Zotefoams Plc · LSE:ZTF
Zotefoams — H1 2014 Earnings Presentation
29 slides from Zotefoams's earnings presentation, August 2014
Slide 1: Interim results presentation
ZOTEFOAMS ZOTEFOAMS Zotefoams plc ZOTEFOAMS plc Interim results presentation August 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 In constant currency: • Total Revenue1 increased by 12% • High-Performance Products revenue growth of 51% • Profit before tax and exceptional items up 28% Other: • MuCell® technology adopted by Unilever • Interim dividend increased by 3% to 1.75 pence 1 Total Revenue consolidate
Slide 4: Contents
Contents ZOTEFOAMS 1. Group Overview 2. Zotefoams’ Strategy 3. Interim Results 4. Business Review 5. Outlook Appendices 4
Slide 5: Group Overview
Group Overview ZOTEFOAMS Revenue by Segment Revenue by Geography 2014 : H1 9% 20% UK Polyolefins North America HPP MEL Europe 44% 27% 2013 : H1 Other 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Revenue by Application Zotefoams is a world leader in cellular materials technology. Using a unique manufa
Slide 6: 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 7: Contents
Contents ZOTEFOAMS 1. Group Overview 2. Zotefoams' Strategy 3. Interim Results 4. Business Review 5. Outlook Appendices 7
Slide 8: Income statement (excluding exceptional)
Income statement (excluding exceptional) ZOTEFOAMS Constant 2014 2013 Currency £m £m Change Change Total revenue 24.70 23.22 6% 12% Group revenue 24.65 23.22 6% 12% Gross profit 6.73 6.22 8% 21% Gross margin 27% 27% Operating profit 3.00 2.68 12% 25% Net interest/joint venture loss (0.13) (0.16) Pro
Slide 9: Segmental Analysis
Segmental Analysis ZOTEFOAMS Sales by Segment : £000s Sales and Margin growth in line 25,000 with long-term strategy of the 20,000 Group 15,000 Polyolefin MEL an early stage growth business 10,000 HPP MEL 5,000 0 2014 constant FX 2014 2013 Result by Segment : £000s 3,000 2,500 2,000 Adverse currency
Slide 10: Polymer (LDPE) Prices
€/tonne 200 400 600 800 1000 1200 1400 1600 1800 0 Jun-06 Dec-06 Jun-07 Dec-07 Polymer (LDPE) Prices Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 ZOTEFOAMS 10
Slide 11: Cash Flow
Cash Flow ZOTEFOAMS 2014 2013 £m £m Operating profit (after exceptional items) 1.73 2.68 Depreciation, impairment & amortisation 3.04 1.75 Working capital (1.12) (0.98) Pension contributions (0.33) (0.33) Share options charge 0.09 0.22 Cash generated from operations 3.40 3.34 Tax paid (0.34) (0.54)
Slide 12: Capital Expenditure & Capacity
Capital Expenditure & Capacity ZOTEFOAMS Capex by Area : £000s 5,000 Building investment increases 4,500 Croydon factory area by 13% to 4,000 allow for future investment in 3,500 extrusion and technical services ERP System to enhance service 3,000 Buildings Other 2,500 Low Pressure capability & effe
Slide 13: Balance Sheet
Balance Sheet ZOTEFOAMS ` 2014 2013 £m £m Investments in joint ventures 0.22 - Intangible assets 4.64 5.45 Tangible assets 28.56 26.13 Net working capital 14.81 14.08 Retirement benefit obligations (4.05) (7.00) Deferred tax, net (0.59) (0.19) Tax payable (0.66) (0.73) Net debt (4.26) (0.78) Total s
Slide 14: Contents
Contents ZOTEFOAMS 1. Group Overview 2. Zotefoams’ Strategy 3. Interim Results 4. Business Review 5. Outlook Appendices 14
Slide 15: 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 16: Polyolefin Foams : Results
Polyolefin Foams : Results ZOTEFOAMS • NARRATIVE THROUGH THE PERIOD Polyolefin – Strong demand from all areas 2014 2013 – Supply curtailed due to intermittent £000's £000's extruder failure. Now operating Total Revenue 21,217 20,325 satisfactorily Segment Result 2,599 2,678 Constant Currency 2,833 •
Slide 17: 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 stability at high- offers the largest opportunity for grow
Slide 18: HPP : Results
HPP : Results ZOTEFOAMS • REVENUE HPP – Growth of 51% in constant currency 2014 2013 – CAGR 36% from 2009 based on reporting £000's £000's currency year to June Revenue 2,757 1,973 – HPP represents 11% of group sales Segment Result 688 118 – ZOTEK ®F fluoropolymer foam is the largest part, with grow
Slide 19: MEL
MEL ZOTEFOAMS Business Model Strategy • MEL licenses technology for continuous • Focus of activities within segments with high foaming potential, mainly in consumer packaging • Process : easy to retrofit to existing 1. thin film equipment. Uses CO2 or Nitrogen inert, 2. plastic sheet environmentally
Slide 20: MuCell Extrusion: Results
MuCell Extrusion: Results ZOTEFOAMS • REVENUE MEL 2014 2013 – Lower than 2013 mainly due to currency £000's £000's and timing of equipment sales Revenue 724 920 – Expected equipment shipments for Constant Currency 790 920 Segment Result (139) 46 Q3:2014 more than double H1:2014 (i.e. >$0.9m) • Equip
Slide 21: Outlook
Outlook ZOTEFOAMS Demand remains strong in our Azote® Polyolefin foams business and we expect that this, along with some inventory increases at customers, will result in volume growth in all major regions in the second six months of the year. The price of LDPE, which has been relatively stable this
Slide 22: Appendices
Appendices iY ZOTEFOAMS 22
Slide 23: 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 24: 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 25: 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 26: MuCell Technical & Business Process
MuCell® Technical & Business Process ZOTEFOAMS 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 a
Slide 27: Zotefoams Process
Zotefoams Process ZOTEFOAMS 27
Slide 28: Key Information
Key Information ZOTEFOAMS • Share price 225p (08/08/14) Shareholder profile* • Market Main Market • Ticker ZTF.L • Market cap. £89.6m • Ord. shares in issue 39,831,312 300 600 280 500 260 240 Traded volume ('000s) 400 Share price (p) 220 200 300 180 200 160 BlackRock 14.9% Schroders 12.7% 140 100 Se
Slide 29: Trademarks
Trademarks ZOTEFOAMS ZOTEK® and Azote® are registered trademarks of Zotefoams plc MuCell® is a registered trademark of Trexel Inc. T-Tubes® is a registered trademark of UFP Technologies Inc. Dove® is a registered trademark of Unilever N.V. 29