Cooper-Standard Holdings Inc. Business Report FY ended Dec. 2015

Financial Overview

(in million USD)

	FY ended Dec. 31, 2015	FY ended Dec. 31, 2014	Rate of change (%)	Factors
Net Sales	3,342.8	3,244.0	3.0	1)
Net Income	111.8	45.5	145.7	-
Sales by Geographic Area
-North America	1,778.6	1,698.8	4.7	2)
-Europe	1,033.6	1,138.4	(9.2)	3)
-Asia Pacific	435.1	249.2	74.6	4)
-South America	95.4	157.6	(39.4)	5)

Factors
1) Net Sales
-The Company's sales for the fiscal year ended December 31, 2015 increased by 3.0% over the previous year to USD 3,342.8 million. Factors contributing to this increase include improved volume and product mix in North America, Europe, and Asia Pacific segments, as well as the Company's previous acquisition of Huayu-Cooper Standard Sealing Systems Co., Ltd. (Shenya). These gains were partially offset by negative currency exchange effects, decreased sale volumes in South America, and global customer price reductions.

2) North America sales
-Sales for the Company's North American segment increased by 4.7% in the fiscal year ended December 31, 2015 to USD 1,778.6 million. Gains from an increase in sales volume and an improved product mix were partially offset by unfavorable foreign currency exchange effects of USD 44.9 million and customer price reductions.

3) Europe sales
-In the fiscal year ended December 31, 2015, the Company's Europe segment had sales of USD 1,033.6 million, a decrease of 9.2% from the previous year. While sales volumes in the region increased, customer price reductions and negative currency exchange effects of USD 204.8 million offset those gains.

4) Asia Pacific sales
-The Company's Asia Pacific segment increased sales by 74.6% to USD 435.1 million for the fiscal year ended December 31, 2015. The increase was caused primarily by the acquisition of Shenya, which was completed in February 2015, and improved sales volumes, and was partially offset by a negative currency exchange effect of USD 11.7 million.

5) South America sales
-Sales in South America for the fiscal year ended December 31, 2015, decreased by 39.4% from the previous year to USD 95.4 million. A combination of negative currency exchange impact of USD 36.8 million with lower sales volumes caused this decrease.

Joint Ventures

-The Company announced the completion of its purchase of Huayu Automotive System Co.'s share in Huayu-Cooper Standard Sealing Systems Co., Ltd. (Shenya). The Company now owns 95% of the business, while the remaining 5% is retained by Shanghai Zhaotun Collective Assets Managing Co. As a result of the transaction, the Company is now the largest automotive sealing manufacturer in the domestic Chinese market. (From a press release on February 27, 2015)

Restructuring

-The Company announced it will consolidate its Goldsboro, North Carolina facilities into a single facility to improve its competitive position in North America. Manufacturing operations from the 207,000-square-foot facility located at 280 Woodland Church Road will be consolidated into the 167,000-square-foot facility located at 308 Fedelon Trail Road. Some of the business will also be moved to other locations in North America. The transition will begin immediately and is expected to conclude in late 2015 to early 2016. Approximately 300 employees will be affected as a result of the consolidation. The Company's Fedelon Trail facility will continue to produce sealing systems. (From a press release on February 4, 2015)

-The Company announced its intention to restructure its European manufacturing footprint based on current and anticipated market demands. The restructuring effort aims to further improve the Company's European capability by removing excess capacity, improving cost structure and shifting some production to Eastern Europe. Planned actions include consolidation of operations to improve efficiency and closure or downsizing of facilities with high costs and unutilized capacity in Western Europe. The Company expects to complete its restructuring activities by the end of 2017. (From a press release on January 21, 2015)

Awards

-Huayu-Cooper Standard Sealing Systems, a joint venture between Huayu Automotive Systems Company Limited and the Company, announced that it received the Excellent Product Quality Award from Chongqing Changan Ford at the automaker's supplier meeting. (From news releases issued by multiple sources on January 13, 2015)

R&D Expenditures

(in million USD)

	FY ended Dec. 31, 2015	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013
Overall	108.8	102.0	103.5

R&D Structure

-The Company has ten technical and design facilities located across the world.

R&D Facilities

-The Company unveiled a new test center in Kunshan, Jiangsu province, China dedicated to fluid transfer products and fuel and brake delivery systems. The facility will also be capable of manufacturing components and systems under those product lines. (From a press release on August 4, 2015)

Capital Expenditure

(in million USD)

	FY ended Dec. 31, 2015	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013
North America	64.9	68.1	71.6
Europe	46.8	77.0	72.9
Asia Pacific	43.3	21.3	20.3
South America	2.8	11.8	13.1
Eliminations and other	8.5	13.9	5.4
Total	166.3	192.1	183.3

Investments outside U.S.

-The Company has unveiled two new facilities in China. The Company unveiled its second facility in Kunshan, Jiangsu province. The Kunshan facility is a manufacturing and test center dedicated to fluid transfer and fuel and brake delivery systems. In a few days, an opening ceremony will take place at the new facility in Shenyang, Liaoning province, which will produce sealing systems. The Kunshan and Shenyang locations cover 25,060 square meters and 8,721 square meters respectively. Combined, the new facilities are expected to have more than 500 employees. (From a press release on August 4, 2015)