CT Automotive well positioned and report positive trading into 2022

CT Automotive Group

CT Automotive Group plc (LON:CTA), a leading designer, developer and supplier of interior components to the global automotive industry, today announced audited results for the year ended 31st December 2021.

Scott McKenzie, Chief Executive Officer of CT Automotive, commented:

“2021 was a landmark year for CT Automotive as we successfully completed our AIM IPO and achieved a positive trading performance.

We have made good progress in 2022 to date, with further new business wins and our new manufacturing plant in Mexico on track to commence operations in early H2. While the global automotive supply chains continue to be disrupted, demand remains strong, and we are seeing customer schedules and visibility improving. The Board remains confident of meeting its expectations for the full year.

Looking ahead, we are well placed to build on our strong track record of growth, client relationships and manufacturing excellence as global semiconductor shortages ease and vehicle production volumes recover.”

Financial highlights

Gross profit29.021.336.2%
Adjusted EBITDA*8.81.1700%
Adjusted Profit/(loss) before taxation*(1.8)(7.9)77.2%
Earnings per share(31.2)p(44.0)p29.1%
Net debt9.557.983.6%

* Adjusted for non-recurring items

·    Strong trading recovery from COVID-19 impacted FY2020

o  Record revenues of $132.9m

o  Recovery momentum in H1 partially offset by H2 2021 slowdown in automotive volumes as a result of global shortage of semiconductors

·    Balance sheet significantly strengthened with gross proceeds of $45m raised at IPO

·    Outperformed the global automotive market, driven by Group’s above average exposure to Electric Vehicles (EVs)

Operational / post period end highlights

·    Successful AIM IPO on 23 December 2021, enabling investment in the next phase of growth

·    Further optimisation of operations in Production division to manage unpredictable customer production schedules

·    Encouraging performance in Tooling division, reflecting increased utilisation of in-house capabilities

·    Continued strong growth in Electric Vehicles (EVs): 17% of revenue derived from EV platforms, compared to EVs overall market share by volume of c4%

·    Appointment of Global Supply Chain and Commercial Director in March 2022 to support growth

·    Investment in new manufacturing facilities in Mexico – on track to begin production in early H2

Current trading and outlook

·    Global vehicle production volumes forecast to recover during 2022 and automotive supply chain issues to resolve fully in 2023

·    Forecast recovery in global automotive volumes reflected across overall CT customer base:

o  Semi-conductor shortage remains, but visibility is improving which is allowing schedules to increase in reliability

o  Customer schedules generally show an upward trend on volumes over the next 3 months

o  Most customers have requested maximum capacity calculations, indicating they are preparing for peak volumes to return

·    The Group has long-term agreements with its customers and is well positioned as volumes recover:

o  c.97 per cent. of anticipated revenue in 2022 and c.91 per cent. of anticipated revenue in 2023 expected to come from projects which are currently in production, or on which the Group has been chosen as the nominated supplier

·    Board remains confident of meeting its FY 2022 expectations

Chair’s statement


I am delighted to present CT Automotive’s first set of results as a listed company. This has been one of the most exciting and challenging years at CT, concluding with the successful listing in late December. I am proud of what we have achieved and the position that the Group now holds.

We achieved record revenues, despite the well documented challenges in our end markets, and, with the funding from the IPO, are well placed to capitalise on the growth opportunities ahead as global vehicle production volumes recover in 2022 and beyond.

This would not have been possible without the resilience and collaboration shown by our people in such an extraordinary year. They have consistently risen to whatever challenges they face which fills me with confidence for the future of CT.

As part of the listing, we have strengthened our Board and I would like to welcome Tracey James, Francesca Ecsery and Ray Bench, our three new non-executive directors. In the short time of working with us, they have already added strong insight and improved direction to our Board so I am excited to see this develop over the coming years.

Finally, I’d like to again thank and welcome our new investors who supported us at IPO. With their backing, we look forward to continuing to build on our growth track record.

