Zotefoams (LSE:ZTF) — Post AGM Investor Presentation

0:02 Good morning, ladies and gentlemen. Welcome to the ZOTEFOAMS PLC Post AGM Investor Presentation. Corner of your screen. Simply type in your question and press send. The company may not be in a position to answer every question it receives during the meeting itself, but the company will review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your investment company dashboard, and you'll be notified once they're ready for your review. I'd

0:34 also like to remind you that this presentation is being recorded. Before we begin, we'd like to submit the following poll. I'd now like to hand over to David Sterling, CEO, and Gary McGrath, CFO of ZOTEFOAMS PLC. Good morning. Thanks, Paul. Good morning, everyone, and thanks for attending our post AGM, presentation and q and a. I can see questions coming in the q and a tab if you if you want to ask a question. What I plan to do as I go through the presentation, if there's a question that comes up that's relevant for that point, then I'll deal with it as we go through. And if the questions are better dealt with at the end, then I will just wait till the end. So if you put a question in and don't answer it immediately, I will get around to it hopefully before the end of the presentation.

1:24 I'd like to start by by just pointing out that ZOTEFOAMS is a 100 years old this year. The business wasn't always called ZOTEFOAMS, but we can certainly trace the technology back to a guy called Charles Marshall who is actually worked at the Edison Labs in America before coming to The UK and inventing making foam foam rubber, in fact, with high pressure nitrogen gas. And it's a technology where, you know, I I think today, we look at this in a different way. We we really see a lot of opportunities. We're taking existing assets in place and redirecting our commercial efforts on those. But it's great to have a 100 years history and we we can go back through the years and see all kinds of weird and wonderful things that that were the phones were used for.

2:22 And actually a lot of them are pretty similar to to some applications today. There's a usual important notice on securities legislation, is in this presentation. I'll move past that and read it out. And just where I'd like to start is actually talking a bit about a press about a process and and why that's important to us. So and how our business works, you know, that's what it's all about. And really, it's about leveraging a unique technology. We are, as far as we know, and certainly I think we would know if someone else was doing this, the only company using very high pressure nitrogen gas on a commercial scale to make to make forms.

3:17 That technology is put together by by our engineers. It's not off the shelf, so there's lots of different suppliers involved in in pulling this together. And it offers a significant barrier to entry. And that process and how we use that process is really at the heart of almost everything we do at ZOTEFOAMS.

3:43 It is fairly capital intensive, particularly when we put a new fact down, there's quite a lot of infrastructure needed to do that. And therefore, really to optimize our profitability, what we need to do is make sure that the assets are running full, and that means twenty four seven. Not quite three hundred and sixty five days a year because we do shut down over Christmas, and we do shut down in the summer in The UK for a couple reasons, including maintenance, required maintenance because we run very high pressure gases and it's dangerous effectively unless it's managed properly. So we need to have safety shutdowns and and very good maintenance. And at Christmas, nobody wants to come in and pick up forms, so we shut down this. But other than that, we we plan to run very high utilizations in the business and over time, increase profitability by improving our mix. And that means some some products per unit of capacity have a much higher margin, higher selling price. And over time, the business gets skewed towards that.

4:56 And that includes, for example, aviation and I'll come to that in a minute. I see a question on that already. So that that our business really covers a wide variety of applications. We'll see a sort of picture of that that was in our annual report and presentation to shareholders previously. But we have to really understand why people use our materials and when we develop new materials, are they gonna be better than existing things for for our customers? And we want to get to that best in class performance. And that gives you two things. One, it typically gives you better margins, but it also gives you a more sustainable position with your customer.

5:44 It's very rare for people to move away from something that's working very well for them. And within our EZOTE business, we do compete with other people using technologies which are making different forms. We're using the same raw material. But we typically pitch at the top end of the market and and best in class. Whereas our high performance products portfolio is much more targeted to make forms which other people don't do, and some kind of cases excel for very high selling prices. So if you think about a cubic meter of foam that's maybe 2% plastic, polymer content, in our HPP business, it's not unusual in the aviation side to sell for £3,000 or higher for a cubic meter of material.

