ME Group International Stock

Good morning, ladies and gentlemen, and welcome to the ME Group International plc Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so on the Investor Meet Company platform.

Before we begin, we would like to submit the following poll. And as usual, if you could give that your kind attention, I'm sure the company would be most grateful. And I'd now like to hand you over to Deputy Chief Executive Officer, Vladimir Crasneanscki.

Vlad, good morning, sir.

Thank you very much. Good morning, and welcome to the ME Group 2026 Interim Results Presentation. My name is Vladimir Crasneanscki. I'm Deputy CEO. Unfortunately, Stephane Gibon is unable to attend. I'll start with an overview of the first half of our 2026 financial year. I'll then provide a brief reminder of our business, our key activities today and the continued evolution of our business mix.

I'll then talk about the financial performance and our key geographic regions, followed by an update on our business areas. And to conclude with, we'll look at the outlook for FY '26.

So turning to a summary of the first half of the year. I'd like to start with a recap on our trading update issued at the start of June. As we said then, the Group's performance in the first 5 months of the year was as expected. However, during April, we saw a softening of revenue primarily within our photobooth business. We believe this is largely due to lower consumer sentiment and travel due to the conflict in the Middle East. In addition, the Board has decided to focus on operational revenue, which is recurring as opposed to equipment sales, which resulted in lower revenue from equipment sales, particularly in Continental Europe than in the first half of 2025.

I'm pleased to say that we have seen a return to more normalized trading with trading in May, which was 11% above May 2025, although this has remained below our initial budget set at the start of the financial year. We are on track to meet revised profit before tax expectations for the year of between GBP 69 million and GBP 74 million. In terms of highlights, I'm pleased to report that we have continued to make strategic progress during the half. Vending revenue grew, driven by a more than 16% increase in revenue from Wash.ME operations. Excluding the April figure, this would have been above 20%.

EBITDA increased by 7.1%, supported by strong laundry growth, and we installed nearly 500 laundry machines in H1 and are on track to install a total of 1,300 net laundry machines in the year as a whole. We secured our largest ever single client deal with ASDA in the U.K., and we have the ambition to roll out up to 700 laundry machines on ASDA sites. We also have an exciting trial underway with Aldi in Austria, the first trial we've ever secured with Aldi. And we are pleased to renew multiyear contracts with state transport operators in France, which together represent more than GBP 9 million worth of revenue.

Shareholder returns remain a key focus for the Board. And since the launch of our share buyback program in March, we have acquired shares to the value of GBP 4.5 million. And the interim dividend will return GBP 13.5 million to shareholders.

I will now provide a brief overview of ME Group and the evolution of our operations. ME Group is a leader in the automated service equipment space aimed primarily at the consumer sector. We operate more than 49,000 machines across 16 countries, spanning 3 key regions: Continental Europe, which is our largest region, followed by the U.K. and Republic of Ireland and then Asia Pacific. We have long-standing and well-established key partnerships with high footfall site owners. As you can see on the right slide -- right of the slide. This includes well-known brands in addition to brands already mentioned, such as Morrisons, MFG, Transport for London, Shell and Tesco and with Carrefour and Intermarché in France.

The Group has 2 core activities, photobooth and laundry operations. While historically best known for photobooth, laundry has been a key and growing part of the business in recent years, supporting diversification of our machine estate. Our ancillary activities include printing kiosks, children's rides, photocopying services and food service equipment alongside our newest product, which is the dog wash. These activities are often co-located with our core activities, leveraging existing site owner relationships and benefiting from maintenance by our dedicated field engineers. A key point here to note is that all of our machines are serviced by the same engineers, which gives us tremendous operational efficiency.

We will talk more about these activities in more detail later in the presentation. We have a significant competitive advantage across our key markets with a dominant market position and high barriers to entry. Innovation remains at the heart of the business and our 100-plus strong in-house R&D team innovates to diversify our machine estate to meet the needs of consumers today. We have a dedicated focus on return on capital, and we aim for a typical payback period of approximately 18 months for laundry machines and photos.

Our success is underpinned by the key strengths of the business and our operational leverage. As a reminder, here are our key components of our growth strategy as we continue to reinvest cash generated to drive growth and enhance shareholder returns. On this slide, you can see the different types of products that sit across our core ancillary activities. And onto the evolution of the business mix, we are on a journey to diversify our operations and business mix, and this slide illustrates the changing shape of our business from a revenue contribution perspective and the significant progress made in laundry in recent years.

Laundry now represents almost 40% of Group total vending revenue compared with 25%, 5 years ago. This slide tells a similar story. Laundry is our fastest-growing business area in terms of machine installation spending revenue and for the first time, EBITDA contribution. Wash.ME now accounts for almost half of Group EBITDA compared to 1/3 over just around 5 years ago.

Moving on to the first half financial performance. Our laundry operations expansion supported the first half growth. Total revenue was marginally up year-on-year, but at constant currency was slightly down due to an FX impact. As previously mentioned, total revenue was impacted by a softening in activity in April and fewer machine sales. Group EBITDA increased by 7.1% and was up 4.5% at constant currency, driven by a 21% increase in laundry EBITDA. This resulted in an improved EBITDA margin from 34.7% to -- sorry, to 36.9%.

Reported profit before tax declined by 3.8% and was down 6.2% at constant currency. This reflected slower-than-anticipated revenue growth, a change in revenue mix to focus on recurring vending revenue with a 14.2% less revenue from the sale of equipment, which is higher margin, but a nonrecurring revenue stream. a higher depreciation charge of GBP 23.5 million and a one-off prior year gain of GBP 1.6 million related to the sale of an office building in H1 2025. This business is cash generative with GBP 38.7 million of cash generated from operations in the first half with the movement driven by working capital.

Inventory increased by GBP 8.3 million, reflecting an increase in the demand for machines, consumables and an increased inventory as new machines are deployed. The cash is used to fund our machine maintenance program and growth CapEx. As planned, CapEx rose by nearly 18%, which reflects our strategy to grow our vending estate, and we've invested nearly GBP 15 million in laundry expansion and just over GBP 8 million in photo upgrades. Cash and cash equivalents have been restated for the first half of 2025, showing a reduction of just over GBP 8 million due to an adjustment in the value of cash held in our vending machines as at April '25.

The Group remains well capitalized with a strong balance sheet and financial position. Diluted earnings per share was 3.9% lower at 6.48p per share, reflecting the factors talked about above. The Board remains committed to shareholder returns and has declared an interim dividend of 3.6p per share compared with 3.85p last year. The company continues to seek to pay annual dividends in excess of 55% of annual profits after tax, subject to market conditions and business requirements.

To date, the company has repurchased shares to the value of GBP 2.7 million as part of the up to GBP 18 million share buyback program launched in March with a further GBP 1.8 million purchased post the half year-end. Once again, laundry was the key revenue driver, contributing GBP 7.7 million more than the first half of 2025 and revenue from photobooth operations was GBP 5 million lower, which reflected softer April trading and the changes to photo ID regulations in Germany, which came into force in May 2025.

In total, Group revenue was 0.3% higher than the prior year at constant currency declined by 1.4%. Looking at profit before tax, the performance reflected lower revenue growth than anticipated in the first half. The first half of 2025 benefited from the sale of an office building amounting to a GBP 1.6 million gain, which was not repeated in 2026 and currency exchange rates resulted in a reduction in the contribution to the Group's profits compared to 2025. As expected, amortization and depreciation were GBP 3.4 million higher, which reflected the increase in the number of vending units in operation compared to last year. Lower-than-expected growth did not cover this increase.

As a result, profit before tax reduced by 3.8% and by 6.2% at constant currency. Cash generated from operations amounted to GBP 38.7 million, which continues to reflect the highly cash-generative nature of the Group's operations. As mentioned on the previous slide, CapEx rose mainly due to an ongoing investment in laundry operations as well as updates to our photobooth and kiosk estate. Taxation in the period was GBP 5.1 million compared to GBP 10.9 million in the prior year -- in the prior period, largely due to a GBP 4 million tax refund in the U.K.

Dividends paid in the period in respect of 2025 amounted to GBP 14.5 million. As a result, the closing net cash position at the 30th of April 26 was GBP 7.5 million. As previously mentioned, 2025 figures for gross cash, net cash and cash generated from operations have been restated due to a reclassification of cash in transit.

