Zoo Digital Group Plc · LSE:ZOO
Zoo Digital — FY2024 Earnings Presentation
53 slides from Zoo Digital's earnings presentation, Aug 20, 2024
Slide 1: ZOO Digital Group Plc
ZOO DIGITAL GROUP PLC August 2024
Slide 2: Disclaimer
DISCLAIMER Final 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 and
Slide 3: Meet Our Presenters
Final Results FY24 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 t
Slide 4: For Global Streaming
Final Results FY24 FOR GLOBAL STREAMING Confidential – Do not forward Page 4
Slide 5: Well Placed to Grow
Final Results FY24 WELL PLACED TO GROW • FY24 overshadowed by customer strategic reviews and Hollywood strikes by writers and actors. • This caused a temporary hiatus lasting over a year, with recovery still in progress. • ZOO’s tech-enabled proposition positions the company well for a return to gro
Slide 6: State of Play
Final Results FY24 STATE OF PLAY • Trading in line with expectations; delivered a profitable Q1. • Cost base reconfigured to support return to profitability in FY25. • Expansion of India team and further automation (including AI) paves the way for margin enhancement. • Target customers should return
Slide 7: FY24 Results
Final Results FY24 FY24 RESULTS Page 7
Slide 8: Financial, Operational and Market Highlights
Final Results FY24 FINANCIAL OPERATIONAL • Revenue decreased by 55% to $40.6 million (FY23: • ZOO selected by major film and TV distributor as a $90.3 million) due to the industry-wide disruption. primary vendor for dubbing and subtitling; orders now • Operating loss $19.1 million (FY23: profit $8.1
Slide 9: Consolidated Statement of Comprehensive Income
Final Results FY24 CONSOLIDATED STATEMENT $000’s 2024 2023 % change OF COMPREHENSIVE INCOME Revenue Cost of sales 40,629 (35,172) 90,260 (56,327) (55.0)% (37.6)% Gross profit 5,457 33,933 (83.9)% Revenues Operating expenses Other operating income 256 8 3,100% • Localisation down 52%. • Fixed operati
Slide 10: Segmental Analysis
Final Results FY24 $000’s 2024 2023 % change Revenues SEGMENTAL ANALYSIS Localisation 27,245 56,578 (51.8%) Media Services 11,909 32,115 (62.9%) Revenues Software Solutions 1,475 1,567 (5.9%) • Localisation and media services impacted by Total 40,629 90,260 (55.0%) industry disruption which led to a
Slide 11: Consolidated Statement of Financial Position
Final Results FY24 CONSOLIDATED STATEMENT OF FINANCIAL POSITION $000’s 2024 2023 Assets 29,737 31,041 Non-current Assets • Intangible assets up 46% due to new international Trade and other receivables 11,485 16,532 investments and R&D capitalisation. Contract assets 2,569 4,836 • PPE down 24% due to
Slide 12: Market Update
Final Results FY24 MARKET UPDATE Page 12
Slide 13: Streaming Is More Popular Than Ever and Set to Grow Further
Final Results FY24 STREAMING IS MORE POPULAR THAN EVER AND SET TO GROW FURTHER Subscription and Advertising Video on Demand forecasted to grow strongly SVOD Total Global Revenue 2023-2031 ($ billion)1 AVOD Total Global Revenue 2017-2027 ($ billion)2 250 70 60 200 50 150 40 30 100 20 50 10 - 0 2023 2
Slide 14: Global Spend on Content Forecast to Return to Growth in 2024
Final Results FY24 GLOBAL SPEND ON CONTENT FORECAST TO RETURN TO GROWTH IN 2024 Hollywood spend on content is forecast to recover to former levels in 2025 Global Content Spend ($ billion)1 Total Hollywood Cash Spend ($ billion)2 300 160 140 250 120 200 100 150 80 60 100 40 50 20 0 0 2019 2020 2021 2
Slide 15: Content Is Increasingly Being Commissioned for a Global Audience
Final Results FY24 CONTENT IS INCREASINGLY BEING COMMISSIONED FOR A GLOBAL AUDIENCE Less than half of content commissioned by Netflix and Amazon is in English Netflix Content Original Language Mix 2024E (%)1 Amazon Content Original Language Mix 2021-2024 (%)2 English English Spanish Spanish Japanese
Slide 16: Demand for content rising, ZOO well positioned
Final Results FY24 • 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 k
Slide 17: AI: An Opportunity Not a Threat
Final Results FY24 AN OPPORTUNITY NOT A THREAT • 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 th
Slide 18: Strategic Progress
Final Results FY24 STRATEGIC PROGRESS Page 18
Slide 19: Five Pillars Differentiate ZOO
Final Results FY23 Final Results FY24 PROGRESS OF Five pillars differentiate ZOO in the market and provide competitive advantage Innovation Scalability Collaboration Customer Talent Create value-adding Operate an extensive Work with like- Secure preferred Engage with software technology. freelance n
Slide 20: Outlook
Final Results FY24 OUTLOOK Page 20
Slide 21: Outlook: Improved Trading in FY25 Q1
Final Results FY24 • Improved trading in FY25Q1 with sales up 35% over prior quarter. • Cost reductions implemented in FY24 led to an EBITDA profit for FY25Q1. • Major customers not yet provided full order schedules for Q3; however, expect further revenue growth and an EBITDA profit in H1 2025. • On
Slide 22: Thank You
Final FinalResults ResultsFY23 FY21 THANK YOU Page 22
Slide 23: Appendix
Final Results FY24 APPENDIX APPENDIX Page 23
Slide 24: ZOO's Proposition
Final Results FY24 ZOO’S PROPOSITION Page 24
Slide 25: On the Waterfront quote
Final 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 25
Slide 26: Needs of Content Owners
FinalResults Final ResultsFY23 FY24 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-production P
Slide 27: Competitive Landscape
Final 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 du
Slide 28: Secure. Scalable. Global capacity.
