Zoo Digital Group Plc · LSE:ZOO
Zoo Digital — FY2022 Earnings Presentation
44 slides from Zoo Digital's earnings presentation, July 2022
Slide 1: ZOO Digital Group Plc Final Results FY22
ZOO DIGITAL GROUP PLC FINAL RESULTS FY22 July 2022
Slide 2: Disclaimer
DISCLAIMER Final Results FY22 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 and
Slide 3: Presenters
Final Results FY22 Stuart Green, CEO • Co-founder • CEO since 2006 • Over 30 years experience in team building and executive management in the TMT industry • More than 30 patents granted in the fields of image PRESENTERS processing and digital media production Phillip Blundell, CFO • Senior finance
Slide 4: Significant Progress Towards Medium Term $100M Target
Final Results FY22 SIGNIFICANT PROGRESS TOWARDS MEDIUM TERM $100M TARGET • 78% organic revenue growth • Established international operations • Strong growth market • New original productions fully resumed • New streaming services begin international rollouts • ZOO perfectly positioned to take furthe
Slide 5: FY22 Results
Final Results FY22 FY22 RESULTS Page 5
Slide 6: Key Performance Indicators
Final Results FY22 KEY PERFORMANCE INDICATORS Financial KPIs • Revenue up 78% to $70.4 million (FY21: $39.5 million) • EBITDA margin 11.8% (FY21: 11.5%) 1 • Opex as a % of revenue improved by 5 points to 27% (FY21: 33%) Operational KPIs • Number of freelancers up 20% to 11,028 (FY20: 9,207) 2 • Reta
Slide 7: Financial Highlights – Progress Towards $100M Sales
Final Results FY22 FINANCIAL HIGHLIGHTS – PROGRESS TOWARDS $100M SALES • Revenue grew organically by 78% to $70.4 million (FY21: $39.5 million) • Adjusted EBITDA grew to $8.3 million (FY21: $4.5 million) – EBITDA* margin 1 increased to 11.8% (FY21: 11.5%) • Operating profit of $3.1 million (FY21: $1
Slide 8: Operational Highlights
Final Results FY22 OPERATIONAL HIGHLIGHTS • ZOOstudio deployment expanded by existing major media client and adopted by second multinational entertainment industry client • Media services grew by 51% due to catalogue content work and regional launches of streaming platforms • Media localisation grew
Slide 9: Scaling Up ZOO's Operations
Final Results FY22 SCALING UP ZOO’S OPERATIONS Significant progress and capacity expansion positions ZOO for continued growth International Services Platforms Freelancers Gearing Cost-efficient Mastering service Continued Regional hubs Expansion of investments in broadens scope enhancement of suppor
Slide 10: Consolidated Statement of Comprehensive Income
Final Results FY22 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Revenues $000’s 2022 2021 % change • Localisation up 108% • Media services up 51% Revenue 70,403 39,525 78.1% • Software solutions flat Cost of sales (48,296) (25,882) (86.6%) Cost of sales Gross profit 22,107 13,643 62.0% • Direct co
Slide 11: Segmental Analysis
Final Results FY22 SEGMENTAL ANALYSIS $000’s Revenues 2022 2021 % change Revenues Localisation 42,186 20,261 108.2% • Localisation up due to resumption of new Media Services 26,425 17,466 51.3% productions Software Solutions 1,792 1,798 (0.3%) • Media services growth due to expansion of Total 70,403
Slide 12: Consolidated Statement of Financial Position
Final Results FY22 CONSOLIDATED STATEMENT OF FINANCIAL POSITION Non-current Assets $000’s 2022 2021 • PPE net value up $3.0 million to $5.4 million Assets 28,831 11,660 • ROU asset up $6.0 million to $8.0 million Trade and other receivables 29,639 10,241 • Investments of $3.9 million Cash 5,962 2,94
Slide 13: Market Update
Final Results FY22 MARKET UPDATE Page 13
Slide 14: The Future of Home Entertainment is Streaming
Final Results FY22 THE FUTURE OF HOME Streaming is the ‘final destination’ of home entertainment PHASE 1 ENTERTAINMENT IS STREAMING PHASE 2 US Consumer Spend on New vs Legacy Subscription TV/Video ($B) $150.0 $100.0 $50.0 $- 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Legacy Pay TV New Su
