Me Group International Plc · LSE:MEGP
Me Group International — Photo-Me International — FY2018 Earnings Presentation
29 slides from Me Group International's earnings presentation, Jul 10, 2018
Slide 1: Results for the Year Ended 30 April 2018
R E S U LT S F O R T H E YEAR ENDED 30 APRIL 2018 10 July 2018
Slide 2: Overview
SER GE C R A SNIA N SKI Chief Executive Officer & Deputy Chairman OVERVIEW
Slide 3: Overview
Overview • Good financial performance • Continued progress on execution of the Group’s growth strategy • Revenue growth in all of Photo-Me’s territories, except Japan • Laundry business revenue growth of almost 70% year-on-year, contributing 16% of total Group revenue • Strategy in place to return J
Slide 4: Agenda
Agenda • OUR BUSINESS MODEL • FINANCIAL HIGHLIGHTS • OPERATIONAL HIGHLIGHTS • FINANCIAL OVERVIEW • BUSINESS REVIEW • GROWTH STRATEGY AND INNOVATION 4
Slide 5: Our business model
Our business model • 46,710 instant-service units focused on three principal areas • Investment in new technologies and complementary products and services • Leverage scale of operations to rapidly deploy new products at low incremental cost, providing rapid return on investment Our key strengths 5
Slide 6: Financial highlights
Financial highlights • Another year of good progress • Expansion of the laundry business remains the primary growth driver (organic and by acquisition) • Further deployment of identification technology in key markets Reported revenue Profit before tax Reported EBITDA +7.1% to £229.8m +4.4% to £50.2m
Slide 7: Operational highlights
Operational highlights • Continued profit growth and strong cashflow • Rollout of secure photo ID upload technology for passport applications launched EXPANDING IDENTIFICATION with HMPO in the UK PARTNERSHIPS WITH • Continued rollout of secure photo ID upload technology in France, Ireland, GOVERNMEN
Slide 8: Financial Review
STEPH A N E GIB ON Chief Financial Officer FINANC IA L R EVIEW
Slide 9: Key financials
Key financials REPORTED REVENUE £m 250 229.8 200 214.7 195.6 • 186.6 184.0 Reported revenue +7.1% 177.2 150 100 • At constant currency1 +5.9% to £216.9m 50 0 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 £m EBITDA 80 (excluding associates) 35% 70 30% 71.0 • 69.0 60 EBITDA +2.8% 25% 56.7 50 20% • 5
Slide 10: Key financials
Key financials £m REPORTED PROFIT BEFORE TAX 60 25% 50 20% • Reported profit before tax +4.4% 50.2 48.0 40 • Underlying profit before tax2 +0.3% to £46.8m, at 15% 40.1 30 35.0 constant currency1 was £47.5m, down 1.6% 30.1 10% • Profit after tax +14.7% to £40.3m, due to reduction in 24.3 20 effective
Slide 11: EPS and dividends
EPS and dividends DILUTED EPS 12.00 10.00 • Diluted earning per share +14.2% 10.60 Pence per share 9.27 8.00 • Total ordinary dividend per share +20.1% 7.72 6.00 6.70 • £26.2m cash returned to shareholders by way 5.70 of dividends in the year 4.76 4.00 3.95 3.74 2.00 • Total dividend to be maintaine
Slide 12: Results by geographic area
Results by geographic area CONTINENTAL EUROPE UK & IRELAND ASIA Austria, Belgium, France, Germany, Netherlands, United Kingdom and Ireland COUNTRIES China, Japan, Singapore, South Korea, Vietnam Poland, Portugal, Spain and Switzerland (Including Corporate) VENDING UNITS 24,550 units 12,055 units 10,
Slide 13: Net cash
Net cash FY 2018 investments comprise: £m Laundries £15.2m Kiosks £3.4m 140.0 Photobooth £13.4m Others £3.5m 61.3 120.0 (0.3) 100.0 (35.5) (3) 80.0 (1.4) (0.2) 39.2 60.0 (25.1) 26.7 40.0 (8.3) 20.0 - Opening cash at FX Operating CF Interest paid Investment in Capitalised R&D Acquisitions Dividends T
Slide 14: Revenue and profit bridges
Revenue and profit bridges £m 240 9.2 229.8 230 Revenue 2.3 5.8 (5) 2.8 220 214.7 210 200 190 180 FY2017 FX Acquisitions Laundry Price My Number SG&A Finance Other NIM Other FY2018 56 54 3.5 Profit before tax 3.7 52 0.8 (1.1) 50.2 50 0.9 (0.9) 48 (0.7) 48 (2.9) (1.1) 46 44 42 40 38 14
Slide 15: Business Review
ERIC MERGUI Chief Operating Officer BUSINESS REVIEW
Slide 16: Vending units in operation
Vending units in operation CONTINENTAL EUROPE UK & IRELAND ASIA 13,500 25,000 11,000 Number of vending units in operation 10,908 24,500 13,000 10,800 13,287 24,550 24,000 10,600 12,500 23,500 10,400 23,751 12 500 23,000 12,000 10,200 12,055 10,200 10,105 22,800 22,500 10,000 11,500 22,000 9,800 11,0
