RESULTS FOR THE YEAR ENDED 30 APRIL 2017 27 JUNE 2017 FINAL - - PowerPoint PPT Presentation

FINAL RESULTS

RESULTS FOR THE YEAR ENDED 30 APRIL 2017

27 JUNE 2017

SERGE CRASNIANSKI, CEO

OVERVIEW

FINAL RESULTS

Agenda

• Highlights & Business Overview
• Financial Review
• Innovation & Growth Strategy
• Conclusion

3

FINAL RESULTS OVERVIEW

Financial highlights

4

Reported revenue

+16.7% to £214.7m

At constant currency Revenue +3.3% Profit before tax + 4.2%

• Strong performance delivering record profits, record operating cash flow and double digit

earnings growth

• Continued good performance from identification and laundry business

Cash generated from

• peration

+18.6% to £61.3m

Reported EBITDA

+ 22.0% to £69.2m

EBITDA margin +140bpts to 32.2% Record Profit before tax

+19.7% to £48.0m

Net cash position £39.2m after distributions and investment in future growth (total of £73.5m) Earnings per share

+20.1% to 9.27p

Total ordinary dividend per share +20% to 7.03p

FINAL RESULTS OVERVIEW

Operational highlights

• Invested £40.3m for further growth
• Development of complementary products and technologies
• Focus on development of proprietary security biometric ID solutions
• Ongoing refurbishment and upgrade to support market leading position

5

Further progress in deployment

• f security technologies in

photobooths

• Photobooth upgrades to ANTS technology in France
• 300 photobooths with encrypted photo ID upload technology being

rolled out in Ireland by end of 2017

• Progressive deployment of secure and direct data transfer technologies

in photobooths in Germany

Expansion of laundry business continued on track to meet target of 6,000 units by 2020

• 1,103 further laundry units deployed during the year
• 50 launderette shops open, including first shop in Japan, as at 30 April

Launch of reduced footprint Revolution unit, targeting locations with limited space

Strengthened market position in the digital printing segment

• Rollout of over 800 new SpeedLab Cube and SpeedLab Bio by Starck
• Acquisition of ASDA photo business for £3.3m

Focused investment in innovation for future growth

FINAL RESULTS OVERVIEW

Business overview

6

• Photo-Me International PLC (Photo-Me), operates, sells and services a wide range of instant

service equipment

• 47,946 units in operation in 18 countries
• International operations and technology innovation focused on three principal segments:
• Identification: photobooths and integrated biometric identification solutions
• Laundry: unattended laundry services
• Kiosks: high-quality digital printing
• Business strategy focused on diversification of operations through investment and development of

technologies with multiple product applications to be deployed across key geographies

• Stable cash flow from long-established photobooth operations utilised to develop new and

complementary products to drive future growth

• Focus on getting the best yield out of automatic unattended vending machines estate
• Low fixed cost base with the same network of field engineers utilised across the entire estate

LONG-TERM PARTNERSHIPS with the leading shopping malls in target markets BRAND RECOGNITION Photo-Me’s products are household names TECHNOLOGY & INNOVATION continuous focus on diversification ESTABLISHED NETWORK

• f engineers able to

support growth at limited cost CUSTOMER EXPERIENCE providing easy to use, reliable, high quality, value for money services STABLE CASH FLOWS utilised to fund R&D for future growth

FINAL RESULTS OVERVIEW

At a glance

7

Operations in 18 countries worldwide

28,541, (60%) 1,965 (4%) 5,872 (12%) 5148 (11%) 6,420 (13%)

