Zotefoams plc (ZTF) Earnings Call Transcript & Summary

Good morning, and welcome to the Zotefoams plc post AGM presentation. [Operator Instructions] Before we begin, I'd like to make the following poll. I'd now like to hand over to Ronan Cox, CEO. Good morning to you, sir.

Good morning, Alessandro, and thank you very much, and welcome, everyone, to the post AGM presentation at Zotefoams. And Alessandro, if we could just move through the slides, please. Just first, in terms of the notices, everyone to take note of those. And now if we move on. Brilliant, thank you. Okay. First of all, I'd like to say I'm delighted to be joining Zotefoams. Delighted to be here at first the presentation post the AGM. And we had our AGM around about 45 minutes ago where I was assigned a role of a Chief Executive Officer for Zotefoams and I've to say that I'm both delighted and proud to be in that role. I tend to Zotefoams for numerous reasons, but it was particularly attractive to a great British manufacturing company with a fantastic heritage. One that focuses on innovation, one that has unique technology that's focused on delivering many sustainable solutions. And one indeed that has got a very large export market opportunities and a growing global footprint. I've been here since early April. I've had a chance to take a good view and look at the business, it's products, it's people, it's processes, it's customers and actually understand also and meet some of our shareholders and owners of the business. And I have to say that the long run here, the more excited I am about the opportunities that we have within the business. What's equally great from my perspective is that David Stirling, who has served this business so incredibly well over the last 27 years, has been a great and guide me over the last few weeks and David will also be staying with us up until the end of October to work on a number of key strategic projects, which we'll talk about a little bit more in the presentation. But with that, I guess, just first -- very first impressions of the business. What struck me and straight away was really the entrepreneurial mindset in this business, a business that has evolved considerably over its 100-year history that has managed to move into and out of markets and actually carve access into a large number of high-growth markets -- high-growth global markets over 18 different markets that we trade in today and some of those offering considerable opportunities for growth in the future. I'm equally excited by some of the alliances that we're making within the business and we'll dive a little bit more into one of those, particularly around Shincell. So the strategic alliance with Shincell and that was announced earlier in the month. Also ReZorce, there's a lot of, I guess, a lot of excitement around ReZorce, particularly after our media launch in Amsterdam last week, and we're going to get an opportunity to show you a little bit more about that, and we'll play a video actually, which is an extract from the media presentation that we did last week. And David, as he is staying on in the business and helping me specifically looking after these 2 key strategic initiatives of the development of the alliance with Shincell and the ongoing development of the ReZorce product and project. The business is entering into a phase of enhanced collaboration and you will see, as we go through the presentation today, just the touch points alone within those strategic alliances are considerable. And that will be an ongoing theme for the business in the coming weeks, months and I would say, years. And we've got quite a few options within the business, options for growth and options for value addition and it is certainly my view that the business has got clear strategic intent in terms of the markets that it wants to develop. I'm delighted that I'm able to come into the business and continue to develop on those strategic -- on that strategic direction for the business. So if we move to the next slide, please. Just a quick reminder of who we are and what we are and what we do. So today, essentially, we've got 2 clear technologies. And the core business is anchored around its autoclave technology, splitting into its polyolefin foams and then it's HPP foams. This is our core business. This is the business in which -- these are the products and the markets in which this business has been found and continues its success. And then we have our Extrusion technology business. So -- which is now almost completely focused on the ReZorce, mono-material packaging solution that we'll have a look at a little later. So in terms of trading in the first 4 months of the year, it's been strong and the group continues to see strong momentum coming out of '23 into this first 4 months and that's manifested in 14% sales growth. We've hit record revenue in those 4 months. Particularly strong is HPP. And within HPP, the footwear sales grew significantly at around 44%. Now a lot of that can be attributed to our customer and one, in terms of the programs that they're driving through, but also some inventory build, particularly compensating for some of the supply chain challenges around the Red Sea and ZOTEK F sales have been strong also in the first 4 months, albeit the start of the year is typically very quiet in this part of the market and T-FIT as well has seen strong sales growth at 57% in the first 4 months of the year. On the other