6:41 So imagine filling the assets with that kind of business, you can see that the mix has a very high potential to be improved. So as well as that, we also have to ensure capacity is sufficient. What we don't want to do is spend a lot of money on business development and some of the things that we're looking at, you know, could generate very significant volumes over time to therefore let ourselves down by not having sufficient capacity. And how we manage that effectively is that we have a portfolio of products. When we put new capacity in, it typically fills up initially with a certain part of our product range. The more substitutable is ZOTE business, which is not the highest margin part of the business but can move fairly quickly, And then over time, we when we have a higher margin business coming in, we can kind of substitute that out and use the capacity to mix enrich and then do that all over again.

7:47 Okay?

7:50 I've got a question I'll just deal with here about comparable competition in the foam market. So as I said, our high performance products, typically we are the only people making these foams at very light densities. In the azole polyolefin business, there are if you want to make a block of foam, essentially what you're using is you're using chemicals, mixing those chemicals in with the plastic, pressing a block, heating it up, and the chemicals then decompose to give gas, and and that gas forms into mold. And by doing that, it's a fairly simplistic and works well in in some applications.

8:39 But the foam you get compared to ours is not as pure because the chemical blowing agent leaves residues, things like urea, ammonia, etcetera. So it smells a bit. It's not as pure. It's also less consistent and that consistency means it's weaker. So to get a comparable performance, they have to use more polymer. So when we are looking at applications that require purity or lightweight, we tend to have a very big differential advantage when we're looking at applications, for example, in product protection. The advantage is there, but not as much. And it depends exactly on the application that the customer wants to to do.

9:29 So I'll I'll see some other questions. I'm gonna come back to those as we go through the presentation, perhaps at the end. So if we think about the business, one of the the key things we think about 2020 was that we are managing the business against the background of kind of global trends, much more environmental interest and pressure, regulation becoming a key driver, particularly on things like safety, fire safety, toxicity, etcetera. Those tend to be one way streets. Nobody ever says, hey, let's make something a bit less safe. We've got a bit of room here. So it tends to be more and more stringent regulation and of course the demographics.

10:24 And those can drive medical applications, they can drive things like use of sports equipment or urbanization, which is which is also important in some applications. So basically, all of those support the growth of lightweight materials, high performance materials where we can specialize. And then inside those megatrends, you obviously have things like economic cycles, COVID, etcetera. And we have to maintain or we want to maintain that high asset utilization. So one of the ways we do that is we supply this variety of products to a variety of different markets. And if one market such as aviation is suffering, then we can redeploy the assets to focus on other markets.

11:19 And that's particularly important. Most of our equipment and certainly all the newer equipment is designed to make the full range of products. So we can switch across the portfolio depending on where the demand is.

11:35 So I think that's that that's kind of how we build resilience into our business. We're not overly exposed generally to any one market, although, you know, if you look at footwear, it's a very big market. We are supplying Nike. I'll talk about footwear later on. We're supplying Nike in an exclusive relationship, and that works two ways. It means, you know, we we we get to be very close to Nike, what they're doing, and they share things with us that they wouldn't share with a normal supply partner. And we develop in a way that probably wouldn't happen with a normal supply partner because they know that we're not gonna go and sell with someone else. So though we are, have a high concentration of business with Nike, we have also very good visibility of that over a fairly long period as they share their development and market plans with us.

12:33 If we look in 2020 versus 2019, you can see in the bottom left here the revenue, and these charts are in previous presentations if you want to pick them up, but you can see where our business is, sports and leisure, product protection, medical, transport, which covers automotive, planes, trains, building infrastructure, etcetera. Fairly geographically diverse as well. Although most of our full production assets are in The UK, we have now started a Polish facility which didn't contribute to these these figures really last year. And we have a decent sized foam production facility in Kentucky as well as foam cutting down in Oklahoma.

13:25 The the the geographic balance is important. And and that's interesting because foam doesn't really travel very well. It's bulky and therefore the cost of transportation is high. And, you know, to see a business which is operating globally in the phone business is pretty unusual. And I think that's testament to our unique performance in right across the portfolio.

