Interim Results for the six months ended 30 April 2021 - Investor presentation
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Interim Results for the
six months ended
30 April 2021
Investor presentation
July 2021
JEAN-MARC JANAILHAC EXECUTIVE DIRECTOR HALF YEAR SUMMARY AND STRATEGY UPDATE
AGENDA
• HALF YEAR SUMMARY AND STRATEGY UPDATE
• FINANCIAL REVIEW
• BUSINESS REVIEW
• CONCLUSION
3
HALF-YEAR SUMMARY
Good performance from Laundry operations and continued expansion
Stronger than anticipated recovery in Identification business, particularly in Japan, France and the UK
Multi-country restructuring plans substantially completed
Continued focus on innovation and diversification of operation to drive future growth
Revenue up 3.4% Reported EBITDA1 Reported Profit before
£94.6m up at £28.7m tax of £12.0m
Six months ended 30 April 2020 Six months ended 30 April 2020 Six months ended 30 April 2020
£91.5m £16.7m £(24.2)m
Cash generated from Gross cash of £95.3m
Adjusted Profit before
Net cash of £16.9m
tax2 of £12.9m operations of £22.4m
Six months ended 30 April 2020 Six months ended 30 April 2020 Six months ended 30 April 2020
£(0.1)m £14.7m Gross cash £65.5m, Net Cash: £7.9m
Earning per share 2.49p Capital Expenditure3 of Gearing
£22.5m 34.7%
Six months ended 30 April 2020: Six months ended 30 April 2020: Six months ended 30 April 2020:
(5.64)p £12.4m 43.9%
All 2020 comparative figures are for the six months ended 30 April 2020
1 EBITDA for the six months ended 30 April 2020 has been adjusted to include comparable data (COVID provision has been added back)
2 Adjusted profit before tax for the six months to 30 April 2021 is profit before tax adjusted to exclude the restructuring costs, additional impairments and the
profit on the sales of Inox assets.
3 Excluding £7.9m from Plaza Create acquisition and leases, Capital expenditure was £14.6m 4
GROWTH STRATEGY UPDATE
Strategic progress despite continued impact due to the pandemic in Q1
• Focused on four principal business areas:
Identification, Laundry, digital Kiosks and Food
• Key investment priorities:
• continued expansion of Laundry operations
• growth of self service food equipment
business
• Diversification and Innovation remain at the core
of the Group, focused on Identification, Laundry,
Food and digitalisation of vending service
• Acquisition of Plaza Create (Japan) and
Resto’Clock (France)
• Sale of B2B Laundry business in the UK
• Extension of geographic footprint, with expansion
into Finland post the period end and organic
growth in Europe, Scandinavia and Australasia
being considered
• Focus on corporate social responsibility to integrate social, environmental and economic
expectations into the Group’s growth strategy and operations
5
STEPHANE GIBON CHIEF FINANCIAL OFFICER FINANCIAL REVIEW
KEY FINANCIALS
£m REPORTED REVENUE
96
94
• Revenue increased by 3.4%,
92
94.6 reflecting an improvement in
90
232.2
91.5 consumer activity compared with
88 186.3
the onset of the pandemic in 2020
86
• Cash flow positive with £22.4m
84
generated from operations
82
80
Six months ended 30 April 2020 Six months ended 30 April 2021
EBITDA1
£m (Excluding associates) • Significant improvement in
30 40%
EBITDA, delivering a 30% EBITDA
28.7 margin compared to and 18%
30% EBITDA margin in the prior period
20
20%
10 16.7
10%
0 0%
EBITDA EBITDA Margin
Six months ended 30 April 2020 Six months ended 30 April 2021
1EBITDA for the six months ended 30 April 2020 has been adjusted to include comparable data (COVID provision has been added back)
7
KEY FINANCIALS
£m REPORTED PROFIT BEFORE TAX
20.0
• Restructuring costs of £0.3 million
related to UK business reorganisation
10.0
12.0
• £1.3 million impairment of machines
0.0 in China
• Sale of UK B2B Laundry business:
-10.0
£(0.7) million
-20.0
(24.2)
-30.0
RECONCILIATION OF REPORTED PROFIT BEFORE TAX TO ADJUSTED PROFIT BEFORE TAX
£m
14
1.3
13.5
13
0.3 (0.7) 12.9
12.5
12
12.0
11.5
11
2
Repoted profit before tax Restructuring costs 2 Impairments 2 Sales of Inox assets Adjusted profit before tax
