Zotefoams Plc · LSE:ZTF
Zotefoams — FY2012 Earnings Presentation
33 slides from Zotefoams's earnings presentation, March 2013
Slide 1: Preliminary 2012 results presentation
ZOTEFOAMS ZOTEFOAMS Zotefoams plc ZOTEFOAMS plc Preliminary 2012 results presentation March Preliminary 2012 2013 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: Contents
Contents ZOTEFOAMS 1. Group Overview 2. Group Business model 3. Zotefoams’ Strategy 4. 2012 Results and Financial Statements 5. Business Review 6. Outlook Appendices 3
Slide 4: Group Overview
Group Overview ZOTEFOAMS 7% Revenue by Geography 2012cc 21% 27% UK 2012 Polyolefin Europe North America HPP Rest of the World MEL 2011 45% - 10.00 20.00 30.00 40.00 50.00 60.00 Revenue £m by Segment Revenue Split by Application Area Zotefoams is a world leader in cellular materials 5% technology. Us
Slide 5: 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 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. Group Business model 3. Zotefoams' Strategy 4. 2012 Results and Financial Statements 5. Business Review 6. Outlook Appendices 7
Slide 8: Financial Track Record
Financial Track Record ZOTEFOAMS 5-year history • Progressive Dividend since 2010 300 • Earnings cover > 2 times 250 • Strong balance sheet 200 • Good operational cash flow Revenue 150 PBT • Growth alongside Dividend Yield 100 TSR 50 0 5-year history 2007 2008 2009 2010 2011 2012 14 12 • Growth in s
Slide 9: Financial Highlights
Financial Highlights ZOTEFOAMS 2012 2011 Change £m £m Revenue 47.2 44.2 7% Profit before Tax 5.9 5.5 8% Basic earnings per share (p) 12.1 11.8 3% Dividends per share for year (p) 5.2 4.9 6% Net (debt)/funds (0.6) 1.9 9
Slide 10: Profit Before Tax
Profit Before Tax ZOTEFOAMS 2012 2011 Change £m £m Revenue 47.2 44.2 7% Gross profit 13.7 12.6 9% Gross margin 29.0% 28.5% Operating profit 6.0 5.6 8% Net interest (0.1) (0.1) Profit before tax 5.9 5.5 8% 10
Slide 11: Polymer (LDPE) Prices
€/tonne 200 400 600 800 1000 1200 1400 1600 1800 0 Jan-06 Jul-06 Jan-07 Jul-07 Polymer (LDPE) Prices Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 ZOTEFOAMS 11
Slide 12: Taxation
Taxation ZOTEFOAMS 2012 2011 £m £m Profit before tax 5.9 5.5 Tax (1.2) (0.9) Effective tax rate 20% 17% Basic earnings per share (p) 12.1 11.8 Dividend (p) 5.2 4.9 Cover 2.3 2.4 12
Slide 13: Free Cash Flow
Free Cash Flow ZOTEFOAMS 2012 2011 £m £m Operating profit 6.0 5.6 Depreciation & amortisation 3.3 3.2 Working capital (2.6) (2.2) Pensions and share schemes, net (0.5) (0.5) Cash generated from operations 6.2 6.1 Taxation (1.0) (1.1) Capital expenditure (incl intangibles) (3.7) (3.1) Interest and ot
Slide 14: Working Capital
Working Capital ZOTEFOAMS 2012 2011 2012 2011 £m £m % of sales % of sales Stock 6.6 5.9 14.1% 13.4% Receivables 11.6 10.5 24.6% 23.8% Payables (4.9) (5.6) -10.4% -12.7% Net working capital 13.3 10.8 28.3% 24.5% NB Payables excludes £2.3m deferred consideration in 2011 14
Slide 15: Net Funds
Net Funds ZOTEFOAMS 2012 2011 £m £m Free cash flow 1.5 1.9 Acquisition (2.2) (2.2) Share capital issued (net) 0.0 2.3 Dividends (2.0) (1.8) Net funds movement (2.6) 0.2 Net funds brought forward 1.9 1.9 Exchange adjustments 0.1 (0.1) Net funds (0.6) 1.9 Comprising: Cash funds 3.7 3.4 Borrowings (4.3
Slide 16: Balance Sheet
Balance Sheet ZOTEFOAMS 2012 2011 £m £m Intangible assets 5.2 5.7 Tangible assets 25.9 25.4 Net working capital 13.3 10.8 Retirement benefit obligations (7.2) (4.9) Deferred tax, net (0.2) (0.7) Tax payable (0.8) (0.8) Deferred consideration (2.3) Net funds (0.6) 1.9 Total shareholders' equity 35.7
Slide 17: Contents
Contents ZOTEFOAMS 1. Group Overview 2. Group Business model 3. Zotefoams’ Strategy 4. 2012 Results and Financial Statements 5. Business Review 6. Outlook Appendices 17
Slide 18: Polyolefin Foams: Business Model
Polyolefin Foams : Business Model ZOTEFOAMS • Azote® polyolefin foams are more consistent, lighter, purer and have better mechanical properties than similar foams made by other foaming methods. • Investment in process equipment, technology, marketing and R&D gives us distinct advantages in both prod
Slide 19: Polyolefin Foams: Results