Slide 17: Identification - overview
Identification - overview PHOTOBOOTH ESTATE • Established network of 29,015 photobooths, representing 62% of total vending estate • Presence in 18 countries • Integrated software to ensure conformity to ISO and ICAO photo ID regulations • Dedicated support maintenance and remote telemetry • Market-l
Slide 18: Identification – strategic progress
Identification – strategic progress 30 April 2018 30 April 2017 Change Number of units in operation 29,015 28,541 +1.7% Percentage of total Group vending estate (number of units) 62.0% 59.0% +5.1% Revenue £149.3m £152.2m -1.9% Capex £13.4m £12.0m +11.6% • Continued expansion of estate and further de
Slide 19: Identification – execution of growth strategy
Identification – execution of growth strategy ENCRYPTED DIGITAL PHOTO ID UPLOAD TECHNOLOGY FOR UK PASSPORT RENEWALS • Positive conclusion of discussions with HMPO in late 2017 • Deployment of e-passport technology in the UK in mid-December 2017 • 2,200 photobooths upgraded as at 30 April 2018 • 4,00
Slide 20: Laundry - overview
Laundry - overview • Launched in 2012, our laundry business operates in three key areas REVOLUTION • Outdoor self-service laundry units • 24-hour access to large capacity, rapid laundry services • Located on easy access, high-footfall sites such as supermarket car parks or petrol forecourts LAUNDERE
Slide 21: Laundry – strategic progress
Laundry – strategic progress 30 April 2018 30 April 2017 Change Total laundry units deployed (owned, sold & acquisitions) 4,449 3,251 +36.9% Total revenue from laundry operations (owned, sold & acquisitions) £36.7m £21.7m +69.1% Number of Revolution units in operation 2,313 1,750 +32.2% Revolution s
Slide 22: Laundry: strategy driving significant shift in revenue mix
Laundry: strategy driving significant shift in revenue mix PORTUGAL • First Revolution laundry machine installed in May 2014 Number of Revolutions Laundry revenue (£m) • Total of 188 units deployed as at 30 April 200 1.6 2018 (2017: 135), up 39% 180 1.4 160 • Laundry revenue was £1.4m as at 30 April
Slide 23: Kiosks - overview
Kiosks - overview UNATTENDED KIOSK ESTATE • More than 5,400 digital printing kiosks in operation • Key markets are France, UK and Switzerland • Wide range of competitively priced print formats and personalised products • Latest generation - Speedlab cube and Speedlab bio units - fully integrated wit
Slide 24: Kiosks – strategic update
Kiosks – strategic update 30 April 2018 30 April 2017 Change Number of units in operation 5,416 5,872 (7.8)% Percentage of total Group vending estate (number of units) 11.6% 12.2% (4.9)% Revenue £16.5m £13.3m 24.1% Capex £3.4m £6.9m (50.7)% • Kiosks revenue grew by 24.1% year-on-year • Photo-Me Reta
Slide 25: Growth Strategy and Innovation
SERGE CRASNIANSKI, CEO G R O W T H S T R AT E G Y A N D I N N O VAT I O N
Slide 26: Growth strategy (2017-2020)
Growth strategy (2017-2020) • Continued diversification of operations focused on three key business areas: • Target expansion into • Deploy 6,000 owned, sold • Increase presence on high-footfall locations and acquired laundry high-footfall sites units by 2020 • Penetrate new territories • Through mu
Slide 27: Innovation - overview
Innovation - overview RESEARCH & DEVELOPMENT PLATFORM • Continual investment in innovation is at the core of the business • Four R&D centres globally; France, China, Vietnam, Japan • 60 highly experienced engineers specialised in software development (3D, security standards, design and unit upgrades
Slide 28: Innovation – strategic update
Innovation – strategic update AWARD WINNING NEW PRODUCT DEVELOPMENT • Banking booth technology won the 2017 Sesames Award at TRUSTECH for Best eTransactions Solution • 3D Enrolment Kiosk product was a finalist BANKING BOOTH • Front-end retail banking services via established photobooth network, supp
Slide 29: Conclusion
Conclusion • Good financial performance • Continued progress on execution of the Group’s growth strategy • Revenue growth in all of Photo-Me’s territories, except Japan • Laundry business revenue growth of almost 70% year-on-year, contributing 16% of total Group revenue • Strategy in place to return
Photo-Me International — FY2018 Earnings Presentation on 6ix