Zotefoams plc
Annual Report 2024
Contents
Strategic Report
3
An introduction from Ronan Cox, Group CEO
4
Group at a glance
6
Our external context
8
Our addressable markets
9
Expanding our strategy
12
Market verticals
13
Expanding our footprint
14
Expanding our innovation capabilities
18
Our manufacturing process
20
Our business model
21
Expanding our leadership
22
Chair’s statement
23
Group CEO’s review
30
Group CFO’s review
38
Risk management and principal risks
51
Viability statement
52
Non-financial information statement
53
S172(1) statement
56
Environmental, social and governance
(ESG) report
Governance
72
Board of Directors
74
Corporate governance
77
Audit Commiee report
81
Nomination Commiee report
84
Directors’ Remuneration report
98
Directors’ report
101
Statement of Directors’ responsibilities
Financial Statements
102
Independent auditor’s report
107
Consolidated income statement
108
Consolidated statement of
comprehensive income
109
Consolidated statement of
financial position
110
Company statement of financial position
111
Consolidated statement of cash flows
112
Company statement of cash flows
113
Consolidated statement of changes in equity
114
Company statement of changes in equity
115
Notes
154
Five-year trading summary
155
Notice of the 2025 Annual General Meeting
159
Appendix to Notice of the
2025 Annual General Meeting
160
Company information
160
Financial calendar
FINANCIAL KPIs
Group revenue
£147.8m
Change
+16%
2023
£127.0m
Gross margin
31.2%
Change
-110 bps
2023
32.3%
Operating profit before
exceptional items
£18.1m
Change
+20%
2023
£15.1m
Operating profit
£3.0m
Change
-81%
2023
£15.1m
Profit before tax and
exceptional items
£15.3m
Change
+19%
2023
£12.8m
Profit before tax
£0.2m
Change
-99%
2023
£12.8m
Basic earnings per share
before exceptional items
25.95p
Change
+37%
2023
19.00p
Basic (loss)/earnings per share
(5.66)p
Change
-130%
2023
19.00p
Total dividend for the year
7.48p
Change
+4.2%
2023
7.18p
Return on capital employed
11.7%
Change
+140 bps
2023
10.3%
AN INTRODUCTION
FROM RONAN COX,
GROUP CEO
We are expanding
beyond the core.
2024 was another
record-breaking year for
Zotefoams. We continued
to exceed expectations
by delivering strong
revenue growth and
enhanced underlying profitability. This success
was driven by the continued growth in sales of our
high-performance products range, highlighting
the significant opportunities in high-value,
high-margin applications.
At Zotefoams, ambition has always driven our success, and in 2025 we are raising
the bar once again as we embark on a transformational journey that will see us
expand beyond our core.
The most significant shift will be our pivot from a product-focused to a market-driven
approach, aligning closer with the industries that demand high-value applications.
This will strengthen customer partnerships, extend our reach across the value
chain, and unlock new opportunities for sustainable, high-margin growth.
Ronan Cox
Group CEO
Strategic Report
Governance
Zotefoams plc
Annual Report 2024
3
Financial Statements
GROUP AT A GLANCE
Zotefoams
produces a wide range of innovative products
that are critical components in everyday applications.
Local manufacturing
presence in Kentucky
for the Polyolefin
Foams business and
cuing operation in
Oklahoma to service
the construction market.
Local representation
for our High-Performance
Products (HPP) business,
including T-FIT®
technical insulation.
North America
19%
(2023
21%
)
Group headquarters
and main factory,
manufacturing
polyolefin foams and
high-performance
products for sale globally.
United Kingdom
9%
(2023
9%
)
Significant market for
polyolefin foams. Local
manufacturing presence
in Brzeg, south-west
Poland, servicing the
Polyolefin Foams and
HPP business units.
Sufficient land has been
purchased to allow
larger-scale operations
in the future.
Continental Europe
21%
(2023
26%
)
T-FIT® manufacturing
in China for sales of
insulation products
globally. Local
representation for our
HPP business. Joint
venture with INOAC
Corporation for AZOTE®
polyolefin foams sales
in Asia. Commercial
operation in India for
T-FIT insulation.
Rest of the world
51%
(2023
44%
)
Manufacturing locations and capabilities
Share of Group revenue by point of sale
North America
United Kingdom
Continental Europe
Rest of the world
Zotefoams plc
Annual Report 2024
4
AUTOCLAVE TECHNOLOGY
Polyolefin foams
AZOTE®
HPP
ZOTEK®
HPP
T-FIT®
Premium durable foams
Uniformly dense foam sheets
with a consistent cell structure.
These foam sheets and blocks
are manufactured from common
polymers using our unique
nitrogen-expansion process.