14:03 So when we talk about the environmental side, You know, there is we we are actually now mandated to report on a lot of these things and and and show how we build environmental considerations, sustainability considerations into our decision making. And as a board, we take that pretty seriously. But when we break it down, you know, we think that there are four main things that we consider important in this lower carbon economy. One is our core process. We use nitrogen gas and energy, and we basically you know, other than that, it's a very, you know, low environmental impact. It's it's quite interesting. We get we we are in the stock exchange, we are considered to be a chemicals company.

15:05 And we get a lot of questionnaires to fill in about pollution and our policies and procedures on on water and environmental things. Mostly it's straight nose. We don't do any of this. We don't have and, you know, as a result, we we we get to see how the shareholders are thinking about these things, but it's it's quite odd for us because we don't we don't have these discharges. We don't work with these chemicals. We don't, you know, the water we use is for cooling. It's not part of our process and it never touches a product. So it's quite it's quite interesting to see how you're viewed from outside versus the reality.

15:51 And I think one of the things that we've decided to do is be a lot more proactive in saying, no, we don't do these things. Because when you're running a business, you don't really think you have to go out and tell people what you don't do. And, well, apparently we do. So that's it's really important that people understand that about a business and about a process. Secondly, I think that efficient use of raw material. I explained earlier how the other process is making foam use more why they use more material. The product's inconsistent. So that means it's a physically weaker product and we can use less material compared to the competitors, but it's also important about why people would want foam in the first place.

16:44 You know, foam is used to often light weight and therefore avoid emissions, such as in a plane. You know, if the plane's lighter, lower emissions. So you can make an argument about whether you want to fly or not, but if people are flying, then we should be flying in the lightest possible plane. And the same with things like cars, same with things like insulation across many industrial processes or clean room environments. You know, our products insulate very well. They they last longer. They're compliant with a lot of regulations that are difficult to meet. And, you know, those are important things for increasingly important things for our customers.

17:34 And then we think about a resource product. I'll come on to talk about that in a minute, but we are looking at new product developments right across our technology portfolio with a view to recyclable, reusable, etcetera plastic. I've got a question here from Siddharth b. What trends do we see in the full market and how we align with those trends? I think I think I've probably answered that. And what rate is demand for high performance forms growing? That's a difficult question to answer because our high performance forms tend to be more application specific. So for example, we're working right now with, you know, the biggest biggest markets are footwear, aviation, and clean room insulation.

18:28 But we're working right now with things like EV cars, bat batteries for electric vehicles. And if those sorts of applications, the battery likes to be insulated, it protects from extremes of heat and cold and therefore it performs better, it charges quicker, it lasts longer. If those sorts of things become reality, you can see a completely new market being added in a kind of discontinuous step change. So that's typically what we're looking at. You know, our our footwear business went from not very much at all to, you know, 20,000,000 sales in three or four years.

19:13 And that's what we're looking at within our HPP. It's these discontinuities where we can create a completely new market. And once we're in it, we try to push. So obviously, we're in aviation. That's not doing very well, but we've got a whole suite of new products going into aviation as they get ready for the the ramp up. Same with TFEIF. TFEIF is something which has been developed for for clean room installation. It was originally biotech and pharma. We then moved into semiconductor, now moving into food and beverage. And we have manufacturing facilities to take our own foam and turn it into tubes.

19:59 In China, we're putting that in Poland. We're now pushing into The US. And in The US, just to answer a question that's popped up, we had a long standing agreement with one of our our customers who had branded the product t tubes and we're selling it. And, we wanted to consolidate that into one brand globally. And effectively, we have done an agreement where we are gonna now manage that customer base that the The US converter had developed. They will continue to take our foam, turn it into tubes, and and sell it onto us at agreed, pricing. And that allows us to consolidate globally under one brand. So it I I think it should work very well because ultimately, most of our customers are global customers. If you think about food and beverage, semiconductor processing, etcetera, pharmaceutical biotech, they're global companies and they want to see, you know, hey, what we're using in China, let's use that in America. What we're using in Switzerland, let's use that in India or whatever.

