A refreshed group strategy was set out last March with ambitious medium-term targets (translating to 7% organic sales CAGR FY25-FY29 and adj. EBIT CAGR of 17%). In Footwear, the strategy is now locked in. The new plant in Vietnam strengthens Zotefoams’ relationship with Nike at a time when it is seeing renewed momentum in its running division whilst also extending the opportunity set beyond the niche, high performance segment. By embedding ZTF at the heart of the global footwear industry, this also creates optionality to broaden the customer base over time. Our view is that there is a sizable growth opportunity if management gets it right. We delve further into these points in this deep dive note focused on Footwear. We see potential for an 11% group sales CAGR FY24-FY27 and adj. EBIT CAGR of 19%. This doesn’t warrant a FY26e PER of 10.9x dropping to 10.3x. Remains a conviction BUY for us.