Lightweight technical foams
Foams which offer superior
technical properties, such as
energy management, durability and
heat and/or fire resistance. ZOTEK
foams are manufactured from
engineering polymers using our
unique nitrogen-expansion process.
Technical insulation
A range of insulation products
manufactured from Zotefoams’
own ZOTEK block foam materials.
T-FIT insulation products are
purpose-designed to perform
in demanding environments.
Key markets served
_
Automotive
_
Aviation
_
Building and construction
_
Industrial
_
Marine
_
Medical
_
Military
_
Product protection
_
Sports and leisure
Key market drivers
_
Lightweighting
_
Fire safety
_
Energy saving
_
Durability
_
Reduced toxicity
Key market drivers
_
Lightweighting
_
High-technology insulation
_
Fire safety
_
Personal safety
_
Durability
_
Sports and leisure
Key market drivers
_
Ageing population
_
Reduced toxicity
_
Demographic changes
_
Energy saving
Key markets served
_
Athletic footwear
_
Automotive
_
Aviation
_
Construction
_
Product protection
Key markets served
_
Food and personal care
manufacturing
_
High-temperature
processing environments
_
Pharmaceutical, biotech
and semiconductor
cleanrooms
Revenue by business unit (%)
Revenue by industry (%)
2024
2023
Product Protection
Aviation
Automotive
Sports & Leisure
Building & Construction
Industrial
Medical
Other
0
10
20
30
40
50
2024
2023
HPP
54%
Polyolefin Foams
46%
HPP
46%
Polyolefin Foams
54%
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Governance
Zotefoams plc
Annual Report 2024
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Financial Statements
We have built a clear long-term strategy for growth based
around three long-term global megatrends that are driving
demand for our products.
Understanding these market trends informs our strategy and
product development, as well as the allocation of our resources.
Given the diversity of applications for foam, it is not possible to
track every use for our materials, and a new idea or application
may come from a foam converter, an end-user or from within
Zotefoams. We therefore actively monitor these and maintain
flexibility to react to a wide variety of possibilities.
Sometimes, as happened during the pandemic, short-term
factors distort longer-term trends. With clarity of purpose and
an understanding of the fundamental drivers of our business
environment, we will make adjustments to our short-term
approach, such as limiting expenses and capital expenditure,
while ensuring that our longer-term goals remain achievable.
OUR EXTERNAL CONTEXT
We deliver stakeholder value by using proprietary technology
to create a portfolio of differentiated products.
We focus
resources primarily on markets where we have a right to win.
We intend to develop our business through sustained high
levels of organic growth and, where appropriate, through
partnerships or acquisitions.
Environment
Optimising the use of scarce resources has become a
universal driver. Lightweighting is fundamental to reducing
fuel usage and controlling emissions for the aviation and
automotive industries. High-quality insulation conserves
thermal energy.
Much of our AZOTE® foam range is used in permanent
packaging or packaging that is designed to be reused,
while foams used in transportation are normally specified
to the lightest weight for the required physical performance.
Zotefoams products typically use less plastic than
competitive solutions due to the cell structure of foam
made in our autoclave process, giving us both a cost and
environmental advantage.
With sustainability and carbon reduction a priority,
the Ecozote® Sustainability+ foams range builds on the
underlying sustainability credentials of all our block foams
– lightweight, durable and foamed using nitrogen borrowed
from the atmosphere – to give customers and end-users
additional choices to address market- or application-specific
requirements. Initial products in the range are low-density
polyethylene foams with 30% recycled content.
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Annual Report 2024
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Demographics
Beer healthcare has created a population boom, especially
in older age groups, while globally, discretionary spending
power is rising rapidly. Demand for healthcare products is
accelerating. Wealthier and more discerning consumers are
driving growth rates in other industries such as food and
drink, sports equipment and transportation.
Transport, medical and sports and leisure applications
account for around 55% of sales directly, while our T-FIT®
insulation products – demand for which is currently linked to
semiconductor, pharmaceutical and biotech manufacturing
– account for a further 5% of sales.
Regulation
Regulatory pressures, primarily to safeguard consumers,
are driving up standards worldwide. These standards
in turn create demand for both safer products and
protective equipment.
Regulatory requirements mainly cover the performance
of end-use products, although there are specific tests for
fire performance and toxicity limits in foams for certain
industries and jurisdictions. Zotefoams provides specifically
tested materials for semiconductor, pharmaceutical and
biotech manufacture and automotive, aircraft and rail
insulation and provides validated materials for medical
transportation and devices, and military storage and
personnel protection. Our technical team is closely involved
in developing new materials to meet and anticipate changes
in standards and we are currently working on projects for
automotive baeries, high-tech composites, foams from
recycled materials and foams which can be more easily
recycled. We sell AZOTE grades for automotive, medical and
packaging designed to minimise emissions and/or meet
specific purity requirements. Around half of Zotefoams’
revenue from foams in 2024 came from products with specific
properties tested to customer requirements, although not
all of this was demonstrably for regulation compliance.