Business overview

2021 was a year of two halves. The first six months continued the strong recovery trend which started at the end of 2020 following the end of most COVID-related lockdowns, precipitating the ramping up of light vehicle production. However, during this period, automotive supply chain shortages started to arise, most notably semiconductors. Although this didn’t directly impact our supply chain, it caused automotive production lines to slow down and at times, come to a halt. Original equipment manufacturers (OEMs) have consequently become more selective about which models to produce to maximise available resources, typically favouring electric vehicles (EVs). Due to our customer mix and the vehicle models we are nominated on, these supply chain issues most significantly impacted the second six months of trading for CT. Nonetheless, we were still able to deliver record revenues ahead of our expectations set out at listing, with revenue of $132.9m, up from $109.9m in 2020.

The listing has allowed the Group to repay various credit facilities including the term loan which arose from the previous management buy-out in 2016. We have maintained our existing working capital facilities in the form of invoice finance and import trade loan facilities. The Group’s balance sheet has therefore been significantly strengthened to position the business perfectly for the next phase of growth.


As outlined at our listing  in late-December, our focus will be on continuing to invest in the business for future growth, including the set-up of the new plant in Mexico. As a result, the Board is recommending no dividend for the 2021 financial year.

This is in line with our capital allocation policy and reflects our confidence in the growth opportunities we see ahead.

Regulatory and governance

As part of the listing, the Board adopted the QCA Corporate Governance Code and will actively monitor the effectiveness of our governance processes.

As a result of the pandemic and related travel restrictions, all Board meetings continue to be held remotely. Although this has not impacted the effectiveness of the Board, we are hopeful that in-person Board meetings will be possible at some point in 2022. The first evaluation of effectiveness for the Board and committees will be completed in late-2022, following a full year of adoption.

Supporting our people

People and culture remains a core focus at CT. Our growth to this point is driven by the strength and commitment of our people.

Keeping our people safe is a top priority for CT. Health & safety is paramount at all sites, with strict guidelines and regular external audits to ensure best practice processes.

The Board is also in the process of implementing a group-wide employee engagement surveys to ensure honest and regular feedback on any issues or concerns or recommendations. As we strive to constantly innovate and improve, we value the input from our people to achieve this.

Our market

The thoughts of everyone at CT are with the people of Ukraine at this time. We continue to monitor the situation closely which has impacted the European automotive industry. Most notably, some automakers source wire harnesses from Ukraine and have been forced to halt production whilst they re-source supply. For CT, this only impacted one customer for which production restarted within four weeks and is expected to recover the lost volumes across 2022. The short-term impact on global volumes was also offset by increased volumes in the US during that 4-week period.

Looking ahead

This is a very exciting time for CT. As the global supply chain issues continue to ease through 2022, there is unprecedented, pent-up consumer demand within the automotive industry. The supply chain issues within the industry are primarily impacting our customers rather than our direct supply chain as we continue to be able to source our required raw materials. Although there is inflationary pressure mounting, the Group primarily utilises open book pricing models and hence there are mechanisms in place to pass costs through to customers. To support this and the future development of the Group, we employed Stuart Lorraine as our Global Supply Chain and Commercial Director in March 2022. Stuart has a wealth of experience within the industry including previously working at OEMs and has already helped mitigate any margin compression.

In addition, we have already achieved a number of significant new business wins in 2022 and are well progressed in setting up the new plant in Puebla, Mexico with production on track to commence in H2 2022. This progress has been detailed more within the Chief Executive Officer’s review.

These factors along with our strong track record of growth, client relationships and manufacturing excellence fill me with confidence that we are well positioned for a strong and extended period of growth.

Chief Executive Officer’s review


2021 was a landmark year for the Group as we successfully navigated a challenging market backdrop, while completing our AIM listing in December and achieving record sales.

The automotive industry has historically been demand-led and hence the just-in-time production processes facilitated the alignment of production schedules with raw materials and parts orders. The pandemic and related lockdowns have caused supply-side issues which re-shaped the global automotive market in 2021 and look set to continue through at least the first half of 2022.

With the pressure to build-back by OEMs around the world mounting and supply chain issues easing to a degree, the industry is set for a significant bounce back.

Operations – production trading

The supply chain issues in 2021, most notably the shortages of semiconductors, caused significant volatility for OEMs. This resulted in a number of customer temporary shutdowns (for example 2-weeks without production) and also reduced output across the industry. Global light vehicle production amounted to 73.4 million vehicles in 2021, up only 3.8% on 2020. So far in 2022, there have been some pandemic-related lockdowns in China. However, these have been restricted to certain areas, primarily Shanghai, and hence our operations have not seen any significant disruptions other than re-sourcing activities which have been completed quickly to ensure continuity of supply.