I will now talk about the performance across 3 core geographies. Starting with Continental Europe, the Group's largest region, where more than half of the Group's total vending estate is located. This region accounts for more than 67% of Group's total revenue and approximately half of the Group's EBITDA. Vending revenue grew by 4.5% and 0.2% at constant currency. As mentioned earlier, the vending performance was impacted by softer trading in April, particularly in photobooths. The performance was driven by growth in laundry revenue with Wash.ME revenue up by more than 12% into the same period in 2025 and nearly 8% at constant currency. 739 net new laundry machines were installed in Continental Europe in the last 12 months, and laundry now accounts for more than 34% of vending revenue in the region.

Our photobooth remain the largest contributor to revenue and more than 800 next-generation machines were installed in France in the period and Photo.ME revenue grew only marginally and was down 4.1% at constant currency. This reflected the previously mentioned slowdown in trading in April and also the year-on-year performance in Germany following regulatory changes introduced in May 2025. Trading in Germany has stabilized. Notably, and this is a very key point, when you remove German photobooth operations in the region, Photo.ME revenue, vending grew by 5%, demonstrating the stability in this market outside of Germany.

Due to the challenges mentioned, operating profit reduced 4.9% and 8.5% at constant currency. We were pleased to renew 2 important partnerships with state-owned transport operators in France, which were a 5-year contract with SNCF and a 7-year contract with RATP. Together, these represent GBP 9 million of revenue for the Group. U.K. and Ireland revenue increased by nearly 9% and 23% at constant currency, contributing 18.4% of total Group revenue. Again, this was driven by a strong laundry performance with vending revenue from Wash.ME up nearly 1/4 at GBP 32.2 million, and this performance reflects the strength of our Wash.ME operations and continued expansion.

We installed almost 400 net new laundry machines in the first half, including at Shell and Morrisons sites. The performance of photobooth continued to be impacted by the winding down of a large low-margin U.K. contract, which finished in April '25, although the nature of this contract meant it had a limited impact on profitability. The performance of our higher-margin laundry business helped to deliver a 2% increase in operating profit in the region, which contributed more than 21% of total Group EBITDA.

Total revenue in Asia Pacific declined by 13.2% due to a combination of factors. Firstly, a 9.1% decline in the value of the Japanese yen. At constant currency, total revenue declined by 5.8%. Secondly, there are 268 fewer machines in operation in the region compared with the prior year period.

Additionally, demand for photobooth services was lower than in the first half of 2025. In the longer term, we expect this market to be smaller due to external factors. As a result, operating profit reduced by 10.3% and by 2.6% at constant currency.

Now I will turn to the business review, starting with our core activities. While the business mix continues to evolve significantly, photobooth operations still account for 2/3 of our machines, while vending revenue declined by 6.2% and by 6.8% at constant currency, the performance can be largely attributed to the previously mentioned challenges in Germany. As a result of these factors, average revenue per machine was lower at GBP 2,549 for the half year. In addition, fewer photobooth machines and services were sold compared with the first half of 2025, which resulted in revenue being 6.4% lower period-on-period. We continue to invest in our photobooth operations with CapEx of GBP 8.2 million, predominantly focused on the rollout of next-generation photobooth in France, which requires less maintenance and delivers higher turnover.

As a result of the above, EBITDA was 8% lower, which delivered an EBITDA margin of 34.4%. At constant currency, EBITDA was down 9.5%. We plan to install approximately 200 next-generation machines per month in the second half. Laundry remains our fastest-growing and highest margin business area. Vending revenue increased by more than 16%, and the average revenue per machine improved by more than 8%. This reflects the larger mix of machines being installed in key account locations. Vending revenue increased by -- sorry, we continue to invest in expansion with CapEx up 3.5% and almost 500 machines added to our laundry machine estate. This led to total laundry EBITDA growth of 21%, delivering an EBITDA margin of 51.2%.

We are delighted to secure a new partnership with ASDA in the U.K. This is our largest ever single client deal, giving us access to ASDA's excellent high footfall sites across their supermarket and petrol estate. We installed our first laundry machine on site in Birkenhead in June. And in the longer term, we ambition to install up to 700 laundry machines with ASDA. Since the launch of our new Wash.ME App available primarily in France at the moment, but will come to the rest of the country by the end of the year, there will be more than 100,000 downloads as consumers look to benefit from real-time laundry push notification, payment via the app, information on local services and the loyalty scheme, enabling users to access discounts.

We plan to roll the app out into additional geographic markets during the second half. Laundry expansion remains a key focus and is second half weighted. As a whole for the financial year, we have ambitions to roll out more than 1,300 laundry machines. On the next couple of slides, I will talk about our ancillary activities. Print.ME operations consist of high-quality digital printing services, mainly located in France. Total revenue declined 4.9%, largely due to the previously mentioned reduction in the sale of machines, while average revenue per machine during the year increased 1.5% to GBP 2,389. For the same reason, EBITDA was slightly lower at GBP 1.9 million, and the business area delivered a 32.8% EBITDA margin.

During the half, we installed a further 240 machines and have continued to roll out an upgrade program to install new Speedlab printing kiosks in France. The new Speedlab kiosk offers enhanced functionality, improved experience and drive stronger revenue per machine. The increase in CapEx reflected the ongoing investment program. Other vending operations consist of profitable ancillary activities, including food service, vending equipment, children's rides and photocopier services. There are almost 6,500 machines in operation at the end of the first half, around 90 fewer machines compared with the prior year.

The revenue performance and EBITDA reduction was due to a GBP 1.5 million reduction in the sale of machines. EBITDA margin was 57.9%, up from 53.8% in H1 2026 (sic) [ 2025 ]. Vending revenue was only down GBP 0.4 million or 7.7%. However, at constant currency, it was only down 3.8% due to a high proportion of machines located in Asia, where FX dynamics are more favorable. We launched a new machine and service in the period, a dog wash machine, and these machines, which leverage our rapidly growing presence in the laundry services market are easily installed alongside the laundry services and enable dog wash owners to wash their dogs outside of the home.

So far, we have installed 200 machines in France and the U.K. In the U.K., the first machine is in Newquay, if anyone wants to go and visit, and it's proving popular with customers.

Moving to the outlook for the full year. We are pleased with the continued positive progress and expansion of our laundry business. And by the financial year-end, we plan to have installed 1,300 net Wash.ME machines. As mentioned earlier, while trading from November to March was in line with our expectations, trading in April was more challenging, particularly for our photobooth businesses. Encouragingly, trading patterns in May were more normalized. In May, total revenue was 11.1% higher than in May 2025 and with Wash.ME up almost 26% and Photo.ME up just under 2%, and this trend has continued.

As a result, the Group is on track to meet the Board's revised 2026 full year expectations and deliver profit before tax of between GBP 69 million and GBP 74 million. Our focus on innovation and diversification will see the new Wash.ME App rolled out to all major countries where we operate laundry machines. Our business is in a strong financial position, and we remain confident in the long-term growth strategy.

Thank you very much for listening. We will now take questions.

Perfect. Vlad. That's great. If I may just jump back in. [Operator Instructions] Just while the team take a few moments to review those questions that have been submitted already, just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can all be accessed via your investor dashboard.

Vlad, as you can see there, we have received a number of questions throughout your presentation this morning, and thank you to all of those on the call for taking the time to submit their questions. But Vlad, at this point, if I may just hand over to you to address those where appropriate, and I'll pick up from you at the end.

Great. Thank you very much. So the first question is, do you have any data or estimate on how Wash.ME customers overlap with traditional laundromat users? More broadly, is Wash.ME primarily taking share from existing laundromats, expanding the market or serving a different customer use case? How does management size the remaining addressable market across existing geographies?

So great question. When we initially launched the Wash.ME launderettes, we -- back in 2011, 2012, we considered this product was really going to be suitable for campgrounds. But we saw that the demand was significantly larger than that. And in fact, many consumers going to the campgrounds even if they weren't staying there to use the machine. So as we test it and as we install more and more machines, we discovered that the -- our users of the machines are much broader than just ex-laundrette users.

So to give you a bit more insight on that, last year in the U.K., we ran a survey on all of our laundry machines, and we found that only 40% of our customers were ex-laundrette users. 60% were people who are not using laundrettes prior to using our machines. So whilst we do capture a portion of the launderette market, we also serve many customers who weren't using laundrette before. And that's fundamentally because our product offers things that laundrettes can't. Firstly, many laundrettes don't have that 20-kilogram drum with the large capacity. Also, many laundrettes don't allow you to put your laundry in there and then leave and go shopping.

