Montana Aerospace AG: MONTANA AEROSPACE AG PREPARES FOR INITIAL PUBLIC OFFERING

Reinach (pta005/23.04.2021/07:00 UTC+2)

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CORPORATE NEWS
Reinach (Aargau), 23 April 2021

MONTANA AEROSPACE AG PREPARES FOR INITIAL PUBLIC OFFERING

- Montana Aerospace AG (the "Company") and its operating subsidiaries (the "Group" or "Montana Aerospace") are a leading, highly vertically integrated manufacturer of system components and complex assemblies for the aerospace, e-mobility and energy sectors with a clearly focused best-cost-country footprint and innovative product design technologies. The Group is planning an initial public offering ("IPO") with an intended listing on the SIX Swiss Stock Exchange in accordance with the International Reporting Standard.

- The Group distinguishes itself by a deeply vertically integrated supply chain and has approximately 4,800 highly skilled employees at 28 locations on four continents. Most of its activities are located in best-cost countries ("BCC") and apply a local-to-local manufacturing approach.

- The offering aims to raise primary gross proceeds of approximately EUR 400 million to fund future organic and smart inorganic growth objectives, broadening the Group's customer, technology and product portfolio, further integrating the value chain and expanding the Group's capacities to cover increased client demands even in challenging markets.

- Two new international institutional investors have pre-committed an aggregate amount of approximately EUR 113 million in the IPO, in exchange for guaranteed allocations.

- Game changer in the aerospace supply chain:
- Montana Aerospace is a highly vertically integrated aerostructures supplier with a solid best-cost-country footprint, multi-material expertise in aluminium, titanium, composite, copper and steel and innovative product design backed by proprietary IP.
- The Group has improved growth in a rapidly changing supplier environment - a clear ESG focus as well as continuous growth investments of EUR 475 million between 2018 and 2020 have made Montana Aerospace a build-and-buy partner of choice for many OEMs and Tier 1 suppliers.

- Proven business model:
- The proximity to the market (local-to-local), customer focus, advanced design, engineering and production capabilities set Montana Aerospace apart.
- The scalable, sustainable business model with a clear focus on ESG has enabled the Group to implement a lasting growth strategy in the US, Europe and also in the APAC region.
- Montana Aerospace's targeted high-profile organic growth is backed by a long-term order book that has increased despite the crisis.

- In 2019, the Group reported strong net sales of EUR 783 million and an adjusted EBITDA[1] of EUR 102 million. In 2020 and despite the COVID-19 crisis, Montana Aerospace secured net sales of EUR 614 million and an adjusted EBITDA of EUR 45 million. Additionally, Montana Aerospace achieved a strong increase in contracted sales for the aerospace and automotive industries from EUR 3.0 billion in 2020 to EUR 4.2 billion as of 31 January 2021.[2]

Reinach, 23 April 2021. Montana Aerospace AG, a leading and highly vertically integrated manufacturer and supplier of system components and complex assemblies for the aerospace, e-mobility and energy sectors, with worldwide engineering and manufacturing operations ("Montana Aerospace", the "Company" and together with its operating subsidiaries the "Group") announces its intention to launch an initial public offering and to list its shares on the SIX Swiss Stock Exchange (in accordance with the International Reporting Standard) in the second quarter of 2021, subject to market conditions. The Company is a subsidiary of Montana Tech Components AG and the offering would represent the third IPO of Montana Tech Components AG following the successful IPOs of VARTA AG and Aluflexpack AG in 2017 and 2019, respectively.

Leading structural change in the sector
Despite the COVID-19 crisis, the aerospace industry remains one of the most critical industrial and growth sectors while also being of high strategic relevance. Forecasts from major aircraft manufacturers (original equipment manufacturers, or "OEMs") predict a high demand for fleet renewal and expansion over the next 20 years.[3]

In the supplier landscape, the need for efficient production processes and industry consolidation has been a key driver of change. In recent years, OEMs and Tier 1 suppliers have tended to continuously reduce the number of suppliers and increasingly have awarded contracts to vertically integrated companies that offer many services under one single roof, thus enabling OEMs to reduce costs and supply chain complexity.

This shift is expected to continue and extend into all levels of the supply chain. The Group recognised these emerging structural changes early, more than 10 years ago, and started to prepare for them by adopting a strategy to support the aerospace market with a highly integrated BCC manufacturing footprint and implemented this strategy through the launch of major CAPEX initiatives, especially in Romania and Vietnam.

