2004 PRELIMINARY RESULTS PRESENTATION 28 JUNE 2004

Shaping the FutureShaping the Future11

2004 PRELIMINARY RESULTS

PRESENTATION

28 JUNE 2004


Legal disclaimer

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.


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


INTRODUCTION


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


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


SHARE PRICE PERFORMANCE

May 2003 Jul 2003 Sept 2003 Nov 2003 Jan 2004 Mar 2004 May 2004

---- PMI SHARES---- FTSE 250---- ALL SHARES

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)


FINANCIAL REVIEW


SUMMARY PROFIT & LOSS

Significant turnaround achieved

Ye 30 April 2004 2003 Variance

Turnover (£m) 219.9 187.4) +17.4%

EBITDA *° (£m) 52.2 35.4) +47.3%

Operating Profit *° (£m) 22.3 0.1) N/A

PBIT ° (£m) 22.6 (1.1) N/A

PBT ° (£m) 21.1 (3.4) N/A

Basic EPS ° (p) 4.0 (1.2) N/A

DPS (p) 1.0 -) N/A

* 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)


ANALYSIS OF TURNOVER BY ACTIVITY

Manufacturing–led growth

Ye 30 April 2004 2003 Variance Variance (exc. FX)

£m £m % %

Vending 141.4 149.8 (5.6) (3.3)

Manufacturing 78.5 37.6 109.0) 115.1)

_______ _______ _______ _______

219.9=====

187.4=====

17.4)=====

20.5)=====


GEOGRAPHICAL ANALYSIS OF TURNOVER AND PROFIT

Continental Europe again the principal territoryTurnover Pre-tax profit*

2004 2003 Variance 2004 2003

£m £m % £m £m

Continental Europe 130.8 97.8 33.7) 17.3) 0.2)

UK & Ireland 54.0 51.1 5.7) 3.0) (0.6)

Asia 31.2 33.0 (5.5) 1.1) (0.5)

USA 3.9 5.5 (27.6) (0.3) (2.5)

_____ ____ ______ ______ ______

Total 219.9 187.4 17.4) 21.1 (3.4)

===== ==== ===== ===== =====

*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


SUMMARY BALANCE SHEET

Balance Sheet strengthened

At 30 April 2004

£m

2003

£m

Fixed assets 85.6) 97.2)

Current assets 87.4) 56.7)

Creditors < 1 year (68.7) (55.0)

Long-term liabilities (32.7) (37.0)

Minority interests (2.5) (2.0)

Shareholders’ funds 69.1) 59.9)

Net assets before minority interests 71.6) 61.9)

Net cash/(debt) 2.9) (33.4)

Gearing N/A 54.0%

Net interest cover by EBITDA 34.3 x 15.2 x


SUMMARY CASH FLOW

£36.3m transformation into net cash

Ye 30 April 2004

£m

2003

£m

Opening net debt (33.4) (51.4)

Gross cash inflow 52.8) 35.4)

Working capital 5.9) 6.9)

Tax (1.1) (1.5)

Returns on investment and servicing of finance (1.6) (2.4)

Capital expenditure - net (21.0) (17.0)

Issue of ordinary shares 0.8) -)

Foreign exchange translation differences 0.4) (3.2)

Other movements - net 0.1) (0.2)

Closing net cash/(debt) 2.9) (33.4)


KEY POINTS OF FINANCIAL REVIEW

• Predicted material improvement in results - achieved

• Predicted material reduction in net debt - achieved

• Prospects of further significant progress - good


BUSINESS REVIEW


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

USA4%

Switzerland2%

Germany8%

Japan16%

Others5%

France33%

UK & Ireland32%


VENDING DIVISION OVERVIEW

• Core skills applicable to a wide range of machines– Network of sites– Services and

maintenance infrastructure

• Majority of machines are imaging-related

Split of sites by type

Photobooths77%

Other2%

Copiers6%

Card Machines7%

Kiddie Rides8%


VENDING MACHINE PORTFOLIOPh

otob

ooth

rang

e

PhotoVision Digibooth MultiServices MiniBooth Express ID

Fun

prod

ucts

ra

nge

Prin

ting

rang

e

Postal Card Funny Face Funny Style

Creativ’StudioSelf Card SymphoniaDigital Photo Kiosk

Kiddie Rides


VENDING OPERATIONAL REVIEW

2004 compared to 2003

No of Sites Turnover Profit

Group Total

Continental Europe

UK & Ireland

Asia

USA


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


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 channelso Tourism: hotels, tourist

attractions, cruise lineso Telecoms: e.g. Orange storeso Catering: e.g. corporate cafeterias

>

>

>

>

>

>

>


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


UNIQUE AND COMPREHENSIVE DIGITAL RANGE

Consumer Up to £7,000

Retail labAround £10,000

Professional labUp to £70,000

Wholesale labAround £400,000

<1000 Up to 20,000800-1,500250-1,000

DKS 15XX

DKS 900

CYRA

SYMPHONIA

Prints per hour


AWARD WINNING DIGITAL PROFESSIONAL LABS


PROFESSIONAL LABS MARKET

Total: 157,000 units Total: 48,000 units

Noritsu40%

Noritsu38%

Noritsu23%

Fuji21%

Fuji53%

Fuji26%

PMI-Kis13%

PMI-Kis13%

PMI-Kis14%

Agfa12%

Agfa5%

Agfa11%

Others14%

Others12%

Others5%

Total: 205,000 units

Transfer to digital underway

Analogue Minilabs Digital Minilabs Minilabs Worldwide

2003 Minilab Market Shares


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


THE FUTURE OF MANUFACTURING

• Digitalisation is fundamentally

changing

– Picture taking habits

– Printing habits

82

8

77

15

76

23

74

33

0

20

40

60

80

100

120

2000 2001 2002 2003

Film vs Digital models(Million of Households)

Digital

Film

Number of US households in March 03: 108.7 million

Source: PMA Marketing Research

0

5

10

15

20

25

30

1996 1997 1998 1999 2000 2001 2002 2003

mill

ion

un

its

so

ld

Total cameras

Traditional cameras

Digital-still cameras

US Camera sales


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

longshort

high

low

Internet

outlets

home inkjet

Symphonia Delay

Price

Retail Lab Equipment< 1.000 prints/hour

2002 2003 2004 2005 2006 2007

8.850

9,950

12.50012.900

13.500

14.900CAGR > 12%

Retail Lab Equipment< 1.000 prints/hour

2002 2003 2004 2005 2006 20072002 2003 2004 2005 2006 2007

8.850

9,950

12.50012.900

13.500

14.900CAGR > 12%

Wo

rldw

ide m

arket – Nu

mb

er of u

nits


KEY POINTS OF BUSINESS REVIEW

• Vending: currently mature but progressing, excellent prospects

• Manufacturing: currently buoyant, excellent prospects

• Overall: PMI a big winner from digitalisation


STRATEGY AND PROSPECTS


DELIVERY OF OBJECTIVES IN YEAR UNDER REVIEW

• Recovery of profitability • Reduced indebtedness • Recovery of UK Vending • Ramp up of production


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 growtho Organically,

- Develop presence in existing and new territories- Launch new services such as Digital Media Kiosk

o Externally, to make acquisitions of businesses or enter into joint-ventures

- Synergetic acquisitions- Networks or products


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


END

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2004 PRELIMINARY RESULTS PRESENTATION 28 JUNE 2004