With our machines, when the consumers use the machine, the machine locks. And we send them a text message 5 minutes before their laundry is about to be done, which allows them to go and shop with confidence waiting for their laundry to be done, which is obviously a benefit for our consumers, but also a benefit for our site partners. Now in regards to the sizing of the remaining addressable markets across existing geographies, -- we're looking to replicate what we've done in Ireland, where we have over 500 units for roughly 5 million people, a ratio of 1 to 10,000 across the markets that we operate in today. And as a reminder, we operate across 16 different laundry markets.

We believe that we have the scale to install significantly more machines than we have today. We set the target in the market to have 20,000 machines in operation by 2035. We're on track to do so. We currently have 8,000. So we are at the beginning of this journey rather than at the end. We describe ourselves that we are at the bottom of the slope at the mountain rather than near the top.

So the next question is, what is holding back faster expansion in Germany? Is the constraint mainly commercial partnerships, regulation, permitting, unit economics, operational capacity, consumer behavior or a deliberate capital allocation choice? And over the medium term, do you see Germany as a capable of reaching a scale comparable to France?

Excellent question. We absolutely do see it as a key market for us and an area of really exciting growth for laundry. They've currently got just shy of, I believe, 350 machines in operation. And what they are following is a very, very typical pattern and pathway. It's something that I experienced myself when I came to the U.K. 4 years ago to help run ME Group U.K. The first -- we always say in ME Group, the first 1,000 machines in the country are always the most difficult ones because when you talk to retailers, there's still a little bit of confusion over what these machines do and if people are actually willing to wash dirty laundry in their car park because they're not so used to the machine. I'm talking about site partners here.

And so the first 1,000 are always the most challenging because you have to convince the site partner that, yes, this is a product in demand. Yes, this is a product that will work for them and will bring them real tangible additional profit as well as additional footfall. And we experienced this in the U.K. ourselves. Once we have installed the first 1,000, it all became much easier from there. What is encouraging in Germany is that we have many accounts in Germany, but we've already had successful rollouts within other countries.

So for example, we have a strong rollout program with Aldi in Austria, and that's really helping to facilitate conversations in Germany. And additionally, there's some crossover with petrol retailers in Germany with -- there are many companies operating in Germany that are also operating in the Netherlands, for example. So there's some good crossovers. We really believe that Germany rightfully should be the largest laundry market we have in Continental Europe. The results on the machines are strong. It's the pace of rollout that we're really focusing on at the moment. And the ways that we increase that are more key account deals, faster installations using different installation partners, larger commercial teams, more commercial focus. And these are all things that we've been doing over the last 12 months.

So are we on track to achieve 1,300 laundry installations for the current financial year? What is the long-term ambition? And how many washing units could the company realistically install in the long term?

Well, I've answered the second half of that question a bit earlier. In terms of installing 1,300 laundry installations for the current financial year, we've installed 500 in the first half. Remember, we are second half weighted in regards to installations normally anyway because lots of retailers don't want us to install machines on their sites in December as there are some work that you have to do to install the laundrettes. And therefore, December being the golden month, they prefer us to install outside of December. So we get an additional month in essence in the second half of the year.

And additionally, this year, for those of you who lived in Western Europe and the U.K., you'll remember that January and February were very cold and this was particularly true across Continental Europe. When the weather is very cold, it takes longer for concrete to set, which means the concrete pads take longer to be ready to have the machine installed on top of it. So we did have some challenges around January, especially in those freezing periods in France and Germany, but we feel that we're on track to deliver 1,300 units this year, especially with ASDA that is now really grabbing pace in the last year's installations.

Can you please speak about pricing? What is the -- what is the company policy on rising prices for its vending machines? And when can we expect an increase in prices across the 50,000 machines in operation?

Well, as many of you will know, we operate quite a decentralized management structure in ME Group where we look to allow local country managers to determine pricing across their countries. And this is just so we can be really flexible for the demand of the market and reflecting inflation you might see in specific geographies. We have not increased prices significantly over the last 2 or 3 years. We do have the ability to significantly increase pricing, especially in the photobooth division, where customers typically come back to the machines once every 5 or 10 years.

So often, they don't remember the last price they paid on the machine and that sale -- that very infrequent sales cycle is useful. We do have the ability to increase prices. And obviously, we'll be informing the market when we do so moving forward. But currently, there are no concrete plans to do so.

So why you cut the dividend when your financial position is relatively strong?

Well, the dividend is determined by our long-term policy, which is we pay 55% of our profits as a dividend. And obviously, as the profit is a little bit less than last year, mainly due to that GBP 1.6 million sale of a building last year, the dividend naturally decreases in line with that earnings decrease.

We have a question. Thanks for doing this. It means a lot to a private investor like me. My pleasure. Is the situation in Germany likely to change to allow booth to be used for official documentation?

So great question. In Germany, our photobooth can still be used for official documentation for everything apart from the passport where the passport has been captured by the live enrollment system in Germany, which I don't mind saying is more expensive and has caused problems. I refer you to look at some articles in Bild around the problems they've had with their official system. That situation has stabilized. So we saw the drop in volumes, but it happened late July, August last year, and it's been stable since then.

We are currently in the process of getting 2 different machines certified by the German regulators. I don't mind saying that we have experienced delays in that, which is disappointing from a regulatory perspective, but we're anticipating certification in the near future will allow us to reenter the passport market, which should be positive for us.

Your updated guidance bakes in a softer market of April, which has recovered. So to what degree of conservatism is built in for the full year as this current trading normalizes, it would be hard not to top your guidance range?

So great question. And obviously, when providing guidance in the middle of April, it's quite hard to estimate for the rest of the financial year. We have been conservative with the estimate we put out for our guidance for the end of the year. And as mentioned in the presentation earlier, whilst May's trading was significantly better than last year, so 11% better than last year, it actually still does not meet our budget that we estimated at the start of the year that was relating to the guidance that we put out into the market.

So you can see that there is a bit of a tail on this headwind in regards to the photobooth business. And we've been very conservative with our guidance for the full year. And whilst we're seeing trading is improving, we're still worse than what we had budgeted for at the start of the financial year, but within the tolerances that we put for our revised guidance. So we feel confident on delivering on our revised guidance. And if there are any positive surprises, of course, we'll be informing the market if there are any.

Aldi, is it a country-by-country possible rollout?

Well, look, we are -- we just finished our trial with them. So that's 25 laundries installed in Aldi, which is a great trial. Obviously, we will be pushing the benefits of that trial to the wider Aldi Group and discussing that on a country-by-country level, and it represents a really good opportunity for the group.

So given the strong fundamentals of ME Group, but relatively small market cap, is there a strategy to try and attract broker sell-side research coverage to expand ownership?

Yes, of course, we are trying to get more coverage of the story -- of the ME Group story in the market. We still think we represent a really attractive opportunity to investors, especially at these current prices. With our dividend alone, there's a fantastic yield for investors. This is a company with no debt, strong growth opportunities, as I said, stable dividend. So we anticipate that there's a really good story to cover with ME Group, and we certainly think there's a lot of room for growth.

Can you please confirm if there were any changes to commercial terms on your major contract renewals in H1?

Of course, every contract is different. And actually, what's really positive about the 2 renewals were we were able to insert new machines into those contracts. So for example, those contracts were signed a while ago before we had our updated printing kiosk, for example, before we had the AI photobooth, before we had the dog wash, before we had some of the key cutting machines. So we're able to install more machines with those 2 key accounts. And there were no significant changes to the commission rate as far as I understand on those 2 key accounts. But I'm also unable to divulge exactly what commercial terms on those. I'm sure you can understand.

So can you discuss the slowdown in trading in April in more detail?

Yes, absolutely. So we started to identify a decrease in revenues towards the end of March, very end of March. And of course, we run our months from the 21st to the 21st. So this was technically in our April month basically. And what we saw was a drop in consumer demand, primarily for our photobooth product, especially concerning Continental Europe. Now I've always said that I've said on these calls before, ME Group is resilient to macroeconomic downturns, but we are exposed to travel. And of course, as consumers decided to either delay travel or go on domestic holidays, we experienced a slowdown in the volume of passport customers essentially.

