Zotefoams
plc
("Zotefoams" or "Group")
Trading Update and Group CEO
Succession
22 May 2024 - Zotefoams, a world
leader in cellular materials technology, provides a positive
trading update for the four months ended 30 April 2024 (the
"period"), ahead of its Annual General Meeting to be held
today.
At this meeting Dr Lynn Drummond,
Chair of Zotefoams, will make the following statement:
Trading in the period has been
strong, with the Group sustaining the positive momentum seen in
FY23 to deliver overall sales growth of 14% and record
revenue.
Key movements, against the
comparative prior year period, were:
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46% increase in High-Performance
Products (HPP) sales:
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Footwear sales grew significantly,
with a 44% increase benefitting in part from customer inventory
build
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ZOTEK® F foam sales for
aviation, space and other technical markets grew by over
100%
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T-FIT® insulation products sales
grew by 57%
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7% decline in Polyolefin Foams
sales:
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2% decline in overall sales volumes,
driven by a continuation of subdued demand conditions in certain
markets, particularly in continental Europe, which was in part
offset by strong volume growth in North
America, where the Group is investing in further capacity to
support future growth
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Average prices were impacted by
unfavourable exchange rate movements (which are hedged) and the
Group's deliberate shift in product mix towards lighter, more
cost-effective foams
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Alongside the strong trading
momentum, the Group has made further progress during 2024 on key
strategic initiatives with two important updates made during
May:
On 7 May, Zotefoams announced a
global alliance agreement with Suzhou Shincell New Materials Co,
Ltd ("Shincell"). Initial co-operation, including technology
sharing from Shincell to Zotefoams, has begun positively and
Zotefoams will provide further details of its plans for the
alliance at the time of our August interim results.
On 15 May, Zotefoams delivered a
progress update and media launch on ReZorce®
mono-material barrier packaging. Refresco, the world's largest
independent beverage solutions provider, is our joint development
partner. Focused on the carton market, ReZorce is entering
late-stage quality and technical validation in preparation for
market trials with a European retailer.
Outlook
The Board anticipates full-year
sales growth to come primarily from the HPP portfolio, after a
particularly strong four months, with good opportunities across all
product groups, together with an expectation of an improving
performance from the Polyolefin Foams business unit later in the
year. At current exchange rates, the Board
expects little impact from currency on
full-year profit.
Internally, beyond a focus on
continued operational excellence, the Group is directing resource
towards three key opportunities:
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ReZorce mono-material packaging
development, where a market trial and development of our portfolio
of products are priorities, alongside securing external
investment;
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Investment in the second
low-pressure vessel in the USA, which we expect to commission in Q2
2025; and
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Development options to enhance the
benefits achievable under the Shincell alliance arrangement, which
includes investment in this technology.
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Performance in the first four months
of the year has been strong and provides a solid platform from
which to deliver further financial and strategic progress in 2024.
While being mindful of remaining macroeconomic volatility, the
Board's full year expectations remain unchanged, and it is
confident about the long-term prospects of the business.
Group CEO Succession
As previously announced, David
Stirling will step down from the Board following the conclusion of
the 2024 AGM and be replaced by Ronan Cox.
Commenting on the update David Stirling, Group CEO
of Zotefoams, said:
Over my 27 years with
Zotefoams, the business has experienced strong
growth and transformational change, with significant investment in
global manufacturing capacity and in new product development,
including the exciting opportunity afforded by ReZorce packaging
technology. In the first four months of this year, Zotefoams
delivered record sales and made progress on a number of strategic
initiatives, and I step down from the Board at a time of
significant positive momentum for the business. It has been a
pleasure to lead Zotefoams for so many years and I wish Ronan and
the team all the best for the future.
Ronan Cox, Group CEO Designate
of Zotefoams, said:
I am honoured to step into the CEO
role and continue driving Zotefoams' legacy of innovation and
growth. With a strong foundation laid by David and the team, I am
excited about the opportunities ahead and committed to leading
Zotefoams into its next chapter of success.
Note. The Board understands that
current market expectations for the year ended 31 December 2024,
prior to release of this trading statement, are revenue of £138.5m
and adjusted profit before tax of £14.9m.
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Enquiries:
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Zotefoams plc
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+44
(0) 208 664 1600
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David Stirling,
Group CEO
Gary McGrath, Group CFO
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IFC
Advisory (Financial PR & IR)
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+44
(0) 203 934 6630
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Graham Herring
Tim Metcalfe
Zach Cohen
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About Zotefoams plc
Zotefoams plc (LSE - ZTF) is a world
leader in cellular materials technology delivering optimal material
solutions for the benefit of society. Utilising a variety of unique
manufacturing processes, including environmentally friendly
nitrogen expansion for lightweight AZOTE® polyolefin and
ZOTEK® high-performance foams, Zotefoams sells to
diverse markets worldwide. Zotefoams uses its own cellular
materials to manufacture T-FIT® advanced insulation for
demanding industrial markets. Zotefoams also owns and licenses
patented microcellular foam technology to reduce plastic use in
extrusion applications and for ReZorce® mono-material
recyclable barrier packaging.
Zotefoams is headquartered in
Croydon, UK, with additional manufacturing sites in Kentucky, USA
and Brzeg, Poland (foam manufacture), Oklahoma, USA (foam products
manufacture and conversion), Massachusetts, USA, Stilling, Denmark
(microcellular foam technology) and Jiangsu Province, China
(T-FIT).
www.zotefoams.com
AZOTE®,
ZOTEK®, ReZorce® and T-FIT® are
registered trademarks of Zotefoams plc.