Slide 15: Growth in Content
Final Results FY22 GROWTH IN CONTENT Content Spending at Major Media and Tech Companies $B (excl. sports)2 • Spend on film and TV production in 2019A 2020A 2021E 2022E 2023E 2024E 2025E 2021 $220 billion 1 $30.0 • Subscription OTT services $25.0 increased investment in content by $20.0 20% in 2021,
Slide 16: Majority of Audience is International
Final Results FY22 MAJORITY OF • US SVOD penetration: 85%1 AUDIENCE IS • Global SVOD subscribers to grow by 43% by 2026 2 INTERNATIONAL • High growth markets: SEA (39% by 2026 ), India (137% by 2026 ) 2 3 • Drives demand for localisation 1. Entertainment on Demand, 2022 2. Digital TV Research, 2021
Slide 17: Content is Going Global
Final Results FY22 CONTENT IS GOING GLOBAL • At least half of European Netflix and Amazon Prime viewing time could be spent watching non-English language content by 2030 1 • Squid Game most popular Netflix show in over 90 countries 2 • Netflix has invested over $1 billion in Korean content alone 2 •
Slide 18: Media Localisation
Estimated addressable market for media localisation: Interim Services Results FY22 overview 2021 • Netflix 7m mins subs and 5m mins dubs in 2021 MEDIA • Estimated Netflix spend $500m 2 • Represents 2.9% of Netflix 2021 content spend of $17bn • Major SVOD companies spent $50bn (out of global total of
Slide 19: ZOO's Proposition
Final Results FY22 ZOO’S PROPOSITION Page 19
Slide 20: From Post to Platform
Final Final Results Results FY22 FY21 FROM POST TO PLATFORM ZOO’s proprietary cloud technology and end-to-end offering make it one of the few vendors trusted by the biggest names in entertainment to deliver localisation and media services at scale Localisation Subtitling Dubbing Media Services Page
Slide 21: Transforming the Content Localisation Supply Chain
Traditional industry Berlin Final Results FY22 studio model Paris TRANSFORMING THE Madrid CONTENT LOCALISATION SUPPLY CHAIN • Traditional approach to dubbing ZOO’s cloud centres on physical studios model • These are capacity-constrained • Slow and expensive to scale • Demand is now outstripping supp
Slide 22: ZOO's Disruptive Proposition
Final Results FY22 ZOO’S DISRUPTIVE PROPOSITION • Cloud production and management platforms • Enforced quality and security standards • Connects efficiently with freelancers, studios, translation partners, etc. • Delivers end-to-end solutions • Enables highly effective remote working • ZOO’s ERP tec
Slide 23: ZOO's Strategy
ZOO’S STRATEGY Five pillars differentiate ZOO in the market and provide competitive advantage Innovation Scalability Collaboration Customer Talent Create value- Operate an Work with like- Secure preferred Engage with adding software extensive minded, world- partner status with experienced and techno
Slide 24: Business Model
Final Results FY22 BUSINESS MODEL • Services charged predominantly based on minutes of runtime • Freelancers paid on same basis • Framework agreements with large customers • Rates are pre-agreed • Projects allocated based on Sales External COS Internal COS Contribution quality of service and capacit
Slide 25: Medium Term Target
Final Results FY22 MEDIUM TERM 100 TARGET 80 60 • $100 million milestone introduced in 2020 as medium- 40 term target • After two years progress is more 20 than one year ahead of plan 0 • Current share <5% of est. $1.5 Baseline Year 1 Year 2 Year 3 Year 4 Year 5 billion of major studio spend – signi
Slide 26: ZOO's Ambition
Final Results FY22 ZOO’S AMBITION To be the number one partner to the major streaming companies assisting their growth and globalisation • Built on technology • Scalable capacity through freelancers • Low-cost presence in key markets • Coverage and capability across all required languages • Capturin
Slide 27: Outlook