And in fact, you can see some of this mirrored in other companies like On the Beach or, for example, WH Smith, which also suffered in April. We also discussed with our partners who are the authorities for passports. So for example, in the U.K., that's HMPO, His Majesty's Passport office and in France, it's ANTS, and they confirmed to us that their April passport figures were lower than what they had expected and driven by consumers canceling travel or putting it off. And in fact, a lot of that was caused by aviation companies announcing they were going to cancel flights in the summer. And what ANTS and HMPO told us was that consumers were very worried that they would book flights in a hotel, the flights to be canceled and they'll be left in the hotel.

So -- that did happen in April, obviously, significantly better in May. But it's a very rapidly changing situation, as I'm sure all of our attendees in this presentation have seen over the last 7 days. So we've been very conservative in our year-end figures, and we will continue to monitor the situation as we move forwards.

How much surprise was the decline in April trading? Is there much precedent for this type of decline variability in trading within recent history of the business? Do you monitor trading daily, weekly, etc.?

We monitor trading daily. All of our machines are connected by telemetry. But because there's a cash element in the machine, there's always a cutoff. So it's an estimate rather than a precise figure. We track it daily, and then we consolidate all of the figures at the end of the month for the month prior.

Is there a precedent?

Yes, absolutely, and that was COVID. And I think COVID is actually a very, very useful precedent for this because in COVID, obviously, we saw volumes decline significantly with the decrease in travel. But as you can see, those customers did not disappear. They came back once COVID was over, people started to travel again. And this is why we were not overly concerned by the April results because this is an absolutely temporary headwind. These customers will get their passports renewed, will travel again. It's just a matter of when and not if. So I think it's quite similar to the situation we encountered in COVID. So I think I've answered some of the questions on April.

I've got another question here over Germany, but I think we've answered that. I'll answer it anyway.

Will Germany be an ongoing headwind to the Group's photobooth business and how much of the annualized photobooth revenues from Germany at its new base level?

So in Germany, we saw the decrease immediately when it happened in end of July, August, and that's stabilized. So that does not move from then until now. So that will annualize out in this July and August. And hopefully, as we get our booth certified, we'll be able to increase that revenue over time as well.

In the dog wash, how do the CapEx and revenue unit dynamics vary from the main laundry machines?

Well, as it's still under trial, I can't divulge exactly what the unit economics are, but I'd be happy to delve more into it once we have a basis of understanding of those machines. Remember, we're still very much in a trial period. The way to think about it is more than photobooth less than laundry, but the machines are very cheap for us to produce. So you're looking at roughly the same price we pay for photobooth, which is really encouraging because the revenues are stronger than photobooth. Of course, this is -- we're still under 6 months old for the oldest machine in the field today. So we're still very much in a trial period, but the signs are very encouraging.

And what's so positive for us is that it is a very easy machine to cross-sell because the utilities can be connected to our laundry machines, it means that the installation costs are really limited. And of course, we have 8,000 -- more than 8,000 laundries already in the field. So that offers a really good basis to go and cross-sell that product to our existing site partners and add a new service to their sites.

Is the decline in dividend just a reflection of the temporary lower profit?

Yes, absolutely. I've already explained that 55% of our profit is our dividend policy. That has not changed.

Have you looked into my suggestion of running food vending machines at gyms? If so, are you planning to sample this market segment?

I know we've had a question in the past. I still think it's a very good idea. But food vending is not one of our areas of expertise. And if you think about ME Group more widely, very rarely do we vend a product. We vend a service. We prefer to vend services, firstly, because it's higher margin. But secondly, because you also don't have the struggles with stocking and stocking machines. As far as we can see it, the gym vending machine market is relatively saturated, and it's really outside our area of expertise. We prefer to vend services. And certainly, you can probably see in the last couple of years, we've really shifted focus away from the food division much more into our bread and butter higher-margin businesses such as the laundry division.

So when will the Wash.ME App roll out in the U.K.?

We are pushing very hard to do so at the moment. With the Wash.ME App, we do have to make a minor upgrade to the hardware of the machine so it can communicate with the app. So we've been going through that upgrade program now in the U.K. We are absolutely determined to have this app launch in all of our geographies by the end of the calendar year. In the U.K., we're targeting before the end of the financial year, which is end of October. So it's a real priority for us. We see great take-up in France with a real enthusiasm by our site partners for this. So we will -- we are pushing this as quickly as possible in other geographies. And yes, hopefully in the U.K. by the end of this financial year.

So photobooth demand will continue shrinking as new processes and better mobile telephony replace their need. Has a full decommissioning being factored into finances or could that create later? Or are the other photo uses still encouraging demand?

So I love this question, and it's a key question. If you go back to the slides, and I won't ask them to put it up now, but you can see the photobooth revenues increased over the last 5 years significantly. And I think this is a really key point. I've been doing the IR for this company for a couple of years now. In fact, I remember in 2017, when the selfie system was launched in the U.K., which allowed consumers to do their passport photos on their phone. Fund managers predicted that the photobooth business will go to 0 in the next 2 years. They've been predicting that for 17 years.

I think the key point here is we do have a regulatory moat. We, in many markets, communicate the photos directly to the regulator. So for example, in France, if you take photo, we send that photo direct to the regulator as well as printing out the photo for the consumer at the booth, and we give the consumer a code. This allows the consumer when they do their passport application, to put in their code and that photo is retrieved from secure server by the regulator. That means that the photo is in a closed loop system, which absolutely guarantees its validity and accuracy.

One of the biggest risks in identity today is a risk called the morphing risk, which people can subtly manipulate the photo, especially using AI to allow more than one person to use a passport. Our system totally deletes that risk and avoids it. And it's why you see the incredible reticence across Europe to change passport regulations because fundamentally, if you change it to something like a selfie system, you got a less secure system and a more expensive one as well. So one of the key areas of investor misunderstanding is that the photobooth business is actually very, very stable from a regulatory perspective and has a regulatory moat. And we're very honest with investors. We always say the photobooth business is a cash cow, and we utilize those funds to reinvest in our other fast, high-profit business, which is the laundry business.

We expect the photobooth division to remain relatively stable over the next 10 to 15 years. But obviously, in 10 years' time, this company will look very, very different. And obviously, we will be a full laundry company at that point. The only other thing I'd say on that is I'll just recall a really important thing that I said in the presentation, and this is key. If you take out Germany from Continental Europe, photobooth revenue increased by 5%. I think that demonstrates again the stability of our business and Continental Europe is the most important market for our photobooth division.

Would water shortage restrictions be a threat to your operations?

Great question. At the moment, absolutely not. Those restrictions tend to be more on private individuals rather than businesses. And obviously, we tap into the water supply for those businesses. If they turn off the water at a Morrisons supermarket or an ASDA or an Intermarché and Carrefour, then of course, it will be impacted. But I would imagine that things would have to get significantly worse for that to be a reality. And I imagine that businesses will be the sort of last resort for any water restrictions, but we certainly haven't heard of anything like that across Europe, and I don't see it as a significant risk.

Can you explain the working capital movement? How much is timing expected to reverse in H2 and how much is due to growth?

Well, it's a bit of both. So we always are a little bit worse off in terms of cash position at the end of H1 just because we just paid the dividend, which is true this year. And we always recoup in H2. So H2 is much more treasury-positive. We have had additional costs this year that have impacted our cash position that we didn't have last year. So for example, we've had the elevated share buyback program. We've also invested more into machines. Now it's, of course, we've installed more machines, but also we're keeping more inventory on stock. So last year, we had sort of a month of inventory. We've increased that to 1.5 months, roughly 2 months. And the reason for that is we have really big rollout programs coming up. So we're front-loading a little bit.

And that's because the key accounts that we work with are very demanding on pace. So we'd rather have more machines on stock to be able to guarantee them the numbers every month than be a little bit tighter with that supply chain movement.

Recently, ME Group invited offers/suggestions presumably for a possible sale of the business or a partnership offer. There was no outcome to this as far as we know. Is this on the agenda long term? Could you throw some light on this, please?

So this was a strategic review that occurred last year. And I will say that the news was leaked, which led us to having to put out an RNS, which informed the market of the strategic review and progress. So I would not -- there was confusion amongst investors. That was not a strategic review saying, please come and we're inviting offers. It was rather reflecting the fact that the news have been leaked elsewhere, and therefore, we had to inform the market.