Game changer in the aerostructures industry
The effects of COVID-19 have demonstrated the aviation sector's significant economic and social importance. To prepare for the sector's expected recovery, the Group has taken anti-cyclical advantage of 2020's transition phase and launched the largest investment programme in its history (CAPEX: EUR 475 million between 2018 and 2020).

As a highly vertically integrated player and - we believe - predominantly single-source supplier, the Group expects to benefit from these structural changes and emerge even stronger in the aerospace market. Strategic M&A transactions, investments in new factories, machinery and in-house competencies are targeted to enable Montana Aerospace to deepen its global value chain.

In this context, the Group continues to reduce the complexity of projects for its customers by reducing their dependence on a large number of small suppliers. This approach lowers costs and drastically reduces long supply chain routes and lead times.

Partner of choice for OEMs and Tier 1s
The Group has 28 locations in 14 countries and is a leading manufacturer of critical aerostructures made of aluminium, titanium, composites and complex components made of steel and copper. Together with its additional product offerings in the automotive (e-mobility) and energy industries, the Company is diversified and well established.

Its global manufacturing and engineering presence and one-stop-shop concept in all major regions, combining the highest manufacturing competencies with broad, multi-material know-how and customer proximity, make the Group one of the leading players in the aerostructures supplier industry. High "design and build" as well as "build to print" competencies at BCC manufacturing conditions across a wide range of process steps have supported Montana Aerospace's growth in recent years.

Pursuing ESG through vertical integration
At the same time, the Company aims to set new standards for efficiency and sustainability. In a non-integrated value chain, most products can be required to pass through as many as eight different production steps from raw material to the finished component - creating high avoidable costs, structural inefficiencies, a high risk to product quality, multiple transportation cycles between the different processing sites, as well as a considerable CO2 footprint for the entire value chain. The Group's manufacturing approach addresses these challenges and offers a solution.

What is needed today are suppliers who can offer the potential to reduce complexity, cost and CO2 emissions. Montana Aerospace is fully dedicated to these objectives and has a clear commitment to sustainability principles which help reduce the carbon footprint of the overall aerospace industry and its supply chain.

At Montana Aerospace we recycle up to 100% of our internal aluminium extrusion scrap required for the production of mission-critical aerospace components. Besides minimising the environmental impact, this saves costs and raw materials resources.

IPO proceeds to fund organic growth investments and acquisitions
Through the primary offering, the Group intends to raise approximately EUR 400 million of gross proceeds with a clear intent to finance organic and inorganic growth programmes. It plans to use approximately 40% of net proceeds for organic growth activities, with approximately two-thirds of this amount intended to be spent in 2021 and the remainder in 2022. The majority of these growth activities is backed by contracts and was started before the announcement of the potential IPO.

The organic growth programme also covers activities in recycling, casting and heavy press as well as surface treatment, and includes the expansion of capacities (e.g., the Group's third heavy press and the expansion of capacities for composites handling), the ramp-up of new capabilities (including titanium and finishing of drawn tube products) and efficiency improvements. The Group intends to target most of these investments at its European and Asian sites.

As complexity reduction within the supply chain is a key priority for OEMs, the remaining approximately 60% of net IPO proceeds are intended to be used for inorganic growth through smart M&A activities. This includes strategic acquisitions to further consolidate the supply chain with the aim of unlocking attractive synergies and returns. The Group generally pursues a clear target list discussed with OEMs / Tier 1s with the intention of further strengthening collaboration and driving integration of mission-critical services and products into the Group's existing value chain.

Profitable Company growth with strong margins and promising outlook
In recent years, Montana Aerospace has positioned itself as a partner of choice for OEMs and Tier 1 suppliers with a focus on mission-critical aerostructures and complex assemblies. The strong net sales of EUR 783 million and the adjusted EBITDA of EUR 102 million in 2019 reflect significant top-line and profitability growth during the previous ten years.

The resilience of the Company's business model brought to bear in 2020 when the COVID-19 crisis significantly impacted the aerospace sector. The Company withstood significant losses thanks to its flexible manufacturing approach and best-cost-country footprint, securing for the full year net sales of EUR 614 million and an adjusted EBITDA of EUR 45 million. Additionally, Montana Aerospace managed to achieve a strong increase in contracted sales for the aerospace and automotive industries of approximately EUR 1.2 billion, reaching as of 31 January 2021 EUR 4.2 billion compared to EUR 3.0 billion as of 31 March 2020.

