Zotefoams Plc · LSE:ZTF
Zotefoams — FY2014 Earnings Presentation
31 slides from Zotefoams's earnings presentation, March 2015
Slide 1: Preliminary Results Presentation
Zotefoams plc Preliminary Results Presentation March 2015 David Stirling : Managing Director Clifford Hurst : Finance Director 1
Slide 2: Highlights
Highlights In Constant FX: • Total Revenue1 increased by 15% • High-Performance Products (‘HPP’) revenue growth of 61% • Profit before tax and exceptional items2 up 43% Other: • HPP segment margins increase to 15% (2013: 6%) • MuCell Extrusion LLC (‘MEL’) installed equipment base increases by 62% to
Slide 3: Contents
Contents 1. Group Overview 2. Zotefoams’ Strategy 3. Preliminary Results 4. Business Review 5. Outlook Appendices 3
Slide 4: Group Overview
Group Overview Revenue by Segment Segments Polyolefins HPP MEL Azote® Polyolefin Foams HPP : High Performance Products MEL : MuCell Extrusion LLC technology licensing Locations (wholly owned) • Croydon, UK : main manufacturing site • Walton, KY, USA : foam expansion • Woburn, MA, USA : MuCell
Slide 5: Zotefoams' strategy
Zotefoams’ strategy Zotefoams’ strategy is to expand through a combination of profitable organic growth of our Polyolefin and HPP foams businesses, new customers for our MuCell Extrusion technology licensing business, and through partnerships or acquisitions in related technologies, products or mark
Slide 6: Contents
Contents 1. Group Overview 2. Zotefoams’ Strategy 3. Preliminary Results 4. Business Review 5. Outlook Appendices 6
Slide 7: Income Statement (excl Exceptional item)
Income Statement (excl Exceptional item) Constant 2014 2013 FX £m £m Change Change Total revenue 49.08 44.63 10% 15% Group revenue 48.95 44.63 10% 15% Gross profit 12.84 11.62 11% 19% Gross margin 26% 26% Operating profit 5.57 4.16 34% 39% Net interest/joint venture loss (0.30) (0.31) Profit before
Slide 8: Polymer (LDPE) prices
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Slide 9: Cash Flow
Cash Flow 2014 2013 £m £m Operating profit (after exceptional items) 4.31 4.16 Depreciation, impairment & amortisation 4.67 3.61 Working capital (2.48) (0.71) Pension contributions (0.66) (0.66) Share options charge 0.14 0.23 Cash generated from operations 5.98 6.63 Tax paid (0.87) (1.01) Capital ex
Slide 10: Balance Sheet
Balance Sheet ` 2014 2013 £m £m Investments in joint ventures 0.17 Intangible assets 6.85 4.92 Tangible assets 28.56 27.33 Net working capital 15.94 13.45 Retirement benefit obligations (6.13) (4.28) Deferred tax, net (0.20) (0.79) Tax payable (0.39) (0.51) Net funds / (debt) 2.42 (1.12) Total share
Slide 11: Contents
Contents 1. Group Overview 2. Zotefoams’ Strategy 3. Preliminary Results 4. Business Review 5. Outlook Appendices 11
Slide 12: Polyolefin Foams
Polyolefin Foams Business Model Strategy • Azote® polyolefin foams are more consistent, • Product line extension in specific sub- lighter, purer and have better mechanical segments, where Zotefoams has a lower properties than similar foams made by other market share and/or can increase our foaming m
Slide 13: Polyolefin Foams: Results
Polyolefin Foams : Results • NARRATIVE THROUGH THE YEAR 2014 2013 Restated – Global underlying demand strong £000's £000's Change % Constant FX – H1 : Capacity constraint in extrusion – H2 : Delayed shipments with new ERP Total Revenue 40,440 38,825 4% 9% system Segment profit 6,008 5,798 4% • INVES
Slide 14: HPP
HPP Business Model Strategy • ZOTEK® HPP foams are manufactured from • ZOTEK® F fluoroploymer foams for aviation raw materials offering enhanced properties, remains the largest market and medium-term such as being fire retardant or having stability offers the largest opportunity for growth. at high-
Slide 15: HPP: Results
HPP : Results • REVENUE 2014 2013 Restated – Constant FX growth of 61% £000's £000's Change % Constant FX – CAGR 42% from 2008 – Represents 13% of group sales Total Revenue 6,614 4,311 53% 61% – ZOTEK ®F fluoropolymer foam is the largest Segment profit 1,022 269 280% constituent, with growth mainly
Slide 16: MEL
MEL Business Model Strategy • MEL licenses technology for continuous • Refocus of activities towards a more limited foaming number of segments with high potential, • Process : easy to retrofit to existing mainly in consumer packaging equipment. Uses CO2 or nitrogen inert, 1. Thin film environmentall
