Zotefoams Plc · LSE:ZTF
Zotefoams — FY2013 Earnings Presentation
31 slides from Zotefoams's earnings presentation, March 2014
Slide 1: Preliminary 2013 results presentation
ZOTEFOAMS ZOTEFOAMS Zotefoams plc ZOTEFOAMS plc Preliminary 2013 results presentation March Preliminary 2012 2014 presentation results March 2013 David Stirling Clifford Hurst 1
Slide 2: Important Notice
Important Notice ZOTEFOAMS 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
Slide 3: Highlights
Highlights ZOTEFOAMS •High-Performance Products (‘HPP’) oRevenue increase of 20% to £4.31m (2012: £3.60m) •First full-year segment profit of £0.42m (2012: loss of £0.08m) •MuCell Extrusion LLC (‘MEL’) •Increased sales by 17%, with an underlying growth rate of 44% •Polyolefin foams •Sales down 8% wit
Slide 4: Contents
Contents ZOTEFOAMS 1. Group Overview 2. Group Business model 3. Zotefoams’ Strategy 4. 2013 Results and Financial Statements 5. Business Review 6. Outlook Appendices 4
Slide 5: Group Overview: year end 2013
Group Overview : year end 2013 ZOTEFOAMS Revenue by Geography Revenue by Segment 9% 2012 21% UK Polyolefin 28% Europe HPP North America MEL Rest of the World 2013 42% 0% 20% 40% 60% 80% 100% Revenue by Application Zotefoams is a world leader in cellular materials technology. Using a unique manufactu
Slide 6: Group Business Model
Group Business Model ZOTEFOAMS Our business model is designed to harness our unique manufacturing technologies and intellectual property to produce added value products that meet or anticipate market requirements. People Products Processes INVEST We ensure Zotefoams’ investment is balanced across pe
Slide 7: Zotefoams' strategy
Zotefoams’ strategy ZOTEFOAMS 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, produc
Slide 8: Contents
Contents ZOTEFOAMS 1. Group Overview 2. Group Business model 3. Zotefoams' Strategy 4. 2013 Results and Financial Statements 5. Business Review 6. Outlook Appendices 8
Slide 9: Financial Highlights
Financial Highlights ZOTEFOAMS 2013 2012 £m £m Revenue 44.63 47.19 Adjusted PBT excl amortisation 4.18 6.08 Profit before tax 3.86 5.78 Basic earnings per share (p) 8.0 11.8 Dividends for year (p) 5.3 5.2 Net debt (1.12) (0.62) 9
Slide 10: Profit Before Tax
Profit Before Tax ZOTEFOAMS 2013 2012 £m £m Revenue 44.63 47.19 Gross profit 11.62 13.67 Gross margin 26% 29% Operating profit 4.16 6.03 Net interest (0.31) (0.26) Profit before tax 3.86 5.78 Including amortisation of: 0.32 0.30 2012 has been restated for IAS 19 which has a negative impact of £0.15m
Slide 11: Polymer (LDPE) Prices
Polymer (LDPE) Prices ZOTEFOAMS 11
Slide 12: Taxation
Taxation ZOTEFOAMS 2013 2012 £m £m Profit before tax 3.86 5.78 Tax (0.70) (1.16) Effective tax rate 18% 20% Basic earnings per share (p) 8.0 11.8 Dividend for year (p) 5.3 5.2 Cover 1.5 2.3 12
Slide 13: Free Cash Flow
Free Cash Flow ZOTEFOAMS 2013 2012 £m £m Operating profit 4.16 6.03 Depreciation & amortisation 3.61 3.31 Working capital (0.71) (2.56) Pension contributions (0.66) (0.66) Share options charge 0.23 0.16 Cash generated from operations 6.63 6.29 Tax paid (1.01) (0.99) Capital expenditure (4.14) (3.68)
Slide 14: Working Capital
Working Capital ZOTEFOAMS 2013 2012 2013 2012 £m £m % of sales % of sales Stock 8.02 6.64 18.0% 14.1% Receivables 10.99 11.61 24.6% 24.6% Payables (5.56) (4.92) -12.5% -10.4% Net working capital 13.45 13.33 30.1% 28.3% 14
Slide 15: Net Funds
Net Funds ZOTEFOAMS 2013 2012 £m £m Free cash flow 1.43 1.56 Acquisition 0.00 (2.23) Dividends (2.05) (1.96) Net debt movement (0.62) (2.63) Net (debt)/funds brought forward (0.62) 1.92 Exchange adjustments/roundings 0.13 0.08 Net debt (1.12) (0.62) Comprising: Cash funds 1.96 3.70 Borrowings (3.07)
Slide 16: Balance Sheet
