Zoo Digital Group Plc · LSE:ZOO
Zoo Digital — H1 FY22 Earnings Presentation
40 slides from Zoo Digital's earnings presentation, Nov 10, 2021
Slide 1: ZOO Digital Group Plc Interim Results FY22
ZOO DIGITAL GROUP PLC INTERIM RESULTS FY22 10 November 2021
Slide 2: Disclaimer
DISCLAIMER Interim Results FY22 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 Exchan
Slide 3: ZOO's services pivotal to global growth ambitions of media companies
Interim ResultsFY21 Final Results FY22 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 3
Slide 4: Executive Summary
Interim Results FY22 EXECUTIVE SUMMARY Page 4
Slide 5: ZOO at a Glance
365 global team Interim FinalResults results FY22 FY21 24-hour coverage ZOO AT A GLANCE 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 spe
Slide 6: 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 7: H1 FY22 Results
Interim Results FY22 H1 FY22 RESULTS Page 7
Slide 8: 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 9: 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 10: 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 11: 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 12: 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 13: Sales Bridge to $100 Million
Interim Results FY22 SALES BRIDGE TO $100 MILLION 120.0 10.5 100.0 100.0 15.0 Medium term target 80.0 4.5 20.0 $100 million breakdown: 60.0 50.0 • Media services 35% 40.0 • Subtitling 30% • Dubbing 35% 20.0 Market share of addressable market: 0.0 Client A Dubs (new) $100m • Current share 3% of est.
Slide 14: ZOO's Market
ZOO’S MARKET Interim Results FY22 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 Services
Slide 15: OTT Consumer Adoption
Interim Results FY22 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 entertainment
Slide 16: 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. Post period, ZOO is making in-roads into these markets. Source: eMarket
Slide 17: Production
Interim Results FY22 PRODUCTION NEW PRODUCTIONS RESUMED • In August 2021 projects in Los Angeles returned to pre-pandemic levels1 SPEND ON ENTERTAINMENT CONTENT AT RECORD LEVELS • Spend increased 16.4% in 2020 to $220 billion, forecast $250 billion in 20212 INTERNATIONAL APPEAL OF NON-ENGLISH CONTEN
Slide 18: Industry Challenges
Interim Final Results Results FY22 FY21 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 them to address t
Slide 19: Cloud-Based Media Localisation Technology
Interim Results FY22 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 achie
Slide 20: End-to-End Services
Interim Results FY22 END-TO-END 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 Localisation • Sc
Slide 21: Our Customers
Interim Results FY22 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 21
Slide 22: Building a Responsible, Future-Focused Business
Final Results FY21 BUILDING A RESPONSIBLE, FUTURE-FOCUSED BUSINESS ZOO is committed to building a responsible, future- focused business, 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 Aca
Slide 23: Growth – Five Strategic Pillars
Interim Results FY22 GROWTH – FIVE STRATEGIC PILLARS INNOVATION Create value-adding software technology SCALABILITY Operate a freelance network COLLABORATION Work with like-minded, world-class experts in media localisation, education and research CUSTOMER Secure preferred partner status with leading
Slide 24: Innovation
Interim Results FY22 INNOVATION Create value-adding software technology – building out financial management features – new editing functionality – now integrated with ZOOsubs, ZOOdubs and ZOOscripts – new secure cloud-based media asset management platform Page 24
Slide 25: Scalability
Interim Results FY22 SCALABILITY Operate a freelance network • 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 streaming services Page 25
Slide 26: Collaboration
Education Partners 365+ global team Services overview 2021 COLLABORATION 24-hour coverage LA, London, Dubai & Turkey and Work with like-minded, world- class experts in localisation, education and research Used in teaching of media localisation • Initiated a further research collaboration in speech R
Slide 27: Customer
Interim Results FY22 CUSTOMER Secure preferred partner status with leading buyers • Currently, preferred vendor for six major media companies • A further large media company has adopted ZOOstudio • Secured a major client for Asset Health Check service Page 27
Slide 28: Talent
Interim Services Results FY22 overview 2021 TALENT Engage with experienced and effective professionals • Established a new division for providing mastering services • Recruited initial team of specialists • Led by Melissa McAllister, formerly of Fox Filmed Entertainment as Director of TV Mastering &
Slide 29: Outlook
Interim Results FY22 OUTLOOK • Tailwinds caused by explosion of new content and accelerated migration of catalogue creates strong drivers of growth • Strong order book across all service lines • Good visibility for H2 and pipeline of work from established customers • First customer relationship for
Slide 30: Thank You
Services Final overview Results FY21 2021 THANK YOU Page 30
Slide 31: Appendix
Interim Results FY22 APPENDIX Page 31
Slide 32: 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 33: 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 34: 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 35: 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 36: Enjoyment of Subtitled vs Dubbed Content, Q3 2020
Interim 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 Ara
Slide 37: Major Competitors in Media Localisation
Interim 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; 2,500 employees; pre-COVID sales of IYUNO $185m and SDI $191m; Korean
Slide 38: The Board
THE BOARD Interim Results FY22 Gillian Wilmot Since July 2019 Extensive board level leadership in private and public environments with industry Chairman experience across B2B, technology, advertising and communications. Strengths in value creation, operational insight and corporate governance. Micke
Slide 39: Major Shareholders
MAJOR SHAREHOLDERS Interim Results FY22 Shareholder* % of capital Stuart Green (CEO) 14.62 Canaccord Genuity Wealth Management (Institutional) 12.89 Herald Investment Management Ltd 12.02 Invesco Ltd 8.13 Hargreaves Lansdown private clients 6.1 Stonehage Fleming Investment Management Ltd 4.38 Sarasi
Slide 40: www.zoodigital.com
www.zoodigital.com