Zotefoams Plc · LSE:ZTF
Zotefoams — FY2016 Earnings Presentation
29 slides from Zotefoams's earnings presentation, Mar 14, 2017
Slide 1: Preliminary Results 2016
Preliminary Results 2016 David Stirling: Group CEO Gary McGrath: Finance Director Presentation Title Presented by 14 March 2017
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 pers
Slide 3: Introduction
Introduction | Y zoreroams
Slide 4: Zotefoams' Strategy
Zotefoams’ Strategy We deliver stakeholder “We intend to be value by using unique the world leader in technology to create a cellular materials portfolio of differentiated technology in our products. chosen markets” Title We focus resources primarily on markets where we are, or have We intend to dev
Slide 5: Highlights
Highlights • Strong currency benefits enabled continued investment in operating cost base to support future growth whilst growing earnings • Full capacity during Q1 and Q4, but soft mid-year conditions in European AZOTE® markets. Inventory adjustment at a key HPP customer • Revenues up 7% to £57.38m
Slide 6: Segment overview
Segment overview Revenue by Geography Revenue by Business Unit United Polyolefins HPP MEL Asia and the rest of Kingdom the World and 10% Ireland 17% Dec 15 US Europe Dec 16 35% 38% 0 20 40 60 35% £ Millions Revenue by Industry 30% 25% 20% • A well balanced geographical and industrial spread 15% • Im
Slide 7: Financial Review
Financial Review | Y zoreroams
Slide 8: Financial Highlights
Financial Highlights % • Group revenue benefits from Change weaker sterling, with 80% of £ million Dec 16 Dec 15 Reported revenues derived mainly from US dollar and euro Group Revenue 57.38 53.87 6.5% • Mid-year polyolefin demand weakness sandwiched Gross Profit 20.54 17.27 19.0% between near full c
Slide 9: Profit Bridge
Profit Bridge 2015 2016 Change £'000 2015 FY PBT to 2016 FY PBT Variance Average rates GBP to Euro 0.72 0.82 13.9% 8,500 GBP to USD 0.65 0.75 15.4% Year-end rates GBP to Euro 0.74 0.85 14.9% 8,000 GBP to Euro 0.68 0.82 20.6% 1,568 104 7,500 453 2,418 722 7,000 6,500 7,232 6,000 5,500 6,010 5,000 FY
Slide 10: Free Cash Flow and Net Debt
Free Cash Flow and Net Debt £ million Dec-16 Dec-15 • Working capital investment reflects inventory Operating profit 7.40 6.33 build in HPP and new businesses, together Depreciation & amortisation 3.60 3.48 with high year end sales • Capital expenditure is driven by US Underlying EBITDA 11.00 9.81 i
Slide 11: Key Performance Metrics
Key Performance Metrics Polyolefin Foams Growth % HPP & MEL Share of Gross Revenue 8% 24% 6% 22% 4% 20% 2% 18% 16% 0% 2012 2013 2014 2015 2016 14% -2% 12% -4% 10% -6% 8% -8% 6% -10% 2012 2013 2014 2015 2016 Group Operating Margin % Return on Capital Employed % 14% 25% 13% 20% 12% 15% 11% 10% 10% 9%
Slide 12: Performance and Outlook
Performance and @ ZOTEFOAMS Outlook
Slide 13: Polyolefin Results
Polyolefin Results Common polymers made extraordinary by Zotefoams’ unique process, creating premium, durable, consistent materials Revenue Polyolefin Dec-16 Dec-15 % Foams £m £m Change • 4% sales growth due to favourable FX rates • Operating close to capacity early and late Group revenue 44.73 43.0
Slide 14: Polyolefin Foams Analysis
Polyolefin Foams Analysis Revenue: Geographical Analysis Revenue: Segment Analysis 45% 40% 40% 35% 35% 2015 2016 2015 2016 30% 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% UK & Eire Europe North America Rest of the 0% Packaging Transport Building & Industrial Sport & Medical Other world Construction
Slide 15: HPP Results
HPP Results ZOTEK® ZOTEK® foams: retaining the attributes of high-performance polymers with the added benefits of (consistent) foaming T-FIT® high-performance insulation Revenue HPP Dec-16 Dec-15 % £m £m Change • Revenues increase 21% with underlying growth despite aviation inventory correction Grou
Slide 16: HPP: a growth portfolio
HPP: a growth portfolio ZOTEK® £'000 HPP Sales Growth Product portfolio with unique attributes 12000 from defensible technology: 10000 • ZOTEK® F fluoropolymer foams: fire, smoke, chemical resistance 8000 • ZOTEK® N nylon foams: high 6000 temperature performance 4000 • ZOTEK® PEBA foams: excellent k
