preliminary results – year to 30 april 2006 presentation to analysts and investors 6 july 2006

Putting you in the Putting you in the picturepicture

11

Preliminary Results – Year to 30 April 2006

PRESENTATION TO ANALYSTS AND INVESTORS

6 July 2006


22

Legal disclaimer

Legal disclaimer

This presentation contains statements that are or may be forward looking statements with respect to the financial condition, operations and businesses of PMI. All statements other than statements of historical facts included in this presentation may be forward looking statements.

These forward‑looking statements involve known and unknown risk, uncertainties and other factors which may cause the actual performance or achievements of PMI or industry results, to be materially different from any performance or achievements expressed or implied by such forward‑looking statements. These forward‑looking statements are based on numerous assumptions regarding the present and future business strategies of PMI and the environment in which it will operate in the future which are not necessarily indicative of future outcomes or the financial performance of PMI and should not be considered in isolation.


33

PRESENTERS

Vernon Sankey Introduction & Conclusion

Chairman

Serge Crasnianski Business Review

Chief Executive Officer

Jean-Luc Peurois Financial Review

Group Finance Director


44

COMPANY OVERVIEW

The specialist digital imaging company positioned to exploit the digital

revolution

Vending – 35,200 sites – over 85% in the UK, France and Japan

Manufacturing – unique and complete range of photo-processing equipment from wholesale labs, to minilabs, to end-consumer vending kiosks


55

KEY POINTS

PMI’s second best ever result, after last year’s recordVending progressedManufacturing did not repeat last year’s outstanding performanceStrategic review may or may not lead to an offer


66

STRATEGIC REVIEW

5 June 2006 announcementFollowed press speculationConfirmed strategic review which may or may not lead to an offerAnnounced appointment of JPMorgan Cazenove to advise in this regard

The process continues


77

FINANCIAL REVIEW


88

SUMMARY INCOME STATEMENT

Y/e 30 April 2006 2005 Variance%

Revenue (£m) 230.0 237.4

-3.1

EBITDA-pre-exceptionals (£m) 53.3 59.4 -10.3

Operating profit - pre-exceptional (£m)

27.9 36.1 -22.7

- post-exceptional (£m) 24.8 36.1 -31.3

PBT - pre-exceptionals (£m) 26.2 34.8 -24.7

- reported(£m) 28.5 33.9 -15.9

EPS - pre-exceptionals (p) 4.77 6.32 -24.5

- reported (p) 5.53 6.18 -10.5

DPS (p) 2.4 2.0 +20.0


99

ACTIVITY ANALYSIS OF REVENUE AND PROFIT

Revenue Operating Profit*

Y/e 30 April 2006 2005 Variance

2006 2005 Variance

£m £m % £m £m %

Vending 146.4 140.0 +4.6 18.9 16.1 +17.4

Manufacturing 83.6 97.4 -14.1 13.8 24.8 -44.4

Group overheads - - - (4.8) (4.8) -

230.0 237.4 -3.1 27.9 36.1 -22.7

* before exceptional item


1010

GEOGRAPHICAL ANALYSIS OF REVENUE AND PROFIT

Revenue Operating Profit*

Y/e 30 April 2006 2005 Variance

2006 2005 Variance

£m £m % £m £m %

Continental Europe 127.1 142.7 -10.9 16.7 30.3 -44.9

UK & Ireland 69.3 60.8 +14.0 5.4 1.8 +200.0

Asia & Australia 30.9 31.0 -0.3 4.9 4.0 +22.5

USA 2.7 2.9 -6.9 0.9 -

Total 230.0 237.4 -3.1 27.9 36.1 -22.7

* before exceptional item


1111

SUMMARY BALANCE SHEET

At 30 April 2006£m

2005£m

Non-current assets 114.4 99.6

Current assets 123.7 97.3

Non-current liabilities (38.3) (31.8)

Current liabilities (92.5) (75.8)

Total equity 107.3 89.3

Minority interests (2.7) (1.2)

