# Zotefoams achieves record third quarter sales performance

- Link: https://www.directorstalkinterviews.com/zotefoams-achieves%c2%a0record-third-quarter-sales-performance/4121086259
- Published: 2022-10-13T08:02:43+01:00
- Author: Amilia Stone

**Zotefoams plc **(LON:ZTF), a world leader in cellular materials technology, has
provided a trading update for the nine months ended 30 September 2022 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^(®) 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^(®) 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 £9.3m._

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