Slide 17: MuCell Extrusion: Results
MuCell Extrusion: Results • REVENUE 2014 2013 – 40% increase in constant currency £000's £000's Change % Constant FX – Most licences not yet mature / Total Revenue 1,562 34% 40% generating royalties 2,088 • COSTS Segment loss pre- (103) (138) amortisation – Maintain investment to support growth Retu
Slide 18: MEL: further analysis
MEL : further analysis • E&E REVENUE (Constant FX) 2014 2013 Change – 58% increase US$m US$m % – “One-off” Equipment & Engineering 1.91 1.21 58% – Strong leading indicator of future L&R License & Royalty 1.54 1.23 25% Total 3.45 2.44 – 20 SCF units sold in 2014 Growth 41% – Increase of installed bas
Slide 19: Investment
Investment • Global capacity increase – Raised £8.8m gross proceeds from share placing in September 2014 – Total investment cUS$22m (c£14.5m) in Walton, KY, USA – Effective increase of c20% in overall Group manufacturing capacity – Facility anticipated operational H2:2016 • Croydon site development
Slide 20: Facility Addition
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Slide 21: ZOTEK King Lai Kunshan
ZOTEK King Lai Kunshan Business Model Strategy • T-Tubes® insulation products alignment with • Main markets are in India, China, South Korea UFPT in MA, USA since 2007 and other ASEAN countries • Premium product for clean room insulation • Local manufacture of end product to and personnel protection
Slide 22: Current Situation
Current Situation • Entered 2015 with a larger than normal order backlog and a strong forward order book • Polyolefin foams – Demand in EU and North America remained robust in the first two months of 2015 – Experiencing increasing levels of activity in Asia • Following very strong levels of growth i
Slide 23: Outlook
Outlook • The wide scope of Zotefoams’ business means we are influenced by global economic conditions • In addition, the timing of sales from new products and markets, where higher growth rates are anticipated, can be somewhat difficult to predict • While being mindful of currency and economic condi
Slide 24: Appendices
Appendices % ZOTEFOAMS 24
Slide 25: Financial History
Financial History Actual Actual Actual Actual Actual Actual Actual Actual Actual 2014 2013 2012 2011 2010 2009 2008 2007 2006 £m £m £m £m £m £m £m £m £m Total Revenue 49.1 44.6 47.2 44.2 39.9 31.8 34.8 31.6 30.1 Revenue growth 10% -5% 7% 11% 25% -9% 10% 5% 7% PBT (excl exceptionals) 5.3 3.9 5.8 5.5
Slide 26: High performance products: Value Chain / Strategy
Value Chain / Strategy Resources to educate, Exploit the develop & benefits of our support unique technology in gas High performance products saturation of high value materials Polyolefin Foams Resources to manage, Focus on support & develop Immediate opportunity Development focus Sales focus 26
Slide 27: Market Information
Market Information Share price 231.5p (16/03/15) Shareholder profile* Market Main Market Ticker ZTF.L Market cap. £101.4m Ord. shares in issue 43,814,440 300 1,000 280 900 260 800 240 700 Traded volume ('000s) Share price (p) 220 600 200 500 180 400 160 300 BlackRock 14.4% Schroders 12.7% 140 200 Se
Slide 28: Zotefoams Process
©. z0oTEFOAMS Zotefoams Process \e Zotefoams Plc process mixing and extrusion * + a impregnation ( & of expansion = 28
Slide 29: MuCell Technical & Business Process
MuCell Technical & Business Process Screw Design SCF System Die Design Technical Process : Key items Business Process Revenue basis Know How Trials engineering support Material Formulation Machinery rental rental fees Processing Licence Negotiation - Patent Coverage Licence finalisation annual licen
Slide 30: Important Notice
Important Notice By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations: • This presentation is being made only in the United Kingdom and this document is being distributed only to and is directed only at pe
Slide 31: Trademarks
Trademarks ZOTEK®, Azote® and microZOTE® are registered trademarks of Zotefoams plc MuCell® is a registered trademark of Trexel Inc. T-Tubes® is a registered trademark of UFP Technologies Inc. 31