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2004 PRELIMINARY RESULTS PRESENTATION 28 JUNE 2004

2004 PRELIMINARY RESULTS PRESENTATION 28 JUNE 2004. Legal disclaimer.

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2004 PRELIMINARY RESULTS PRESENTATION 28 JUNE 2004

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  1. 2004 PRELIMINARY RESULTS PRESENTATION 28 JUNE 2004

  2. Legal disclaimer Statements contained in this material, particularly those regarding the possible or assumed future performance, costs, dividends, returns, production levels or rates, prices, reserves, divestments, growth of the organisation making this presentation, industry growth or other trend projections and any estimated company earnings are or may be forward looking statements and as such involve risks and uncertainties. Actual results and developments may differ materially from those expressed or implied by these statements depending on a variety or factors. Legal disclaimer

  3. PRESENTERS Vernon Sankey Introduction Non-Executive Strategy and Prospects Deputy Chairman Serge Crasnianski Business Review Chief Executive Officer Jean-Luc Peurois Financial Review Group Financial Director

  4. INTRODUCTION

  5. COMPANY OVERVIEW PMI is a specialist digital imaging company focused on professional laboratories and end-consumer vending solutions PMI has 26,000 vending locations worldwide and is the world’s leading operator of photobooths, with 20,000 sited. Recently, PMI has started to roll out kiosks which enable digital camera users to fulfil their instant imaging needs PMI manufactures a unique and complete range of photo-processing equipment covering all market segments, from wholesale, via specialist and general retail, to consumer-operated vending

  6. 2004 HIGHLIGHTS • Financial turnaround achieved • Pre-tax profit of £21.1m (2003: pre-tax loss of £3.4m) • EBITDA of £52.2m (2003: £35.4m) • Net cash of £2.9m (2003: net debt of £33.4m) • Manufacturing-led growth • Vending improved performance, despite slightly reduced turnover, and continued to generate substantial cash • Manufacturing more than doubled turnover and contributed significantly to the improved pre-tax profit • Unique product range and vending network: springboard for future growth • Dividend payment resumed, underpinning prospects for further substantial progress

  7. SHARE PRICE PERFORMANCE May 2003 Jul 2003 Sept 2003 Nov 2003 Jan 2004 Mar 2004 May 2004 ---- PMI SHARES Market cap: £365m ---- FTSE 250 Free float: c. 80% ---- FTSE ALL SHARES(as of June 24, 2004) May 2003 Jul 2003 Sept 2003 Nov 2003 Jan 2004 Mar 2004 May 2004 ---- PMI SHARES ---- FTSE 250 ---- ALL SHARES

  8. FINANCIAL REVIEW

  9. SUMMARY PROFIT & LOSS Significant turnaround achieved * excluding an exceptional credit of £0.4m in 2004 and debit of £1.2m in 2003 ° after goodwill amortisation of £0.5m (2003: £0.5m)

  10. ANALYSIS OF TURNOVER BY ACTIVITY Manufacturing–led growth

  11. GEOGRAPHICAL ANALYSIS OF TURNOVER AND PROFIT Continental Europe again the principal territory *PBT stated after exceptional credit of £0.4m in 2004 and debit of £1.2m in 2003, and after goodwill amortisation of £0.5m in both years

  12. SUMMARY BALANCE SHEET Balance Sheet strengthened

  13. SUMMARY CASH FLOW £36.3m transformation into net cash

  14. KEY POINTS OF FINANCIAL REVIEW • Predicted material improvement in results - achieved • Predicted material reduction in net debt - achieved • Prospects of further significant progress - good

  15. BUSINESS REVIEW

  16. VENDING DIVISION OVERVIEW • PMI operates a network of 26,000 locations across 18 countries, up 1,000 over last year • Concentration in France, UK & Ireland, Japan, Germany, USA and Switzerland Split of sites by geography

  17. VENDING DIVISION OVERVIEW Split of sites by type • Core skills applicable to a wide range of machines • Network of sites • Services and maintenance infrastructure • Majority of machines are imaging-related

  18. VENDING MACHINE PORTFOLIO Photobooth range PhotoVision Digibooth MultiServices MiniBooth Express ID Fun products range Postal Card Funny Face Funny Style Kiddie Rides Printing range Self Card Creativ’Studio Digital Photo Kiosk Symphonia

  19. VENDING OPERATIONAL REVIEW 2004 compared to 2003

  20. VENDING DIVISION ACHIEVEMENTS • Geographically: • Strengthened France profitability and renewed key public sector contracts (Metro and Railways) • Improved UK profitability • Reinforced Japanese network • Streamlined cost structure • Leveraged network by launch of new machines • Photobooths • Adding new services to existing products (e.g. fun photobooths) • New and innovative products: Digital Media Kiosks