Final Results FY24 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 i
Slide 29: End-to-End Services
Final Results FY24 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 30: Our customers are the world's biggest content creators and distributors
Final Results FY24 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 30
Slide 31: ZOO Technology
Final Results FY24 ZOO TECHNOLOGY Confidential – Do not forward Page 31
Slide 32: Workflow
Final Results FY24 WORKFLOW Client Systems Asset Management Order management Finance etc. Page 32
Slide 33: Workflow
Final Results FY24 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 availa
Slide 34: ZOO's localisation ecosystem platform
Final Results FY24 • 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 and
Slide 35: Customer quality metrics among the highest in the industry
Final Results FY24 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% FY 21 FY 22 FY 23 FY 24 KPI Min required • ZOO’s performance metrics are amongst the highest in the industry. • The ‘reta
Slide 36: ZOO's Global Footprint
Final Results FY24 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 global
Slide 37: 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 38: Growing a connected global network through acquisition and partnerships
Final Results FY24 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
Slide 39: Services charged predominantly based on minutes of runtime
Services charged Final 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 C
Slide 40: ZOO has good ESG credentials
Final Results FY24 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) for
Slide 41: Enjoyment of Subtitled vs Dubbed Content
Final Results FY24 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% Chi
Slide 42: Market
Final Results FY24 MARKET Page 42
Slide 43: Streaming Is More Popular Than Ever: SVOD
Final Results FY24 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 20
Slide 44: Streaming Is More Popular Than Ever: AVOD
Final Results FY24 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 20232 70 MENA 60 Latin 5% 50 America 10% North 40 America 35% 30 20 Asia Pacific 1
Slide 45: Consumers Move from Cable and Broadcast to Streaming
Final Results FY24 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 20231 45 40 35 Other 30 11% 25 20 Streaming Broadcast 15 39% 20% 10
Slide 46: Content Commissioned for a Global Audience
Final Results FY24 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 46
Slide 47: FY24 Financial Statements
Final Results FY24 FY24 FINANCIAL STATEMENTS Page 47
Slide 48: Consolidated Statement of Comprehensive Income
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Final Results FY24 2024 2023 $000 $000 Revenue 40,629 90,260 Cost of sales (35,172) (56,327) Gross Profit 5,457 33,933 Other income 256 8 Administrative expenses (24,831) (25,860) Operating (loss)/profit (19,118) 8,081 Analysed as: EBITDA before share b
Slide 49: Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH Final Results FY24 2024 2023 $000 $000 ASSETS Non-current assets Intangible assets 15,115 10,341 Property, plant and equipment 11,189 14,736 Equity accounted investments 3,097 4,300 Deferred income tax assets 336 1,664 29,737 31,041 Current
Slide 50: Consolidated Statement of Cash Flows
CONSOLIDATED STATEMENT OF CASH FLOWS2024 2023 Final Results FY24 $000 $000 Cash flows from operating activities Operating (loss)/profit for the year (19,118) 8,081 Other income - 8 Depreciation and impairment 4,999 3,973 Amortisation and impairment 2,271 1,762 Share based payments (1,729) 1,650 Disp
Slide 51: The Board
Final Results FY24 THE BOARD Page 51
Slide 52: 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 53: www.zoodigital.com
www.zoodigital.com