REG - Zotefoams PLC - Trading Update

ZotefoamsAnnouncement

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RNS Number : 6585J  Zotefoams PLC  22 May 2025

Zotefoams plc

("Zotefoams" or "Group")

Trading Update

 

22 May 2025 - Zotefoams, a world leader in supercritical fluid foaming, is
pleased to provide a positive trading update for the four months ended 30
April 2025 (the "period"), ahead of its Annual General Meeting to be held
today.

Trading in the period has been strong, with the Group maintaining the positive
momentum seen in FY24 to deliver overall sales growth in the period of 8% and
record revenue of £50.7m.

As announced in March 2025, Zotefoams has re-orientated commercially from the
previous product focus of Polyolefin Foams, High-Performance Materials and
MuCell Extrusion to a market focus across three key verticals, comprising
Consumer & Lifestyle, Transport & Smart Technologies and Construction
& Other Industrial. Alongside this, the Group has pivoted to a regional
management and reporting structure. Performance is presented in line with this
new structure.

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

 ·   11% increase in EMEA sales to £40.4m:
     - Consumer & Lifestyle sales up 15% to £24.8m, a vertical currently
     dominated by the Footwear sector, currently manufactured and managed in the UK
     and with strong growth in the period of 17%
     - Transport & Smart Technologies sales up 8% to £14.3m, led by continued
     growth in ZOTEK(®) F foam sales for aviation and space markets
     - Construction & Other Industrial sales down 9% to £1.3m, reflecting
     challenging market conditions in China for T-FIT(®) insulation products
 ·   5% increase in North America sales to £9.3m:
     - Transport & Smart Technologies sales up 24% to £6.1m, led by strong
     growth in ZOTEK(®) F foam sales for aviation and space markets
     - Construction & Other Industrial sales down 15% to £2.8m, with lower
     demand from our industrial insulation business, which is expected to recover
     as the year progresses
 ·   The Asia-Pacific region, though currently representing a small portion of the
     business at £1.0m (down 41% year-on-year), remains strategically important as
     the Group prepares to commence operations in Vietnam, a key market for the
     Consumer & Lifestyle vertical.

 

Zotefoams has begun to execute its refreshed strategy, making notable progress
in a number of strategic areas:

 ·   The commercial function has been restructured into a global organisation
     targeting the three market verticals, existing staff have been repositioned
     into the new structure and good progress is being made in recruiting industry
     experts into targeted roles
 ·   The development of a new manufacturing facility in Vietnam continues as
     planned and will position the Group closer to a key global footwear
     manufacturing hub. Despite the recent US tariff announcements affecting
     regional exports, the Board remains confident in this strategic investment for
     several reasons:
     - The global athletic footwear market remains concentrated in Asia, with
     China, Vietnam and Indonesia producing approximately 94% of the world's
     athletic shoes
     - Zotefoams' presence in Vietnam supports its diversified global footprint,
     serving markets beyond the USA
     - The economics of footwear production, where labour costs represent 20-30% of
     product price, continue to favour Asian manufacturing locations
     - The Group anticipates the continued migration of footwear industry
     production from China to Vietnam and Indonesia, with Vietnam maintaining
     significant competitive advantages in productivity
 ·   Zotefoams continues to advance its innovation pipeline, with encouraging
     developments in sustainable materials applications across all three verticals
 ·   The North American low-pressure vessel remains on course for commissioning in
     Q3 2025, enhancing the ability to serve the North American market directly as
     reshoring of high-value manufacturing increases demand for domestically
     produced performance materials

 

Outlook

The Board continues to expect the Group to deliver overall growth in 2025,
supported by the strong performance in the period, a growing order book and
with good opportunities across all geographies.

While recent US-led tariff announcements may result in some market disruption
and associated incremental costs, this presents a manageable headwind rather
than a fundamental shift in our market opportunity. The adoption rate of
supercritical foams in athletic footwear, currently at 4-6% of the total
market, continues to present significant growth potential despite these
developments.

Margins through the period have remained robust and in line with expectations.
At current exchange rates, the Board expects negligible impact from currency
fluctuations on full-year profit. Zotefoams is actively monitoring
international trade developments and is well-positioned with its global
manufacturing footprint to adapt to evolving conditions.

The strong performance in the period provides a solid platform from which to
deliver further financial and strategic progress in 2025. While mindful of
remaining macroeconomic volatility, the Board's full year expectations remain
unchanged, and it remains confident about the long-term prospects of the
business.

Commenting on the update Ronan Cox, Group CEO of Zotefoams, said:

"I am very pleased with the business performance in the period, with the
delivery of further record revenue, and the early-stage progress in executing
our refreshed strategy. Zotefoams has significant opportunity to grow in the
selected markets where we have a right to succeed, and we are structuring
ourselves to maximise this opportunity.

"Our Vietnam investment remains strategically important, despite the evolving
backdrop of trade negotiations. The footwear industry's manufacturing base
remains firmly established in Asia, with Vietnam continuing to offer strong
productivity advantages. While we may need to manage near term disruption
effectively, the fundamental proposition of our high-performance materials
remains compelling.

"Additionally, our expanding North American production capacity positions us
well to capitalise on increasing domestic demand as high-value manufacturing
continues to reshore to the USA. This balanced global approach, combined with
our focus on technical differentiation and relatively low labour intensity
compared to other materials suppliers, enables us to maintain operational
flexibility across market cycles and gives us confidence in the year ahead."

Note. The Board understands that current market expectations for the year
ended 31 December 2025, prior to release of this trading statement, are
revenue of £149.7m and adjusted profit before tax of £19.4m.

 

- Ends -

 

Enquiries:

 Zotefoams plc                         +44 (0) 208 664 1600
 Ronan Cox, 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 supercritical fluid foam
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(®) and
ZOTEK(®) high-performance foams, Zotefoams sells to diverse markets worldwide
across three market verticals, Consumer & Lifestyle, Transport & Smart
Technologies, and Construction & Other Industrial. Zotefoams uses its own
materials to manufacture T-FIT(®) advanced insulation for demanding
industrial markets.

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

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

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

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