Plastazote® foam, from our AZOTE polyolefin foams range,
is the most frequently cited thermoplastic foam in medical
literature due to its purity and hypoallergenic characteristics.
It meets ISO 10993 standards for evaluating the
biocompatibility of medical devices and is the material
of choice for skin contact applications.
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Annual Report 2024
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Financial Statements
We operate in a global and diverse market,
serving
a wide range of industries where high-value foam
applications play a critical role and there is a large
runway for growth.
OUR ADDRESSABLE MARKETS
Global polymer foam market
1
High-value foam segment
1
1
Zotefoams proprietary market study, 2024
2023
£106bn
2029
£135bn
2023
£15bn
2029
£17bn
Our existing market share
Zotefoams’ current core business focuses on
a portion of the polyolefin foam market, with
some participation in select high-performance
engineered polymer foam applications.
Zotefoams’ addressable market has historically
been limited to £800m within these segments.
Global PE, crosslinked block foam market size
Global Zotefoams market share
8%
North America Zotefoams market share
11%
Europe Zotefoams market share
30%
£800m
Sports & Leisure
Footwear
Aerospace
Auto & Other Transport
Industrial Packaging
Medical
Construction & Insulation
Source: Kline & Company
Global polymer foam market
£106bn
Addressable market
£15bn
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Annual Report 2024
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Our refined strategic approach
will ensure that we go
even further in fulfilling our purpose to create optimal
material solutions for the benefit of society.
INDUSTRY AND CUSTOMER FOCUS
1. From product
to industry
CLOSER TO THE CUSTOMER
2. Expanding
geographic reach
INNOVATION AND SUSTAINABILITY
LEADERSHIP
3. Sustainable
innovation
HIGH PERFORMING TEAMS
5. Executing the
strategy
M&A BEYOND THE CORE
4. Extending
capabilities and moving
up the value chain
EXPANDING OUR STRATEGY
OUR STRATEGY HAS EVOLVED TO
ACCELERATE OUR GROWTH AMBITIONS
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Governance
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Annual Report 2024
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Financial Statements
EXPANDING OUR STRATEGY
(CONT.)
INDUSTRY AND
CUSTOMER FOCUS
1. From product
to industry
Consumer & Lifestyle,
Transport & Smart
Technologies and
Construction & Other
Industrial
Our right to win
As a world leader in supercritical
fluid foaming, Zotefoams has
pioneered the development of
uniquely sustainable materials
for over 100 years. Our highly technical
proprietary process enables us to
create products that are unmatched
– delivering the performance, reliability
and sustainability demanded by
high-specification markets.
Market focus
To unlock the next phase of our
growth and align even closer with
our customers and end-users, we
are shifting towards a market-driven
approach. Following an extensive
market study, we have identified
Consumer & Lifestyle, Transport
& Smart Technologies and Construction
& Other Industrial as the key markets
where high-value foam applications
play a critical role and we have a
strong right to win.
These markets present significant
opportunities to scale our business
with both existing and new customers.
This strategic shift will also see us
moving further up the value chain –
evolving from a material provider to
a true solutions partner.
CLOSER TO
THE CUSTOMER
2. Expanding
geographic reach
Leveraging new technology
and skills to get closer to
our customers
Enhancing customer experience
The commercial team realignment
to a market-focused approach will
enable us to beer understand
our customers’ needs, allowing
us to enhance their journey with
us while delivering value and
solutions-driven support.
This extends to understanding
where our customers need us to
be, and strengthening our customer
relationships will also require
strategic decisions about our
physical manufacturing presence.
Puing supply where demand is
We are making significant
infrastructure investments to position
ourselves closer to key customers,
enabling us to proactively meet their
needs and support their growth.
By establishing a local presence in
strategic locations, we are unlocking
opportunities that were previously out
of reach, strengthening partnerships,
and creating a more responsive,
customer-focused supply chain.
The most significant example
of this strategy is our expansion
into Asia, where we will establish
manufacturing and innovation
capabilities to support continued
growth and deeper collaboration
with Nike.
INNOVATION AND
SUSTAINABILITY
LEADERSHIP
3. Sustainable
innovation
Harnessing heritage with new
technology and AI to develop
the next generation of
sustainable industry solutions
Expanding our innovation capabilities
At the heart of our strategy is a relentless
focus on innovation, which we see as a
transformative opportunity for the Group.
Our innovation commitment
In 2025, we will launch our UK Innovation
Centre of Excellence, as well as our first
Market Focused Innovation Centre –
a Footwear Innovation Centre in Busan,
South Korea – in close proximity to our
end-customer. This model will enable us
to work more closely and collaboratively
with customers, delivering tailored
solutions that anticipate their evolving
needs while strengthening our proximity
to raw material sources, enhancing
both efficiency and sustainability.
