Zoo Digital Group Plc · LSE:ZOO
Zoo Digital — FY2021 Earnings Presentation
43 slides from Zoo Digital's earnings presentation, July 2021
Slide 1: ZOO Digital Group Plc Final Results FY21
ZOO DIGITAL GROUP PLC FINAL RESULTS FY21 July 2021
Slide 2: Disclaimer
DISCLAIMER Final Results FY21 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 Exchange
Slide 3: In a year when the world stayed at home and watched more TV
Final Results FY21 In a year when the world stayed at home and watched more TV, ZOO worked from home to deliver more content, to more audiences than ever before Page 3
Slide 4: Executive Summary
Final Results FY21 EXECUTIVE SUMMARY Page 4
Slide 5: ZOO at a Glance
309 global team Final Final Results FY21 results FY21 24-hour coverage ZOO AT A GLANCE from LA, London & Dubai Distributed workforce ZOO Digital is a leading provider of in 59 countries cloud-based localisation and media services to the global entertainment industry 9,207 freelance language speciali
Slide 6: Investment Summary
Large, growing Final Results FY21 Significant year- Continued R&D global market on-year growth investment $1.3 billion est. INVESTMENT 33% in FY21 $1.6 million in FY21 addressable SUMMARY Market-leading position Fully supported remote solutions Distributed global supply chain Network of 9,000+ Strat
Slide 7: The Market
THE MARKET Final Results FY21 Total market size for ZOO’s services est. over $3B1, made up of: Aerospace & Gaming, $0.7B Defense, $1.2B • Media localisation market Finance, $1.4B Public Sector, • Worth US$2.3B2 $5.6B • Fifth largest segment in the language industry2 Life Sciences, • Split approx. 70
Slide 8: Industry Challenges
Final Results 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 their current challeng
Slide 9: Market Development
Final Results FY21 MARKET DEVELOPMENT • Halted film/TV production led to lower demand for localisation and media services • Market trends provide ZOO with opportunity to seize market share • PayTV, a key part of entertainment commercialisation, in decline • Streaming video now central to the strateg
Slide 10: Cloud-Based Media Localisation Technology
Final Results FY21 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 achieve
Slide 11: A secure platform to manage localisation and media service operations
Final Results FY21 A secure platform that provides a centralised system to manage localisation and media service operations. Adopted by a major streaming service for managing all OTT production operations. Page 11
Slide 12: Distributed orchestration of dubbing tasks
Final Results FY21 Enables the entire creative and technical tasks associated with dubbing to be orchestrated and performed in a distributed fashion • Virtualises workflow • Allows talent and dubbing directors to work from different locations • Eliminates space and capacity constraints of traditiona
Slide 13: End-to-End Services
Final Results FY21 END-TO-END SERVICES Trusted by the biggest names in entertainment to deliver localisation and media services at scale • Audio Description • Metadata Localisation • Media Services • Artwork Localisation • Scripting • Compliance Page 13
Slide 14: Our Customers
Final Results FY21 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 14
Slide 15: 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 Bui
Slide 16: Growth – Five Strategic Pillars
Final Results FY21 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 b
Slide 17: Innovation
Final Results FY21 INNOVATION Create value-adding software technology – enhanced through wide range of new features – better support for hybrid projects – new platform to centralise secure streaming delivery of content – new platform for electronic processing of legal documentation Page 17
Slide 18: Scalability
Final Results FY21 SCALABILITY Operate a freelance network • Talent pool grown to 9,207 individuals • Focus on greater number of languages • Growing dubbing capacity ahead of greater demand Page 18
Slide 19: Collaboration
Education Partners 300+ global team Services overview 2021 COLLABORATION 24-hour coverage from LA, London & Dubai Work with like-minded, world-class experts and in localisation, education and research • Expanded the number of partner studios Used in teaching of and vendors media localisation • Stren
Slide 20: Customer
Final Results FY21 CUSTOMER Secure preferred partner status with leading buyers • Currently, preferred vendor for six major media companies • ZOOstudio used by a major streaming service • Selected as vendor for a leading AVOD service • Engaged by multiple licensors under the Netflix Preferred Fulfil
Slide 21: Talent
Final Services Results 2021 overview FY21 TALENT Engage with experienced and effective professionals Significant appointments: • Teresa Alonso, Territory Manager for Spain and Portugal • Dave Concors, Global Head of Sound • Mariusz Jaworowski, Creative Director for CEE • Andreas Kaj, Territory Manag
Slide 22: FY21 Results
Final Results FY21 FY21 RESULTS Page 22
Slide 23: Financial Highlights – Progress Towards $100M Sales
Final Results FY21 FINANCIAL HIGHLIGHTS – PROGRESS TOWARDS $100M SALES • Revenue grew by 33% to $39.5 million (FY20: $29.8 million) • Adjusted EBITDA* more than doubled to $4.5 million (FY20: $2.1 million) – EBITDA* margin increased to 11.5% (FY20: 7.0%) • Operating profit of $1.0 million (FY20: los
