Autins : Annual Report & Accounts 2021

Oursolutions are driven by you

ANNUAL REPORT AND ACCOUNTS 2021

Solving your acoustic and thermal challenges

OUR PURPOSE

Autins is a specialist in solving acoustic and thermal problems. Historically, we focused on the automotive industry but we are now diversifying into other industries such as commercial vehicles, flooring, office pods and building applications. We have a unique product offering, due to the breadth of our materials, products and manufacturing processes and a highly responsive technical support service, which is valued by customers.

Contents

Strategic report

Operational Highlights	3
At a glance	4
Technology and innovation	6
Our markets	10
Chairman's statement	14
Chief Executive Officer's review	18
Adding Value Responsibly	20
Business model	21
Strategy	22
Strategy in action	24
Responsible business	26
Our commitment to ESG	26
Our Stakeholders	32
Financial review	38
Key performance indicators ('KPIs')	46
Principal risks and uncertainties	50
Statement of Directors' responsibilities	59

Governance

Board of Directors and senior management	60
Corporate governance statement	66
Directors' report	72
Director's remuneration report	76
Audit Committee report	78

Financial statements

Independent auditor's report	80
Consolidated income statement	88
Consolidated statement of comprehensive income	89
Consolidated statement of financial position	90
Parent company statement of financial position	91
Consolidated statement of changes in equity	92
Parent company statement of changes in equity	93
Consolidated statement of cashflows	94
Notes to the financial statements	96
Directors, secretary, registered office and advisors	125

Revenue	Net debt2
£23.4m	£ £2.7m
+8.9%	FY20: £1.9 m
FY20: £21.5m

EBITDA1

£ £1.1m

FY20: £1.1 m

Cash from Operations

£1.0m

FY20: £1.5 m

Financial overview

Adjusted gross profit	Earnings per share
£6.3m1	-2.74p
(27.0%)	FY20: -4.35p
+5.4%
FY20: £6.0 m1 (28.0%)
Operating loss	Final dividend
-£0.7m	Nil
FY20: -£1.3 m
	FY20: Nil

1 Adjusted gross profit calculated for FY20 excludes a £0.2 million exceptional inventory impairment. Also in FY20 a further £0.3 million of exceptional restructuring costs are excluded from EBITDA. There are no such exceptional costs in FY21.. See note 5 for reconciliation.

2 Cash less bank overdrafts, invoice discounting and hire purchase finance, excluding IFRS16 lease liabilities.

Autins Group PLC Annual Report 2021

1

Revenues increased by

8.9%

to £23.4 million. This reflected a marginal automotive recovery, but mainly growth of £1.7 million in non-automotive revenues, primarily in our flooring applications.

Neptune sales increased

64%

to £7.1 million (FY20: £4.3 million) despite pandemic supply chain disruption.

Flooring sales grew

161%

to £4.7 million (FY20: £1.8 million).

Operational

Hıghlights

Operational efficiency

improvements and Neptune manufacturing yield gains achieved to strengthen margins against disrupted supply chain volume reductions and related cost increases.

Operating cash inflow was

£1.0m

(FY20 inflow of £1.5 million) despite £0.5 million additional inventory, primarily reflecting a strategic buffer investment for critical Far East supplies.

OPERATIONAL HIGHLIGHTS

Gross profit increased by

5.4%

to £6.3 million (FY20: £6.0 million). Gross

margin reduced to 27.0% (FY20: 28.0%).

Consistent EBITDA of

£1.1m

achieved, despite considerable pandemic and semiconductor disruption impact on revenues.

£1.0m

of debt was repaid from the operating cash inflow.

Further strong performance seen in

Germany; sales grew by

69%

to £7.6 million (FY20 £4.5 million) and EBITDA increased to £0.9 million (FY20 £0.4 million).

In December0m2 21, the Company raised

£3.

via the placing of 15 million new ordinary shares at a price of 20 pence per share with new and existing investors.