21:16 So that that's important. So just one, know, giving some sort of examples of what we've done and, you know, why environmental issues are important. We kind of set it to be provide optimal material solutions for the benefit of society. And we do believe that plastics, if used properly, can be the best solution.

21:52 And I think there's a there's a big push back against plastics. Certainly, it's single use disposable items and I think that's right. I I think that's not the optimal use for plastics. In some cases, we shouldn't be making these products at all of anything. But, you know, there are plenty of things that plastic is an optimal solution for and and definitely, we want to make sure that, you know, end of life considerations are are taken into account, but also longevity. So for example, if we're looking at our installation and clean rooms, often our competitors' products will last a year and we are in there lasting four or five years. So it's not just, you know, it's that kind of whole life carbon accounting is is really important. Same with planes, cars.

22:46 Most of ZOTEFOAMS products are sold into products which are the foam is part of the product and that product is designed to last a decent amount of time. And at the end of its life, it can be recycled. So, you know, that we tend to focus on those areas. And I think partly by by good luck really in some cases, I'll be honest, if we look back ten years or five years, it wasn't that we were designing that. It's just our products are expensive. They're not designed and they were never priced to be used and throw away items. And that effectively has led us into the portfolio that we have today, which are permanent solutions. And we also look at how can we improve that, you know, making lighter forms, better use of raw material, recycling our scrap.

23:39 This resource product that'll come on to, We have achieved the ISO at forty five thousand one twenty eighteen, you know, environmental credentials well ahead of the deadline. We're adopting sustainability accounting standards and task force for climate related financial disclosures in our annual report so that transparency is gonna be there. We've done things like signing up to a 100 renewable electricity. So there's a whole lot of things that that that we are doing that we can do to move the business into a more sustainable footing when we think about environmental.

24:26 But it's really an extension of things we've been doing for for quite a few years. And I think we're pretty well placed for that. One of those things is this resource barrier packaging. So you see here beverage cartons of the kind of things that we told apple juice or oat milk or or something like that. And if you take these and and you look at them in your fridge today or on your sale shelf if it's a non refrigerated product, you'll find that they all say they're recyclable. The reality is far from from that. These products are loved by consumers because they're nice and easy to handle. They're loved by packaging companies and and retailers because they pack in, you know, nice square pallets and they're easy to transport and fill.

25:22 Very flexible. You can print on the surface, etcetera. But the reality is they're not really recyclable. They're made from multiple materials. Certainly, with pulp and it's always virgin wood pulp because you can't use recycled because it's not strong enough. And at least two, commonly three layers of plastic and for the things that don't go in your fridge, a layer of aluminium or something equivalent to that. And therefore, those multiple materials all bound together with a plastic cap on top, very difficult to recycle. We have developed what looks and feels the same but uses a 100% polymer.

26:09 And that plastic can be recycled. And we can actually take recycled content and put it into the manufacture of this product. And the innovation here is that we have created using a layer structure with bubbles, something that gives you barrier performance. And that barrier performance stops things like oxygen or moisture going from the outside into the product or from the product out. So it creates a sterile sealed environment. And that's what the plastic and the aluminum do in the the current system. So they can't take that plastic and aluminum out and just have wood pulp with apple juice in it. It doesn't work.

26:56 But because it's multiple materials, how do you recycle it? Is it a plastic? Is it pulp? Etcetera. So it has to be sent to specialist facilities and is is down cycled effectively into something you might find in a park bench, plastic park bench or something. And even then, recycling actual recycling rates are are less than 50% and close to 20% in even good environments. Our product is, excuse me, a 100% recyclable. You can just throw it. It's effectively a plastic milk carton, Same materials that have been formulated in a different way.

27:41 Just and when we compare it with the kind of cartons that are out there at the moment, we are half of the carbon footprint. And that's a full end to end life cycle including, you know, growing the trees right through to the end of life. In our case, being made from virgin plastic right through the end of life. But we can go up to a 100 recycled content in our products. So we use, you know, when we start to get up to these levels, it's even better for the environment as long as it's recycled. So this is something that we're looking at very, very high levels of interest commercially for this.