That process lasted too long, in my opinion, at least, and it was frustrating being in a closed period. And what I can say is that moving forward, I think that period is behind us. And we're very much focused on delivering the numbers this year and improving the share price in the public markets. I think that answers the questions on the strategic review.

I think we've answered most of the questions. Of course, if you have further questions or you don't feel like I've answered one of the questions in enough detail, please feel free to send us an e-mail. We're more than happy to share with you more information. I would just like to thank all of you for your attention, and I hope everyone has a great rest of the week.

Perfect. Vlad, if I may just jump back in at this point. And thank you very much indeed for being so generous with your time then addressing all of those questions that came in this morning.

Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback. On behalf of the management team of ME Group International plc, we'd like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.

Good morning, and welcome to the ME Group International plc Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to the management team. Vlad, good morning, sir.

Good morning, Mary. Thank you. Good morning, and welcome to the ME Group 2025 Annual Results Presentation. My name is Vladimir Crasneanscki, Deputy Chief Executive Officer; and sat next to me is Stephane Gibon, who is our CFO. We'll start with an overview of the financial highlights for 2025, and we'll then provide a brief reminder of our business, our key activities today and the evolution of our business mix. We will then talk about the financial performance and our key geographic regions, followed by an update on our business areas, and we'll conclude with a summary of 2025 and the outlook for 2026.

In terms of highlights, I'm pleased to report that 2025 has been another solid year for ME Group. We achieved record profitability with year-on-year profit before tax growth of 6.5%, and we generated GBP 115.5 million of cash from operations. The highly cash-generative nature of our business is a key strength, which funds our investment in future growth. This includes further expanding our washing operations, a key strategic focus with a record 1,326 new laundry machines installed in 2025. This is compared with 1,168 net new machines in 2024 and 780 in 2023. We continue to roll out our next-generation photobooths. And by the end of 2025, we have a total of around 3,100 machines installed. In addition, innovation remains at the heart of the business as we evolve our machine estate to meet the ever-changing needs of consumers.

Innovation highlights include the launch of the new AI photobooth functionality, a new Wash.ME app and the successful launch of our dog washing product. We will talk about these in more detail later on. As always, we are committed to delivering shareholder returns and will return GBP 32.6 million to our shareholders in respect of 2025. So about us. I'll now provide a brief overview of our business and the evolution of our operations for those of you who may be newer to ME Group. ME Group is a leader in automated service equipment space aimed primarily at the consumer sector. The way to think about ME Group is we have 2 commonalities between all of our products and all of our geographies.

All of our machines are serviced by the same technicians, which gives us operational leverage, and we tend to operate in the same commercial model, i.e., we pay our site partners a percentage of revenue rather than rent or machine sales. We operate more than 49,000 machines across 16 countries, spanning 3 key regions: Continental Europe, which is our largest region, followed by the U.K. and Republic of Ireland and then Asia Pacific. We have long-standing and well-established key partnerships with high footfall site owners, including well-known brands such as Morrisons, MFG, Transport for London and Tesco. More recently, Shell in the U.K. and with Intermarche and SNCF in France.

The group has 2 core activities, which are photobooths and laundry operations. While historically, we have best been known for our photobooths, laundry has been a key area of growth in recent years, supporting diversification of the machine estate. Our ancillary activities include printing kiosks, children's rides, photocopying services and food service equipment. These activities are often co-located with our core activities, leveraging existing site owner relationships and benefiting from maintenance by our dedicated field engineers. We'll talk about more -- we'll talk more about the evolution of our core and ancillary activities later in the presentation. Our in-house R&D team supports innovation and diversification of our product range to meet the ever-changing needs of our consumers, and we have a significant competitive advantage across our key markets with a dominant market position and high barriers to entry.

We have a dedicated focus on return on capital, and we aim for a typical payback period of approximately 18 months for laundry machines and photobooths. Our key strengths underpin the group's investment case and position us well for long-term success. For those that are new to ME Group, I hope the above was useful in understanding more about our activities. So our products. On this slide, you can see the different types of products that sit across our core and ancillary activities, and we think it's useful for you to see some of the units that we're talking about. So in regards to the evolution of business mix, innovation and diversification have driven the evolution of our business mix in recent years.

And while photobooths vending revenue remains the largest contributor to the group's revenue, the proportion of vending revenue from laundry has increased significantly in recent years. In 2021, laundry vending revenue represented 1/4 of our total vending revenue. Today, it represents more than 1/3. We often hear from investors their concerns about our photobooth business. And while laundry has more than doubled in the period, it is worth noting that photobooth revenue has increased by 35% since 2021. So in regards to this slide, it also tells a similar story on the EBITDA level. In recent years, laundry has been our fastest-growing business area in terms of machine installations, spending revenue and EBITDA contribution. And what's important to note here, we'll go into it later, but the EBITDA margin on this product, the laundry product is stronger than the photobooth product.

So in 2021, laundry represented just over 1/3 of group EBITDA, and today, it's closer to half. The increase in corporate costs has not matched the overall percentage increase in EBITDA, showing that we have become more efficient over time. And these -- the last 2 slides really illustrate the ongoing evolution and diversification of our business. It is a key strategic focus for us, and we are very focused on the growth of our laundry product. So -- well, I'll now hand over to Stephane to talk through the 2025 financial performance.

Thank you, Vlad. So we are pleased to report another strong performance. The positive trading momentum in the first half driven by our expanding laundry operations continued into the second half of the year. Total revenue increased by more than 2%, reflecting a strong performance in our laundry business and continued resilience in photobooths. At constant currency, revenue increased 3%. This growth was across all our geographic regions. Group EBITDA increased by more than 5%, up 6% at constant currency, driven by a 17% increase in laundry EBITDA. Reported profit before tax increased by 6.5% and was up 7% at constant currency.

We continue to be a highly cash generative business, and we use this cash to fund maintenance and growth CapEx. Cash generated from operations increased by nearly 9% year-on-year. As planned, our CapEx increased by 20% to GBP 65 million. This included GBP 32 million in laundry expansion, GBP 13 million in upgrading our photobooth estate, GBP 7 million for refreshing our printing kiosks. The increase in CapEx resulted in a 3% reduction in net cash. Figures for gross cash, net cash and cash generated from operations have been restated for '24. The group remains well capitalized with a strong balance sheet and financial position. Diluted earnings per share for '25 increased by 4.5%, supported by the record performance. As a result of the strong performance, the Board has declared a total dividend of 8.64p per share for '25, a 9.5% increase from the prior year.

Overall, GBP 32.6 million will be returned to shareholders. Laundry has continued to be the key driver of revenue growth and during the year contributed just over GBP 9 million more than in '24. Photobooths revenue was around GBP 7 million lower than in '24. This was mainly due to 3 factors: a one-off supplier issue related to printers, which was resolved in the first half and we received compensation from the supplier, the end of U.K. contract in '24 impacting year-on-year revenue and a change to official photo ID regulations in Germany. New rules in Germany, which came into force in May '25 affect how passport photos are sourced and citizens are not required to do this either directly at the citizens offices or by a certified photographer. In total, group revenue increased by 2.4% and increased 3% at constant currency.

Looking at profit before tax, an increase in total revenue performance delivered GBP 7.5 million of additional profit on the prior year. The group saw a GBP 1 million benefit from the reversal of impairment in the period. More favorable currency exchange rates resulted in a GBP 2.9 million contribution to the group's profit compared with '24. Amortization and depreciation were GBP 3.4 million higher, which reflected the increase in the number of vending units in operation compared to last year. As a result, profits increased by 6.5% and was up 7% at constant currency. Cash inflow from operations amounted to GBP 115.5 million, which continues to reflect the highly cash generative nature of the group's operations.

As mentioned on the previous slide, CapEx rose mainly through ongoing investment in laundry operations as well as updations to our photobooths and kiosks estates. Taxation for the year was GBP 21.4 million, GBP 3.9 million higher than the prior year. Dividends in respect of '24 amounted to GBP 29.8 million. As a result, the closing net cash position at 31 October '25 was GBP 26.5 million. As previously mentioned, '24 figures for gross cash, net cash and cash generated from operations have been restated due to a reclassification of cash in hand.