side, in polyolefin foams, we've seen declines of 7%. And that's largely being driven by some challenges in Continental Europe, where we've seen fairly subdued demand for a number of reasons in some of those markets. That's been partly offset by pretty strong demand in sales in North America. We've also seen some change in terms of average selling price in the polyolefin business and that's a combination of things, but a large part coming from a deliberate shift in product mix towards lighter and more cost-effective foams and a little bit in there from exchange rates. If we go to the next slide, please. Okay. So I just want to touch on first in terms of the strategic projects. We've got to focus on 2, and then I will come back to the third project before we end the presentation today. But the first one is with regards to the alliance that we discussed with Shincell. So we announced that agreement on the 7th of May. And so a particularly exciting development around the technology. I will go into a bit more detail in a second. And then on the 15th of May, we gave an update to the media on the ReZorce packaging solution, circular packaging solutions. So if we go to the next slide, we'll just be able to [ enter ] into Shincell a bit more. So what is the agreement? Well, essentially, we have agreed at a price of GBP 9 million, which will be paid over 5 years. We have agreed to -- with that agreement, we tap into the technology, which is a mixed gas technology that Shincell have been developing over the last 5 or 6 years in China. This is a technology that we at Zotefoams, have been experimenting with, and we recognized over the last periods that and to boost this Shincell and alliance with Shincell would greatly accelerate us across that innovation curve. The one thing that I would really like to stress around this agreement is that it is a one-way agreement. We are buying IP. We are buying that know-how and that knowledge from Shincell. And we are not treating any of our IT back to Shincell. So this is entirely about boosting our innovation in this mixed gas territory. In parallel with that, we have also agreed a distribution agreement with Shincell and that is targeting a specific part of a PBDS market that will really support our commercial development of existing and new products. And indeed, in this area, we believe we'll also be able to work with Shincell and their market access, particularly into China. So why are we doing this? Essentially, this is to open up new markets. So new markets in terms of industries, new markets potentially in terms of geographies, but particularly in terms of industries and also accessing new products, so driving innovation and new products with this technology. And a significant part of what we hope to achieve and we plan to achieve with the Shincell alliance is to develop in-house technologies. We are not envisaging outsourcing any considerable volumes to Shincell. This is about taking that technology in-house and developing it within the Zotefoams footprint. And what's very clear around the alliance is that we have got exclusivity. So as I say, this is a -- it is a very attractive technology. There are particular attributes in the way that this technology allows us to increase our production and our volumes at a less capital-intensive way. It allows us to say, access potentially new products and potentially access products in different forms, so if we think about near net ship forms. And we have that exclusivity over the 5-year period. And as I say, I stress that this will greatly accelerate our journey on the innovation curve in our core markets and opening up new markets for us also. If we go to the next slide, please. Okay, ReZorce. Our mono-material, disruptor circular packaging. A very exciting project that Zotefoams have been working on for a number of years now. You will know some of the headline and numbers around this. A less energy consumed, much less water. Overall, global warming potential is 50% lower than its rival products, up to 100% recycled content, legislation, tier wins coming in the market that are going to penalize, the alternative LTV products that cannot be properly recycled and this business and technology is absolutely lead backed with strong, strong IP. At the media launch last week, we introduced our strategic partners here, so in the form of Sudpack and Refresco, and we also have been working with Biffa, the large U.K. recycler. Our next steps in this process are really driving forward sterility trials, also working then on retail and consumer acceptance in North Europe. And what we are looking as we gain more traction and more interest in the technology is to secure investment partners to allow us to scale up this opportunity. We've engaged with [ Amazon ], and we'll be working with them over the coming weeks and months as we look at the potential investment landscape for people to partner with us. But rather than we try to talk more about this, we're going to take the opportunity to share a video with you, which is an extract from the 2-hour session that we had last week. And I'd just like to say that I've also got David is joining me in the background here today. And just to reinforce the point that he'll still be working on this particular project to answer any questions after the end. So -- and if we could just go to the next slide, please, and then we'll play the video, Alessandro. [Presentation]

