Zoo Digital Group Plc · LSE:ZOO
Zoo Digital — Investor Presentation (February 2022)
44 slides from Zoo Digital's investor presentation, Feb 3, 2022
Slide 1: Introducing ZOO Digital Group Plc
INTRODUCING ZOO DIGITAL GROUP PLC 3 February 2022
Slide 2: Disclaimer
DISCLAIMER Introducing ZOO Digital This document has been prepared by ZOO Digital Group plc (the “Company”) in connection with the proposed placing of ordinary shares in the Company (the “Placing”) and the admission of such ordinary shares to trading on AIM (a market operated by the London Stock Exc
Slide 3: Presenters
Introducing ZOO Digital Stuart Green, CEO • Co-founder • CEO since 2006 • Over 30 years experience in team building and executive management in the TMT industry PRESENTERS • More than 30 patents granted in the fields of image processing and digital media production Phillip Blundell, CFO • Senior fin
Slide 4: Introduction
Introducing ZOO Digital INTRODUCTION • ZOO is an exciting growth story focused on the global streaming video market • A unique set of circumstances have aligned to create and accelerate this opportunity • We will detail our path and how we plan to grow sales to $100m in the medium term Page 4
Slide 5: About ZOO
365 global team Introducing Final ZOO Digital results FY21 24-hour coverage ABOUT ZOO LA, London, Dubai & Turkey Distributed workforce ZOO Digital is a leading provider of in 59 countries cloud-based localisation and media services to the global entertainment industry 10,000 freelance language speci
Slide 6: Our Customers
Introducing ZOO Digital OUR CUSTOMERS ZOO operates as part of the rapidly expanding global media and entertainment industry. Our customers are the world’s biggest content creators that distribute TV shows and movies to vast multi-lingual audiences via global streaming services. Page 6
Slide 7: What We Do: Localisation Services
Introducing ZOO Digital 🎶 Porque tengo el corazón valiente Voy a quererte, voy a quererte WHAT WE DO: LOCALISATION SERVICES For I have a brave heart, • Services for entertainment localisation provided in 80+ I'll love you, I'll love you! languages: • Subtitling Subtitling • Dubbing • Material is…
Slide 8: What We Do: Media Services
Introducing ZOO Digital Services overview 2021 WHAT WE DO: MEDIA SERVICES Preparing digital ‘packages’ of media assets compatible with the unique requirements of each streaming service Formatting Conforming Editing Quality Control Digital Packaging Delivering video, Ensuring playout Making changes t
Slide 9: Investment Summary
Large, growing Continued R&D global market Significant year- investment on-year growth $1.5 billion est. $1 million+ in INVESTMENT addressable 64% in H1 FY22 H1 FY22 SUMMARY Market-leading position Fully supported remote solutions Distributed global supply chain Network of 10,000 Strategically align
Slide 10: ZOO's Market
ZOO’S MARKET Introducing ZOO Digital Total global market size for ZOO’s services made up of: Media Services, • Media Localisation $0.9B • Predominantly subtitling (30%) and dubbing (70%)3, 4 • Declined by 5.4% in 2020 due to pandemic; ‘high growth vertical’ expected to recover in 20212 • Media Servi
Slide 11: New title production resuming and catalogue migration accelerating
Introducing ZOO Digital Final Results FY21 With new title production resuming and migration of catalogue content accelerating, ZOO’s services are pivotal to the global growth ambitions of all major media companies Page 11
Slide 12: Revenue Growth
Introducing ZOO Digital Revenue $ million REVENUE GROWTH $100 $90 $80 • Estimated FY22 revenue growth $70 44% to at least $57 million (FY21: $60 44% growth $50 $39.5 million) $40 33% growth • Consensus FY22 EBITDA forecast* $30 CAGR 27% $5.4 million (9% EBITDA margin) $20 $10 • Stated medium term ta
Slide 13: Sales Bridge to $100 Million
Introducing ZOO Digital SALES BRIDGE TO 120.0 $100 MILLION 100.0 15.0 8.5 100.0 80.0 4.5 Medium term target 15.0 $100 million breakdown: 60.0 57.0 • Media services 35% 40.0 • Subtitling 30% 20.0 • Dubbing 35% Market share of addressable market: 0.0 n ue t A e w) e w) ic es 0m • Current share 3% of e
Slide 14: OTT Consumer Adoption
Introducing ZOO Digital Over-the-Top (OTT), which refers to film and television OTT CONSUMER content platforms provided via high-speed internet connections instead of cable or satellite provider-based platforms, has displaced PayTV and optical disc as the ADOPTION preferred way to consume entertainm
Slide 15: OTT International Growth