28:27 And we are investing in our facility in The US in Boston to put an extrusion line to make the sheet and a box making and filling machine that can do apple juice or milk or or or whatever to prove that the technology can be sterilized, run at pace, and and effectively give the confidence to the commercial interest. So I've got a question from Andy. How would the resource product be sold to manufacturers and what's the revenue model? We're looking at that at the moment. We may end up making sheet extruded sheet ourself. We could license it. We could sell the whole thing. We could joint venture.

29:14 But making the extruded sheet, which would then sell on downstream to existing infrastructure, box making is the core to that that revenue model. So but we haven't fully decided. The the market is, in some ways, quite consolidated. The the 250,000,000,000 cartons a year globally. And the players some people just make sheet and and sell it to packers. Some people actually are integrated making the sheet and the machine to fold and and and fill. So we're certainly not gonna be in machine making, but we may end up partnering with with people through that that supply chain.

30:00 We're probably at least eighteen months away from, you know, that sort of fully fully commercial because we're dealing with, you know, food packaging which is never an easy thing to just rock up and say we've got something that works and don't worry about it here. It's gonna it's got a lot of validation to go. But the market is is enormous, crying out for change because of environmental and recycling pressures, and we've got an awful lot of interest in our technology. So just a couple of final slides then. I do want to talk about footwear. It's become increasingly important to us. And when we talk about footwear, we mean Nike.

30:47 We we signed up exclusively with Nike in 2017, initially based on a elastomeric resin that that is very difficult to form using other other methods. And if you do form it using other methods, it's difficult to get it lightweight and consistent. And we have managed to do that, and that's given us a form which gives not only a lightweight shoe, but a fantastic energy return. And that that's what Nike have been putting in their footwear that's been, getting them, Olympic medals, podium finishes on the marathons, breaking the world record, the marathon record below two hours for the men's marathon, all based on on ZOTEFOAMS materials.

31:34 And if you look at Nike, any Nike shoe that says Zoom x material will have ZOTEFOAMS technology in there. And as I said earlier, that exclusive relationship means we have a very close relationship with Nike. And it means they can spend their marketing dollars saying, hey, look at this technology. Isn't it great? Because they know other people can't get their hands on it. So it's a it it works very well both ways. And following that exclusive relationship and the initial successes on the track and on the road. We have developed other forms for them, are at different price point, which allows them to go into a wider range of shoes.

32:24 But we're we're still at, you know, the kind of premium running category. That's where we are with Nike. And in 2020, it was 25% 26% of group revenue. And, you know, it's a big part of our very strong growth in the first four months this year. We expect that 2021 will see a good growth across footwear completely because, actually, most most of our growth in 2020 came in the second half. And that was purely because of Nike's product launch cycle. So you can see, go to Nike website or Nike stores, you know, wider range of shoes using our technology.

33:16 But those those typically get launched and then redeveloped every two years. So we've we've kind of gone into the next part of a two year cycle, sort of halfway through 2020. And actually, we've just been awarded by Nike the the the most innovative supplier, which is, you know, for a company the size of Nike with, you know, 35,000,000,000 in sales and 24,000,000,000 in footwear sales to be the most innovative supplier is is is quite an honor, actually. So I'm very pleased with that and we need to get some PR done in that. And then finally, just we have scheduled this meeting to be coincident with our announcement this morning on how the first four months have gone.

34:12 And very, very strong even if we compare it with 2019 where we started very, very well, 2021 has, you know, delivered certainly a record four months, record for for a comparative period, record March and and April were the best months ever that we've we've had in ZOTEFOAMS, and that we can see very good momentum for the remainder of this year. So the result of that is that the analysts have typically upgraded their sales expectations for for this year from about 90,000,000, up by about 10%. They have, however, kept more or less the the profit expectations where they were.