Slide 17: MuCell Extrusion: Results
MuCell Extrusion: Results Revenue MEL Dec-16 Dec-15 % £m £m Change • Further 22 lines installed at licensees, bringing total installed base to 111 Group revenue 2.73 2.62 4% • 2016 “consolidation of technology” focus Segment loss pre (0.40) (0.50) 20% • Record order intake, with large project amorti
Slide 18: Coveris and MuCell Technology
Coveris and MuCell® Technology MuCell Extrusion in partnership with a leading international manufacturing company who produce polystyrene-free packaging NEOCELL® PP+ has been developed as a “breakable” Polypropylene “Form Fill Seal” sheet NEOCELL® PP+ eliminates the need for chemical foaming agents
Slide 19: Significant USA Investment
Significant USA Investment • $31 million investment in existing Kentucky site • Extrusion and high-pressure autoclave • Autoclave suitable for AZOTE® and ZOTEK® foams • A 2nd autoclave included in investment sum • Commissioning around the middle of 2017 Walton Kentucky facility Autoclave: Internal b
Slide 20: Key Messages & Outlook
Key Messages & Outlook 2016 • Strong currency benefits enabled continued investment in operating cost base to support future growth whilst growing earnings • HPP growth, with first significant sales of ZOTEK® PEBA energy foams • Solid progress in delivering strategy 2017 • Operating close to capacit
Slide 21: Appendices
Appendices | X ZOTEFOAMS
Slide 22: Investment Case
Investment Case Sustained high levels of organic growth with margin enhancement through product mix and operational gearing Flexible core ZOTEK® F autoclave capacity MuCell optionality: fluoroploymer for block foam investment in foams for aviation production customer remains base with the largest (A
Slide 23: Overview
Overview Organisation Products Founded on AZOTE® Innovation HPP stretching back to Polyolefin Foams 1921 ZOTEK® Environmentally friendly High Performance Nitrogen/CO2 gas A world leader in Products foaming Barriers to cellular materials processes MuCell entry: IP, technology capital, Technology Lice
Slide 24: Group Overview - Locations
Group Overview - Locations MuCell Extrusion HQ Zotefoams Plc Woburn, MA, USA Croydon UK licences MuCell® Block foam technology to end users Main manufacturing site Zotefoams Inc, Walton, KY, USA AZOTE® block foam expansion AZOTE® Asia Limited Hong Kong Zotefoams Midwest Sales Joint Venture Tulsa, OK
Slide 25: Main markets & typical applications
Main markets & typical applications Packaging Transport Industrial AZOTE® ZOTEK® MuCell AZOTE® ZOTEK® AZOTE® T-FIT® Luxury, fine art and museum Galley areas / window seals Seals and gaskets Industrial protective and transit ECS (air ducting) Marine hoses and fenders Aviation & aerospace Soft touch t
Slide 26: Technology Block Foams
Technology Block Foams What sets us apart from competition is a unique, environmentally friendly process that uses nitrogen gas to produce a range of uniform closed-cell cross-linked foams. Stage 1: High quality extrusion and cross-linking Stage 2: Impregnation and saturation of solid polymeric shee
Slide 27: MuCell Process Technology
MuCell® Process Technology MUCELL® technology produces foam that performs like solid plastic. It creates microbubbles in the centre of plastic extrusions by injecting gas into the melt during manufacture. • Lighter • Greener • Lower cost Sheet Film Blow moulding Pipe and profile Consumer Automotive
Slide 28: Polymer (LDPE) Prices
Polymer (LDPE) Prices £1.200 £1.144 £1.150 £1.100 £1.050 £1.041 £1.000 £0.950 £0.900 £0.850 £0.800 £0.750 £0.700 Page : 28
Slide 29: Market Information
Market Information Share price 298.0p (08/03/17) Market Main Market Ticker ZTF.L Shareholder Profile* Market cap. £132.4m Ord. shares in issue 44,414,442 14.2% 320 1,000 28.1% 12.2% 300 800 1.5% Traded Volume ('000s) 2.6% 11.5% Share price (p) 280 600 4.1% 4.2% 260 400 5.4% 8.6% 7.7% 240 200 Miton 1