Final Results FY21 OTT INTERNATIONAL GROWTH The global OTT market was worth $122 billion in 2019. It is forecast to grow to $1 trillion by 20271. While penetration of US households is high, emerging markets are growing strongly. ZOO is making in-roads into these markets. Source: eMarketer, Statista
Slide 16: Production
Introducing ZOO Digital PRODUCTION NEW PRODUCTIONS RESUMED • In August 2021 projects in Los Angeles returned to pre-pandemic levels1 SPEND ON ENTERTAINMENT CONTENT AT RECORD LEVELS • Streaming global spend increased 14% in 2021 to $220 billion2 INTERNATIONAL APPEAL OF NON-ENGLISH CONTENT • Squid Gam
Slide 17: Addressing Industry Challenges
Introducing Final Results ZOO Digital FY21 ADDRESSING INDUSTRY CHALLENGES Content creators face unprecedented challenges as they launch new platforms and distribute content to new audiences around the world. In ZOO, they have a partner with a purpose to make their lives easier. We work alongside the
Slide 18: Cloud-Based Media Localisation Technology
Introducing ZOO Digital CLOUD-BASED MEDIA LOCALISATION TECHNOLOGY ZOO has created an interconnected ecosystem of cloud-based production and management software platforms. The platforms support efficiency, quality and security across all ZOO services. Cost-effective, scalable servicing capacity is ac
Slide 19: Innovation in Dubbing
Introducing ZOO Digital INNOVATION IN DUBBING • Cloud dubbing and production management From this… platform • Virtualises workflow …to this • Allows voice talent and dubbing directors to work from different locations • Eliminates space and capacity constraints of traditional studios • Enables flexib
Slide 20: Post-to-Platform Services
Introducing ZOO Digital POST-TO-PLATFORM SERVICES Trusted by the biggest names in entertainment to deliver localisation and media services at scale using proprietary cloud technology • Subtitling and captioning • Dubbing • Audio Description • Metadata Localisation • Media Services • Artwork Localisa
Slide 21: Building a Responsible, Future-Focused Business
Final Results FY21 BUILDING A RESPONSIBLE, FUTURE-FOCUSED BUSINESS ZOO is always looking forward, to ensure that we and our services are built for tomorrow as well as today Education Diversity Innovation Environment Workplace Our ZOO Academy Building a far- ZOO Digital Labs is Use of cloud- Creating
Slide 22: Growth – Five Strategic Pillars
Introducing ZOO Digital GROWTH – FIVE STRATEGIC PILLARS Page 22
Slide 23: Innovation
Introducing ZOO Digital INNOVATION Create value-adding software technology Recent developments: – building out financial management features – new editing functionality – now integrated with ZOOsubs, ZOOdubs and ZOOscripts – new secure cloud-based media asset management platform Page 23
Slide 24: Scalability
Introducing ZOO Digital SCALABILITY Operate a freelance network Recent developments: • Talent pool grown to 9,752 individuals • Focus on languages in SEA and CEE • Growing dubbing capacity ahead of greater demand • Announced global growth initiative to support needs of major content creators and str
Slide 25: Collaboration
Education Partners 365+ global team Services overview 2021 COLLABORATION 24-hour coverage LA, London, Dubai & Turkey Work with like-minded, world- class experts in localisation, and education and research Recent developments: Used in teaching of media localisation • Initiated a further research coll
Slide 26: Customer
Introducing ZOO Digital CUSTOMER Secure preferred partner status with leading buyers Recent developments: • Currently, preferred vendor for seven major media companies • Primary vendor for two D2C streaming video services • Two large media companies have adopted ZOOstudio • Secured a major client fo
Slide 27: Talent
Interim Services Results FY22 overview 2021 TALENT Engage with experienced and effective professionals Recent developments: • Established a new division for providing mastering services • Recruited initial team of specialists • Led by Melissa McAllister, formerly of Fox Filmed Entertainment as Direc
Slide 28: Summary
Introducing ZOO Digital SUMMARY • Strong revenue growth reported in interims continued into H2 • Tailwinds caused by explosion of new content and accelerated migration of catalogue creates strong drivers of growth • Secured strong and growing pipeline of orders across all service lines • Additional
Slide 29: Thank You
Services Final overview Results FY21 2021 THANK YOU Page 29
Slide 30: Appendix
Introducing ZOO Digital APPENDIX Page 30
Slide 31: Operational Highlights
