TIDMZTF
RNS Number : 7181C
Zotefoams PLC
13 October 2022
Zotefoams plc
("Zotefoams" or "Group")
Trading Update
Continued positive momentum through Q3 and full year
expectations increased
13 October 2022 - Zotefoams, a world leader in cellular
materials technology, today provides a trading update for the nine
months ended 30 September 2022 ("year to date") and in respect of
its financial year ending 31 December 2022.
Zotefoams is pleased to report a record third quarter sales
performance, with Group revenues approximately 27% ahead of Q3 2021
which was its previous record third quarter. As a result, year to
date Group revenue is approximately 24% ahead of the comparable
period last year.
Current trading
Encouragingly, the Group continues to benefit from its broad
customer diversification and has seen continued resilient demand
across most of its end market segments. Both revenues and margins
are also seeing an increasing benefit from pricing actions
implemented earlier in the year, in response to cost inflation, as
well as from a weaker Sterling exchange rate, primarily against the
US dollar.
Reflecting this commercial backdrop, each of the Group's three
business segments has delivered solid progress year to date with
sales having increased by approximately:
-- 27% in Polyolefin Foams with volumes increasing by 4%
-- 20% in High-Performance Products (HPP) with growth of:
o 18% in footwear products
o 22% in aviation and other non-footwear HPP foams
o 39% in T-FIT(R) insulation products
-- 11% in MuCell Extrusion, although these sales represented
only around 2% of Group revenues, with the focus for the
business being on the technical and commercial development
of ReZorce(R) mono-material packaging solutions
Input cost inflation, other than energy prices, has seen some
recent abatement, with commodity polymer prices declining from
all-time high levels experienced late in the first half of this
year. Wholesale energy prices remain volatile but, in the UK, which
accounts for the majority of Group energy consumption, the
short-term risk associated with energy pricing has been reduced due
to Government pricing actions.
As described above, the Group has seen some benefit from
Sterling weakness, albeit the impact of exchange rate movements on
both sales and costs has been hedged in accordance with its hedging
policy.
Good progress has been made on strategic initiatives, including
the development of ReZorce, as well as the Group's wider ESG focus
on reducing Scope 1 and 2 carbon emissions and launching foams with
recycled content.
Outlook
Demand entering the final quarter remains encouraging and we
have good visibility of confirmed orders for the remainder of
2022.
Based on its current sales forecasts and foreign exchange rates,
and subject to there being no material disruption to the business,
the Board now expects adjusted profit before income tax to be
significantly ahead of market expectations*.
Cash generation also continues to be strong and so the better
than anticipated earnings performance should contribute to an
appreciable reduction in both net debt and leverage.
Commenting on the update David Stirling, Group CEO of Zotefoams,
said:
"I am delighted that Zotefoams is performing well in this
volatile market environment which is a credit to our people, market
positioning and strategy. Our exposure to a wide range of
attractive markets has enabled us to deliver continued volume
growth, which has been supported by the pricing actions taken
earlier in the year.
We are mindful of the challenging backdrop but continue to see
significant opportunity for the Group in both the short and longer
term."
* Current Company-compiled consensus expectations for adjusted
profit before income tax and separately disclosed items, for the
year ending 31 December 2022, is GBP9.3m.
- Ends -
Enquiries:
Zotefoams plc +44 (0) 208 664 1600
David Stirling, Group CEO
Gary McGrath, Group CFO
IFC Advisory +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 (R) polyolefin and ZOTEK (R) high-performance
foams, Zotefoams sells to diverse markets worldwide. Zotefoams uses
its own cellular materials to manufacture T-FIT (R) 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 (R)
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 (MuCell Extrusion) and Jiangsu
Province, China (T-FIT).
AZOTE (R) , ZOTEK (R) , ReZorce (R) and T-FIT (R) are registered
trademarks of Zotefoams plc.
www.zotefoams.com
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