Zoo Digital Group Plc · LSE:ZOO
Zoo Digital — H1 FY25 Earnings Presentation
49 slides from Zoo Digital's earnings presentation, Nov 12, 2024
Slide 1: ZOO Digital Group plc
ZOO DIGITAL GROUP PLC November 2024
Slide 2: Disclaimer
DISCLAIMER Interim Results FY25 This document has been prepared by ZOO Digital Group plc (the “Company”). It should not be reproduced, redistributed or passed to any other person. This document, the talks given by the presenters, the information communicated during the delivery of the presentation a
Slide 3: Meet our presenters
Interim Results FY25 MEET OUR PRESENTERS Stuart Green, CEO Phillip Blundell, CFO • Co-founder in 2001 and CEO since 2006. • Senior finance professional and Chartered Accountant. • Over 30 years’ experience in team building and • Over 20 years’ experience in software industry. executive management in
Slide 4: For global streaming
Interim Results FY25 FOR GLOBAL STREAMING Confidential – Do not forward Page 4
Slide 5: In the entertainment industry
Interim Results FY25 IN THE ENTERTAINMENT INDUSTRY • FY25 H1 has seen the return of orders following customer strategic reviews and Hollywood strikes by writers and actors in 2023 • Major Hollywood studios are being reshaped, leading to ongoing hiatus that is expected to be resolved during 2025 • ZO
Slide 6: State of play
Interim Results FY25 STATE OF PLAY • Trading in line with expectations; delivered an EBITDA profit in H1 FY25 • Streamlined the business while protecting production capability • Strengthened market position as a highly trusted, global, end-to-end vendor • Target customers should return to 2022 level
Slide 7: H1 FY25 Results
Interim Results FY25 H1 FY25 RESULTS Page 7
Slide 8: Financial highlights – streamlined business well positioned as industry recovers
Interim Results FY25 FINANCIAL HIGHLIGHTS – STREAMLINED BUSINESS WELL POSITIONED AS INDUSTRY RECOVERS • Revenues increased by 29% to $27.6 million (H1 • Operating loss of $2.5 million (H1 FY24: loss of FY24: $21.4 million) as content output continues to $10.9 million) recover following the Hollywood
Slide 9: Highlights
Interim Results FY25 HIGHLIGHTS Strengthened market position as a highly • Standard of customer satisfaction maintained – retained sales KPI of 97.7% trusted, global, end-to-end vendor • Gold-standard security audit for ZOO’s production platforms Streamlined the business while • Salary costs reduced
Slide 10: Consolidated statement of comprehensive income
Interim Results FY25 Six months ended 30 September 2024 1 CONSOLIDATED STATEMENT 1 $000’s H1 2025 H1 2024 % change OF COMPREHENSIVE INCOME Revenue Cost of sales 27,561 (17,451) 21,408 (19,329) 29% (10%) Gross profit 10,110 2,079 386% Other operating income - - - Revenues Operating expenses Operating
Slide 11: Segmental analysis
Interim Results FY25 Six months ended 30 September 2024 1 $000’s H1 2025 H1 2024 % change 1 Revenues SEGMENTAL ANALYSIS Localisation 17,133 13,471 27% Media Services 9,948 7,065 40% Revenues Software Solutions 480 872 (45%) • Localisation revenues positively impacted by Total 27,561 21,408 29% the r
Slide 12: Consolidated statement of financial position
Interim Results FY25 CONSOLIDATED STATEMENT As at 30 September 1 1 OF FINANCIAL POSITION $000’s H1 2025 H1 2024 Assets 26,782 33,952 Non-current Assets • Intangible assets up 10% due to new international Trade and other receivables 11,799 7,742 investments and R&D capitalisation Contract assets 4,64
Slide 13: Market update
Interim Results FY25 MARKET UPDATE Page 13
Slide 14: Demand for content rising, addressable market undiminished
Interim Results FY25 • Demand for content rising, addressable market over long term undiminished ZOO: scalable business model well positioned to address growing demand • Greater international exploitation drives demand for localisation ZOO: has global reach across 80+ languages with local hubs in ke
Slide 15: An opportunity for ZOO
Interim Results FY25 AN OPPORTUNITY FOR ZOO • ZOO has been active in AI R&D for many years • Speech-to-text already incorporated • Many AI technologies have limited application for performing creative functions in the Media & Entertainment market • Focused on technology to supplement rather than rep
Slide 16: Outlook
Interim Results FY25 OUTLOOK Page 16
Slide 17: Outlook