Total shareholders’ equity 104.6 88.1

Net (debt)/cash (16.7) 3.9

Gearing 15.6% -

Net interest cover (excluding exceptional item) 16x 27x


1212

SUMMARY CASH FLOW

Y/e 30 April 2006£m

2005£m

Opening net cash 3.9 2.8

Cash FlowOperating profitNon-operating profitDepreciation

24.65.4

25.4

35.3-

23.3

Use of Cash FlowWorking capitalDividend paidCapexInvestmentTaxationInterest paidPurchase of treasury sharesNet other movements

(19.1)(4.4)

(36.8)(1.4)

(11.8)(1.9)(0.9)

0.3

(7.1)(6.6)

(33.7)(2.5)(5.9)(1.7)

--

Closing net (debt) / cash (16.7) 3.9


1313

INTERNATIONAL FINANCIAL REPORTING STANDARDS

Overall impact on 2005 pre-tax profit is a positive £0.9m

Principal changesAbolition of goodwill amortisation increased profit by £0.6mUse of average rather than closing exchange rates increased profit by £0.3m

No changeCapitalisation of R&D already applied under UK GAAP

Equity excluding minority interests at 1 May 2005 is increased by £4.6m, of which dividends £4.4m


1414

KEY POINTS OF FINANCIAL REVIEW

Income StatementPMI’s second best ever result, with good Vending performance

Balance SheetTotal shareholders’ equity up 19%

Cash Flow Statement£21m cash outflow reflects high capex and atypical working capital outflows

Dividends per ShareUp 20%


1515

BUSINESS REVIEW


1616

Increasing offering beyond photobooths (71% of sites a year ago)

Great majority of machines imaging-related

VENDING DIVISION – SPLIT OF SITES BY TYPE

Photobooths59%

Other6%

Card Machines4%Copiers

5%

Digital Media Kiosks

10%

Kiddie Rides16%


1717

VENDING DIVISION – GEOGRAPHICAL SPLIT OF

SITES35,200 locations, up 6,800

In c.20 industrialised countries

Over 85% of sites in UK, France and Japan

UK & Ireland39%

France31%

Japan16%

Switzerland2%

Germany6%

Others4%

US2%


1818

VENDING DIVISION -PHOTOBOOTHS

Stable revenue at £ 144m (VAT included)20,600 (2005: 20,100) sites88% (2005: 83%) digitalFairly predictable and cash generative businessImproved UK market position, Japan cost basew.e.f. current year, regulatory benefits in Japan and France


1919

VENDING DIVISION - DIGITAL MEDIA KIOSKS

Revenue up 169% to £7.5m3,500 (2005: 1,400) sites, of which 2,300 (2005: 1,000) in FranceEncouraging France roll-outRoll-out continues in current year


2020

VENDING DIVISION - OTHER VENDING EQUIPMENT

Revenue up 42% to £15.7m11,000 (2005: 6,900) sites, of which 5,800 (2005: 2,800) UK kiddie ridesExpansion of UK kiddie ridesPossible further expansion in leisure sector


2121

VENDING DIVISION - STRATEGY

Upgrade photobooths £ 11.0m spent on 2,100 units in 2006

Roll out digital media kiosks £ 7.8m spent on 2,200 units in 2006

Diversify into kiddie rides and other leisure areas leveraging off site network, customer relationships, and maintenance /cash collection infrastructure

£ 4.6m spent on 2,900 units in 2006

Expand into other territories, notably China


2222

MANUFACTURING DIVISION - UNIQUE AND COMPREHENSIVE

RANGE

Consumer lab<£7,000

Retail lab<£10,000

Professional lab<£70,000

Wholesale lab<£400,000

<1,000 < 20,000800-1,500250-1,000

DKS 15XX

DKS 900

FASTPRINT

SYMPHONIA 2

Prints per hour 2,000

DKS 3

FASTSCAN


2323

MANUFACTURING DIVISION – MINILABS H1 TRADING

Much reduced unit sales –

Market

Print retail price wars and reduced demand softened demand for minilabs

Some major chains were waiting for their analogue minilabs to be fully depreciated