Meeting our customers’ future needs
The launch of our Footwear Innovation
Centre will support our transition towards
3D pre-forms for Nike, marking a major
shift from supplying raw material in sheets
to producing near-net shape products.
This offers significant sustainability
benefits, including reduced material waste
and lower energy consumption, all while
streamlining Nike’s production process.
Next-generation autoclave technology
Another critical advancement is our
investment in new autoclave technology.
This shift moves us towards a more agile,
less capital-intensive model, enabling us to
enhance customer proximity and improve
responsiveness. By breaking installations
into smaller, faster investments, we gain
the flexibility to scale efficiently while
maintaining our innovation edge.
Zotefoams plc
Annual Report 2024
10
M&A BEYOND
THE CORE
4. Extending
capabilities
and moving up
the value chain
Going beyond supercritical
fluid foam sheets to extend
capabilities, unlock new
formats and applications,
and secure greater margin
opportunities
Strong foundations for growth
In addition to significant opportunities
for organic growth, we also recognise
the value of expanding our capabilities,
market reach and innovation pipeline
through acquisition. We are actively
exploring opportunities that will
complement and enhance our strategic
direction by extending our capabilities
and accelerating our move up the value
chain. In preparation for this, we are
laying the groundwork for successful
integration by simplifying our structure,
processes and systems, ensuring we
are ready to scale efficiently.
HIGH PERFORMING
TEAMS
5. Executing
the strategy
Developing and hiring
the best people to lead
collaborative, results-driven
teams that seize the freedom
to operate within a framework
Delivery culture
We believe that our people are the
foundations on which we will successfully
deliver our strategic objectives. We are
commied to developing, retaining and
hiring growth-minded, solutions-focused
employees who are motivated by our
values. By empowering them with the
freedom to operate and maintaining
a sharp focus on performance and
delivery, we will build bold ambition
across the business.
A realigned global commercial team
will strengthen customer relationships
and drive pipeline growth, while a
newly formed global innovation team
will accelerate the development and
launch of new products and solutions.
Investing in growth and efficiency
We will simplify our business and
manage costs effectively, ensuring
that resources are directed towards
areas that create the most value and
long-term growth. As part of this
approach, we are also investing in
early careers programmes to build
a strong pipeline of future talent.
Our success will depend on us
executing this proactive strategy
with a clear commitment to our
people – a commitment that will drive
lasting impact across the Group.
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Annual Report 2024
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Financial Statements
MARKET VERTICALS
Consumer
& Lifestyle
Footwear and premium consumer
goods applications
Transport & Smart
Technologies
Automotive, aviation and high-specification
industries requiring advanced material solutions
Construction
& Other Industrial
Supporting building, infrastructure and
specialised industrial applications
Addressable market
Premium & Performance
Footwear
Consumer & Lifestyle
Sports Surfaces
Recreational/Sports
Equipment
High-impact Protective Gear
8%
12%
7%
73%
£1.1bn
Transport & Smart Technologies 2024 sales
£55.0m
Construction & Industrial 2024 sales
£20.1m
Medical Devices
23%
Other
10%
Industrial Packaging
53%
Automotive &
Other Transport
8%
Aerospace
6%
Transport & Smart Tech
£9.0bn
Addressable market
Addressable market
Construction & Insulation
Construction &
Other Industrial
Industrial Applications
8%
92%
£4.3bn
Consumer & Lifestyle 2024 sales
£72.7m
Zotefoams plc
Annual Report 2024
12
EXPANDING OUR FOOTPRINT
Current geographic locations
Expanding capabilities in region
Factory/Plant
Sales office
Innovation
Centre
Zotefoams Midwest
Tulsa, OK, USA
Foam-cuing
Capacity and capability
investment
Zotefoams Inc
Walton, KY, USA
Foam manufacture
Capacity and capability
investment
UK
Innovation Centre
South Korea
Footwear Innovation
Centre
Vietnam
Ho Chi Minh City
Footwear manufacture
Zotefoams T-FIT
Material Technology
(Kunshan) China
T-FIT®
products
manufacture
T-FIT Insulation
Solutions
Ahmedabad, India
T-FIT
® sales operation
Factory/Plant
Sales office
Zotefoams Midwest
Tulsa, OK, USA
Foam-cuing
Zotefoams Inc
Walton, KY, USA
Foam manufacture
Zotefoams Poland
Brzeg
Foam manufacture
Zotefoams plc
Croydon UK
Foam manufacture
AZOTE® Asia
Hong Kong
Sales Joint Venture
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Zotefoams plc
Annual Report 2024
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Financial Statements