ME Group International plc · LSE:MEGP
ME Group International — Photo-Me International — FY2008 Earnings Presentation
34 slides from ME Group International's earnings presentation, Jul 10, 2008
Slide 1: Preliminary Results – Year to 30 April 2008
Preliminary Results – Year to 30 April 2008 Legal disclaimer PRESENTATION TO INVESTORS AND ANALYSTS 10 July 2008
Slide 2: Legal disclaimer
Legal disclaimer This presentation contains statements that are or may be forward-looking statements with respect to the financial condition, operations and businesses of Photo-Me. All statements other than statements of historical facts included in this presentation may be forward-looking statement
Slide 3: Presenters
PRESENTERS Hugo Swire Introduction & Conclusion Chairman Thierry Barel Business Review Chief Executive Officer & Operational Review Robert Lowes Financial Review Company Secretary* * in lieu of Jean-Luc Peurois, Group Finance Director, on medical leave of absence 33
Slide 4: Board
BOARD New non-executive Director, John Lewis, appointed in July OBE, LLB (Hons) Consultant to Eversheds Non-executive director of GR Holdings plc Non-executive director of Prime People plc 44
Slide 5: Strategy
STRATEGY Sale of Vending aborted September 2007 New strategy presented today 55
Slide 6: Financial Review
FINANCIAL REVIEW 66
Slide 7: Income Statement
INCOME STATEMENT Y/e 30 April 2008 2007 Revenue (£m) 209.7 212.8 EBITDA - adjusted (£m) 35.8 46.0 Operating profit - adjusted (£m) 1.7 15.8 - reported (£m) (18.6) 16.9 PBT - adjusted (£m) (1.9) 13.9 - reported(£m) (21.6) 15.7 DPS (p) - 2.4 Adjusted excludes exceptionals and accelerated depreciation,
Slide 8: Activity Analysis
ACTIVITY ANALYSIS Revenue Operating Profit* Y/e 30 April 2008 2008 2007 Variance 2008 2008 2007 Variance ** ** £m £m £m % £m £m £m % Vending 148.8 144.7 142.9 4 13.8 13.5 15.1 (9) Manufacturing 60.9 58.1 69.9 (13) (7.5) (7.1) 5.2 (244) Group - - - - (4.6) (4.6) (4.5) (2) overheads 209.7 202.8 212.8
Slide 9: Geographical Analysis
GEOGRAPHICAL ANALYSIS Revenue Operating Profit* Y/e 30 April 2008 2008 2007 Variance 2008 2008 2007 Variance ** ** £m £m £m % £m £m £m £m Continental 121.6 115.0 122.5 (1) (0.7) (0.6) 12.4 (106) Europe UK & Ireland 60.4 60.2 62.6 (4) - - (0.1) 100 Asia & 27.7 27.6 27.7 - 2.4 2.4 3.5 (31) Australia T
Slide 10: Exceptionals and Accelerated Depreciation
EXCEPTIONALS AND ACCELERATED DEPRECIATION 2008 2008 2007 2007 £m £m £m £m Exceptional restructuring: Strategic Review costs 4.3 - Other restructuring costs 3.2 (1.1) 7.5 (1.1) Exceptional impairment: Operating equipment 4.2 - Capitalised R & D 2.8 - Stock/other 0.8 - 7.8 - Accelerated depreciation:
Slide 11: Summary Balance Sheet
SUMMARY BALANCE SHEET At 30 April 2008 2007 £m £m Non-current assets 116.1 121.5 Current assets 101.7 105.8 Assets held for sale 0.5 - Non-current liabilities (45.2) (33.7) Current liabilities (92.3) (93.2) Liabilities held for sale (1.3) - Total equity 79.5 100.4 Minority interests (2.6) (2.1) Tota
Slide 12: Summary Cash Flow
SUMMARY CASH FLOW Y/e 30 April 2008 2007 £m £m Opening net debt (27.7) (16.7) Cash Flow Operating profit – Continuing operations (18.6) 15.8 Operating profit – Discontinued operations (0.7) (3.4) Depreciation 39.1 30.2 Impairment 7.8 - Use of Cash Flow 27.6 42.6 Working capital 5.8 (2.5) Dividends (
Slide 13: Key Points of Financial Review
KEY POINTS OF FINANCIAL REVIEW Income Statement Substantial adjusted EBITDA Disappointing PBT Balance Sheet Still solid Impacted by exceptionals and accelerated depreciation Cash Flow Statement Higher net debt Significant reduction in net debt expected 13 13
Slide 14: Business Review
BUSINESS REVIEW 14 14
Slide 15: Vending: Sites by Type
VENDING: SITES BY TYPE 50,000 43,000 45,000 40,000 35,000 28,000 Num ber of units 30,000 25,000 20,000 15,000 71% 50% 50% 10,000 71% 5,000 0 2005 2006 2007 2008 Photobooths Digital Media Kiosks Amusement Machines Others 15 15
Slide 16: Vending: Sites by Country
VENDING: SITES BY COUNTRY 16 Countries 50 45 14% 40 units in thousands 35 Others* 18% 30 17% 25 Japan 28% 20 16% 15 33% France 10 40% 5 34% UK & Ireland 0 2005 2008 * Others include Germany, Switzerland, USA (in 2005), The Netherlands (in 2008) and Other companies 16 16