Thank you, Alessandro. And if we could just go to the next slide, please, fantastic. So I think that clip, as I said, is a 5-minute extract from the media event last week. Just pulling out and referencing some of the people that we heard from. So Paul Polman, who is the former CEO of Unilever and I guess, a sustainability champion recognized globally for the work that he does in terms of climate change and action around that, was our keynote speaker and really, he endorsed what we are doing, and I think that you heard that there. We heard from Chris Hanlon is the Commercial Director in the U.K. for Biffa, probably came out with the simplest and best statement that we will hear around this, which is simple packaging is easy to recycle and complex packaging is difficult to recycle. So ReZorce as a monomaterial alternative, so simple to the complicated LPB is just absolutely what recyclers want. They want something that can be recycled. We heard from [ Kurt McKellen ] and I think just to underline Kurt's role, he is the Chief Procurements & Manufacturing Officer at Refresco. Refresco, one of the large packages in the industry globally, and absolutely have been working with us hand in hand as we've been developing the technology on their lines to ensure that this is a -- that is workable in terms of the solution. We heard from [ Willian Peter ] who is a sustainability camp with her business at Sirius. And we also heard from [ Dierk ] from Sudpack one of our partners in the supply chain and supplying a laminated filaments for us. So an incredible a panel of people that were coming to support what we are doing in ReZorce. Now we have got more milestones ahead, particularly around sterility testing, particularly about the ongoing book trials with ReZorce. And as I said before the video, and it is incumbent on us to also look at who can partner with us to help us drive the most amount of optionality around this innovation that we've been developing at Zotefoams. So great developments, great reception, great partners. And as we see from this slide, this is not about Zotefoams going it alone. It is absolutely vital that we have a whole ecosystem that will work with us as we continue to develop this as we continue to bring this product to market with partners. Great. And if we go to the last slide. Okay. As I step back and I look at our outlook for the business, and the Board anticipates that most of our growth is going to come from the HPP portfolio but for the reasons that you heard earlier. We do expect that we will see the performance of the polyolefin business to improve. And at the current exchange rates, we believe that there will be little impact on our previously forecasted full year profit. So we maintain guidance at that level. As we look forward for the coming weeks and months, there are 3 big priorities besides business as usual. And you've heard from 2, to come to the 3rd, just to underline the investment that we're making in the U.S., bringing in a second low pressure vessel. That work is already well underway. It is a big piece of work, and we expect the commissioning of that extra capacity to come online in Q2 2025. So that project has started it is going to plan. We've heard about the Shincell alliance and we've heard about ReZorce. I underline that David is continuing with the business up until the end of October to make sure that we've got continuity around these 2 really key strategic projects. So in summary, the performance for the first 4 months of the year has been really strong. We've got a really, really strategic, a strong platform to deliver these strategic projects. Clearly, the world remains incredibly volatile, and we need to be mindful of that volatility. However, our full year expectations do remain unchanged. And more importantly, remain very confident about the long-term prospects of the business. So with that, I'm going to conclude the formal presentation and open for Q&A.

[Operator Instructions] I'd like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A can be accessed via your investor dashboard. As you can see, we have received a number of questions throughout today's presentation. If I could just hand back to you just to read out the questions and give response to it if appropriate to do so. I'll pick up from you at the end.

Alessandro, I can't switch the camera back on.

Okay. Let me just refresh your browser one moment, and then I'll pull that through for you. Could you give us one moment? So I'm just going to put your camera up now. Perfect.

There we go. Excellent. Thank you for that. Okay. All right. So let's start with -- let's start at the top and work our way down. So how is the Refour acquisition contributing to the business? Very good and David?

Well, the Refour acquisition was last year in Denmark, we bought a company that was aimed really trying to do the same thing as ReZorce. The had invested in extrusion capacity or capability and us bringing that inside and working together with them, combined our knowledge on the technology of the markets, we have some market contacts that indirectly actually led to the Refresco alliance. But as importantly, the people within the Refour business are kind of integral part of our management team and we have in Denmark, a pilot scale extrusion line that we can make all of the ReZorce substrate on. So that gives us the capacity to scale up for market trials, all of that in-house, do formula changes and look at different functionality layers, the packs, all on the right scale. It's not full-scale production, but it's not lab scale either. It's exactly in the middle which gives you very high confidence of transferring it to full scale when you need it. And the Sudpack guys are absolutely full scale extrusion guys. They came up to the Denmark site, to have a look at that and they understand it and they're very confident that, that can be replicated at industrial scale on standard extrusion equipment, which is exactly what we're aiming for.