Identification Laundry Kiosks Children's rides Other vending units

Network and relationships

• Building relationships with site owners for over 50 years
• Strategically positioned in attractive, high footfall

locations

• Dedicated teams of approximately 700 regional field

engineers to support, maintain and upgrade estate

• Network connected via a sophisticated telemetry system

Focus on innovation and ID security biometrics

• Track record of collaborating with recognised

design and technology firms through mutually beneficial partnerships

• Ongoing RD investment is a key tenet of the

business model

• Enhancing photobooth capabilities, particularly in

the area of biometrics identification Photo-Me estate by number of units

(% of total estate) Austria, Belgium, China, France, Germany, Ireland, Italy, Japan, Netherlands, Poland, Portugal, Singapore, South Korea, Spain and Switzerland, Vietnam, UK, USA

GABRIEL PIRONA, CFO

FINANCIAL REVIEW

FINAL RESULTS

Key financials

9

207.8 195.6 186.6 177.2 184.0 214.7 185.9 188.8 190.2 195.4 211.0 214.6

50 100 150 200 250 FY 2012 FY 2013 FY 2013 FY 2015 FY 2016 FY 2017

Revenue

Reported Constant currency (excl. minilab)

£m

44.0 44.3 47.8 51.8 56.7 69.2

0% 5% 10% 15% 20% 25% 30% 35% 10 20 30 40 50 60 70 80 FY 2012 FY 2013 FY 2014 FY 2015* FY 2016 FY 2017

EBITDA

EBITDA EBIDTA Margin

£m

20.1 24.3 30.1 35.0 40.1 48.0

0% 5% 10% 15% 20% 25%

10 20 30 40 50 60 FY 2012 FY 2013 FY 2014 FY 2015* FY 2016 FY 2017

Profit before tax

PBT PBT Margin

£m

42.4 46.6 45.6 48.1 51.4 61.3

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Cash generated from operations £m

FINAL RESULTS

EPS and Dividends

10

2.00 2.50 3.00 3.75 4.88 5.86 7.03 3.00 2.00 2.815

0.00 2.00 4.00 6.00 8.00 10.00 2011 2012 2013 2014 2015 2016 2017

Dividend history

Ordinary dividend Special dividend

3.74 3.95 4.76 5.70 6.70 7.72 9.27

0.00 2.00 4.00 6.00 8.00 10.00

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Diluted EPS

• Diluted EPS +20% slightly better than PBT, due to

lower effective tax rate

• Total ordinary dividend per share increased by 20% to

7.03p per share

• £32.6m cash returned to shareholders
• Progressive dividend strategy, with commitment to

increase ordinary dividend by 20% for FY 2018

Pence per share Pence per share

FINAL RESULTS

Continental Europe UK & Ireland Asia & ROW Countries

Austria, Belgium, France, Germany, Italy, Netherlands, Poland, Portugal, Spain and Switzerland United Kingdom and Ireland China, Japan, Singapore, South Korea, Vietnam and USA

Vending units % of the Group 23,751 units

49%

12,602 units

28%

10,553 units

23%

Revenue

2017 £111.7m 20171 £97.6m 2016 £93.7m Change +19.2% 2017 £53.6m 20171 £53.1m 2016 £45.8m change +17.0% 2017 £49.4m 20171 £39.3m 2016 £44.5m change +11.0%

Operating Profit

£33.9m £29.6m £24.1m +40.7% £7.3m £7.2m £8.0m

• 8.8%

£8.4m £6.9m £10.7m

• 21.5%

Margin

30.4% 30.3% 25.8% +17.9% 13.6% 13.5% 17.4%

• 21.7%

17.4% 17.5% 24.0%

• 27.3%

Results by geographic area

11

1 For constant currency comparatives, average rates of exchange used were £/€ 1.18 (2016: 1.35), £/Yen 140 (2016: 178)

FINAL RESULTS

Net cash

12

62.4 39.2 2.0 61.3 (1.1 ) (33.8 ) (3.3 ) (3.8) (32.6 ) (12.0 )

• 20.0

40.0 60.0 80.0 100.0 120.0 140.0

Opening cash at 30 April 2016 FX Operating CF Interest paid and Financing Investment in Estate and infrastructure (Net) Capitalised R&D and SW Acquisitions Dividends Tax Closing cash at 30 April 2017

