Preliminary Results (unaudited) for the Year Ended 31 December 2023

“Record profit alongside significant investment in our ReZorce® recyclable packaging solution."

19 March 2024 – Zotefoams plc (“Zotefoams” or “the Company” or “the Group”), a world leader in cellular material technology, today announces its unaudited preliminary results for the year ended 31 December 2023.


  Foams4       Group  
2023 2022 Change   2023 2022 Change
Revenue (£m) 125.7 124.6 1% 127.0 127.4 0%
Gross margin (%) 33.9% 31.0% 290 ppt 32.3% 30.4% 190 ppt
Operating profit1 (£m) 19.5 15.8 23% 15.1 13.9 9%
Operating margin (%) 15.5% 12.7% 280 ppt 11.9% 10.9% 100 ppt
Profit before tax1 (£m) 17.2 14.1 22% 12.8 12.2 5%
Basic EPS1 (p) 19.0 20.6 (8%)
Net debt (£m) 31.6 27.8 (13%)
Leverage ratio2 1.2 1.2 0%
Final dividend3 (p) 4.90 4.62 6%
1 This is a reported number under UK adopted IAS and is after the deduction of amortisation of acquired intangibles amounting to £0.257m in 2023 and £0.258m in 2022 2 Leverage is that defined under the bank facility, with net debt at the end of the period divided by the preceding 12 months’ EBITDA, adjusted for the impact of IFRS2 and IFRS16 3 Final dividend is subject to approval at the May 2024 Annual General Meeting 4 Polyolefin Foams and HPP Business Units only. This excludes MuCell Extrusion LLC (MEL) which is incurring operating losses as it invests in ReZorce mono-material barrier packaging

Strategic Progress


Good progress in both of the Group’s business areas, reflecting different stages of development


Foams business


– Record profit, strongly ahead of previous year


– Margin growth through mix enrichment, efficiency and cost control


– Exclusivity agreement with Nike extended to December 2029, first sales into basketball category


– Planned capital investment in North America to support further organic growth


MEL/ReZorce® mono-material barrier packaging


– Joint development agreement with a world-leading packager of beverages


– Multi award-winning development, with significant technical and commercial progress in the year


– Preparing for market trial by filling the first ReZorce cartons with fruit juice on commercial-scale equipment


– Key milestones in Q2 will enable determination of optimal path to realise value

Results highlights


Group revenue of £127.0m, in line with record Group revenue in prior year


Record profits and continued improvement in profit margins


– Gross margin up 190 ppt to 32.3% (33.9% excl. MEL)


– Operating margin up 280 ppt to 15.5% excl. MEL and 100 ppt to 11.9% incl. MEL


– Segment margin in Polyolefin Foams up from 7% to 11%


– Profit before tax excl. MEL up 22% to a record £17.2m


– Profit before tax up 5% to £12.8m after continued investment drives progress in our ReZorce technology


Strong cash generation reinvested in growth


– £6.3m of inventory investment to optimise capacity and in expectation of HPP growth


– £5.5m cash outflow in MEL to drive the ReZorce opportunity


– Net debt at £31.6m while year-end leverage ratio unchanged at 1.2x

David Stirling, Group CEO, said:

“We have made a positive start to 2024, with overall sales ahead of the previous year’s record first quarter.

Sales of HPP products have, thus far, been strongly ahead of the prior year, with expectations for continued strength in H1 2024 and more muted growth after this, mainly linked to in-year footwear demand patterns and underlying improvements in the markets for aviation and T-FIT insulation products.

To date, sales of polyolefin foams are below the comparative period in the prior year, with European customers particularly impacted by weaker industrial demand, partially offset by more robust conditions in North America.

We are cautiously optimistic about the underlying demand environment for polyolefin foams later in the year, supported by a business focus on application-specific initiatives to increase market share.

Currently, polymer and energy input prices remain relatively stable and therefore, other than in non-footwear HPP where prices have increased based on raw material price inflation experienced in 2023, we do not anticipate any uplift in selling prices this coming year.

Improved asset utilisation, product mix and operational efficiency are our key drivers of margin enhancement. In our MEL business unit, we continue to make good progress against the commercialisation objectives we have set for ReZorce, with some important milestones expected to be reached in Q2.

Investment to support this will continue during 2024 as we determine the optimal pathway to realising the opportunity presented by this technology. As a result, and while we remain mindful of the uncertain economic backdrop, 2024 is expected to be another year of good progress for Zotefoams”.