Due to the well-positioned value proposition of a highly integrated value chain combined with its broad materials competence, Montana Aerospace is able to achieve strong margins. Montana Aerospace further targets expansion of its top line through organic growth and strategic acquisitions. With its comprehensive M&A expertise, the Company aims to further consolidate the supplier landscape while strengthening its integrated business model. Backed by its strong financials and margin potential, the Company's long-term strategy is to establish and expand its positioning as a partner of choice for OEMs and Tier 1 suppliers in the aerospace market.

Cornerstone Investors
In the context of the planned IPO and based on the indicated envisaged offering size, two new international institutional investors, (i) funds advised by Capital International Investors and (ii) M&G Investments, (the "Pre-Committed Investors"), have committed to subscribe, severally and not jointly, for freely tradable new shares in the IPO at the final offer price for an aggregate amount of approximately EUR 113 million, in exchange for a guaranteed allocation.

Further details on the planned IPO
In the course of the planned offering, new shares from a planned capital increase are expected to be offered, with targeted gross proceeds of approximately EUR 400 million. Additionally, the majority shareholder will make existing shares available for a possible over-allotment comprising up to 15% of the new shares sold in the offering (Greenshoe option). Montana Tech Components AG ("MTC") intends to remain the majority shareholder after the listing of Montana Aerospace and, as for the other publicly listed companies in the MTC portfolio, VARTA AG and Aluflexpack AG, plans to hold a majority stake.

A lock-up of twelve months is expected for the Company and those members of management holding shares, and a lock-up of 24 months for the existing majority shareholder MTC. In the planned IPO, Joh. Berenberg, Gossler & Co. KG acts as Sole Global Coordinator and Joint Bookrunner. Commerzbank AG and Zürcher Kantonalbank are mandated as Joint Bookrunners. According to the current plan, the offering is expected to comprise a public offering in Switzerland and private placements outside of Switzerland, including in the U.S. to qualified institutional buyers as defined in and in reliance on Rule 144A under the U.S. Securities Act of 1933, as amended (the "Securities Act"). Outside of the U.S., the shares of the Company are planned to be offered and sold only in offshore transactions in reliance on Regulation S under the Securities Act.

[1] Adjusted EBITDA is based on EBITDA, adjusted for litigation expenses mainly related to litigation in the U.S. and inter-company expenses with Montana Tech Components AG, which are expected to be discontinued following the offering.
[2] Contracted sales are calculated by multiplying the value of parts and shipsets to be delivered to our customers under a long-term supply contract over the contract term at the expected build rates which are based on forecast information and estimates provided by customers, as adjusted by our management estimates. As of 31 January 2021, EUR 3.9 billion is attributable to our aerospace business and EUR 0.3 million to our automotive/e-mobility business. For 2020, the figure shown represents the estimate for the aerospace business for 31 March 2020 (EUR 2.9 billion) and for the automotive/e-mobility business for 31 December 2019 (EUR 0.1 million); the different points in time result from the fact that harmonised figures were not available for a common period.
[3] Boeing Commercial Market Outlook 2020-39; Airbus Global Market Forecast 2019-38

Head of M&A and Investor Relations 
Marc Vesely recte Riha
Phone: +43 664 61 26 261
E-mail: ir@montana-aerospace.com 

Press contact:
Christian Pichler
Phone: +49 89 59 94 58-137
E-mail: christian.pichler@kekstcnc.com

About Montana Tech Components AG
Montana Tech Components AG, founded in 2006, is a globally active industrial group focusing on key technologies in future markets. The companies of the growth-oriented group hold a leading position in their field of activities. By focusing on selected key technologies, market leadership, and continuous innovation, MTC pursues a sustainable growth strategy in its divisions - VARTA AG, Aluflexpack AG and Montana Aerospace AG. The Group generated sales worth EUR 1.72 billion in 2020 and is represented at 83 locations in 34 countries worldwide. It currently employs a total of around 10,700 highly qualified staff members.