Polyolefin Foams : Results ZOTEFOAMS Polyolefins • REVENUE Restated – Growth of 4% in reporting currency 2012 2011 £000 £000 – Growth of 8% in constant currency Revenue 42,295 40,531 – Volume +2.9%, price/mix +1.5% Segment profit 6,434 5,682 – All areas contributed to cc growth EBITDA 9,267 8,478 –
Slide 20: Polyolefin Foams: Developments
Polyolefin Foams : Developments ZOTEFOAMS Market Development Products • ASIA • Product line variants matched to specific needs – LP foam expansion • New launches in: – Same technology as KY, USA 1. Packaging technology: – Supply from UK : • Limits investment – “no-mould” product differentiation • Pr
Slide 21: HPP: Business Model
HPP : Business Model ZOTEFOAMS • ZOTEK® HPP foams are manufactured from raw materials offering enhanced properties, such as being fire retardant or having stability at high-temperature. With additional value added and existing installed capacity these foams offer potential for higher margins • Portf
Slide 22: HPP: Results
HPP : Results ZOTEFOAMS HPP • REVENUE Restated 2012 2011 – Growth of 51% £000 £000 – ZOTEK ®F : fluoropolymer foams in aviation, Revenue 3,595 2,380 mainly in North America Segment profit/(loss) (82) (175) EBITDA 64 (60) – T-Tubes® : insulation systems for clean rooms, mainly in Asia & India – Pebax
Slide 23: HPP: Developments
HPP : Developments ZOTEFOAMS Market Development Products • Market awareness and penetration • Portfolio well established – Application engineering support • Internal focus on efficiency & quality • Industrial markets : longer development times but more secure business • Improvements and market varia
Slide 24: MuCell Extrusion: Business Model
MuCell Extrusion : Business Model ZOTEFOAMS • MEL licenses technology for continuous foaming • Process : easy to retrofit to existing equipment. Uses CO2 or Nitrogen inert, environmentally friendly gases • Value to licensee : saving of material cost and environmental benefits (less plastic, fully re
Slide 25: MuCell Extrusion: Results
MuCell Extrusion: Results ZOTEFOAMS • REVENUE MEL – Focus in 2012 on acquiring new licensees 2012 2011 with longer-term scale potential £000 £000 – Short-term shift in mix with additional Revenue 1,330 1,329 equipment sales (lower margin) in 2012 Segment profit/(loss) (322) 143 EBITDA 11 445 – Equip
Slide 26: MuCell Extrusion: Developments
MuCell Extrusion: Developments ZOTEFOAMS Market Development Services • Benefits of foaming technology is already • Refocus of activities towards a more recognised by the market limited number of segments with high • Requirement for success potential 1. technology implemented by plastics 1. thin film
Slide 27: Outlook
Outlook ZOTEFOAMS Against a strong comparative sales performance at the start of 2012, so far in 2013 we have seen a relatively subdued level of sales. However, levels of order intake are more encouraging and we believe that caution in the supply chain regarding uncertain economic conditions, couple
Slide 28: Appendices
Appendices iY ZOTEFOAMS 28
Slide 29: Financial History
Financial History ZOTEFOAMS Actual Actual Actual Actual Actual Actual Actual Actual Actual 2012 2011 2010 2009 2008 2007 2006 2005 2004 £m £m £m £m £m £m £m £m £m Sales 47.2 44.2 39.9 31.8 34.8 31.6 30.1 28.0 25.2 Sales growth 7% 11% 25% -9% 10% 5% 7% 11% 7% PBT (excl exceptionals) 5.9 5.5 4.7 3.2 3
Slide 30: 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 31: Key Information
Key Information ZOTEFOAMS • Share price 202.5p (04/03/13) Shareholder profile* • Market Main Market • Ticker ZTF.L • Market cap. £80.7m • Ord. shares in issue 39,831,312 280 1,400 240 1,200 200 1,000 Traded volume ('000s) Share price (p) 160 800 120 600 80 400 Blackrock 14.8% Schroders 13.1% Sekisui
Slide 32: Process
iY Process ZOTEFOAMS Zotefoams Plc process > mixing and extrusion * 4 a impregnation ( ee r expansion = 32
Slide 33: Trademarks
Trademarks ZOTEFOAMS ZOTEK® and Azote® are registered trademarks of Zotefoams plc HydroZOTE™ is a trademark of Zotefoams plc MuCell® is a registered trademark of Trexel Inc. T-Tubes® is a registered trademark of UFP Technologies Inc. Red Bull® is a registered trademark of Red Bull GmbH Pebaxfoam® is