Interim Results FY25 • Entertainment industry recovery expected to gradually improve through calendar 2025 • FY25 outturn is dependent on a continuing improvement in trading while visibility of Q4 orders remains limited • Ongoing restructuring of cost base provides strong platform to return to cash
Slide 18: Thank you
Final FinalResults ResultsFY23 FY21 THANK YOU Page 18
Slide 19: Appendix
Interim Results FY25 APPENDIX APPENDIX Page 19
Slide 20: ZOO's proposition
Interim Results FY25 ZOO’S PROPOSITION Page 20
Slide 21: On the Waterfront quote
Interim Results FY25 You don't understand. I coulda had class. I coulda been a contender. I coulda been somebody, instead of a bum, which is what I am, let's face it. On the Waterfront, 1954 Page 21
Slide 22: Needs of the industry
Interim ResultsFY23 Final Results FY25 NEEDS OF From completion of a new title, work is required to prepare technical materials for distribution (“media services”) and adapt for different countries, languages and cultures (“localisation services”). Media Localisation Subtitling Dubbing Pre-productio
Slide 23: Competitive landscape
Interim Results FY25 COMPETITIVE LANDSCAPE Language Offering Subset or local languages only Global languages Media services specialists End-to-End Vendors All services Service Line Offering 100s of independent dubbing studios Multilingual subtitling specialists Subset of services Some multinational
Slide 24: Secure. Scalable. Global capacity.
Interim Results FY25 Secure. Scalable. Global capacity. Owned-and-Operated Hubs: Dubbing, localization and media services operations are controlled by hubs in key locations in the Americas, Europe, Middle East and SE Asia. Territory Managers: Each regional hub works with ZOO territory managers based
Slide 25: End-to-end services
Interim Results FY25 END-TO-END SERVICES Powered by Project Audio Audio Post Media Mastering Scripting Subtitling Dubbing Artwork Metadata Compliance Management Description Production Services Chennai ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Mumbai ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Seoul ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Los Angeles ✓ ✓ ✓ ✓
Slide 26: Our customers are the world's biggest content creators and distributors
Interim Results FY25 Our customers are the world’s biggest content creators and distributors that produce TV shows and movies for vast multilingual audiences via global streaming services. Page 26
Slide 27: ZOO technology
Interim Results FY25 ZOO TECHNOLOGY Confidential – Do not forward Page 27
Slide 28: Workflow
Interim Results FY25 WORKFLOW Client Systems Asset Management Order management Finance etc. Page 28
Slide 29: Workflow
Interim Results FY25 WORKFLOW Licensing Deal & On-Boarding Studio places ZOO in-territory PM contacts order with ZOO content owner to set on-boarding call ZOO will manage entire Studio completes License deal details confirmed – CO communication and licensing deal with ZOO works with CO to align avai
Slide 30: ZOO's localisation ecosystem for end-to-end project management
Interim Results FY25 • ZOO’s localisation ecosystem for end-to-end project management. • A vendor-agnostic platform for managing the localisation of movies and shows across multiple language service providers. • Designed in collaboration with industry experts, content owners, localisation vendors an
Slide 31: Customer quality metrics among the highest in the industry
Interim Results FY25 ZOO’S CUSTOMER QUALITY METRICS ARE AMONG THE HIGHEST IN THE INDUSTRY Client Quality Scorecard by Year FY21 to FY24 100% 99% 98% 97% 96% 95% 94% 93% 92% 91% 90% FY21 FY22 FY23 FY24 KPI Min required • ZOO’s performance metrics are amongst the highest in the industry. • The ‘retain
Slide 32: ZOO's global footprint
Interim Results FY25 ZOO’S GLOBAL FOOTPRINT • An end-to-end provider, with the second- largest global footprint in media localisation. • An extensive footprint spanning 13 dedicated localisation production facilities worldwide. • Further investments and strategic growth plans ready to serve the glob
Slide 33: Our ecosystem
OUR ECOSYSTEM Secure, scalable global servicing capacity made possible by our global ecosystem • Regional hubs, dubbing studios, partners and freelancers work together in the ZOO technology ecosystem. • Guarantees consistent security, process efficiency, production quality and rapid scalability acro