35:02 We can see some foreign exchange headwinds, particularly in the US dollar. We can see and we're experiencing raw material price hikes and not so much availability of raw materials. I think there's a question about that earlier. Can we get raw materials? Yes, we can, but the prices have gone up to levels that in my twenty four years in the business I've never seen. So I do expect that to be, you know, a peak pricing. I don't know how long it'll last, but I think it will it will affect, you know, us in in the second half. We have put our prices up, and this is more about polyolefin than than HPP. We have put our prices up to recover some of that, but not to recover peak peak polymer inflation because I think when you do that, quite rightly your customers come back and accuse you of being somewhat opportunistic and you get a lot of pressure to to pull those prices back down again.

36:07 And actually, I think, you know, by sharing a little bit of the pain in the short term, we'll be in a much better position in the medium term with with our business development customers. So that's kind of what we've done. And, you know, right now, although we are running very hard, we are facing challenges with with freight just with, you know, some operational disruption in in in a few areas that means that, you know, I think our our business is going very, very well, but we're not sitting here patting ourselves in the back at all. We're acutely aware that in a very volatile world, you have to keep your finger on everything that can go wrong and and do your best to make sure that it doesn't.

36:58 And if it does, it doesn't impact you significantly. We did that very, very well last year, I think, through COVID refocusing our assets, reprioritizing how and changing how we run factories, keep people safe, etcetera. And I think our operational response to the strong recovery is is really, really good. Know, it's the team have been very effectively managed And, you know, I think we will we will come out of what is a pretty volatile couple of years very well placed. And and certainly, we've continued to invest in sales and admin and technical development.

37:44 We've we've continued to invest in equipment. We recently, you know, started up a Polish facility and that's gone now from from one to two shifts a week. And so, you know, I feel pretty positive about about the not just the the short term, but medium term. I think we're doing the right things and so I'm very, very pleased about where we're we're sitting. I'll just now cover some of the questions. So I've had a couple about aviation. I'll start with that. Is any insight into when aviation demand may rebound?

38:30 Yes. We do. We are, you know, we we're more exposed to Boeing than Airbus or or the Chinese guys, Comac, at at the moment. And that is something where most of the supply chain are expecting, you know, to resume some sort of manufacture. We didn't call it a rebound necessarily, but we're looking at fourth quarter for us. So we're seeing almost nothing happening in the first half or or or through through third quarter. And fourth quarter, a pickup, although not quite at the levels that, you know, we had been running at in 2019.

39:16 And we think it will be, you know, into 2022 before demand levels are are up and probably into 2023 before plain building is is running at the levels it was in 2019. However, we don't just sell into the OEM plane building kind of market. We do supply materials that go into existing airlines for refurbishments, upgrades, etcetera. And we are also widening our product range and come out with new lighter materials to replace solids, etcetera, which has been pretty well received.

40:01 So I think these things, you know, give us the opportunity to to grow our franchise in aviation. It's not just that we're sitting here waiting for the market to to rebound and then we'll we'll deal with what that is. We're act very active in aviation market just now positioning ourselves for for better times. Next question. Can you talk lightweighting in the SpaceX? Can we assume you get premium pricing from them, given it some benefit? So I can't talk specifically about any particular company or application that, you know, we've got this nondisclosure agreements that sort of prevent that.

40:47 It's not that healthy for the relationships. So but but space in general, of course, weight is super important. And anything we can do to reduce weight on a on a rocket is massively beneficial. Also safety, you know, you've got not only fire safety, but you've got things like toxic outgassing from certain forms that over time would do things like corrode seals, etcetera. Your product has to be light, it has to be safe, fire standards, it has to be pure. And I think we're pretty uniquely positioned for that.

41:34 It is a premium product. It's sold, you know, effectively it's aviation grades and, you know, these grades of of material are they are of the sort of 3,000 plus pounds per cubic meter HPP. So it's a it's a pretty interesting market. It's it's part of the portfolio and mainly used in interiors of of rockets. Rock no rockets. The interiors of the the the capsules holding the people. And are we being built into the likes of space, etcetera, and Starlink satellite programs? The anything that's carrying people, generally, yes.