Slide 17: Vending: An Extensive Range
VENDING: AN EXTENSIVE RANGE PHOTOBOOTHS Digibooth Espace booth Easybooth Minibooth Universal booth AMUSEMENT Sticker Machine Kiddie Rides Boulie Machine Crane Pile-up Machine DanceHeads SERVICES Business Card Machine Copiers Digital Media Kiosk Charge Box 2 Self-service launderettes 17 17
Slide 18: Vending: Photobooths
VENDING: PHOTOBOOTHS Stable – Cash Generative 50% of sites – 80% of Revenue Sites = +4% to 21,400 Revenue = +3% (+1%)* 100% Digital Dye Sublimation (*) @ constant exchange rates 18 18
Slide 19: Vending: Digital Media Kiosks
VENDING: DIGITAL MEDIA KIOSKS Fast growing market 11% of sites – 8% of Revenue Sites =-2% to 4,600 Revenue =+18% (+11%)* Market development in France and Switzerland 3500 r a n ncece 3000 FFra N u m b e r o f u n its 2500 2000 1500 n d UK er n l a d 1000 UK it z r l a ds Sw tze la n y i er an Sw th
Slide 20: Vending: Other Vending Equipment
VENDING: OTHER VENDING EQUIPMENT 39% of Sites – 10% of Revenue Sites = +5% to 16,900 Revenue = +2% (-1%)* (*) @ constant exchange rates 20 20
Slide 21: Manufacturing: An Extensive Range of Equipment
MANUFACTURING: AN EXTENSIVE RANGE OF EQUIPMENT SELF-SERVICE Kiddie Ride Symphonia 2 Speedlab 200 Speedlab 100 ATTENDED RETAIL DKS 16XX DKS 17XX Photobook Pro DKS 910 / 920 WHOLESALE Fastprint Fastscan Wideprint FastBook 21 21
Slide 22: Manufacturing: Retail Photographic Equipment
MANUFACTURING: RETAIL PHOTOGRAPHIC EQUIPMENT Difficult market Revenue = - 15%(-19%)* Units sold Average price Dollar effect Spares & consumables Deterioration into loss DKS 9xx series minilab won DIMA award Possible sizeable contracts Smooth change of minilab subcontractor (*) @ constant exchange ra
Slide 23: Manufacturing: Wholesale Equipment
MANUFACTURING: WHOLESALE EQUIPMENT Revenue = -6% (-9%)* Small loss Difficult market conditions Delayed launch of the FastBook album-making machine (*) @ constant exchange rates 23 23
Slide 24: Strategic Review
STRATEGIC REVIEW 24 24
Slide 25: Strategic Advantages
STRATEGIC ADVANTAGES Strong & extensive contracts with Key Accounts Market leader in Europe and Japan Substantial field service network Cash collection infrastructure Integrated R&D Low cost production Cash generative Vending 25 25
Slide 26: Vending: Total Sites
VENDING: TOTAL SITES 50,000 43,000 45,000 40,000 28,000 35,000 Num ber of units 30,000 25,000 20,000 15,000 71% 50% 50% 10,000 71% 5,000 0 2005 2006 2007 2008 Photobooths Digital Media Kiosks Amusement Machines Others 26 26
Slide 27: Vending: Revenues from Sites
VENDING: REVENUES FROM SITES 200 180 160 G ro s s T a k in g s (£ 'm illio n ) 140 2% 8% 120 100 80 91% 81% 60 @ 40 20 0 2005 2006 2007 2008 Photobooths Digital Media Kiosks Kiddie Rides Other Amusement machines Solid photobooth takings in a mature market Slight decrease in the past four years: -3%
Slide 28: Kiosks Beyond Photo
KIOSKS BEYOND PHOTO Worldwide Installed Base and Projections 2007-2010 3000 +55% 2500 T h o u san d s o f U n its 2000 1500 1000 500 0 2007 2008 2009 2010 North America Europe Asia-Pacific ROW Source: Summer Research Associates (2008, 09 and 10 projected). The “new” kiosk market = +55% worldwide by
Slide 29: Amusements
AMUSEMENTS Fast growing activity Jolly Roger = success story New branches of development Systematic approach 29 29
Slide 30: Photobooth Evolution
PHOTOBOOTH EVOLUTION biometric digital enrolment National tenders for passports Partnerships with OEMs Photobooth = Strategic network in retail areas Biometric logo 30 30
Slide 31: Sell-Operate-Service
SELL-OPERATE-SERVICE DIVERSIFICATION INNOVATION MANUFACTURING VENDING SYNERGIES REVENUE + COSTS 31 31
Slide 32: Conclusion
CONCLUSION 32 32
Slide 33: Outlook: Current Year
OUTLOOK: CURRENT YEAR Stability and consolidation Operations, Sales and Service Vending = stable business but biometric enrolment is coming Manufacturing = difficult market conditions but opportunities Operational Review effect will be gradual A significant reduction in net debt is expected 33 33
Slide 34: Outlook: Further Out
OUTLOOK: FURTHER OUT Expansion of sited units Extend offering beyond digital imaging Stream of innovative concepts Renewed focus, built on strengths 34 34
Photo-Me International — FY2008 Earnings Presentation on 6ix