Autins Group PLC Annual Report 2021

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AT A GLANCE

Accelerating					UK
product
								Where we operate
development					conversion operation
								TAMWORTH
								Materials' manufacturing, assembly and
Who we are	Whatwe do					RUGBY
166					Group headquarters, Group technical centre
WE DESIGN					(laboratory and test site), new product
				introduction centre, assembly and conversion
We use our acousticand thermal
				operation
expertise and experience to research,
				NORTHAMPTON
		Employees	test and develop bespoke solutions
			and products for our customers.					Joint venture with Indica Industries (India),
3	Innovative design is the starting point					materials manufacturing and assembly
for how we differentiate ourselves.
WE MANUFACTURE					GERMANY
We have a wide range of advanced
		Countries	manufacturing and conversion					DUSSELDORF
			processeswhich delivertruly world-
5					New product introduction centre, assembly and
class quality productsand services,
				conversion operation
includingthe unique and patented
Neptunenonwoven material					SWEDEN
manufactured in ourTamworth facility.
		Operating locations	WE SUPPORT
							GOTHENBURG
		160	We recognise thatour products exist					Newproduct introductioncentre, materials
		to solve customerproblems. We	Neptune 80% lighter than traditional	manufacturing,assembly and conversion
		are focused on providing support	decoupling treatments	operation
		to our customers throughout their	Equivalent acoustic performance but 80% weight
		Customer locations	programme life cycles to ensure	reduction over traditionaldecoupling treatment
			those problems remain solved.	when using Neptune treatment.

Our specialist solutions

ACOUSTIC

Our range of nonwoven products are low weight and designed specifically to provide excellent acoustic absorption making them suitable for various areas in the automotive sector, office acoustics, and in HVAC applications.

THERMAL

• number of our materialsprovide thermalinsulation, whether to protect passengers
  from the heat of an engine or to provide thermal control and so extend battery life in combustion and electric engines.
  Our patented Neptune product haslow thermal conductivity ideal for applicationsin automotive and commercial vehicles andwhen combined with reflective foils is also suitable for the constructionand HVAC sector.

		Automotive
Acccoustic		79
Performance		Customers
	Othermarkets
	21
0	Frequency
		Customers

Neptune Acoustic Decoupling Treatment (12kg/m3)

Traditional Acoustic Decoupling Treatment (60kg/m3)

4

Autins Group PLC Annual Report 2021

Autins Group PLC Annual Report 2021

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UK Automotive Sales Manager

SHANE KIRRANE

TECHNOLOGY AND INNOVATION

Technology and innovation

DESIGNING SOLUTIONS

Specialists in bespoke technical solutions

Our customers require solutions that are tailored to their specific acoustic and thermal challenges. We work closely with our customers from concept through

to manufacture and product launch, providing engineering design expertise across projects of all sizes.

Our knowledgeable and experienced team members are subject matter experts who specialise in creating bespoke solutions. We continue to provide support after product launch to ensure our customers' problems stay solved.

Expertise in design

Design is an integral part of our core business. We offer a product design and development service that starts with effective customer conversations to understand their needs.

From prototype part supply through development and design until part delivery and approval, this service is flexible and supportive to ensure customer requirements are met.

Our electric vehicle solution

The problem - new sources of noise, vibration and harshness ("NVH")

With the removal of the internal combustion engine ('ICE') and therefore engine noise, there is an expectation of a quieter drive in electric vehicles. In practice the removal of one major

£0.3m

invested in R&D being 1.3% of revenues (FY20 £0.3 million, 1.5%)

"By 2030 we forecast 75% of new cars in the UK will be battery electric. We see this as an opportunity to help OEMs understand the challenges of NVH in future"EV platforms and to define the future NVH solutions.

noise source uncovers a range of different NVH challenges across the vehicle. Particularly troublesome are continuous high frequency noises causing irritation to passengers including from motors, the battery, the transmission systems and the climate control systems.

Experience in EV is growing

Autins has already supplied NVH solutions on numerous electric vehicle platforms and has developed an innovative product which is currently filed for patent. During 2021 we have seen an increase in the number of pure electric vehicle companies and projects seeking our advice and support. This will inevitably grow given the increasing legislation driving the move to alternative fuel vehicles and therefore EV solutions will be prioritised within our new product product development so that we remain at the forefront in development of new EV and technology solutions.

Over

34%

estimated share of all cars in the UK that will be electric by 2030

6 Autins Group PLC Annual Report 2021