FY 2017 investments comprise: Laundries £11.0m Kiosks £4.5m PMR £3.7m Photobooths in China & Asia £3.8m Launderettes £1.5m Photobooths Ireland £1.5m ANTS France £1.0m

£m

FINAL RESULTS

Revenue and profit bridge

13

Revenue Profit before tax

FY2016

FX Acquisitions Laundry Price Volume My Number SG&A Finance Other NIM

FY2017 184.0 24.7 5.3 7.9 1.2 (5.1) (3.1) (0.2) 214.7 160 170 180 190 200 210 220 230 40.1 6.2 (1.8) 4.3 0.8 (2.6) (1.6) 2.0 0.9 (0.4) 48.0 38 40 42 44 46 48 50 52 54 56

£m

ERIC MERGUI, COO

BUSINESS REVIEW

FINAL RESULTS BUSINESS REVIEW

Vending units in operation

15

• Total vending estate increased by 5.4% to 47,946 units (2016: 45,500)
• 554 additional laundry units deployed, 29 new laundry shops opened
• Deployment of more than 800 new SpeedLab and SpeedLab Bio by Starck, digital photo printing kiosks
• Expansion of photobooth presence into new locations in Asia

22,800 23,751

22,000 22,500 23,000 23,500 24,000 FY 2016 FY 2017

Continental Europe

+4.2%

12,500 13,287

12,000 12,500 13,000 13,500 FY 2016 FY 2017

10,200 10,908

9,800 10,000 10,200 10,400 10,600 10,800 11,000 FY 2016 FY 2017

UK & Ireland Asia & ROW

+6.3% +6.9%

Number of vending units in operation

6,580, (49%) 992 (8%) 499 (4%) 3,928, (30%) 1,288, (10%)

Number of vending units in operation (% of estate)

12,682, (54%) 4,756 (20%) 1,459 (6%) 1,218, (5%) 3,636, (15%) 9,279, (85%) 1,496, (14%)

Children's’ rides Photobooth Kiosk Laundry Other

FINAL RESULTS BUSINESS REVIEW

Identification

• Established network of 28,541 photobooths, representing 59% of total estate
• integrated software to ensure conformity to ISO and ICAO photo ID regulations
• Starck booth, next generation photobooth, now accounts for 18% of photobooth estate
• c.10% higher monthly revenue than for traditional photobooth*
• Continued progress in deployment of ID solutions for government
• launch of secure digital upload system in Ireland for Online Passport Applications

renewals, in partnership with Irish government

• investment in software upgrades to photobooths in France for secure transmission
• f e-photo and e-signature for driving licences applications
• technology currently deployed in 7 countries
• progressive rollout of secure data capture and transfer technology in Germany
• Price increases implemented in The Netherlands (from €5 to €6), Switzerland (CHF8 to

CHF 10), and UK (£5 to £6)

• Adoption of My Number Card ID programme in Japan lower than the government initially

anticipated - expected to become compulsory in the medium term (2020/2021)

16

Growth drivers

• Steady replacement rates of official documents
• Population growth supporting marginal expansion
• Increased travel linked to GDP
• Increasing appetite from governments for improved, digitalised security ID

PHOTOBOOTHS AND INTEGRATED BIOMETRIC SOLUTIONS

* Company estimate

FINAL RESULTS BUSINESS REVIEW

Identification: case study

Encrypted photo ID technology launched in partnership with Irish Government Secure digital upload technology was adopted by the Irish Government in March 2017 for digital transfer of ID photos as part of the Online Passport Application

17 PHOTOBOOTHS AND INTEGRATED BIOMETRIC SOLUTIONS

• November 2016, a Memorandum of

Understanding was signed with the Ministry

• f Foreign Affairs and Trade in the Republic
• f Ireland.
• Early 2017, Photo-Me’s technology system

trialed in 100 photobooths in Ireland.