Slide 34: Growing a connected global network through acquisition and partnerships
Interim Results FY25 ZOO Korea ZOO Turkey ZOO Denmark ZOO India Growing a connected global network through acquisition and strategic partnerships • Enhanced existing facilities. Further investments planned • Investments in strategic partners. • Europe. • Flexible, multipurpose facilities. • Southeas
Slide 35: Services charged predominantly based on minutes of runtime
Services charged Interim Results FY25 predominantly based on minutes of runtime Freelancers paid on same basis Current contribution margins are lower than the business at maturity, due to being in a heavy investment phase Projects allocated based on quality of service Sales External COS Internal COS
Slide 36: Good ESG credentials and responsible future-focused business
Interim Results FY25 ZOO has good ESG credentials and is committed to building a responsible future-focused business • Minimising travel of freelancers. • Smaller infrastructure footprint. • Flexible working for staff and freelancers. • Established Diversity, Inclusion, Equity and Belonging (DIEB) f
Slide 37: Enjoyment of subtitled vs dubbed content
Interim Results FY25 ENJOYMENT OF SUBTITLED VS DUBBED CONTENT 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 Arabia 40% C
Slide 38: Market
Interim Results FY25 MARKET Page 38
Slide 39: Streaming is more popular than ever and set to grow further
Interim Results FY25 STREAMING IS MORE POPULAR THAN EVER AND SET TO GROW FURTHER Subscription Video on Demand is forecast to continue to grow strongly SVOD Total Global Revenue 2023-2031 ($ billion) Global Video Subscribers 2018-2031 (millions) 250 2,000 200 1,500 150 1,000 100 500 50 - - 2023 2024
Slide 40: Streaming is more popular than ever – AVOD
Interim Results FY25 STREAMING IS MORE POPULAR THAN EVER AND SET TO GROW FURTHER Advertising Video on Demand is forecast to continue to grow strongly Worldwide AVOD Revenue ($ billion) 1 Global AVOD Services Market Share 2023 2 70 MENA 60 Latin 5% 50 America 10% North 40 America 35% 30 20 Asia Pacif
Slide 41: Streaming is more popular than ever – viewing trends
Interim Results FY25 STREAMING IS MORE POPULAR THAN EVER AND SET TO GROW FURTHER Consumers continue to move away from cable and broadcast towards streaming TV Viewing Trends in the US (2021-2023) (%) 1 TV Viewing Trends in the US, July 2023 1 45 40 35 Other 30 11% 25 20 Streaming Broadcast 15 39% 20
Slide 42: Content increasingly commissioned for a global audience
Interim Results FY25 CONTENT IS INCREASINGLY BEING COMMISSIONED FOR A GLOBAL AUDIENCE The absolute number of worldwide consumers of digital video continues to grow Worldwide Digital Video Viewers (billions)1 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2019 2020 2021 2022 2023 1 Source: Statista, 2023. Page
Slide 43: H1 FY25 financial statements (unaudited)
Interim Results FY25 H1 FY25 FINANCIAL STATEMENTS (UNAUDITED) Page 43
Slide 44: Consolidated statement of comprehensive income (unaudited)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) Interim Results FY25 Unaudited Unaudited Audited 6 months to 6 months to Year ended 30 Sep 2024 30 Sep 2023 31 Mar 2024 $000 $000 $000 Revenue 27,561 21,408 40,629 Cost of sales (17,451) (19,329) (35,172) Gross Profit 10,110 2,079 5,457 Othe
Slide 45: Consolidated statement of financial position (unaudited)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH Interim Results FY25 (UNAUDITED) Unaudited as at 30 Sep 2024 Unaudited as at 30 Sep 2023 Audited as at 31 Mar 2024 $000 $000 $000 ASSETS Non-current assets Property, plant and equipment 8,754 14,092 11,189 Intangible assets 14,827 13,443 15
Slide 46: Consolidated statement of cash flows (unaudited)
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) Interim Results FY25 Unaudited 6 months to 30 Sep 2024 Unaudited 6 months to 30 Sep 2023 Audited Year ended 31 Mar 2024 $000 $000 $000 Cash flows from operating activities Operating (loss)/profit for the period (2,502) (10,909) (19,118) Depreciation 2
Slide 47: The Board
Interim Results FY25 THE BOARD Page 47
Slide 48: The Board
THE BOARD Gillian Wilmot CBE 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. Stuart Green Co-founder; CE
Slide 49: www.zoodigital.com
www.zoodigital.com