Very good. Thank you, David. And this week we've got quite a few questions on ReZorce, okay? So I'm may -- I've got a few more to you here, if you don't mind. And I can answer a few myself. So I think the first is ReZorce price competitive against LPB and what sort of margin do you expect on what sort of volume? Actually, I'll take that one. And absolutely, we believe that ReZorce is price competitive against LPB. So this is really a function of scale. And so at lower volumes, there is a small marginal premium on the ReZorce product. However, that is not so significant that we don't think that we can get the parity when we get up to reasonable volume production. And then at that point, we would expect sort of similar margins and that you would see in that industry. So yes, we can be price competitive. In fact, I think that that's a core aspect of this is that the product will be price competitive and that we can get to a part of [ lab ]. Let's go to the next question. If you tackle pouches next, what would be the timeframe to market? That's a great one. That's a -- well, I think the pouches are a great opportunity for this product. It's really -- I think that we need to take the right steps. We need to complete what we've been doing in terms of cartons. Pouches are a very natural next step for this technology as we prove ourselves in the carton space. It really lends -- the technology lends itself very, very well to pouches. So it's not a huge jump. In terms of time lines, I think it would be tricky to say that. All I would say is that it's a very logical next step after cartons and it's not a huge job to develop into that market. Can you give some more detail on the time lines for the rollout of ReZorce? Clearly, the next steps around sterility testing than on-shelf trials and consumer acceptance. All of this is a body of work that we are going through with our partners, a Refresco. It's difficult to be certain about the amount of time that would take. But it's certainly activity that we would want to have completed this year within 6 months. It's a hard time line to really nail down. But that's where our focus is. And these are really the important next steps and big milestones. The next point is ReZorce sounds terrific. I'd rather -- Zotefoams fund this ourselves rather than giving away upside to an outside investment partner. Why can't we go it alone in this even if it means a small placing of new shares? I'd say that at this point, finding a partner to come in will help accelerate, it's not just about the money, but it's also about the market access and navigating this market where we are -- which is not central to our activity. That said, we are committed to remain incredibly flexible, agile. And we just need to watch the level of interest, the quality of partners and that we can engage with investment partners. So whilst never say never in terms of what we were planning to do, we want to retain optionality. We -- it is our view that it will take investment partners to get this to scale because it will require a considerable amount of money, but also a considerable amount of expertise. And I would say an already existing presence in the market. But as I say, we retain all sort of optionality there at the moment. The next question is, you mentioned stocking up by customers to cope with the effects of the Red Sea diversion. And are you able to quantify what impact you believe this has had on your sales forecast for the year? I think for the year, we're actually anticipating that we've seen demand going forward a bit in this early part of the year under maybe a bit of correction in the second half of the year. So it's not materially changing the -- well it's not changing -- sorry, it's not changing our forecast per se around that part of the market. It's really more a question of phasing. That part of the business is still on a year-for-year basis and showing good growth. When are you expecting commercial production for ReZorce to start? I think I'd kind of address that in terms of the trials. It's -- so the sterility trials and the on-shelf trials, the consumer testing, it is very dependent around that. And you've heard the interest from people like Chris, from Kurt, from [ Bill Marian ], from [ Dirk ], from all the panel that we met last week. There's a -- we've got a momentum around ReZorce, and it's clearly very important that we maintain that momentum. So really, it's a case that we are going to be focused on driving that forward. David is, as I say, staying here, I think it's going to be help accelerate that and continue the focus within the business. I don't know, David, do you want to comment on timing? I maybe even say a little bit more around the overall project and as you see the milestones.