Slide 24: Operational Highlights
Final Results FY21 OPERATIONAL HIGHLIGHTS • Cloud software allowed ZOO to continue providing an efficient, secure and uninterrupted service to customers throughout the global pandemic • Increased workflow from preparing back catalogue titles led to significant increase in demand for media services •
Slide 25: Key Performance Indicators
Final Results FY21 KEY PERFORMANCE INDICATORS Financial KPIs • Revenue up 33% to $39.5 million (FY20: $29.8 million) • EBITDA margin1 improved by 4.3 points to 11.5% (FY20: 7.2%) • Opex as a % of revenue improved by 3 points to 33% (FY20: 36%) Operational KPIs • Number of freelancers2 up 28% to 9,20
Slide 26: Consolidated Statement of Comprehensive Income
Final Results FY21 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Revenues $000’s 2021 2020 % change • Media Services up 136% • Localisation down 2% Revenue 39,525 29,793 32.7% • Licences up 10% Cost of sales (25,882) (19,705) (31.3%) Cost of sales Gross profit 13,643 10,088 35.2% • Direct cost of s
Slide 27: Comparative Loss/Profit Before Tax
Final Results FY21 COMPARATIVE LOSS/PROFIT BEFORE TAX From operating profit to PBT $’000 2021 2020 Medium term target 2000 • Revenue growth of 33% 1000 • Gross margin improvement of 1 percentage point to 35% 0 Op erating Ex chang e loss Finance Cost FV movement PBT • Operating profit of $1m -1000 pr
Slide 28: Segmental Analysis
Final Results FY21 SEGMENTAL ANALYSIS $000’s Revenues 2021 2020 % change Revenues Localisation 20,261 20,751 (2.4%) • Localisation affected by lack of new Media Services 17,466 7,411 135.7% productions Software Solutions 1.798 1.631 10.2% • Media Services benefiting from new streaming platform terri
Slide 29: Consolidated Statement of Financial Position
Final Results FY21 CONSOLIDATED STATEMENT OF FINANCIAL POSITION • Non current Assets up 8% $000’s 2021 2020 • Trade receivables up 10% Assets 11,660 10,811 • Cash up 142% Trade and other receivables 10,241 9,323 Cash 2,949 1,218 • Current liabilities up 51% Total Assets 24,850 21,352 • Trade payable
Slide 30: Sales Bridge to $100 Million
Final Results FY21 SALES BRIDGE TO 120.0 $100 MILLION 100.0 20.0 7.5 100.0 Medium term target 80.0 9.5 $100 million breakdown: 23.5 60.0 • Media services 25% 40.0 39.5 • Subtitling 30% • Dubbing 45% 20.0 Market share of addressable market: 0.0 • Current share 3% of est. $1.3 billion of Client A Dubs
Slide 31: Well Funded for Future Growth
Final Results FY21 WELL FUNDED FOR FUTURE GROWTH • Equity fund raise of £7.4 million ($10.3 million) in March 2021 to provide growth capital • Use of proceeds: o Grow R&D team including longer range research function o Establish regional hubs for media services (India, Southeast Asia) o Expand inter
Slide 32: Outlook
Final Results FY21 OUTLOOK • Q1 trading has been strong and ahead of prior year • Visibility for H1 indicates significant growth in the first half • New productions beginning to complete • Catalogue-related projects are continuing o Titles adapted for OTT for the first time o Streaming platform laun
Slide 33: Thank You
Services Final overview Results FY21 2021 THANK YOU Page 33
Slide 34: Appendix
Final Results FY21 APPENDIX Page 34
Slide 35: Consolidated Statement of Comprehensive Income
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Final Results FY21 2021 2020 $000 $000 Revenue 39,525 29,793 Cost of sales (25,882) (19,705) Gross Profit 13,643 10,088 Other operating income 188 252 Other operating expenses (12,869) (10,896) Operating profit/(loss) 962 (556) Analysed as: EBITDA befor
Slide 36: Consolidated Statement of Financial Position as at 31 March
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH Final Results FY21 2021 2020 $000 $000 ASSETS Non-current assets Property, plant and equipment 4,362 3,633 Intangible assets 6,812 6,692 Deferred income tax assets 486 486 11,660 10,811 Current assets Trade and other receivables 8,063 7,302
Slide 37: Consolidated Statement of Cash Flows
CONSOLIDATED STATEMENT OF CASH FLOWS Final Results FY21 2021 2020 $000 $000 Cash flows from operating activities Operating profit/(loss) for the year 962 (556) Depreciation 1,715 1,383 Amortisation and impairment 1,221 1,068 Share based payments 649 290 Changes in working capital: Increases in trade
Slide 38: Enjoyment of Subtitled vs Dubbed Content, Q3 2020
Final Results FY21 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 39: Major Competitors in Media Localisation
Final Results FY21 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 h
Slide 40: The Board
THE BOARD Final Results FY21 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. Mickey
Slide 41: Major Shareholders
MAJOR SHAREHOLDERS Final Results FY21 Shareholder* % of capital Stuart Green (CEO) 14.2 Herald Investment Management 10.3 Canaccord Genuity Wealth Management (Institutional) 8.7 Invesco Ltd 8.7 Hargreaves Lansdown private clients 6.1 Stonehage Fleming 4.7 Deka Investment 4.2 Sarasin 3.7 Canaccord Ge
Slide 42: Convertible Unsecured Loan Stock
CONVERTIBLE UNSECURED LOAN STOCK Final Results FY21 • £2.6 million ($3.5 million) loan stock • Coupon 7.5% • Term ends 31 October 2021 Loan note holder % of loan stock Herald Investment Trust plc 60.7 Stuart Green (CEO) 20.0 David Gray, MBE 7.3 Canaccord Genuity Group Inc. 7.0 JM Finn 2.1 Others 2.9
Slide 43: www.zoodigital.com
www.zoodigital.com