Balance Sheet ZOTEFOAMS ` 2013 2012 £m £m Intangible assets 4.92 5.25 Tangible assets 27.33 25.87 Net working capital 13.45 13.33 Retirement benefit obligations (4.28) (7.17) Deferred tax, net (0.79) (0.16) Tax payable (0.51) (0.80) Net debt (1.12) (0.62) Total shareholders' equity 39.01 35.69 Geari
Slide 17: Contents
Contents ZOTEFOAMS 1. Group Overview 2. Group Business model 3. Zotefoams’ Strategy 4. 2013 Results and Financial Statements 5. Business Review 6. Outlook Appendices 17
Slide 18: Polyolefin Foams
Polyolefin Foams ZOTEFOAMS 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
Slide 19: Polyolefin Foams: Results
Polyolefin Foams : Results ZOTEFOAMS • NARRATIVE THROUGH THE YEAR Polyolefin – Capacity improvement in early 2013 2013 2012 leads to inventory reversal at a few £000's £000's customers Revenue 38,825 42,295 – Improved lead times , better service and Segment Result 4,199 6,434 market position but wit
Slide 20: Polyolefin Foams: JV in Asia
Polyolefin Foams : JV in Asia ZOTEFOAMS Structure About INOAC Corporation • SALES • Japan HQ global manufacturing – Signed July 2013 conglomerate – 50:50 shares, Zotefoams operated • US$ 3.3 bn in sales – INOAC as significant customer – B2B mainly in plastics and – Location HK rubbers – Transfer of
Slide 21: HPP
HPP ZOTEFOAMS 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
Slide 22: HPP: Results
HPP : Results ZOTEFOAMS • REVENUE HPP – Growth of 20% 2013 2012 £000's £000's – CAGR 40% from 2008 Revenue 4,311 3,595 – Represents 10% of group sales Segment Result 423 (82) – ZOTEK ®F fluoropolymer foam is the largest constituent, with growth mainly from aviation – Other products in this segment :
Slide 23: MEL
MEL ZOTEFOAMS 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 envi
Slide 24: MuCell Extrusion: Results
MuCell Extrusion: Results ZOTEFOAMS • REVENUE MEL – One legacy licence “paid up” in 2012 2013 2012 – Excluding this, revenue increased 44% £000's £000's – Most licences not yet mature / Revenue 1,562 1,330 generating royalties Segment Result (138) (22) • COSTS – Investment to support growth – Higher
Slide 25: Outlook
Outlook ZOTEFOAMS So far in 2014 we have experienced good growth in Polyolefin foams, with demand levels in Europe and North America reflecting improved levels of activity in the marketplace and sales to Asia well up on early 2013. Levels of order intake are strong and, as planned, we are commission
Slide 26: Appendices
Appendices xy ZOTEFOAMS 26
Slide 27: Financial History
Financial History ZOTEFOAMS Actual Actual Actual Actual Actual Actual Actual Actual Actual 2013 2012 2011 2010 2009 2008 2007 2006 2005 £m £m £m £m £m £m £m £m £m Sales 44.6 47.2 44.2 39.9 31.8 34.8 31.6 30.1 28.0 Sales growth -5% 7% 11% 25% -9% 10% 5% 7% 11% PBT (excl exceptionals) 3.9 5.8 5.5 4.7
Slide 28: High performance products: Value Chain / Strategy
Value Chain / Strategy ZOTEFOAMS Resources to educate, Exploit the develop & benefits of our support unique High performance products technology in gas saturation of high Polyolefin Foams value materials Resources to manage, Focus on support & develop Immediate opportunity Development focus Sales fo
Slide 29: Key Share Information
Key Share Information ZOTEFOAMS • Share price 177.5p (14/03/14) Shareholder profile* • Market Main Market • Ticker ZTF.L • Market cap. £70.7m • Ord. shares in issue 39,831,312 280 600 240 500 200 Traded volume ('000s) 400 Share price (p) 160 300 120 200 80 BlackRock 15.0% Schroders 12.4% 100 Sekisui
Slide 30: MuCell Process
MuCell Process ZOTEFOAMS SCF System Screw Design Die Design Key items include • Know How • Material formulation • Processing • Patents covering • Method and Apparatus • Articles 30
Slide 31: Zotefoams Process
Zotefoams Process ZOTEFOAMS 31