I will now talk about the performance across our 3 core geographies. Continental Europe is the group's largest region, which holds more than half of the group's total revenue estate. The region accounts for more than 68% of the group's total revenue and 80% of total group EBITDA. While photobooths remained the largest contributor to revenue, our laundry operations once again performed strongly with washing vending revenue growth of nearly 7%. This performance was supported by estate expansion, particularly in France with growing demand for convenient laundry services. While revenue was impacted by some of the factors mentioned earlier, total revenue for Continental Europe increased by 3%.

Due to the challenges mentioned, operating profit was marginally lower at GBP 67.6 million. U.K. and Ireland revenue increased by almost 2% and contributed 16% of total group revenue. Again, this was driven by a strong laundry performance, vending revenue from roughly up 18% at GBP 32.2 million. Our strong washing performance reflected the continued expansion of our laundry operations and this performance was achieved despite softer consumer demand in the summer months, which were warmer than usual. We installed a further 415 (sic) [ 414 ] net new laundry machines. The vending down of the contract in '24 impacted total vending revenue, however, due to the nature of this contract, this has limited impact on profitability.

The performance of our higher margin laundry business paired with our focus on operational efficiencies helped deliver a 4.6% increase in operating profit. Asia Pacific delivered a resilient revenue performance with revenue growth driven by 2.2% increase in photobooths vending revenue. Operating profit grew significantly by 61%. In addition to photobooths, we operated 426 orange juice vending machines in Japan and 41 in Australia. I now hand over to Vlad to take you through the business review.

Thanks, Stephane. So our growth strategy. Looking at our growth strategy, we've made good progress, and I wanted to pull out a few highlights. We acquired 116 photobooths in Belgium from APS, a local competitor. This, alongside the continued rollout of photobooths in the Netherlands has expanded our presence in Continental Europe. We've added new features to our photobooths to broaden our offer, which we'll talk about in more detail later. We also launched our new Wash.ME App, which currently has over 60,000 users, even though it's only been launched for a month and a bit. So we're very happy about that. And this provides consumers with a more seamless and integrated experience when using our laundry services, whilst enabling them to benefit from our loyalty scheme.

And we've also successfully launched our new dog wash product situated alongside our laundry machines in France and Ireland. We have approximately 70 machines rolled out to date. On the following slides, I'll talk through our business areas, starting with our core photobooths and laundry activities. While the business mix has evolved significantly, photobooth operations still account for 62% of our machines and are our largest contributor to revenue and EBITDA. Our Photo.ME business performed resiliently with a total revenue of over GBP 168 million. The revenue decline was primarily due to the previously mentioned challenges. As a result of these factors, average revenue per machine was slightly lower at GBP 5,437 per machine.

2024 was a year of particularly high levels of investment in our photobooth operations. The comparatively smaller level of CapEx in 2025 reflects this. Despite the factors above, EBITDA has remained stable. We continue to roll out next-generation photobooths in France, which has been a major focus. And these photobooths offer new functionality, enabling us to deliver multiple services and features. At the year-end, a total of around 3,100 next-generation photobooths have been installed in France. And by the end of October 2027, we plan to have a total of 8,000 next-generation photobooths installed. Innovation remains at the heart of our business and is essential to how we develop our services and meet the needs of our consumers.

We have launched new generative AI capabilities in our next-generation photobooths, providing an enhanced end user experience, including visually experimental photo products, easy download options via our QR code and enabling consumers to share images via social media directly from our photobooths. The AI integration in our photobooths is really focused around that fun photo element, which we believe will be a big growth driver for the group moving forward. And as evidence of that, notably, we've recently had a strategic campaign with PSG in France, leveraging the club's success during its Champions League campaign. We remain committed to investing in our existing photobooth estates and new geographies where market dynamics make this attractive.

So on to Laundry. Laundry remains our fastest-growing business area in terms of machine installations revenue and EBITDA contribution and is the group's highest margin activity. The 17.3% increase in total revenue was driven by the ongoing expansion in our target geographies with a record number of machines installed. This led to a total laundry EBITDA growth of 18.1% with an EBITDA margin of 49.4%, an increase on the prior year. Investment in laundry expansion saw CapEx increase by 25%. We installed a record 1,326 new machines in the year. We are very proud with this figure as we had set ourselves the ambition of 1,200, and this consisted of 1,172 net new machines and 154 relocations. We removed 181 old or unprofitable machines.

As a result, the net number of machines increased by almost 1,150. In 2026, we are targeting the ambition of installing more than 1,300 net laundry machines, which would be another record. In addition to implementing our expansion strategy, we're also investing in innovation to create a more efficient and seamless service for all our consumers. As previously discussed, we launched our new Wash.ME app, which is an all-in-one loyalty system, which allows our users to generate points when using our machines and then redeem those points for free products. In addition, we have onetime code usage, and we can send push notifications to our users to tell them about new offers and new machines installed nearby where they live. As of the start of this year, the app is currently live in France and will be launched more widely into all countries when our -- when the app is available.

The new Wash.ME app reinforces the group's commitment to investing in innovative solutions aimed at improving the experience and services for our consumers. So on the next few slides, I'll talk about our ancillary services. Our Print.ME operations consist of high-quality digital printing services. The performance remained robust with the total revenue down slightly at GBP 11.1 million, while vending revenue has remained flat at GBP 10.8 million. In France, we installed 649 new Speedlab kiosks in place of our old or unprofitable machines. And the new Speedlab kiosks offer enhanced functionality, improved experience and drive stronger revenue per machine. Average revenue per machine during the year increased 1.5% to GBP 2,389 per machine, and the continued program to install new machines is reflected in higher CapEx, which increased to GBP 6.7 million compared to GBP 700,000 in the prior year.

While our ancillary activity, we continue to commit investment to this part of the business where attractive target returns can be achieved. The group will continue to focus investment in Print.ME on the replacement of old machines, and we expect to commit CapEx of around GBP 3.8 million to this program in the current financial year. In regards to other vending, this consists of profitable ancillary activities, including food service, vending equipment, children's rides and photocopier services. Performance was robust with total revenue of GBP 23.3 million, which is broadly in line with 2024. Vending revenue, which excludes the sale of equipment consumables, spare parts and services, increased by 2% to GBP 10.1 million and at a constant currency was up by 5.1%. CapEx for the year was lower at GBP 1.6 million and was focused on Amuse.ME, Feed.ME and Copy.ME.

Our other vending operations consist of more than 6,500 units, and we operate 470 freshly squeezed orange juice vending machines in the Asia Pacific with most of these situated in Japan and Australia. We also sell pizza vending equipment on a small scale in Continental Europe and the U.K. and Ireland. Whilst other vending remains a small business area in terms of total revenue and EBITDA contribution, it provides high margins as an incremental service at high footfall sites where we have existing operations in place. So recapping on our performance and outlook. We are pleased to report another year of record profitability. There was further strategic expansion of Wash.ME operations with a record number of machine installations and the rollout of next-generation photobooths progressed well, enhancing the functionality and attractiveness of our machines.

Innovation and diversification remains at the heart of the business as we continue to evolve our offering to meet the needs of our consumers. We remain highly cash generative and are committed to delivering shareholder returns, and we returned GBP 32.6 million to shareholders through dividends in respect of 2025. So looking ahead, 5 months into the 2026 financial year and trading has been in line with management expectations. The group remains focused on delivering against our long-term growth strategy driven by further progress in our core photobooth and laundry activities. We plan to install 1,300 plus net washing machines in the current year, and we're targeting on deploying a total of 8,000 next-generation machines by the end of 2027.

Our focus on innovation and diversification, we'll see the new Wash.ME app rolled out to all major countries where we operate laundry services. And we have installed 50 Kee.ME cutting machines in France under an SNCF contract and plan to continue to roll out our wash product. These are new ancillary activities for the group. We will also launch our share buyback program to acquire between 15 million and 20 million shares in pounds. And you can see the RNS this morning, announcing our GBP 18 million share buyback. And our business is in a strong financial position, and we're well placed to capitalize on future growth opportunities. Thank you very much for listening. We really appreciate it, and we will now take some questions.

[Operator Instructions] I'd like to remind you that recording of this presentation, along with a copy of the slides and the published Q&A can be accessed via investor dashboard. As you can see, we have received a number of questions through today's presentation. Please ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end.