The Group optimised operations through 2020 and 2021 to better deal with the unpredictable customer production schedules. However, in-line with the experience of manufacturers across the global automotive sector, the “stop-start” production impacted efficiency and created some additional quality costs.

Customer schedules, although still at reduced levels, have started to become more consistent and reliable in Q1 2022, with reduced in-month order cancellations. Such cancellations were most disruptive in Q3 2021 with in-month order reductions running at c.37%. This improved slightly in Q4 2021 to c.27% and has further improved to c.17% in Q1 2022, as expected. There were numerous headwinds impacting light vehicle production across the industry in Q3 2021, most notably the semiconductor shortages and disrupted shipping schedules. These shipping schedules in 2022 have become noticeably more stable.

The nature of our production cycle relies on customer schedules being upheld. This is particularly important for production completed in China and then shipped to the UK, US and Europe. In 2021, there was an increased level of in-month order cancellations due to customer supply chain issues. As a result, this caused issues with overstocking certain product lines in our UK and US distribution centres. In 2022, this has improved as noted above and hence our stock levels are more balanced across the Group and our various locations.

Operations – production tooling

Our in-house toolroom in Shenzhen had a very busy year, running at maximum capacity on new programmes for a variety of products. We are particularly pleased as this reflects the efforts made to increase utilisation of our in-house tooling capabilities rather than outsourcing.

Development has been broadly isolated from supply-chain issues in 2021 and progress has been able to largely continue irrespective of customer shutdowns. The main impact has been a small number of delayed vehicle launches causing minor delays to tooling approvals.


Agility is one of our core values and has been more important than ever through the last two years. As a high-growth business there are always multiple challenges and fast changes impacting the business. Our people have adopted a culture to: Assess, Adjust, Act – allowing us to respond appropriately to challenges as they arise.

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There are many examples of this agility over the last two years, most notably in our working practices including how many of our people have transitioned to working from home and how we have maintained strong communication and relationships with significantly reduced travel (previously a key element in our global business).

This agility is crucial as we continue to adapt to capitalise on market trends such as EVs or design trends such as hidden IP vents or address the impact of tax changes such as the US S301 tariffs.

Expanding in the EV sector

Our design expertise and track record has allowed us to maintain our market position as a supplier for EVs. This can be seen in our customer mix and the vehicles we are nominated on which include both established EV manufacturers and new entrants to the markets. This is supported by our recent nominations on EV cars, including the Nissan Ariya and e.Go Mobile.

The growth in EVs is also driving an increase in the potential value of interior components that the Group can supply per model. In addition, technology advances in autonomous driving have been  most  prevalent  across  EVs  resulting  in  more  ‘hands-off’  time  and  interaction  with  a  vehicle’s interior. EV marques including Lucid and a major global EV OEM, have focused particular attention on their vehicles’ interior design, with the Group’s highest value of supplied components per vehicle being that within the new Lucid Air.

The trend towards EVs continues to gain momentum across the globe. This has been further enhanced in 2021 with the multiple commitments from OEMs towards full electrification (largely following the COP 26 event in November 2021). We have also seen a trend of customers prioritising EV production lines when chip availability has been restricted. Within the automotive sector, EV sales reached 6.75 million globally in 2021, up 108% on 2020.

Trading performance in Q3 and Q4 2021 was challenging due to the supply chain conditions and reflected by the global light vehicle production, however we attribute our slight overall outperformance of the global market due to the Group’s significant exposure to EVs. The Group has above average exposure to the EV segment with 17% of revenue derived from EV platforms, compared to EVs overall market share by volume of 4%.

Setting up a new plant in Puebla, Mexico

Following the introduction of additional import tariffs by the Trump administration on certain goods arriving from China into the USA it has become less economical for the Group to supply components to US based customers directly from China. While the Group has entered into cost sharing agreements with some of its existing customers to mitigate the impact of the tariffs, the Directors do not believe that they would be able to competitively bid for new contracts supplied directly by the Group’s Chinese plants while the tariffs remain in force.