• March 2017, the Irish Government launched

its new Online Passport Application Services, with ID photo requirement exclusively supported by Photo-Me’s secure digital upload system.

• February 2016, entered into discussions with the Irish Government to develop technology

to enable the secure digital upload of ID photographs for Online Passport Applications to a secure government server.

FINAL RESULTS BUSINESS REVIEW

Laundry

18 UNATTENDED LAUNDRY SERVICES

• Laundry business operates in 3 key segments; Outdoor self-service, Launderette shops, B2B
• 1,965 owned/operated units in 12 countries
• Outsourced units manufactured in Eastern Europe
• Continued expansion of laundry operations, focused on France, Belgium, Portugal, Ireland, UK
• 3,251 units deployed in FY 2017
• 95 units deployed in the UK as at 30 April 2015
• Revolution range extended to include two reduced footprint models (5m2 compared with

10m2), better suited to some target locations eg: Far East

• 27 launderette shops added to the estate in Europe, with encouraging results in FY 2017
• 50 launderette shops in total
• First launderette shop opened successfully in Japan, starting expansion into one of the

largest markets in the world for launderettes

• Opportunity to expand B2B business in UK and Europe

Growth drivers

• Demand for high capacity laundry services
• Competitive pricing
• Convenience; prime locations, open 24/7
• Very limited competition

FINAL RESULTS BUSINESS REVIEW

Growth in laundry units

19

• Total laundry revenue increased by 79% to £21.7m (2016: £12.1m), reflecting our growth strategy
• Revenue from operated laundry estate up 89% to £14.3m (2016: £7.6m)
• Number of operated units was up 58%
• Average takings per owned unit increased by 8% year on year

1,084 2,148 3,251 500 1,000 1,500 2,000 2,500 3,000 3,500 2015 2016 2017

Total number of deployed units

14,396 15,382 16,586 13,000 13,500 14,000 14,500 15,000 15,500 16,000 16,500 17,000 2015 2016 2017

Average takings per

• wned unit (€)*

* Average calculate only on machines in France, Ireland, Portugal with full month takings

UNATTENDED LAUNDRY SERVICES

6.3 12.1 21.7 0.0 5.0 10.0 15.0 20.0 25.0 2015 2016 2017

Laundry revenue (£m)

+98.2% +51.4% +6.9% +7.8% +92.1% +79.3%

FINAL RESULTS BUSINESS REVIEW

Laundry: Revolution case study

20 UNATTENDED LAUNDRY SERVICES 61% 35%

16%

Turnover – FY 2017

Laundry Photobooths Other

Portugal: First laundry installed in May 2014

41% 34%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Oct-16 Apr-17

Weight of Laundry Revenue

Laundry Photobooths Other 0% 20% 40% 60% 80% 100% FY14 FY15 FY16 FY17

35%

Weight of Laundry Revenue

Other Photobooths Laundry 61% 0.14 0.29 0.23 0.80 0.2 0.4 0.6 0.8 1 FY 2014 FY 2015 FY 2016 FY 2017

Profit before tax*

€m 13%

+456%

* Profit before tax and Group fees

41%

64% 58%

FINAL RESULTS BUSINESS REVIEW

Laundry: Revolution case study

21 UNATTENDED LAUNDRY SERVICES

Ireland: First laundry installed in May 2014

66% 18% 16%

Turnover - FY17

Laundry Photobooths Other

17% 20%

16% 15% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Oct-16 Apr-17

Weight of Laundry Revenue

Laundry Photobooths Other 0% 20% 40% 60% 80% 100% FY14 FY15 FY16 FY17 18%

Weight of Laundry Revenue

Other Photobooths Laundry 0.12 0.14 0.19 1.01 0.2 0.4 0.6 0.8 1 1.2 FY 2014 FY 2015 FY 2015 FY 2016