Yes. Certainly, at this point, there are 2 threads. Clearly, market -- in market validation. We don't see anything there that we are concerned about thought that there's a process to go through. And following the validation, we have a very large responses or had a very large response to the ReZorce project over the last 12 months or so. That's without doing much advertising. Now we're kind of out there saying that we're working with people like Refresco where we've got the capability as the largest independent packaging -- beverage packaging company in the world to deliver this, the interest levels have increased. So we've got a huge market full year happening. The actual scale up is something that we have to decide between us and Refresco, and that would be something that would be discussed really at the point of the market trial or shortly thereafter. But -- if we look at the infrastructure we have built and the way we've built it, we've gone through every step of the supply chain, making sure that not only can we deliver, but it's compatible with existing infrastructure systems. And that's why even though we got a pilot line in Denmark, the Sudpack guys are very interested about using their facilities, their equipment to scale up. So the timing is definitely something that will primarily triggered following the market trials, the formalization of that timing. So inappropriate to cover that just now.

Very good. Thank you, David. Okay. Does the Shincell deal allow you to expand the range of products which can potentially use ReZorce technology? In short, no, there are 2 different spaces. And the Shincell deal is absolutely focused on our core home business. And so no, the answer is no. Okay. How will ReZorce actually be recycled? Does it require any major investment from recycling partners or packages before recycling can kick in? I think we probably heard the answer from Chris there, but David, go for this.

Well, what you didn't hear in the video clip because we had to [indiscernible] for the highlights really and I think this was -- if we do other 40 seconds, we would have another section from Chris and he said because recycling systems vary across the world. Let's take the U.K. The product is made with the same material as a milk carton or milk bottle, high-density polyethylene that is widely recycled. And in fact, Chris said, if every single beverage carton in the U.K. was transferred to ReZorce tomorrow, the industry has sufficient capacity to recycle all of those. He also said that 75% of [indiscernible] cartons are landfilled or incinerated. And the 25% that do get recycled in some way never ever come back as a carton.

Very good. Thank you, David. Gary, a couple of questions here. I've got to group them together.

So let me say something.

To let you say something absolutely. Okay. With the group looking to secure investment partners, what is the most likely approach at this stage? The possible the company would look to do a [ piercing ] for shareholders? And I guess let's tie this in, what the investment partner you aim to bring on board, be limited to cartons are with all resource applications be included?

Yes. So I mean, you've answered part that in a previous question, Ronan. The most likely price so -- the media launch was important to demonstrate that we have a product that we are working with serious partners and that we have reached a particular milestone. The step now is to proceed with engaging by using [ Mazon ], as you mentioned earlier, to look at what -- who are out there with interest. The point is, again, trying to answer that question about why don't we do it ourselves? This is a GBP 360 billion carton market and we are talking -- and we talked about Sudpack and they're talking about GBP 100 million, it's a very small number if we -- from when we start doing it ourselves. The market -- the challenge, the issue is here now, as Neil said, right here right now. And the quickest way and the way to scale this is by working with a partner who is in the industry and who is multibillion. This is a multibillion industry, it's a packaging industry. Zotefoams is not a packaging industry expert. We have the technology. We are an autoclave technology expert with significant opportunity with our HPP products. So we are looking to monetize the opportunity. We're looking to deliver a solution to society, an optimal material that has the optimal benefit for society, which is the single-use, very simple to run through if it's existing infrastructure when we're looking at the U.K. So if we were to go to market, the amount that we'd have to raise to make this matter, is quite significant and far superior to the size of the business. So we do believe that the partnership is the right approach. We've got the product out there. We've got this messaging out there and the process starts from today. The second -- what was the second question?

The second question was...

With the investment partner you aim to on board, be limited to cartons? No. I mean, it's -- we are focused on cartons because that is a very large business, and it is -- it is a business supplied by a few participants occupied by a few participants. The pouch market is very, very broad. And so we're able to speak to a very clear number of potentially interested parties. But the fact is that the -- and we've got limited resources, we're focused on proving this out. As we've said, we can move on to pouches. The -- it is entirely up to the partner that we feel is the most beneficial to us from a monetizing perspective to decide what they want to do. We are not necessarily looking at one sole solution. It is not a one size fits all. We may -- and David has mentioned this in the past, the type of investor we might work at the beginning may be very much focused on Europe and North America. When you start looking at options in Japan or in Korea, these companies may not be active there. And obviously, we know local companies normally are the experts in those goods, and that might be a different opportunity in time with a different scheme potentially licensing our technology. Pouches might be with the same might be with a different business. This is the first stage, developing the carton, find the partner. If they want more great, if this is their bag then great because it's a massive opportunity.