About Montana Aerospace AG
Montana Aerospace AG is a leading producer of system components and complex assemblies for the aerospace industry, with worldwide engineering and manufacturing operations. The Company has approximately 4,800 highly skilled employees at 28 locations on four continents - designing, developing and producing ground-breaking technologies for tomorrow's aerospace, e-mobility and energy industries out of aluminium, titanium, composite, copper and steel.

Disclaimer
The information contained herein is not for release, directly or indirectly, in or into the United States of America, Canada, Australia, Japan or any other jurisdiction where to do so would be unlawful. This document (and the information contained herein) does not contain or constitute an offer of securities for sale, or solicitation of an offer to purchase securities, in Canada, Australia or Japan or any other jurisdiction where such an offer or solicitation would be unlawful. In particular, this document is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or an exemption from registration. The securities referred to herein have not been and will not be registered under the Securities Act. No public offering of the securities will be made in the United States.

None of the underwriters or any of their respective subsidiary undertakings, affiliates or any of their respective directors, officers, employees, advisers, agents, alliance partners or any other entity or person accepts any responsibility or liability whatsoever for, or makes any representation, warranty or undertaking, express or implied, as to the truth, accuracy, completeness or fairness of the information or opinions in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Group, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith. Accordingly, each of the underwriters and the other foregoing persons disclaim, to the fullest extent permitted by applicable law, all and any liability, whether arising in tort or contract or that they might otherwise be found to have in respect of this announcement and/or any such statement.

This communication is not an offer to sell or a solicitation of offers to purchase or subscribe for securities. This communication is not a prospectus within the meaning of the Swiss Financial Services Act (the "FinSA") and will not be reviewed by any competent authority. Any offer of securities of the Company will be made solely by means of, and on the basis of, a prospectus that will contain, among others, detailed information about the Company and its management, the offered securities (specifically the associated rights, obligations and risks) as well as the offer itself. This communication does not constitute advertising within the meaning of article 68 of the FinSA. Any persons considering the purchase of any securities of the Company must inform themselves independently based solely on such prospectus (including any supplement thereto). Investors are furthermore advised to consult their bank or financial adviser before making any investment decision.

This document does not constitute an "offer of securities to the public" within the meaning of Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the "UK Prospectus Regulation") of the securities in the United Kingdom (the "UK"). Any offers of the securities in the UK will be made pursuant to an exemption under the UK Prospectus Regulation from the requirement to produce a prospectus for offers of the securities. In the UK, this document is only addressed to qualified investors within the meaning of the UK Prospectus Regulation. In addition, this document is only being distributed to and is only directed at (i) persons who are outside of the United Kingdom or (ii) to investment professionals falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "FSMA Order") or (iii) persons falling within articles 49(2)(a) to (d), "high net worth companies, unincorporated associations, etc." of the FSMA Order, and (iv) persons to whom an invitation or inducement to engage in investment activity within the meaning of section 21 of the Financial Services and Markets Act 2000 may otherwise be lawfully communicated or caused to be communicated (all such persons together being referred to as "relevant persons"). The securities are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

This document does not constitute an "offer of securities to the public" within the meaning of Regulation (EU) 2017/1129 of the European Union, as amended (the "Prospectus Regulation") in any member state of the European Economic Area (the "EEA"). Any offers of the securities to persons in the EEA will be made pursuant to an exemption under the Prospectus Regulation from the requirement to produce a prospectus for offers of the securities. In any member state of the EEA, this document is only addressed to qualified investors in that relevant member state within the meaning of the Prospectus Regulation.

Statements contained herein may constitute "forward-looking statements". Forward-looking statements are generally identifiable by the use of the words "may", "will", "should", "plan", "expect", "anticipate", "estimate", "believe", "intend", "project", "goal", "aim" or "target" or the negative of these words or other variations on these words or comparable terminology.

Forward-looking statements involve a number of known and unknown risks, uncertainties and other factors that could cause the Company's or its industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. The Company does not undertake publicly to update or revise any forward-looking statement that may be made herein, whether as a result of new information, future events or otherwise.

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Emitter:	Montana Aerospace AG Alte Aarauerstrasse 11 5734 Reinach Switzerland
Contact Person:	Marc Vesely Recte Riha
Phone:	+41 62 7652500
E-Mail:	m.vesely@montana-aerospace.com
Website:	www.montana-aerospace.com
ISIN(s):	CH1110425654 (Share)
Stock Exchange(s):	SIX Swiss Exchange