1Profit before tax includes £33.6 million loss due to exceptional items, provisions and impairment due to COVID-19
2Exceptional item
All figures are calculated from actual figures in the financial statements as opposed to the rounded figures included in the above table 8
RESTRUCTURING PROGRAMMES
Programmes to remove and relocate unprofitable machines substantially completed in April 2021
• Programme implemented to address significant loss in Identification and other vending
machine revenue
• Approximately 5,000 machines have been removed
• UK: c.3,800 units (c.32% of machines in the UK)
• China: c. 444 photobooths (c.57% of machines in China)
• South Korea: 200 units impaired (100% of machines in South Korea)
• Continental Europe: c. 1,000 machines (mainly France, Netherlands and Spain)
• On completion 5,000 machines will have been removed or relocated from Photo-Me’s estate,
a 7% reduction of total machines in operation
• A small number of programmes have been paused, pending assessment of recent revenue
performance vs cost of removal/relocation
• Operations now better aligned to anticipated consumer activity levels
9
EARNINGS PER SHARE AND DIVIDEND
DILUTED EARNINGS PER SHARE
4.00 • Earning per share of 2.49p
• Board has not declared an
2.00
2.49 interim dividend
Pence per share
0.00 • Future dividend payments will
be aligned to business
-2.00
performance
-4.00
(5.64)
-6.00
10NET CASH BRIDGE
£m
120
22.4
100
80 (5.9)
60
(15.1)
21.9
40
(6.0) (0.4) 16.9
20
0
Opening Operating Acquisitions Investment in Tax Interest & Closing
Net Cash at cash flow estate and Finance Net Cash at
1 November 2020 infrastructure 30 April 2021
11REVENUE BRIDGE
£m
100
1.1 0.6 0.1
95 2.3
0.3 (1.0) 94.6
90 91.5
85
80
75
70
65
60
55
50
Six months ended Laundry Photobooths Kiosks Other Sales & B2B Six months ended
31 October 2020 except B2B 30 April 2021
12REPORTED PROFIT BEFORE TAX
£m
15
2.1
2.5 0.7
10 12.0
1.2
1.2
22.4 0.6
5
(0.6)
0
(24.2)
-5
-10
-15 1.3
2.2
-20 3.1 (0.5)
-25
-30
Six months Changes in Commission Labour IFRS 16 Impairment & Exchange Restructuring Sales Consumable Amortisation Inox Other* Six months
ended revenue gain costs impact provisions loss cost Margin spare parts sales ended
31 October 2020 savings 30 April 2021
* Other relates to: Travel & entertainment, Legal & professional fees, Cash collection, Bad debt, Vehicle costs, R&D depreciation
13RESULTS BY GEOGRAPHIC AREA
CONTINENTAL EUROPE UK & REPUBLIC OF IRELAND ASIA
Austria, Belgium, Finland, France, United Kingdom and Ireland China, Japan, Singapore,
COUNTRIES Germany, Netherlands, Poland, South Korea, Vietnam
Portugal, Spain and Switzerland,
VENDING UNITS
24,913 units | 55.8% 8,356 units | 18.7% 11,371 units | 25.5%
% OF THE GROUP
Six months to Six months to Change Six months to Six months to Six months to Six months to
Change Change
30 April 2021 30 April 2020 30 April 2021 30 April 2020 30 April 2021 30 April 2020
REVENUE £58.7m £52.5m +11.9% £13.3m £19.0m -29.9% £22.5m £19.9m +13.1%
OPERATING
£10.1m £(9.9)m 201.7% £2.0m £(11.0)m +118.4% £2.7m £1.1m +143.8%
PROFIT
MARGIN 17.0% -19.0% 15.0% -58.0% 12.0% 6.0%
• All geographic areas delivered an operating profit
• Continental Europe remains the largest geography by number of units, revenue and profit
14OPERATING REVENUE EVOLUTION VS SAME
PERIOD IN THE PRIOR YEAR1
CONTINENTAL EUROPE UK & REPUBLIC OF IRELAND ASIA
+16.1% +17.8% +44.2%
+13.7% +12.9%
+13.8%
-28.6%
-41.4%
-10.4%
-8.4%
-78.0% -15.5%
• Improved revenue trend • Identification and children’s • Identification performance
in Identification, Kiosks ride market remained driven by My Number in
and Laundry extremely challenging March and April
• Most significant increase • Laundry operations • China market expected to
in France and Germany performed strongly remain challenging
1 Variation in operating revenue: Nov 2020 to April 2021 vs Nov 2019 to April 2020
15JEAN-MARC JANAILHAC EXECUTIVE DIRECTOR BUSINESS REVIEW
VENDING UNITS IN OPERATION