Very good. Thank you, Gary. Will Shincell technology be used for Nike products? Shincell technology can be used across all of our full product ranges. It's got -- it can bring particular attributes and benefits. And we will be looking to really leverage that technology across the customer base. So could that evolve later? Absolutely yes. Can you provide a quantitative or at least a qualitative summary of CapEx that will be required in the coming months and year to grow the ReZorce business? Gary, that sounds like one you would like.

That definitely sounds like one, doesn't it? So that is where are we at the moment? We are -- we have the extrusion capability through Refour in Denmark, and we are lining up companies such as Sudpack who can take further. There's a number that David has mentioned in the past, there's a number of processes, you take it, you extrude the product, we have to seal it. We have to crease it. We have to put labeling on. We have -- we are investing in those machines, a few million of our -- I think it's GBP 16 million and few of the analysts have been saying for like a GBP 16 million, GBP 17 million spend this year, which includes the LP2, the low pressure vessel in the states, plus ReZorce, plus obviously, ongoing investments. So that's what's important to get these 2 stages through. Otherwise, what we capitalize is actually people on that video. A number of the people that are in-house are actually expert -- industry experts who are part -- who are not full employees of Zotefoams, and they're working on a development project under accounting rules, that has to be capitalized which could get us CapEx. So that is what's going in there. It's pretty much now that we've effectively placed our orders in for those machines, the capital going forward for the rest of this year is mostly people being capitalized. What happens next is very much dependent upon what happens with this investment partner.

Great. Thank you. David, are there any key regulatory changes that are important or even required to give commercial impetus to ReZorce, for example, PPWD? Are there any specific changes on the horizon, which you think are key? And then from a different person but a little bit, I guess, connected, is Tethered caps EU Directive 2019/904, which I'm sure you know intimately. Is that a challenge?

So let's deal with the easy one, Tethered caps, no problem, proven. Okay. If we look at some of the packaging waste directive, we look at EPR, extended producer responsibilities for packaging. Yes, the EU is certainly going that way. We're looking at really 2 avenues. The first one is, can the product be recycled and how recyclable is it? And secondly, does the product use recycled content? And so if you look at those, we are very well positioned for both of those. The way that EU directive is being implemented in different member states is somewhat different. So there are areas where I think we are -- we will get a bigger leg up than others. But certainly, in all cases, what we see is having a solution, which is compliant with that future legislation and also the desire of the brands or the retailers to connect with the consumer in that way because I think consumers are being increasingly well informed about not just is it recyclable, but does it get recycled because there's a lot of claims around recyclability. And so you heard from [ Willman Bakers ] who's really active in lobbying EU regulators and in the video around opening the regulator's eyes to the possibilities of other technologies because the carton format is ubiquitous and up to this point, it's all being liquid paperboard, multi-material construct, but card with aluminum with polymer altogether, and as we have [indiscernible] that's not what people want, and it's not recycled, it's certainly not circular. And so the regulators are put in a position by saying, oh, we want to put pressure on the industry to be more circular, we have to put pressure on the industry to use recycled content, et cetera. It's easier to do that if they can point to something that says that does it. And so our launch allows us to engage and people like [indiscernible], et cetera, to engage with regulators. So in summary, we have not just designed ReZorce to be compliant with an existing scale up physical infrastructure. We have designed it to be compliant with the regulatory environment. And today, 30% recycle content, we can increase that as the threshold to move up.

Excellent. Thank you, David. We've got more coming. Another one for you, David, what sort of products could use the microwave ability of ReZorce?

