REG - Zotefoams PLC - Trading Update and Group CEO Succession

ZotefoamsAnnouncement

22/05/2024 07:00

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RNS Number : 3588P  Zotefoams PLC  22 May 2024

Zotefoams plc

("Zotefoams" or "Group")

 

Trading Update and Group CEO Succession

 

22 May 2024 - Zotefoams, a world leader in cellular materials technology,
provides a positive trading update for the four months ended 30 April 2024
(the "period"), ahead of its Annual General Meeting to be held today.

At this meeting Dr Lynn Drummond, Chair of Zotefoams, will make the following
statement:

Trading in the period has been strong, with the Group sustaining the positive
momentum seen in FY23 to deliver overall sales growth of 14% and record
revenue.

Key movements, against the comparative prior year period, were:

 ·    46% increase in High-Performance Products (HPP) sales:
  -   Footwear sales grew significantly, with a 44% increase benefitting in part
      from customer inventory build
  -   ZOTEK(®) F foam sales for aviation, space and other technical markets grew by
      over 100%
  -   T-FIT(®) insulation products sales grew by 57%
 ·    7% decline in Polyolefin Foams sales:
  -   2% decline in overall sales volumes, driven by a continuation of subdued
      demand conditions in certain markets, particularly in continental Europe,
      which was in part offset by strong volume growth in North America, where the
      Group is investing in further capacity to support future growth
  -   Average prices were impacted by unfavourable exchange rate movements (which
      are hedged) and the Group's deliberate shift in product mix towards lighter,
      more cost-effective foams

 

Alongside the strong trading momentum, the Group has made further progress
during 2024 on key strategic initiatives with two important updates made
during May:

On 7 May, Zotefoams announced a global alliance agreement with Suzhou Shincell
New Materials Co, Ltd ("Shincell"). Initial co-operation, including technology
sharing from Shincell to Zotefoams, has begun positively and Zotefoams will
provide further details of its plans for the alliance at the time of our
August interim results.

On 15 May, Zotefoams delivered a progress update and media launch on
ReZorce(®) mono-material barrier packaging. Refresco, the world's largest
independent beverage solutions provider, is our joint development partner.
Focused on the carton market, ReZorce is entering late-stage quality and
technical validation in preparation for market trials with a European
retailer.

Outlook

The Board anticipates full-year sales growth to come primarily from the HPP
portfolio, after a particularly strong four months, with good opportunities
across all product groups, together with an expectation of an improving
performance from the Polyolefin Foams business unit later in the year. At
current exchange rates, the Board expects little impact from currency on
full-year profit.

Internally, beyond a focus on continued operational excellence, the Group is
directing resource towards three key opportunities:

 ·   ReZorce mono-material packaging development, where a market trial and
     development of our portfolio of products are priorities, alongside securing
     external investment;

 ·   Investment in the second low-pressure vessel in the USA, which we expect to
     commission in Q2 2025; and

 ·   Development options to enhance the benefits achievable under the Shincell
     alliance arrangement, which includes investment in this technology.

Performance in the first four months of the year has been strong and provides
a solid platform from which to deliver further financial and strategic
progress in 2024. While being mindful of remaining macroeconomic volatility,
the Board's full year expectations remain unchanged, and it is confident about
the long-term prospects of the business.

Group CEO Succession

As previously announced, David Stirling will step down from the Board
following the conclusion of the 2024 AGM and be replaced by Ronan Cox.

 

Commenting on the update David Stirling, Group CEO of Zotefoams, said:

Over my 27 years with Zotefoams, the business has experienced strong growth
and transformational change, with significant investment in global
manufacturing capacity and in new product development, including the exciting
opportunity afforded by ReZorce packaging technology. In the first four months
of this year, Zotefoams delivered record sales and made progress on a number
of strategic initiatives, and I step down from the Board at a time of
significant positive momentum for the business. It has been a pleasure to lead
Zotefoams for so many years and I wish Ronan and the team all the best for the
future.

Ronan Cox, Group CEO Designate of Zotefoams, said:

I am honoured to step into the CEO role and continue driving Zotefoams' legacy
of innovation and growth. With a strong foundation laid by David and the team,
I am excited about the opportunities ahead and committed to leading Zotefoams
into its next chapter of success.

 

Note. The Board understands that current market expectations for the year
ended 31 December 2024, prior to release of this trading statement, are
revenue of £138.5m and adjusted profit before tax of £14.9m.

 

 

- Ends -

 

Enquiries:

 

 Zotefoams plc                         +44 (0) 208 664 1600
 David Stirling, Group CEO

 Gary McGrath, Group CFO
 IFC Advisory (Financial PR & IR)      +44 (0) 203 934 6630
 Graham Herring

 Tim Metcalfe

 Zach Cohen

 

About Zotefoams plc

 

Zotefoams plc (LSE - ZTF) is a world leader in cellular materials technology
delivering optimal material solutions for the benefit of society. Utilising a
variety of unique manufacturing processes, including environmentally friendly
nitrogen expansion for lightweight AZOTE(®) polyolefin and ZOTEK(®)
high-performance foams, Zotefoams sells to diverse markets worldwide.
Zotefoams uses its own cellular materials to manufacture T-FIT(®) advanced
insulation for demanding industrial markets. Zotefoams also owns and licenses
patented microcellular foam technology to reduce plastic use in extrusion
applications and for ReZorce(®) mono-material recyclable barrier packaging.

 

Zotefoams is headquartered in Croydon, UK, with additional manufacturing sites
in Kentucky, USA and Brzeg, Poland (foam manufacture), Oklahoma, USA (foam
products manufacture and conversion), Massachusetts, USA, Stilling, Denmark
(microcellular foam technology) and Jiangsu Province, China (T-FIT).

 

www.zotefoams.com (http://www.zotefoams.com)

 

AZOTE(®), ZOTEK(®), ReZorce(®) and T-FIT(®) are registered trademarks of
Zotefoams plc.

 

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