Profit before tax*

€m

* Profit before tax and Group fees

+739%

13% 41% 66% 66% 67%

FINAL RESULTS BUSINESS REVIEW

Kiosks

22 HIGH-QUALITY DIGITAL PRINTING

Growth drivers

• Increased use of smartphones; used to take 80% of photos in 2016
• Digital photo sharing across social media platforms
• Fragmented market, expansion opportunities across Europe, US and Asia
• 5,872 digital printing kiosks in operation and key geographic markets are Europe and Japan
• Wide range of competitively priced print formats and personalised products
• Latest generation kiosks fully integrated with all major social media networks
• Positioned in attractive high footfall locations
• In 2017, kiosks deployed in 363 selling points of the UK Photo Division of Asda Stores Limited,

acquired on 31 October 2016

• Reconfiguration of layouts, equipment upgrades and operational measures expected to

restore profitability of the business

• 3% increase in number of kiosks in Europe, driven by SpeedLab Cube and SpeedLab Bio

kiosks, designed by Philippe Starck - results so far have been encouraging

• 120 SpeedLab Cube by Starck kiosks at Morrisons stores in UK
• Started the deployment at Carrefour replacing Kodak units
• 20 dedicated MoneyGram kiosks and 80 transaction kiosks operated in France
• Ongoing discussions with MoneyGram to extent partnership into other geographies

SERGE CRASNIANSKI, CEO

GROWTH STRATEGY & INNOVATION

FINAL RESULTS GROWTH STRATEGY & INNOVATION

Three year growth strategy (2017 – 2020)

24

FINAL RESULTS GROWTH STRATEGY & INNOVATION

Innovation

Development capabilities

• Investment in innovation for future growth lies at

the core of the business

• R&D capabilities in:
• Echirolles (France),
• Shanghai (China),
• Hanoi (Vietnam),
• Tokyo (Japan)
• Team of 60 highly experienced engineers

specialising in:

• software development, 3D technology, ID

security standards, design and unit upgrades

• Photo-Me is a leader in employing 3D facial image

capture and facial recognition technology

25

FINAL RESULTS GROWTH STRATEGY & INNOVATION

Innovation

Key areas of focus

• Refurbishment and upgrades
• Software upgrades and maintain to maintain market leading position
• Telemetry software provides automated monitoring to ensure optimal

availability and high quality of service

• New product development
• Development of complementary products and services with attractive

cash-based characteristics

• Leverage strong existing site owner relationships with all new

products introduced

• Aim to achieve first year gross revenue equivalent to the cost of the

investment

• New product in development with capability to provide front-end retail

banking services via extensive network of photobooths

• Proprietary security biometric identification solutions
• Board believes next generation in identification will incorporate

integrated 3D image capture, facial recognition, biometrics and enrolment technologies

• Currently the only company in the market employing instant 3D image

capture

• Embedded security features in technologies enhance protection

against counterfeit and fraudulent identification papers

26

FINAL RESULTS GROWTH STRATEGY & INNOVATION

Conclusion

• Strong performance in 2017, delivering record profits, record operating cash flow and double digit earnings growth
• Commitment to 20% increase in dividend for FY 2018
• Remain focused on driving profitability from existing estate
• Steady expansion programme in all segments of laundry business
• Ongoing self-funded investment in technological innovation and complementary products to extend suite of

services available through established estate

• Looking ahead, the Board anticipates another year of consistent underlying progress building further on key

strengths

27

LONG-TERM PARTNERSHIPS with the leading shopping malls in target markets BRAND RECOGNITION Photo-Me’s products are household names TECHNOLOGY & INNOVATION continuous focus on diversification ESTABLISHED NETWORK

• f engineers able to

support growth at limited cost CUSTOMER EXPERIENCE providing easy to use, reliable, high quality, value for money services STABLE CASH FLOWS utilised to fund R&D for future growth