CONTINENTAL EUROPE UK & REPUBLIC OF IRELAND ASIA
12,000 12,000
26,000
Number of vending units in operation
11,000 11,000
24,000 25,597 11,198 11,371
24,913 10,000
22,000 10,000
20,000 9,000 10,221
9,000
18,000 8,000
8,356
16,000 8,000
7,000
14,000
6,000 7,000
12,000
10,000 5,000 6,000
Six months to 30 April Six month to 30 April Six months to 30 April Six months to 30 April Six months to 30 April Six months to 30 April
2020 2021 2020 2021 2020 2021
• Increase mainly due to the installation of • Reduction due to removal of unprofitable • 1,500 photobooth added to region
Revolution machines photobooths through acquisition
Number of vending units in operation (% of estate)
0.1%
1.0% 0.3%
5%
17% 19%
32%
12%
53%
52%
10%
95%
Photobooth Kiosk Laundry Children's rides 17IDENTIFICATION Photobooths and integrated biometric identification solutions
Six months Six months Change
ended ended
30 April 30 April
2021 2020
Number of units in operation 28,095 28,537 -1.5%
Percentage of total Group vending estate (number of units) 62.9% 60.7% +3.6%
Revenue £52.5m £51.9m +1.2%
Capex £3.3m £3.3m +0.3%
• Photobooth revenue recovered faster than
expected in Q2 (mainly in France)
• Strong activity levels in Japan in March and April due
to increased applications for ‘My Number Card’
• Action taken to remove unprofitable machines
• Trading in UK and China remained extremely
challenging
• Capex focused on refurbishing of removed machines
to be relocated
• Board remains confident of longer term opportunities
18IDENTIFICATION Photobooths and integrated biometric identification solutions
PHOTOBOOTH OPERATING REVENUE EVOLUTION1
£m
25
20
15
10
5
0
Nov 2019 to Jan 2020 Feb to Apr 2020 May to Jul 2020 Aug to Oct 2020 Nov 2020 to Jan 2021 Feb to Apr 2021
Continental Europe UK & Republic of Ireland Asia
1 Operating revenue last 18 months to Apr 2021 by quarter 19LAUNDRY Revolution: Outdoor self-service laundry units, Launderettes: self-service shops, B2B Laundry Services
Six months Six months Change
ended ended
30 April 2021 30 April 2020
Total laundry units deployed
5,298 5,471 -3.2%
(owned, sold and as a result of acquisitions)
Total revenue from laundry operations £23.9m £19.4m +23.2%
Revolution (excludes Launderettes and B2B):
- Number of Revolutions in operation 3,762 3,205 +17.4%
- Percentage of total Group vending estate (number of units) 8.4% 6.6% +27.3%
- Total revenue from Revolutions £18.4m £15.9m +15.8%
- Revolution capex
£8.1m £4.9m +64.7%
• Continued growth in Revolution units, up 17.4%, now 8.4%
of total estate
• Revolution revenue grew by 15.8%
• Key contract wins with petrol forecourt operators and
retailers
• Ongoing investment in rollout c.55 per month in the Period
• Plans to return to c.70 Revolution installations per month,
subject to easing of lockdown restrictions
• Photovoltaic solar panels installed on 100 Revolution units in
France, with plans to rollout to other countriesKIOSKS High quality digital printing services
Six months Six months Change
ended ended
30 April 2021 30 April 2020
Number of units in operation 5,211 5,497 -5.2%
Percentage of total Group vending estate (number of units) 11.7% 11.7% -
Revenue £6.0m £5.5m +9.1%
Capex £0.2m £0.8m -75.0%
• Revenue grew by 9.1% reflecting improvement in
consumer activity levels in France, the UK and Switzerland
• Unprofitable units removed, resulting in a 5.2% reduction in
the number of units in operation
• Capex reduction reflects investment in premium sites only
and ongoing focus on Laundry expansion
OTHER VENDING EQUIPMENT (such as children’s rides, photocopiers etc)
• More than 7,500 machines operated, representing 16.8% of total vending estate
• Contributes 5.7% of total Group revenue
• Demand has been significantly impacted by the pandemic and unprofitable
machines have been removed as part of restructuring programmes
21KIS FOOD Self-service fresh fruit juice machines
Six months Six months
ended ended
30 April 2021 30 April 2020
Number of units in operation 2,700 2,788
Revenue £3.2m £3.2m
