 million for Cell Two capital equipment. This total requirement is now reduced to GBP40 million, a saving of GBP10 million

-- Working capital cash needs remain unchanged. This announcement only impacts capital expenditure

Upon completion of this project there will no longer be any self-contained complete production cells in Knowsley. The technologies will be grouped together, and work-in-progress will flow from one technology to the next in a lean environment. The machines in the current SVP Cell and production Cell One will be moved to the appropriate new location in the new factory layout.

Kevin Johnson, CEO, commented:

"At the time of the fund raising we said that we thought there could be sufficient demand to fill the Knowsley factory by 2025, albeit the sales were then, and are still now, only partially contracted. Our continuing discussions with existing and potential customers together with increasingly encouraging test results have not only lifted our confidence in this view but led us to the conclusion that we may require this capacity by 2024. This new manufacturing strategy will achieve the primary capacity objective with the added benefit of reducing overall capital expenditure. There are numerous positive cash implications, and we continue to work with our customers to convert the significant number of active projects into firm agreements to fill this capacity."