Zotefoams Plc · LSE:ZTF
Zotefoams — FY2015 Earnings Presentation
31 slides from Zotefoams's earnings presentation, March 2016
Slide 1: Preliminary Results 2015
Preliminary Results 2015 David Stirling: Group CEO Gary McGrath: Finance Director
Slide 2: 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 3: 2015 Summary
2015 Summary • Total Revenue1 growth of 11% to £54.44m (2014: £49.08m) • Adjusted profit before tax and exceptional items increased by 14% to £6.36m (2014: £5.60m), with reported profit before tax up 50% • Polyolefin foams • Total Revenue growth of 8% to £43.61m (2014: £40.44) • Continued investment
Slide 4: Contents
Contents Zotefoams is a world leader in cellular materials technology. Using a unique manufacturing process with environmentally friendly nitrogen gas expansion, Zotefoams produces lightweight foams in UK and USA for diverse markets worldwide. Zotefoams also owns and licenses patented MuCell® microc
Slide 5: Group Overview
Group Overview Revenue by Business Unit 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 : Mu
Slide 6: 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 7: Contents
Contents 1. Group Overview 2. Zotefoams’ Strategy 3. Preliminary Results 4. Business Review 5. Outlook Appendices 7
Slide 8: Income Statement (excluding 2014 exceptional item)
Income Statement (excluding 2014 exceptional item) £ million 2015 2014 Change Total Revenue 54.44 49.08 11% Group Revenue 53.87 48.95 10% Gross margin 27.6% 26.2% Operating profit 6.33 5.57 14% Net interest/joint venture loss (0.32) (0.30) Profit before tax 6.01 5.27 14% Tax (1.21) (0.93) 31% Effect
Slide 9: Polymer (LDPE) prices
€/tonne 0 200 400 600 800 1000 1200 1400 1600 1800 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Polymer (LDPE) prices Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 • LDPE prices remain high, but steady, de-coupled from recent oil price Dec-15 9
Slide 10: Free Cash Flow
Free Cash Flow £ million 2015 2014 Operating profit (after exceptional items) 6.33 4.31 Depreciation, impairment & amortisation 3.48 4.67 Working capital (0.95) (2.48) Pension contributions (0.66) (0.66) Share options charge 0.22 0.14 Cash generated from operations 8.41 5.98 Tax and interest paid (0
Slide 11: Cash Flow and Net Debt
Cash Flow and Net Debt £ million 2015 2014 Free cash flow (1.57) (2.52) Share capital issue (net) (0.00) 8.43 Repayment of borrowings (0.74) (0.87) Proceeds from borrowings 5.36 0.00 Dividends (2.40) (2.11) Other 0.16 (0.24) Net cash generated 0.80 2.70 Net cash at 1st January 4.63 1.96 Exchange adj
Slide 12: Balance Sheet
Balance Sheet £ million 2015 2014 Investments in joint ventures 0.16 0.17 Intangible assets 6.87 6.85 Tangible assets 35.37 28.56 Net working capital 16.64 15.94 Retirement benefit obligations (5.24) (6.13) Deferred tax, net (0.36) (0.20) Tax payable (0.73) (0.39) Net debt (1.59) 2.42 Total sharehol
Slide 13: Contents
Contents 1. Group Overview 2. Zotefoams’ Strategy 3. Preliminary Results 4. Business Review 5. Outlook Appendices 13
Slide 14: AZOTE®
AZOTE® | “e, ZOTEFOAMS
Slide 15: Polyolefin Foams Business Model Strategy
Polyolefin Foams Business Model Strategy • Azote® polyolefin foams are more • Product line extension in specific sub- consistent, lighter, purer and have better segments, where Zotefoams has a lower mechanical properties than similar foams market share and/or can increase our made by other foaming m
Slide 16: Polyolefin Foams: Results
Polyolefin Foams : Results • NARRATIVE THROUGH THE YEAR POLYOLEFIN FOAMS 2015 2014 % Change – Backlog of shipment delays from 2014 £m £m cleared in H1:2015 Total Revenue 43.61 40.44 8% Group Revenue 43.04 40.30 7% – Global underlying demand strong with Segment profit pre amort 7.60 6.01 26% 10% grow
Slide 17: ZOTEK®
ZOTEK® | YX ZOTEFOAMS
Slide 18: HPP Business Model Strategy
HPP Business Model Strategy • ZOTEK® HPP foams are manufactured • ZOTEK® F fluoroploymer foams for aviation from raw materials offering enhanced remains the largest market and medium-term properties, such as being fire retardant or offers the largest opportunity for growth. having stability at high-
Slide 19: HPP: Results
HPP : Results • REVENUE 2015 2014 HPP % Change – Increase 25% (2014:53%) £m £m – CAGR 40% from 2008 Total and Group Revenue 8.27 6.61 25% – Represents 15% of group sales Segment profit pre-amort 0.82 1.02 – ZOTEK ®F fluoropolymer foam is the Segment profit 0.82 1.02 largest constituent, with growth
Slide 20: MuCell®
MUCELL® | Q ZOTEFOAMS
Slide 21: MuCell Extrusion Business Model Strategy
MuCell Extrusion Business Model Strategy • MEL licenses technology for continuous • Refocus of activities towards a more foaming limited number of segments with high • Process : easy to retrofit to existing potential, mainly in consumer packaging equipment. Uses CO2 or nitrogen inert, 1. thin film e
Slide 22: MuCell Extrusion: Results
MuCell Extrusion: Results • REVENUE – 25% increase driven by Equipment MEL 2015 2014 % Change and favourable FX £m £m Total and Group Revenue 2.62 2.09 25% – Most licences not yet mature / Segment profit pre-amort -0.50 -0.10 generating royalties Amort of acquired intangibles -0.30 -0.30 – Very stro
Slide 23: Investment
Investment • Developing an international, multi-site Capex by Area (GBP £000s) business through organic growth and 10,000 leveraging our unique technology 8,000 6,000 • Autoclave technology used for both 4,000 AZOTE® and ZOTEK® foams – Need to increase capacity based on 2,000 demand expectations 0 –
Slide 24: Chairman's Statement
Chairman’s Statement Current trading and prospects Sales for the first two months of 2016 have been higher than those of the comparative period in 2015. Sales in AZOTE® polyolefin foams have grown in line with our long-term target of twice the rate of global GDP growth, while our HPP business has al
Slide 25: Chairman's Statement: Outlook
Chairman’s Statement Outlook Zotefoams sells globally into a variety of industries and we are therefore influenced by, and mindful of, worldwide economic conditions. Our strategy of organic development for materials based on our proprietary technology offers higher growth potential, but is accompani
Slide 26: Appendices
Appendices | %) ZOTEFOAMS
Slide 27: High performance products
Value Chain / Strategy 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 focus 27
Slide 28: Zotefoams block-foam process
Zotefoams block-foam process 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: Financial History
Financial History Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual £ million 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Total Revenue 54.4 49.1 44.6 47.2 44.2 39.9 31.8 34.8 31.6 30.1 Revenue growth 11% 10% -5% 7% 11% 25% -9% 10% 5% 7% PBT (excl exceptionals) 6.0 5.3 3.9
Slide 31: Market Information
Market Information Share price 288.0p (11/03/16) Shareholder profile* Market Main Market Ticker ZTF.L Market cap. £127.9m Ord. shares in issue 44,414,440 Schroders 14.4% BlackRock 13.9% Miton 11.4% Sekisui Alveo 8.6% Hargreave Hale 7.5% Legal & General 5.1% Mr & Mrs Downes 4.2% Mr N A Beaumont-Dark