Zoo Digital Group Plc · LSE:ZOO
Zoo Digital — H1 FY2024 Earnings Presentation
36 slides from Zoo Digital's earnings presentation, Nov 30, 2023
Slide 1: Zoo Digital Group Plc Interim Results FY24
ZOO DIGITAL GROUP PLC INTERIM RESULTS FY24 30 November 2023
Slide 2: Disclaimer
DISCLAIMER Interim Results FY24 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 FY24 MEET OUR PRESENTERS Stuart Green, CEO Phillip Blundell, CFO • Co-founder 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 the TMT indu
Slide 4: Well Placed to Grow Market Share
Interim Results FY24 WELL PLACED TO GROW MARKET SHARE • FY24 overshadowed by customer strategic reviews and Hollywood strikes by writers and actors • This has caused a temporary hiatus lasting nine months, with recovery now underway from November • ZOO’s tech-enabled proposition positions the compan
Slide 5: First simultaneous strike of US writers' and actors' unions in 60 years
Interim Results FY24 First simultaneous strike of US writers’ and actors’ unions in 60 years • Dispute over pay and use of AI • Brought film and TV production projects to a halt for six months • ZOO’s pipeline of work significantly affected Recovery underway • Writers’ strike ended in September and
Slide 6: H1 FY24 Results
Interim Results FY24 H1 FY24 RESULTS Page 6
Slide 7: Financial Highlights – Disruption During a Period of Industry Transition
Interim Results FY24 FINANCIAL HIGHLIGHTS – DISRUPTION DURING A PERIOD OF INDUSTRY TRANSITION • Revenues fell to $21.4 million (H1 FY23: • Loss per share of 10.6 cents (H1 FY23: EPS of $51.4 million) due to production hiatus caused by 3.80 cents) customer strategic reviews and strikes • Cash at peri
Slide 8: Highlights
Interim Results FY24 HIGHLIGHTS • Segment revenues fell due to a low pipeline of orders • Continuing development and integration of ZOOstudio with during the strikes – localisation down 58%, media services customer operations down 61% • Leading standard of customer satisfaction maintained – • Strate
Slide 9: Reshaping ZOO for Profitable Growth
Interim Results FY24 RESHAPING ZOO FOR PROFITABLE GROWTH Monthly Financials Operating Activities • Fixed costs reduced by $0.8 million from 1 December • EBITDA break-even reduced to $4.4 million of revenues • Cash break-even reduced to $4.8 million Investing Activities • R&D reduced by 15% to $0.3 m
Slide 10: Market Update
Interim Results FY24 MARKET UPDATE Page 10
Slide 11: The ending of strikes will pave the way for industry recovery
Interim Results FY24 The ending of strikes will pave the way for industry recovery • First joint industrial action by writers and actors in more than 60 years • Brought productions to a halt for six months • New agreements now reached means projects can resume, mostly in January • Expect ZOO order p
Slide 12: Operational Priorities for H2
Interim Results FY24 OPERATIONAL PRIORITIES FOR H2 Focus on break-even in Q4 • Capture market share as productions resume • Support major clients with international roll-out • Promote wider adoption of ZOOstudio • Expand capacity in Chennai • Establish further international hubs Page 12
Slide 13: Outlook
Interim Results FY24 OUTLOOK • Productions in Hollywood, UK and elsewhere are now resuming • Expect progressively stronger sequential performance in each of Q3 and Q4 • Expect significant expansion of sales from Q1 FY25 • ZOO expects to remain a valued partner to major clients and a beneficiary as p
Slide 14: Thank You
Services Final overview Results FY21 2021 THANK YOU Page 14
Slide 15: Appendix
Interim Results FY24 APPENDIX Page 15
Slide 16: Consolidated Statement of Comprehensive Income
Interim Results FY24 CONSOLIDATED STATEMENT $000’s Revenue H1 2024 21,408 H1 2023 51,422 % change (58%) OF COMPREHENSIVE INCOME Cost of sales (19,329) (34,941) (45%) Gross profit 2,079 16,481 (87%) Revenues Operating expenses Operating expenses (12,988) (12,671) 3% • Localisation down 58% • Fixed op
Slide 17: Segmental Analysis
Interim Results FY24 SEGMENTAL ANALYSIS $000’s Revenues H1 2024 H1 2023 % change Localisation 13,471 32,325 (58%) Revenues Media Services 7,065 18,241 (61%) • Localisation – impact of strikes and Disney Software Solutions 872 856 3% reorganisation Total 21,408 51,422 (58%) • Media Services – as abov
Slide 18: Consolidated Statement of Financial Position