Thank you very much. So we'll start with the first question. Are you planning to increase product prices? Across the majority -- well, last year's figures do not increase -- include any pricing increases. This year, we are planning on doing a moderate pricing increase in France on the photobooths where the price has lagged behind other European countries. So for reference, in France, we charge EUR 8 for a ePhoto. In the U.K., that figure is GBP 10. In Germany, it's EUR 10. So you can see France is a little bit behind. We'll be considering and increasing the price of specifically the ePhoto product in France to a moderate degree. So the next question is, is the reduction in the share buyback program because you have less cash than you previously thought? Yes. I mean I...

No, I think that we have the opportunity to raise the loan. To be clear, we wanted to be sure to face the growth and the growth of the number of installations in terms of laundry for the year. We think we will be able to do it organically, but we prefer to raise a loan. We had a loan at a very low condition so for 5 years at 2.8% -- rate of 2.8%, which is an opportunity. It will also be used maybe for a future acquisition if needed.

So the next question is, please, can you explain how the error to previously overstate cash and cash equivalents rose. The lack of explanation creates uncertainty.

It's a technical error. It was done -- it's a problem with reclassification of the credit card suspense because we were classifying the cash in transit that we calculate, it's a provision that we calculate every year and also the credit card suspense in the cash and cash equivalents, it's a double account that we have done for years. So the new team of Mazars has detected that and asked us to reclassify the credit card suspense elsewhere in the balance sheet.

Okay. So have the company considered releasing FY results earlier? This will remove the risk of suspension if there were any issues with the audit and/or auditors. There's a question later on about why the annual report was delayed. We'll answer more fully then. We were intending to release the annual report this year midpoint of February. So we were already anticipating doing that. Unfortunately, there are a number of delays, and we'll talk about that a little bit later on. So the next question is, can you expand on the pet washing business, which appears very attractive with a large total addressable market. Also your comments related to the acquisitions in a potential new strategic category. Any additional color would be appreciated.

So thank you for the question. We are very excited about the dog wash, primarily because it's very easy for us to roll out. All of our existing laundry customers will be customers for this product. It's very -- what's the word, it's very well situated next to our laundry. So we already have the customers there. And in terms of installations, all of the utilities required for the dog wash machines are the same utilities we need for the Revolution. So the installation and rollout pace should also be very good. It's a big market. Currently, there's lots of fragmented players who mainly buy units from third-party suppliers and then install them with small entrepreneurs. So we think we have a really strong opportunity to aggressively expand this business because we have the operational capacity and the maintenance teams that are ready to service these machines, but also we have the existing client base who will -- who are already showing very strong interest in this product.

Okay. Can you advise of the reason that the results were delayed? So as you can probably imagine, over the last month, we've been very focused on getting the results released. We will, of course, do a full investigation into why there were significant delays. We're very pleased that in the results, you can see there were no material adjustments. And as far as we're concerned a clean bill of health for the company. We have worked with Mazars for a number of years. The difference this year, there are a few different things this year. Primarily, we had a new audit partner who was in charge of the audit and we had an expansion in the number of countries that were under the scope. So it went from Stephane from what to what...

Yes. We had traditionally around 7 countries that were audited because they were the major entity of the company. And it was in November, we were informed that we have now 17 entities that were audited plus the fact that we considered that the requests were multiplied by around 3. So it was extremely complicated for us to organize so late. And it was part of the delay, but not the only delay. I think that was maybe something.

Yes. We will obviously conduct our investigation. Obviously, we're very disappointed with the 2 separate delays. And we will have an investigation following our roadshow. Okay. So the next question is, you said changes to photo ID regulations in Germany requiring passport photos to be taken in the citizens office or certified photographers was part of the reason for the fall in photobooth sales to FY '25. What does this actually mean for all machines? Does it mean that they are no longer generating sales from photo ID purposes? I assume that's a large portion of the total photobooth sales, but could you mention how much as a percentage? Also is the next generation of photobooth you're already rolling out in France meeting the German standards? Or do you have to update them?

So a longer question on Germany and one we're happy to answer. In Germany, they've moved to a live enrollment system where the German government has decided to say that all photos taken for passports need to be taken by someone in person. Obviously, we pointed out to the German government that our photobooths have biometric built in, but we guarantee that there was a live person when the photo is taken. But regardless, the regulatory change has meant that citizens need to have their photo taken by a live person or in the local mail offices, which is really what they're pushing. This has led to a reduction in volumes on our photobooths, but not so much as you may imagine. So we're seeing between 20% and 30% in terms of reduction in volume on photobooths. That still means there's a very healthy business there.

And there's lots of other use cases for the photobooths and that figure has stabilized. So I think that demonstrates the diversity of user types for our products, but also the fact that the photobooth business in Germany has a future. We will continue to operate our photobooths there, albeit with a reduction in volumes due to the changes in regulation. We also have strategies in terms of how we're going to increase volumes and combat this change in regulation, which we feel is onerous, and we will continue to take those actions.

Okay. Do we have a sense of when growth in the Wash.ME area of the business is expected to stabilize? We have ambitious targets in the Wash.ME division. We are continuing to invest into it, and it is the primary focus of our CapEx, but also of our management focus. We think there's a large total addressable market that we haven't yet captured in the countries we already operate in. And of course, there are new geographies as well that are of interest to the group, some of which we launched recently such as Australia. We hopefully will never see -- well, we won't see the laundry business stabilizing in the near future. We have really strong growth ambitions. We're seeing a lot of commercial interest in our products. And we anticipate that the number of units we install per year will keep growing.

And I said this a few years ago on our webinar, but I said we're a photobooth company today. We will be a laundry company tomorrow. I think we're delivering on that. Nearly 50% of the group's EBITDA was laundry in 2025. And I anticipate that very shortly, we will be a laundry company with a historical cash-generative photo business. So next questions. How does a dog washing machine work? Animals do not like to be contained. Fear not. It's not like a launderette where you put a dog in the machine and close the door. It's a unit where dogs can sit on a platform and then there is a hose for the user to use alongside shampoo, conditioner, hair dryer so it's very much a spa treatment for the dog. We like to say there's no contained space total control for the owner. So yes, please let your fears be erased.

Okay. So the next question, what exposure do you have in your washing machines to rising energy prices? And when might your operation -- operating costs start to experience inflation? So very good question. We already have experience of this with the Russia-Ukraine conflict when energy prices raised significantly. When that happens, what we tend to find is that performance on the machines on a per laundry machine basis actually increases when consumers are very conscious of their energy costs at home and rather utilize our machines where we can promise and guarantee a fixed cost. The other important thing to note is for the majority of our site partners, they pay the energy cost, not ME Group. That means that we're well insulated from energy shocks. The only impact that we see is that it can impact the pace of our rollout where site partners are less enthusiastic to install new machines due to concerns around energy, although this is a short-term impact, and we're hoping to avoid much disruption.

But the good news is, it generally leads to higher revenues per laundry machine. Okay. So with the Photo.ME business in decline, with the recovery post-COVID lockdowns, a recovery from a low base, there are obviously far more cost-effective ways to obtain passport photos given current technologies. What is the impact of the Photo.ME location no longer wants to retain a photobooth? So we'll have to agree to disagree. As you can see from our initial slides, our Photo.ME business is not in decline. In fact, we're experiencing moderate growth year-on-year, 2025 being an abnormal year due to one-off headwinds such as the end of a contract in the U.K. and a printer issue primarily affecting France. Our photobooths are very profitable, very cash generative for the group and a business area that we see as a sustainable one continuing over many years. One of the things we're always keen to point out is that we have a lot of U.K.-based shareholders and the regulatory environment in the U.K. is unique. It's not copied across the rest of the world.

In the U.K., they launched a selfie system where you're able to take your photo -- your passport photo on your phone in 2017. We're still trading incredibly strongly in the U.K., nearly 10 years later, something that I'm sure many investors didn't predict would happen. But as I said, the U.K. is a unique regulatory environment. Across the rest of our markets, we don't have another market where you're able to take your passport photo on your phone through a selfie system like you do in the U.K. So we still think that the regulatory environment across Europe is very, very stable. The most important country for us in regards to photobooths is France. France is a very stable regulatory environment. We're very close to the French authorities, and we work hand-in-hand with them as we're the largest provider of par photos there. So we are very positive about the photobooth business, and we anticipate stability moving forward.