• Business impacted by widespread closure of
restaurants and hotels due to the pandemic
• Revenue was £3.2 million, contributing 3.4%
to total Group revenue
• Apple juice machine rollout delayed, c.100
machines installed to date
• Plans to rollout out pineapple machines and
prototype of new grape juice machines is
being tested
• New ‘juice wall concept’ developed
offering a variety of self-service fresh juice
options
• Group aims to become the market leader
for food vending equipment in France by
2023, and plans to deploy machines in all
countries in which it operate
22INNOVATION & DIVERSIFICATION
Continued innovation and diversification of operations remains at the core of the Group
KIS FOOD ACQUISITION
• Acquisition of French manufacturer of pizza
vending machines, Resto’Clock
• Resto’Clock, a leader in France (top 3),
currently sells 30 to 40 machines per year
• Machines to be designed by Philippe Starck
and sold or leased to B2B hospital market
(restaurants and takeaways)
• Group expects to sell c100 machines per
month by the end of 2023
DEVELOPMENT OF INDOOR REVOLUTION LAUNDRY
MACHINE
• Approximately 1 sqm indoor format for B2B
markets such as supermarkets, petrol stations,
universities and hospitality
• Rental model, with maintenance contract. Unit
managed by customer day-to-day
23INNOVATION & DIVERSIFICATION
Continued innovation and diversification of operations remains at the core of the Group
NEXT GENERATION PHOTOBOOTH
• Development of new photobooth underway
offering enhanced features and customer
experience
• Proprietary “anti-spoofing” solution
developed for ID photos to avoid risk of fraud
DIGITIALISATION OF INSTANT VENDING SERVICES
• Development of 5G cloud architecture for
vending machine estate, bring full product
offer onto one platform
• Initiative to include a group loyalty
programme expected to increase use of the
Group’s equipment
24NEW BRAND STRATEGY
New corporate brand to reflect successful diversification growth strategy
• New, more coherent, ambitious and strong brand
strategy to communicate the breadth and reach of
operations today
• Captures easy-to-use and convenient nature of diverse
vending portfolio and consumer experience and
engagement
• Reflects Group’s mission to revolutionise local retail by
bringing innovative automated self-service solutions to
consumers delivered through a more self-sufficient and
simpler customer experience everyday
• Why ME?
• ME for MY EXPERIENCE
• ME for MORE ENGAGED
• ME for MINUTE EXPERIENCE
• ME for MAKING EASY
• Photo-Me International PLC will remain the Group’s listed entity name
25NEW BRAND STRATEGY
Rollout across all countries of operations in the coming months
Each subsidiary company All Business areas will capture Well known and
will adopt the ME Group “Me” positioning recognised B2C brands to
corporate identity co-exist with ME Group in
the short-to-medium term
Identification Kiosks
Laundry KIS Food
26CONCLUSION
Board confident in long-term growth strategy
• Confidence in longer-term Identification market opportunities, supported by new product
development
• Laundry expansion remained a key growth driver
• Board considering opportunities to further extend geographic presence through acquisitions and
international franchising model
• Group focused on continued evolution of digital and environmental capabilities
• Launch of ME Group corporate identity to better reflect the Group’s operations today
• Strong cash position
• Board remains confident in the Group’s long-term growth strategy and its ability to adapt to and
operate in the new consumer environment
• The first quarter of FY21 was impact by the pandemic, nevertheless the Board anticipates that
profits in FY2022 will be broadly similar to FY2019 levels
27APPENDICES
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 April 2021
29GROUP STATEMENT OF FINANCIAL POSITION
as at 30 April 2021
30GROUP STATEMENT OF CASH FLOWS
for the six months ended 30 April 2021
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