Final Results FY22 OUTLOOK • Q1 has been a record quarter – sequential growth over FY22Q4 and significantly ahead of prior year • Visibility through H1 indicates further significant progress towards our 2020 goal of delivering $100 million sales in the medium term • H1 expected to exceed FY22H2 • In
Slide 28: Investment Summary
Revenue $ million Invested in Significant $100 $90 front of INVESTMENT year-on-year growth $80 $70 demand SUMMARY $60 $50 Proprietary Cash $40 tech provides generative; $30 $20 scalability and Strategically aligned low net debt $10 with the world’s biggest $0 2016A 2020A 2021A Page 2022A differentia
Slide 29: Thank You
Services Final overview Results FY21 2021 THANK YOU Page 29
Slide 30: Appendix
Final Results FY22 APPENDIX Page 30
Slide 31: Consolidated Statement of Comprehensive Income
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Final Results FY22 2022 2021 $000 $000 Revenue 70,403 39,525 Cost of sales (48,296) (25,882) Gross Profit 22,107 13,643 Other operating income 204 188 Other operating expenses (19,165) (12,869) Operating profit 3,146 962 Analysed as: EBITDA before share
Slide 32: Consolidated Statement of Financial Position as at 31 March
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH Final Results FY22 2022 2021 $000 $000 ASSETS Non-current assets Property, plant and equipment 13,317 4,362 Intangible assets 9,514 6,812 Equity accounted investments 4,154 - Deferred income tax assets 1,846 486 28,831 11,660 Current assets
Slide 33: Consolidated Statement of Cash Flows
CONSOLIDATED STATEMENT OF CASH FLOWS Final Results FY22 2022 2021 $000 $000 Cash flows from operating activities Operating profit for the year 3,146 962 Depreciation 3,022 1,715 Amortisation and impairment 1,659 1,221 Share based payments 513 649 Changes in working capital: Increases in trade and ot
Slide 34: Enjoyment of Subtitled vs Dubbed Content, Q3 2020
Final Results FY22 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 Arabi
Slide 35: Major Competitors in Media Localisation
Final Results FY22 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; 2,600 employees; 2021 sales of $450m; Korean headquartered • Deluxe Ent
Slide 36: The Board
THE BOARD Final Results FY22 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 Kalif
Slide 37: Major Shareholders
MAJOR SHAREHOLDERS Final Results FY22 Shareholder* % of capital Stuart Green (CEO) 12.80 Herald Investment Management Ltd 12.78 Canaccord Genuity Wealth Management (Institutional) 8.06 Invesco Ltd 7.92 Hargreaves Lansdown private clients 5.38 Stonehage Fleming Investment Management Ltd 4.68 Canaccor
Slide 38: Environmental, Social and Governance
Final Results FY22 ENVIRONMENTAL, ZOO Digital is committed to SOCIAL AND building a responsible future-focused business GOVERNANCE • Cloud software gives customers an energy and infrastructure efficient approach • Significantly reduces the need for purpose-built studios • Reduces time and emissions
Slide 39: Three Delivery Pillars and the ESG Focus Areas
THREE DELIVERY PILLARS AND THE 16 ESG FOCUS AREAS Final Results FY22 THINK SMARTER MAKE IT EASIER BE BETTER We enrich the lives of our people and enhance We work to make it easier and more efficient for Disruption favours the brave. We are always their skills through access to industry-leading custo
Slide 40: Netflix Subscribers
Final Results FY22 NETFLIX SUBSCRIBERS Page 40
Slide 41: Percentage of Streaming Services' Content
Final Results FY22 PERCENTAGE OF STREAMING SERVICES’ CONTENT Page 41
Slide 42: Major US-Based Subscription Video Streaming Services
Final Results FY22 MAJOR US-BASED SUBSCRIPTION VIDEO STREAMING SERVICES Page 42
Slide 43: % of Population That Cannot Speak a Foreign Language
Final Results FY22 % OF POPULATION THAT CANNOT SPEAK A FOREIGN LANGUAGE Page 43
Slide 44: www.zoodigital.com
www.zoodigital.com