Interim Results FY24 CONSOLIDATED STATEMENT OF FINANCIAL POSITION $000’s H1 2024 H1 2023 Non-current Assets Assets 33.952 28,359 • PPE up 9% due to upgrade to Indian and Korea facilities Trade and other receivables 12,573 18,692 • Intangible assets up 38% due to acquisition goodwill and higher R&D c
Slide 19: ZOO's Proposition
Interim Results FY24 ZOO’S PROPOSITION Page 19
Slide 20: On the Waterfront quote
Interim Results FY24 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 20
Slide 21: Needs of Media Localisation and Media Services
Interim Results FY24 Final Results FY23 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 22: Competitive Landscape
Interim Results FY24 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 23: Our customers are the world's biggest content creators
Interim Results FY24 Our customers are the world’s biggest content creators that distribute TV shows and movies to vast multilingual audiences via global streaming services. Page 23
Slide 24: Interconnected ecosystem of production and management software platforms
Interim Results FY24 • Interconnected ecosystem of production and management software platforms • Focus on efficiency, quality and security • A tech-enabled dubbing solution removes the need to own and operate facilities in every country Page 24
Slide 25: ZOO's Customer Quality Metrics Are Among the Highest in the Industry
Interim Results FY24 ZOO’S CUSTOMER QUALITY METRICS ARE AMONG THE HIGHEST IN THE INDUSTRY Client Quality Scorecard by Month FY23 Client Quality Scorecard by Year FY21 to FY23 100.00% 100.00% 99.00% 99.00% 98.00% 98.00% 97.00% 97.00% 96.00% 96.00% 95.00% 95.00% 94.00% 94.00% 93.00% 92.00% 93.00% 22 2
Slide 26: Global Growth Initiative
Interim Results FY24 GLOBAL GROWTH INITIATIVE • Establishing regional hubs in strategic locations • Investing in high growth markets Growing a connected global network through • Flexible, multipurpose facilities acquisition and strategic partnerships • Supporting all service lines • All operations i
Slide 27: Growing a connected global network through acquisition and strategic partnerships
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 • Southeast Asia • Supporting all s
Slide 28: Services charged predominantly based on minutes of runtime
Services charged Interim Results FY24 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 29: Environmental, Social and Governance
Interim Results FY24 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 emission
Slide 30: FY24 H1 Financial Statements (Unaudited)
Interim Results FY24 FY24 H1 FINANCIAL STATEMENTS (UNAUDITED) Page 30
Slide 31: Consolidated Statement of Comprehensive Income
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Interim Results FY24 Unaudited Unaudited Audited 6 months to 6 months to Year ended 30 Sep 2023 30 Sep 2022 31 Mar 2023 $000 $000 $000 Revenue 21,408 51,422 90,260 Cost of sales (19,329) (34,941) (56,327) Gross Profit 2,079 16,481 33,933 Other operating
Slide 32: Consolidated Statement of Financial Position as at 30 September
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER Interim Results FY24 Unaudited as at 30 Sep 2023 Unaudited as at 30 Sep 2022 Audited as at 31 Mar 2023 $000 $000 $000 ASSETS Non-current assets Property, plant and equipment 14,092 12,952 14,736 Intangible assets 13,443 9,746 10,341 Inv
Slide 33: Consolidated Statement of Cash Flows
CONSOLIDATED STATEMENT OF CASH FLOWS Interim Results FY24 30 Sep 2023 30 Sep 2022 31 Mar 2023 Unaudited 6 months to Unaudited 6 months to Audited Year ended 30 Sep 2023 30 Sep 2022 31 Mar 2023 $000 $000 $000 Cash flows from operating activities Operating (loss)/profit for the period (10,909) 3,810 8
Slide 34: The Board
THE BOARD Interim Results FY24 Gillian Wilmot, CBE Since 2019 Extensive board level leadership in private and public environments with industry experience Chairman across B2B, technology, advertising and communications. Strengths in value creation, operational insight and corporate governance. Micke
Slide 35: Major Shareholders
MAJOR SHAREHOLDERS Interim Results FY24 Shareholder* % of capital Canaccord Genuity Group Inc. 12.44 Stuart Green (CEO) 11.84 Herald Investment Management Ltd 9.90 Invesco Ltd 5.18 Janus Henderson Investors 4.92 Stonehage Fleming Investment Management Ltd 4.91 * Based on an independent analysis of Z
Slide 36: www.zoodigital.com
www.zoodigital.com