In order to continue to supply to customers, including a major EV company in the US, without the imposition of the China tariffs, the Group is setting up a new manufacturing site in Mexico from which it will export to the US. The plant has been identified with a new lease signed and a number of new staff on site from May 2022. This site has in place the required infrastructure including appropriate energy connections, to allow the Group to rapidly deploy machinery. Industrialisation of the plant including shipping the tools from China will proceed across May and July with production on track to start in H2 2022.

CT has developed a low-cost modular factory design (inclusive of fixtures, quality gauges and capital equipment) with production lines built and tested in China prior to shipment, resulting in substantial reductions in capital expenditure. The Directors estimate that capital expenditure of c.$2.5 million will be required to prepare the site for first production. The Group has followed a demand-led expansion program and has secured contracts for delivery from the Mexico plant such that it is expected to be revenue generating immediately upon completion. This new site will allow us to remain competitive, and expand, in the North American market without tariffs and continues to be well-received by our customers.


The semiconductor shortages have continued to impact the industry in early 2022 with further short-term disruption also caused by the Ukraine invasion in Europe. Our customer schedules are however becoming more consistent with allows the Group to more effectively plan production schedules and better manage stock levels across the globe. We continue to expect a recovery in global production across 2022, most significantly in H2 2022, as supply issues ease. This recovery timing is largely aligned with public statements made by a number of OEMs and Tier One suppliers.

The current customer trend towards prioritising key models, due to chip restrictions, is leading to EVs and larger models typically being favoured. Although our mix of programmes is powertrain agnostic and includes a mixture of model sizes, this trend typically favours CT with our above-average exposure to EV compared to the market. This is aligned with the existing direction of travel of continued increased demand for EVs and the commitments towards achieving full electrification on new models made by a number of OEMs.

As a result of existing nominations, we anticipate the Group to benefit from increased serial production revenues in 2022 as the OEMs seek to meet the pent-up consumer demand for cars, with the full effect of new launches in 2021 contributing to further growth for CT Automotive Group. Accordingly, we have seen production volumes start to recover in early 2022 and expect this to continue ahead of automotive supply chain issues resolving fully in 2023.

The Group is positioned to recover strongly with c.97% of anticipated revenue in 2022 and c.91% of anticipated revenue in 2023 expected to come from projects which are currently underway or on which the Group is already the nominated supplier. This will be further supported once the new plant in Mexico is operational, allowing us to be more competitive in the North American markets.

Chief Financial Officer’s review

Our existing manufacturing facilities and highly skilled people fill me with confidence that we can continue to exceed our customer expectations and return to strong growth.

The global automotive market remains challenging following the impact of COVID-19 and the global shortage of semiconductors, but demand remains strong and having completed the AIM listing, CT is now well placed to capitalise on the recovery when it comes and return to historic growth and profitability.

Trading overview

There was a significant drop in global vehicle production in 2020 as a result of the COVID-19 pandemic and the preventative measures that were implemented globally, including national lockdowns that led to factory shutdowns.

Global vehicle production recovered strongly during the latter half of 2020 and this continued into 2021, with significant demand for new vehicles. Accordingly, as global vehicle production recovered, the Group performed strongly, generating revenues of $74.7 million in H1 2021, in spite of some disruption to production caused by a global shortage of semiconductors.

However, in the second half of 2021, the semiconductor shortage increasingly impacted global vehicle production, which was significantly below prior expectations for 2021. While the semiconductor shortage has impacted OEMs unevenly and they have sought to preserve production on key models, the extent of the shortage led to the Group experiencing a significant trading slowdown in the second half of 2021 in-line with wider automotive production declines and as reported at the time of the AIM listing.

As we continue through 2022, production schedules have stabilised, but we have yet to see any significant improvements. That said, our key customers are all anticipating higher production volumes later in the year which we hope will be the start of a longer term recovery.

Revenue increased 21.0% compared to 2020, driven by the completion of some Engineering, Design and Development programmes in the final quarter of 2021, as well an improved performance in serial production.  