Some potential buyers were waiting for introduction of third generation minilabs

Some companies exiting the business - AgfaPhoto, Kodak and Konica - were offloading minilabs

PMI

Kodak was no longer a customer

PMI was reserving some minilabs for CVS


2424

MANUFACTURING DIVISION - MINILABS H2 TRADING

H1 market weakness only partially reducedH1 niggling technical problems resolvedGreatly increased unit sales, notably to CVS, at lower average margin


2525

MANUFACTURING DIVISION – MINILABS: THE FUTURE - DKS 3

High productivity, up to 2,000 prints/hour

Print format up to 12” x 18”

Smallest footprint on the market for this

performance level

Best value for money on the market

The basis for a new minilab range

Volume production commences July 2006


2626

MANUFACTURING DIVISION - WHOLESALE LABS

Trading Revenue up 13% and profit increased

The AgfaPhoto acquisition Stock purchased for £6.1m in November 2005 Little financial impact in year Positive contribution expected in current year Last substantial competitor eliminated


2727

THE MARKET - NUMBER OF DIGITAL CAMERAS

100170 200

300400

500 550

80

130220

320

400

550

750

180300

420

520

800

1,050

1,300

2003A 2004A 2005A 2006E 2007E 2008E 2009E

Camphones Digital Cameras

Photo-Me is well placed to benefit from this expected growth with its suite of digital products

Forecast number of digital cameras and camphones worldwide (m)Forecast number of digital cameras and camphones worldwide (m)

CAGR = 53%

CAGR = 36%

Source: PMA Marketing Research (February 2005)


2828

THE MARKET – QUALITY OF DIGITAL IMAGES

Camphone resolution improvement (North America)

Camphone resolution improvement (North America)

In 2008, more than 50% of camphones are expected to have a minimum resolution of 3 mega pixels

5%

50%

25%

5%

42%

25%

95%

20%

20%13%

2004A 2006E 2008E

Sub-1.0 Megapixels 1.0—1.9 MP 2.0—2.9 MP

3.0—4.9 MP 5.0+ MP

55%

Growth in 3m+ pixels

resolution

95% of mobile phones are camphones (50% are 2MP)

Japan

39% of mobile phones are camphones (low relative resolution at 2MP)

France

50% of mobile phones are camphones (equivalent to Japan figures in 2001)

Europe

Other marketsOther markets



2929

THE MARKET – DIGITAL PRINTS

0

5

10

15

20

25

30

35

2000A 2001A 2002A 2003A 2004A 2005A 2006E 2007E 2008E 2009E 2010E

Prints

in b

illio

ns

Digital Film Total

Today

Imaging market–USAImaging market–USA



3030

KEY POINTS OF BUSINESS REVIEW

Vending - increased revenue and profit

Manufacturing – did not repeat last year’s outstanding result, notwithstanding much improved H2


3131

CONCLUSION


3232

CURRENT YEAR OUTLOOK

Board confident in both Vending and Manufacturing

Vending should benefit from recent capex and regulatory requirements in Japan and France

Manufacturing:wholesale labs will benefit from AgfaPhoto acquisitionminilabs prospects uncertain as market in state of flux, but excellent new third-generation DKS3 product


3333

BUSINESS STRENGTHS

Digital market– well positioned to benefit from trends in the digital market with growth in digital capture

devices and digital printing

Technological advantage– PMI has a long history of technical leadership and has remained at the forefront of

technological advancement in photo-processing

Unrivalled network of sites– A worldwide network of 35,200 sites - the imaging world’s largest – in high footfall

locations

Strength of customer relationships– Established customer relationships, supported contractually

Limited direct competition – in both Vending and Manufacturing

Low-cost manufacture– by sub-contractors, of both vending equipment and equipment for re-sale

Product diversification– A policy of diversification into alternative coin-operated equipment, benefiting from

operational efficiencies associated with its service organisation

Growth potential– Growing need for identification– Potential from the leisure market– Expansion into new markets

preliminary results – year to 30 april 2006 presentation to analysts and investors 6 july 2006

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