42:25 Anything that is, you know, things like satellites, etcetera. If they need foam, then we are usually in the mix. It depends on the design. Some of these things need foam for insulation or or or protection. Some of them don't. So we're not trying to convince them to use foam when it's not needed, but if they need foam, yes, we are tend tend to be one of the first people to call. Question here. Is there any material difference between the current revenue visibility between your higher and lower margin products? Yeah. Actually, best visibility we have is is in footwear, believe it or not. Because because we're an exclusive partner, Nike like to keep us informed about their short, medium, and long term forecast to make sure that, you know, we have enough capacity both both on our our sites and through the supply chain. So these aren't actual purchase orders, but it's it's very good visibility.

43:35 So we effectively, we believe what Nike believe about their business and we can see that. The rest of the business, I would say the visibility tends to be better the more specialist the product is because it's not substitutable easily in the short term. So customers could put in orders for aviation business months out. If it's something like construction product, tends to be no. It's it's weeks. Actually, the shortest visibility we've got is probably on our t fit business, which is very high margin. But and and we work a lot with people who say they're gonna use you.

44:24 So we've got a lot of quotes out there. We can see quote books, etcetera. But when they actually place the order, they tend to want it delivered within a few days. So we've got some sort of visibility, but it's not a hard order book, if that makes sense. Question about how do we see a new plant in Poland developing in the next twelve months? So Poland is currently being fed from The UK and The US. If you looked at how we started up a US plant, that's exactly what's happening in Poland. We built an expansion facility, we send materials over there that are processed in The UK for example, and when they get to Poland we form them. That allows us to take all the inventory holding and the transport costs, manage those much better to supply the local markets.

45:26 We expect to begin extrusion in Poland either late this year or very early next year and then develop it from there. As I said, we're currently on two shifts. We may move to three shifts operation towards the end of this year if demand warrants. So I think it's it's going more or less on plan. Extremely pleased that the guys have got the the factory up and running under COVID because, you know, normally, we'd have engineers and support staff and everything going from The UK to to do that. That's all been done remotely with a very small crew of of Polish nationals that we had recruited before COVID and and trained over here. So it's really fallen on on on three pretty much three individuals to pull that whole thing together with our suppliers and engineers from the machine makers, etcetera, and get the place up and running. And they've they've done that really well.

46:33 The outputs, the quality that we're getting from the assets in Poland are already equaling what we're getting in The UK. So, you know, full scale production levels. And that's within within a, you know, couple of months. So that's that's really fantastic performance. I can't say enough about the the team out there on that. So I hope that answers all the all the questions. I don't I don't see any any more questions coming in through the q and a. David, I think you've been very kind. You've actually answered all the questions today from investors, so thank you indeed for that. And if there are any further questions that are submitted today, you will be able to review those. And, of course, we'll publish the answers on the investor me company platform.

47:20 David, just before, we redirect investors to give you a little bit of feedback, could I just ask for a few final words just to wrap up, please? That'd be great. Yeah. So what what I would say is it's been it's been a bit of a roller coaster for the last twelve or or fourteen months or so. I think the business has performed very well. We've managed to deliver a whole load of capacity improvements. We've reprioritized where we were focusing our business. We've continued to supply all of the main customers like Nike, etcetera, throughout the pandemic through we've kept our people safe. We've reduced our debt levels significantly or improved our gearing, actually. We're on reduced debt. We've really improved our gearing levels.

48:07 And I think we're still operating in a pretty volatile market. You'll see, you know, people talking about inflation. We'll see people talking about supply chain disruptions, etcetera. It is part of our daily mix to deal with these things, but I think we are dealing with it very well. We've obviously delivered a very strong four months trading. And, you know, if we can move from, you know, 80,000,000 last year up to to to mid nineties and deliver year on year growth at 20% plus, as the analysts are forecasting, I think I think that's testament to a business that continued to invest through the pandemic, continued to deliver for our customers, and we're seeing the benefit now.

48:55 So thanks for your participation here. But I leave you, I I think feeling I feel very positive about this business. David, that's fantastic. Thank you again for updating investors today. Could I please ask investors not to close the session? They should be automatically redirected for the opportunity to provide your feedback in order that, the management team can better understand your views and expectations. This will only take a few moments to complete, and it's greatly valued by the company. On behalf of the management team of ZOTEFOAMS PLC, we'd like to thank you for attending today's presentation. That concludes today's session.