Gross margins improved slightly from 2020 but remained lower than expected as a result of lower production volumes in China in Q4, with the completion of some de-stocking also impacting production efficiency. The ongoing disruption being caused mainly by the shortage of semi-conductors continues to impact margins and remain below the Group’s target margins in normal trading conditions.

Distribution costs have also increased due to a full 12-month period of increased freight charges following the pandemic and related logistic issues. This has resulted in freight container costs exceeding the container rates quoted to customers. We expect this to normalise over time and have hence negotiated to recover the excess freight costs from customers as much as possible.

These irrecoverable excess freight costs have been classified as non-recurring items for the purpose of alternative performance measures (APMs). Non-recurring items in 2021 also include AIM listing fees, Turkish foreign exchange losses and impacted charges following the divestment of Scomadi.

Administrative expenses (adjusted for non-recurring items) have remained largely flat compared to 2020, reflecting the fact that CT has already scaled up for the growth that was forecast with significant new program launches, prior to the pandemic.

These factors have resulted in adjusted EBITDA of $8.8m and adjusted operating profit of $3.2m, which are both significantly improved from 2020 but margins remain below the levels achievable once the supply chain issues are resolved.


The financing position of the Group has changed significantly over the last 12 months, most notably from the admission to AIM in December 2021. We continued to utilise the Government-backed CLBILS loan obtained in 2020 and also obtained a further short term loan for $2.5m in January 2021.

Following the decision to list on AIM, the Group raised pre-IPO funding in the form of convertible loan notes for $5.6m, which converted to Ordinary Shares on the date of listing.

The AIM listing in December 2021 raised share issue proceeds of $42.5m which allowed us to pay down multiple credit facilities and inject working capital into the Group to set up for the next phase of growth.

Admission to AIM

I am delighted that we achieved a successful listing in December 2021. I am pleased that our new investors recognised our track record for growth prior to listing and the significant opportunity for future growth as the automotive industry recovers and CT Automotive delivers on the existing nominated programmes.

Organic growth

The past two years have been challenging with extreme disruption across the business. The robust nature of our business and low-cost operating model has allowed us to continue throughout to meet all of our customer requirements. The business is now perfectly positioned to capitalise on the recovery of the automotive market in the coming years and achieve our growth ambitions. Our existing manufacturing facilities and highly skilled people fill me with confidence that we can continue to exceed our customer expectations and return to strong growth.

This is further supported by the ongoing set-up of our new plant in Mexico which will further increase our appeal to customers in both North America and South America.


The Group has consolidated its focus on automotive components in 2021 which included the divestment of our Scomadi minority share prior to admission to AIM. The Scomadi business needed additional investment following the impacts of the pandemic and the Board concluded that our resources were better focused on our own growth.

Following the listing and strengthening of the balance sheet, we are open to acquisition opportunities that may arise. We have significant in-house corporate finance expertise along with trusted advisors who continue to search for businesses that meet our strict acquisition criteria and would be a good strategic fit with our Group.

Post listing actions

The proceeds from listing were intended to provide the Group with capital to execute our growth plans. Most notably, the proceeds have allowed us to fully repay our term loan, CLBILS loan along with other debt within the Group. This strengthened balance sheet position is critical as the Group can now realise the full growth potential and move away from the previously significant debt servicing commitments. Over time, this is expected to unlock free cash flow to fund our growth plans.

The Board previously highlighted the following plans:

Growth planCurrent status
Enlarging the Group’s production facilities in Europe and opening a new facility in MexicoThe Mexico facility set-up is underway with local staff currently being recruited and production planned to commence by July 2022.We are currently looking for new premises within Czech Republic to expand our operations.
Taking on a larger number of new programmesA number of new programmes have been secured since listing to commence in 2023 and 2024.The working capital of the Group is expected to increase over time in 2022 as the reduction in debt servicing costs is realised compared to 2021.
Reducing supplier costs by up to c.5%A number of negotiations have already been successfully completed, particularly in China. Further negotiations are awaiting re-rating from credit agencies which will follow the publication of this Annual Report. These negotiations have been primarily led by the new Global Supply Chain and Commercial Director.
Entry into more strategic partnershipsThis continues to be planned across 2022 and 2023.
Increasing research and development expenditure to enhance competitive advantageThis continues to be planned across 2022 and 2023.
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