So we go -- firstly, current cartons can't be microwaved. They got aluminum in. And so it's not a product category that we really look at. So we're talking range extension here. The obvious ones are things like soups, if you go to get, for example, Covent Garden Soup Company, soup in a carton. What do you do with that? You put it out into pot or you put it into dish then you have to put it in the microwave with the right 100% mono-material polymer structure, we just opened up a little bit, put it in the microwave and put it in table. So that's an example. It also does open up other range extensions for things like oils, whether that's cooking oil or whatever, soaps, refilled detergents, et cetera. Those are pretty difficult to do with the current carton system. Carton system is great because as a -- on the shelf, it looks like a great pack. It's got a full front printing marketing messages on, it distributes very well, bulk packing density because it square, works really well for distribution compared to bottles, which are round, of course. But also, the inbound packaging when it's being filled, it comes flat pack and then it's filled with the carton. So for many reasons, distribution reasons, it's like but you can't do multi poured. The minute you open the carton for once, a little bit of liquid goes into the forestry product card or whatever paperboard part of that carton and starts to weaken the structure, not a problem if you're using apple juice, you typically will use that carton in a day or two. You put cooking oil in there. You put laundry detergent in there and you put it back under your -- in your cabinet over a few course, you will weaken the structure and it potentially will fail. And so that's not something we've got a problem with. We have a non-wetting carton. That's one of the patents, the IP around that. And I think that's a very interesting discussion to have as a brand extension -- range extension portability in addition to the microwavability.

Brilliant. Sort of ties into that a little bit. One last, last question. You're on a roll, you're on a roll. And this is from [ Rupert K. ] And I do apologize for not announcing the names from the other question but [ Rupert ] has got the last question here and it does tie into that. I believe the answer ties into to your previous answer, particularly around working challenges. So are there any nonplastic packaging solutions being developed by others? And to what extent are they a threat?

Yes. If we touch on the carton market for a moment, I'll come to touch this later. We have seen the [ Incumbent ] try to eliminate aluminum for the packs which is to be welcomed and it does reduce their carbon footprint, but it doesn't get anywhere near as good as ours. So they're approaching these as the next generation. But they still have 0 recycled content. They still have multi-material packs and they are definitely not circular. And the problem with that linear economy, it doesn't change that. Moving to nonplastic. Yes, people are trying to make nonplastic barrier -- liquid barrier. But -- and that can be done, but you've got a combination of things you need to think about. You need to think about the liquid barrier. You need to think about the oxygen barrier and you also need to think about is it scalable and many of the solutions that are being cited around today are not scalable within the existing infrastructure. And so that remains important. So I have not seen, and we are fairly active in monitoring these, have not seen any comparable alternative packaging in the carton space. In the pouch space, I think people are doing a pretty decent job in moving away from multi-material solutions towards mono-material pouches. So that's something that, as Ronan said, we've got capability there. But I think, Gary said it as well that market is much more fragmented, much more complicated and I think we've got a solution that wouldn't have it part of that space in pouches, whereas with carton, we have a solution that not only covers all of the existing products packaged in carton, but given range expansion possibilities.

Brilliant. Thank you very much. And with that I think we have now addressed all of the questions. So -- and just to conclude the call today, first of all, I would just like to recap and remind us all that the first 4 months have seen a very strong performance in the business, with that revenue increase to record levels. We've answered a lot of questions about ReZorce today and the excitement is very clear. I would stress that the business has been built on its core business around foams, around polyolefins, around our HPP business. We have strategic projects with the Shincell alliance, which is extremely exciting. ReZorce is another very key strategic initiative and project and an exciting area for the business. There's a lot going on in the business, and there's a lot to be positive about. As we look to the full year and with all of the volatility in markets, et cetera, we retain our guidance in terms of profitability. And so we are doing well. And I would like to close finally by saying it's an absolute honor and privilege to be taken on the role as a CEO at this incredibly exciting time and I hope that you that -- many of you that would have known David for a long time will also appreciate him continuing to work with the business to the end of October on these -- on the 2 of the 3 strategic projects. You can see how that's going to help he considerably as well as I embark on this role, the CEO of this fantastic company. So with that, we've hit the hour. Thank you all. It's been a pleasure, and I look forward to many more meetings with you all. Thank you very much.

Perfect. Ronan and Gary, David. Thank you very much for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations. This take a few moments to complete, but I'm sure it will be greatly valued by the company. On behalf of Zotefoams plc, we'd like to thank you for attending today's presentation, and good afternoon to you all.