Okay. So we're trying to make sure we don't miss off a lot of questions. There are a lot coming in. So please forgive us. So the value proposition and profitability of Wash.ME are clear to me -- clear to see how can you protect your competitive position in this division. We have significant barriers to entry in the Laundry division. And there are -- I mean I could sit here for half an hour talking about them. I think the most important ones are, firstly, they're very CapEx intensive and you as a company take a risk, right? You have to invest money into the site. You have to invest money to bring it to the site and you have to invest money to install it on site. So it's quite a significant investment upfront. And of course, with the way that the contracts work, you obviously share a percentage of the revenue to the consumers, but they don't pay any upfront cost. So you're taking on that risk.

Now the way we're able to benefit and operate in this commercial environment is we have a lot of data from our machines, so we can make really informed decisions on where to invest our CapEx. New entrants to the market don't have that information. And on top of that, the CapEx required to grow this division is intensive. So that rules out a number of different actors. Secondly, if we didn't have the existing photobooth business, I don't think we will be successful in the laundry business. And the reason I say that is when we launched our laundry business over 10 years ago, we already had a lot of the locations we wanted because we already have them as photobooth customers, and we've already had our operational coverage. To develop those 2 things when you don't have them is -- requires a significant amount of time and capital to be able to match us.

And the final barrier to entry -- not the final one, but the final big one is we have a significant first-mover advantage. If you were to try and copy us and try and become our competitor in the laundry business, you would want to install machines where we currently have no presence because when we install a machine, we capture the market around that machine. And yes, we still have a lot of machines to place and there's a large total addressable market, but we already have nearly 8,000 locations. We're installing over 1,000 a year. It's taken us 10 years to get up to that pace of installation. Any new entrant will be starting with much more modest rollout numbers.

And I think that the first mover advantage is a key competitive advantage for us. Okay. Can you help me understand approximately how much a new-gen photobooth and a Wash.ME laundry machine cost to produce? I'm thinking CapEx was GBP 32 million for Wash.ME during 2025 and you installed around 1,300 machines, at least capping the cost to GBP 25,000. But I imagine it could be well below that due to some of the CapEx being maintenance CapEx.

Yes, you're absolutely right. The CapEx of machine of laundry is not GBP 25,000 because it's a little bit less than GBP 20,000, but we have GBP 5,000 of installation cost. You know that we have to create a concrete platform to get the electricity and the water and so on. So that's one. And for the photobooth, the cost is approximately GBP 5,000 to GBP 6,000.

Okay. So in terms of geographical expansion, do you see a presence in the U.S. over the medium to longer term? There are a number of U.K. listed companies that have promised an aggressive U.S. expansion and then not delivered on it. We are very interested in the U.S. market, but we have no concrete plans at present to launch that. But of course, it's an interesting market for us. Are you concerned that other European countries take the German approach? We are not, and we will explain why. The regulatory environment in Germany was -- is significantly different to the rest of Europe, primarily because the main -- our main competitor in Germany is a company called BVR, who are in part owned by the German government. This is a peculiar situation and not something we see replicated in other countries.

And I think that in part did lead some regulatory changes. Your balance sheet is and has been historically very strong. If acquisitions did present that were more transformational in nature, what is your comfort zone in terms of leverage, net debt to EBITDA for the right deals? Thank you for your question. We are in a very strong position financially. And we are always looking for interesting opportunities. I think it's important to note here that we're very selective when it comes to acquisitions. We want businesses that we can operate. So our technicians can go and look after the machines, and we want businesses that have a similar model in terms of payback time and margin to our laundry business because we always think to ourselves with this acquisition opportunity, if we took that money and invested it into laundry, what would the returns be?

That obviously sets a high bar in terms of the quality of acquisitions that we're looking at. We will continue to be selective and opportunistic in the market moving forward. And obviously, we are well capitalized and are able to take on moderate leverage to capitalize on transformational opportunities. So we're always looking and always attentive to the market. Okay. We've answered the washing machine production costs. How many users per week do you require to make a Wash.ME machine profitable? Could they be installed by developers of large apartment blocks with, say, 200 flats?

Excellent question and certainly someone who's paying attention. So absolutely, we love to install units in locations where we have captive market and apartment blocks, council housing areas are a key area of growth for us moving forward. In fact, I'm very pleased to announce that we've just installed our first machine with Lambeth Council in a council estate, which is excellent because we're obviously located close by to where people live, but also we're providing a valuable service to a community that doesn't have one.

So certainly, we can install in locations such as that. In terms of the average users per day or how many users we require for a machine, it's a bit more of an art than a science because different machines will have different types of users. You may have a more B2B user, which is frequent, high volume. You might have more residential who uses 9 kilo more. So it very much depends. But we utilize our data to ensure that we make the correct decisions in regards to where we want to install machines. So you've written that Wash.ME performed well despite slightly softer consumer demand during the unusually warm summer months. I'm trying to understand the consumer and customer behavior. Can you explain why a warmer weather causes people to use the washing machines less?

So great question. It's really very simple, but it's one to get your head around. So when we see very warm and dry weather, dry is a key point, we see the usage of our dryer decreasing because what people will do is wash their clothes in our machines but then prefer to dry at home lime drying, for example. Now last summer was a really great summer for weather. So it was very dry and very warm, which is great personally. But professionally, we really do want some rain and some moisture because that helps to drive the utilization of our dryer.

Now this impact was felt more in our more northernly countries such as Ireland, the U.K. and the north of France. And last year, we had unseasonably abnormally warm weather -- sorry, not warm weather, dry weather, which was the critical factor. You must also remember that in 2024, by contrast, it was a very wet summer. So what we had is a very wet summer of the year before and then 2025 was a dry summer. And so that impacted our dry utilization, which can be as high as 40%, 50% in Ireland and the U.K. So I hope that explains why that abnormally dry summer impacted our dry utilization and therefore, the overall revenue...

Would you be willing to separately disclose the growth in maintenance CapEx for the various businesses?

This is effectively something that we could do, but you have to know that so far, there is absolutely, I would say, really few -- it's really -- sorry, it's really weak. We have no real maintenance CapEx. When we do some intervention on the field, this is directly done in the P&L. So I would say maybe one day, we will have to replace the machine, but our fleet is extremely young, around 6 years old in average per machine. So it means that this is not the case so far. It will be the case maybe in 5 or 6 years.

Great. Okay. So the next question -- so we're trying to answer all the questions. It's been a while since we've spoken to you so we want to be as thorough as possible. There are a lot of questions coming in. So if we do miss any questions, please feel free to send them to me and Stephane separately, and we'll look to get back to you as quickly as possible. So what is the impact to the company if a location no longer wishes to retain the machine/booth, can they be relocated, resold? Yes, this is one of the big advantages of ME Group. If we have a machine that is no longer profitable or a site partner, for example, closes a store for a refurbishment or sells a location, if they do not wish to retain the machine in that site, we can pick it up and move it to a new location very easily.

Now with the laundrette, it's particular -- sorry, with the photobooth, it's particularly easy because all we have to do is unplug it, put it on a truck for our engineers and drive it to another location. We can even swap photobooth between countries, which is really useful. And the laundry is very much the same. The only difference to the laundry is because it's plumbed in, we do have to make good the site installation costs afterwards. So it's a little bit more tricky, but they are also movable and transportable machines, and we can also move those between countries. So it's one of the big advantages. And actually, the next question is related to that. You mentioned that you removed some washing machines like 180 or something during the year. I understand it like these machines aren't relocated. Why not?

So essentially, we removed some machines during the year. There are a number of factors. One of them is that the machines were not living up to our revenue expectations per machine. So we would rather pick it up and move it to a better location to become more profitable and ensure that we're hitting our average revenue per machine that we require. But we also had certain factors last year, which didn't help us, such as unfortunately, Homebase going into administration. We've just become -- we've just launched a rollout program with them, 20-odd machines or so. So we had to remove those. So all of those figures accounted in that, how many machines we removed.

I think I would say that last year was higher than we would have anticipated. I expect it to be a lower number this year, barring any large bankruptcies from our partners, hopefully. Okay. I think that's all of the questions that we have the time to answer, I'm afraid. But we are here to answer any questions that our investors may have. So please feel free to e-mail me or Stephane either from our e-mails or to Hudson's team, we'll be more than happy to answer your questions. We thank you very much for your attention and your thoughtful and insightful questions. And yes, thank you for your continued interest.

That's great. Thank you for updating investors today. Can I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order that the management team could better understand your views and expectations. This may take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team, we'd like to thank you for attending today's presentation, and good morning to you all.

Thank you very much. Bye-bye.