Interim Results FY22 OPERATIONAL HIGHLIGHTS • Extended ZOOstudio platform further and secured a new customer deployment • Media services grew by 142% due to a high volume of work in preparing back catalogue titles for release on streaming platforms • Localisation grew 30% as new productions resumed
Slide 32: Financial Highlights – Acceleration to $100M Sales
Interim Results FY22 FINANCIAL HIGHLIGHTS – ACCELERATION TO $100M SALES • Revenues increased by 64% to $26.9 million (H1 FY21: $16.4 million) driven by very strong growth in the period for subtitling and media services • Gross profit increased by 68% to $8.6 million (H1 FY21: $5.1 million) • Adjuste
Slide 33: Consolidated Statement of Comprehensive Income
Interim Results FY22 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Revenues $000’s H1 2022 H1 2021 % change • Media Services up 142% • Localisation up 30% Revenue 26,927 16,393 64.3% • Licences down 13% Cost of sales (18,357) (11,277) (62.8%) Cost of sales Gross profit 8,570 5,116 67.5% • Direct co
Slide 34: Segmental Analysis
Interim Results FY22 SEGMENTAL ANALYSIS $000’s Revenues H1 2022 H1 2021 % change Revenues Localisation 12,906 9,940 29.8% • Localisation – strong recovery in subtitling Media Services 13,122 5,416 142.3% • Media Services – two major territory launches Software Solutions 899 1,037 (13.3%) • Software
Slide 35: Consolidated Statement of Financial Position
Interim Results FY22 CONSOLIDATED STATEMENT OF FINANCIAL POSITION • Non current Assets up 21% $000’s H1 2022 H1 2021 • Trade receivables Assets 14,297 11,829 • Trade debtors up 70% Trade and other receivables 14,634 9,180 • Prepayments up 210% Cash 8,214 2,073 • Investment in partner Total Assets 37
Slide 36: Key Performance Indicators
Interim Results FY22 KEY PERFORMANCE INDICATORS Financial KPIs • Revenue up 64% to $26.9 million (H1 FY21: $16.3 million) • EBITDA margin1 improved by 0.8 points to 8.7% (H1 FY21: 7.9%) • Opex as a % of revenue improved 1.5% to 30.9% (H1 FY21: 32.4%) Operational KPIs • Number of freelancers2 up 18%
Slide 37: Consolidated Statement of Comprehensive Income
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Interim Results FY22 Unaudited Unaudited Audited 6 months to 6 months to Year ended 30 Sep 2021 30 Sep 2020 31 Mar 2021 $000 $000 $000 Revenue 26,927 16,393 39,525 Cost of sales (18,357) (11,277) (25,882) Gross Profit 8,570 5,116 13,643 Other operating
Slide 38: Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH Interim Results FY22 Unaudited as at Unaudited as at Audited as at 30 Sep 2021 30 Sep 2020 31 Mar 2021 $000 $000 $000 ASSETS Non-current assets Property, plant and equipment 6,935 4,650 4,362 Intangible assets 6,876 6,693 6,812 Deferred tax
Slide 39: Consolidated Statement of Cash Flows
CONSOLIDATED STATEMENT OF CASH FLOWS Interim Results FY22 Unaudited Unaudited Audited 6 months to 6 months to Year ended 30 Sep 2021 30 Sep 2020 31 Mar 2021 $000 $000 $000 Cash flows from operating activities Operating profit/(loss) for the period 373 (80) 962 Depreciation 1,097 705 1,715 Amortisati
Slide 40: Enjoyment of Subtitled vs Dubbed Content
Introducing ZOO Digital ENJOYMENT OF SUBTITLED VS DUBBED CONTENT, Q3 2020 60% Markets with strong Proportion of respondents who enjoy watching dubbed content dubbing preference Italy Brazil Markets without strong 50% India preference for dubbed Germany Turkey or subtitled content Spain Mexico Saudi
Slide 41: Major Competitors in Media Localisation
Introducing ZOO Digital MAJOR COMPETITORS IN MEDIA LOCALISATION • IYUNO-SDI – formed in 2021 through the acquisition by IYUNO Media Group of SDI Media, which follows the acquisition of BTI Studios in 2019; 67 offices in 34 countries; 2,500 employees; pre-COVID sales of IYUNO $185m and SDI $191m; Kor
Slide 42: The Board
THE BOARD Introducing ZOO Digital Gillian Wilmot Since 2019 Extensive board level leadership in private and public environments with industry experience across Chairman B2B, technology, advertising and communications. Strengths in value creation, operational insight and corporate governance. Mickey
Slide 43: Major Shareholders
MAJOR SHAREHOLDERS Introducing ZOO Digital Shareholder* % of capital Stuart Green (CEO) 12.90 Herald Investment Management Ltd 12.88 Invesco Ltd 8.12 Canaccord Genuity Wealth Management (Institutional) 7.35 Hargreaves Lansdown private clients 5.50 Stonehage Fleming Investment Management Ltd 4.66 Dek
Slide 44: www.zoodigital.com
www.zoodigital.com
ZOO Digital Group — Investor Presentation (February 2022) on 6ix