  21. THE FUTURE OF VENDING Digital Media Kiosks > > > > > > > • Successful two year trial involving 265 machines • Roll out started in May 2004 • Small footprint (0.5m²) • Attractive economics for site owner • Deployment anticipated • Across PMI’s vending network • In new distribution channels • Tourism: hotels, tourist attractions, cruise lines • Telecoms: e.g. Orange stores • Catering: e.g. corporate cafeterias

  22. MANUFACTURING REVIEW • Outstanding turnaround of wholesale labs • Imaging Solutions bought from Gretag liquidator • Significant contributor to Group profits, with pay back in under one year • Synergies with PMI, mainly on R&D • Professional labs show dramatic progress • Units sold doubled • Successful transfer of full production to Poland • Quality evidenced by award of industry-leading DIMA prize for second successive year • Retail labs: a unique offering • Targeted at retailers impacted by digitalisation • First thermal (no chemicals) minilab – delivering pictures at quality similar to silver halide • Lowest capital expenditure for customers • Consumer labs: Digital Media Kiosk • Successfully trialled • Roll-out from May 2004, focus on PMI locations • Unique automatic vending solution

  23. UNIQUE AND COMPREHENSIVE DIGITAL RANGE Wholesale lab Around £400,000 CYRA Professional lab Up to £70,000 Retail lab Around £10,000 DKS 15XX DKS 900 Consumer Up to £7,000 SYMPHONIA Prints per hour <1000 250-1,000 800-1,500 Up to 20,000

  24. AWARD WINNING DIGITAL PROFESSIONAL LABS

  25. PROFESSIONAL LABS MARKET Transfer to digital underway 2003 Minilab Market Shares Analogue Minilabs Digital Minilabs Minilabs Worldwide Others 5% Others 12% Others 14% Agfa 5% Noritsu 40% Noritsu 23% Noritsu 38% PMI-Kis 14% Agfa 11% Agfa 12% PMI-Kis 13% PMI-Kis 13% Fuji 53% Fuji 26% Fuji 21% Total: 157,000 units Total: 48,000 units Total: 205,000 units

  26. MANUFACTURING KSF • Technology • PMI’s major innovations are fully patent protected • Key PMI technologies include MSB, LCD Booster, EYE-TECH…. • Quality • DIMA 2004 award for quality of picture for the second year in a row • Competitive pricing • Unique ability to build quality equipment to a low-cost specification in order to achieve a competitive sales price • Outsourcing model based on preserving multiplicity of spare parts suppliers

  27. Number of US households in March 03: 108.7 million Source: PMA Marketing Research US Camera sales 30 25 20 Total cameras million units sold 15 Traditional cameras Digital-still cameras 10 5 0 1996 1997 1998 1999 2000 2001 2002 2003 THE FUTURE OF MANUFACTURING • Digitalisation is fundamentally • changing • Picture taking habits • Printing habits

  28. high home inkjet outlets short long Symphonia Internet low THE FUTURE OF MANUFACTURING • Traditional retailers are likely to suffer • financially: no more film “drop” • PMI has developed two ranges of • product offerings • Retail labs • Consumer labs Worldwide market – Number of units Price Delay

  29. KEY POINTS OF BUSINESS REVIEW • Vending: currently mature but progressing, excellent prospects • Manufacturing: currently buoyant, excellent prospects • Overall: PMI a big winner from digitalisation

  30. STRATEGY AND PROSPECTS

  31. DELIVERY OF OBJECTIVES IN YEAR UNDER REVIEW • Recovery of profitability    • Reduced indebtedness    • Recovery of UK Vending   • Ramp up of production  

  32. STRATEGIC OBJECTIVES • Continue to materially improve Vending Division performance and extend the services on offer into related areas • Obtain for the Manufacturing Division a substantial share of the world market for digital photo-processing equipment • Create sustainable shareholder value through organic or external growth • Organically, • Develop presence in existing and new territories • Launch new services such as Digital Media Kiosk • Externally, to make acquisitions of businesses or enter into joint-ventures • Synergetic acquisitions • Networks or products

  33. TRADING PROSPECTS Current Year: further significant progress Vending • France - continued success • UK - further recovery • Japan - recovery in the medium term Manufacturing • With increased volumes and margins, a significant contribution to results Further out: huge opportunities for sustained profitable growth

  34. END

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