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Preliminary Results – Year to 30 April 2006 PRESENTATION TO ANALYSTS AND INVESTORS 6 July 2006

Preliminary Results – Year to 30 April 2006 PRESENTATION TO ANALYSTS AND INVESTORS 6 July 2006. Legal disclaimer.

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Preliminary Results – Year to 30 April 2006 PRESENTATION TO ANALYSTS AND INVESTORS 6 July 2006

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  1. Preliminary Results – Year to 30 April 2006 PRESENTATION TO ANALYSTS AND INVESTORS 6 July 2006

  2. Legal disclaimer This presentation contains statements that are or may be forward looking statements with respect to the financial condition, operations and businesses of PMI. All statements other than statements of historical facts included in this presentation may be forward looking statements. These forward‑looking statements involve known and unknown risk, uncertainties and other factors which may cause the actual performance or achievements of PMI or industry results, to be materially different from any performance or achievements expressed or implied by such forward‑looking statements. These forward‑looking statements are based on numerous assumptions regarding the present and future business strategies of PMI and the environment in which it will operate in the future which are not necessarily indicative of future outcomes or the financial performance of PMI and should not be considered in isolation. Legal disclaimer

  3. PRESENTERS Vernon Sankey Introduction & Conclusion Chairman Serge Crasnianski Business Review Chief Executive Officer Jean-Luc Peurois Financial Review Group Finance Director

  4. COMPANY OVERVIEW • The specialist digital imaging company positioned to exploit the digital • revolution • Vending – 35,200 sites – over 85% in the UK, France and Japan • Manufacturing – unique and complete range of photo-processing equipment from wholesale labs, to minilabs, to end-consumer vending kiosks

  5. PMI’s second best ever result, after last year’s record Vending progressed Manufacturing did not repeat last year’s outstanding performance Strategic review may or may not lead to an offer KEY POINTS

  6. 5 June 2006 announcement Followed press speculation Confirmed strategic review which may or may not lead to an offer Announced appointment of JPMorgan Cazenove to advise in this regard The process continues STRATEGIC REVIEW

  7. FINANCIAL REVIEW

  8. SUMMARY INCOME STATEMENT

  9. ACTIVITY ANALYSIS OF REVENUE AND PROFIT * before exceptional item

  10. GEOGRAPHICAL ANALYSIS OF REVENUE AND PROFIT * before exceptional item

  11. SUMMARY BALANCE SHEET

  12. SUMMARY CASH FLOW

  13. Overall impact on 2005 pre-tax profit is a positive £0.9m Principal changes Abolition of goodwill amortisation increased profit by £0.6m Use of average rather than closing exchange rates increased profit by £0.3m No change Capitalisation of R&D already applied under UK GAAP Equity excluding minority interests at 1 May 2005 is increased by £4.6m, of which dividends £4.4m INTERNATIONAL FINANCIAL REPORTING STANDARDS

  14. KEY POINTS OF FINANCIAL REVIEW Income Statement • PMI’s second best ever result, with good Vending performance Balance Sheet • Total shareholders’ equity up 19% Cash Flow Statement • £21m cash outflow reflects high capex and atypical working capital outflows Dividends per Share • Up 20%

  15. BUSINESS REVIEW

  16. VENDING DIVISION – SPLIT OF SITES BY TYPE • Increasing offering beyond photobooths (71% of sites a year ago) • Great majority of machines imaging-related

  17. VENDING DIVISION – GEOGRAPHICAL SPLIT OF SITES • 35,200 locations, up 6,800 • In c.20 industrialised countries • Over 85% of sites in UK, France and Japan

  18. Stable revenue at £ 144m (VAT included) 20,600 (2005: 20,100) sites 88% (2005: 83%) digital Fairly predictable and cash generative business Improved UK market position, Japan cost base w.e.f. current year, regulatory benefits in Japan and France VENDING DIVISION -PHOTOBOOTHS

  19. Revenue up 169% to £7.5m 3,500 (2005: 1,400) sites, of which 2,300 (2005: 1,000) in France Encouraging France roll-out Roll-out continues in current year VENDING DIVISION - DIGITAL MEDIA KIOSKS

  20. Revenue up 42% to £15.7m 11,000 (2005: 6,900) sites, of which 5,800 (2005: 2,800) UK kiddie rides Expansion of UK kiddie rides Possible further expansion in leisure sector VENDING DIVISION - OTHER VENDING EQUIPMENT

  21. VENDING DIVISION - STRATEGY • Upgrade photobooths • £ 11.0m spent on 2,100 units in 2006 • Roll out digital media kiosks • £ 7.8m spent on 2,200 units in 2006 • Diversify into kiddie rides and other leisure areas leveraging off site network, customer relationships, and maintenance /cash collection infrastructure • £ 4.6m spent on 2,900 units in 2006 • Expand into other territories, notably China

  22. MANUFACTURING DIVISION - UNIQUE AND COMPREHENSIVE RANGE Wholesale lab <£400,000 FASTPRINT Professional lab <£70,000 FASTSCAN DKS 3 Retail lab <£10,000 DKS 15XX DKS 900 Consumer lab <£7,000 SYMPHONIA 2 Prints per hour <1,000 250-1,000 800-1,500 2,000 < 20,000

  23. Much reduced unit sales – Market Print retail price wars and reduced demand softened demand for minilabs Some major chains were waiting for their analogue minilabs to be fully depreciated Some potential buyers were waiting for introduction of third generation minilabs Some companies exiting the business - AgfaPhoto, Kodak and Konica - were offloading minilabs PMI Kodak was no longer a customer PMI was reserving some minilabs for CVS MANUFACTURING DIVISION – MINILABS H1 TRADING

  24. H1 market weakness only partially reduced H1 niggling technical problems resolved Greatly increased unit sales, notably to CVS, at lower average margin MANUFACTURING DIVISION - MINILABS H2 TRADING

  25. MANUFACTURING DIVISION – MINILABS: THE FUTURE - DKS 3 • High productivity, up to 2,000 prints/hour • Print format up to 12” x 18” • Smallest footprint on the market for this performance level • Best value for money on the market • The basis for a new minilab range • Volume production commences July 2006

  26. MANUFACTURING DIVISION - WHOLESALE LABS • Trading • Revenue up 13% and profit increased • The AgfaPhoto acquisition • Stock purchased for £6.1m in November 2005 • Little financial impact in year • Positive contribution expected in current year • Last substantial competitor eliminated

  27. THE MARKET - NUMBER OF DIGITAL CAMERAS Forecast number of digital cameras and camphones worldwide (m) CAGR = 36% CAGR = 53% Photo-Me is well placed to benefit from this expected growth with its suite of digital products Source: PMA Marketing Research (February 2005)

  28. THE MARKET – QUALITY OF DIGITAL IMAGES Japan 95% of mobile phones are camphones (50% are 2MP) Europe 50% of mobile phones are camphones (equivalent to Japan figures in 2001) France 39% of mobile phones are camphones (low relative resolution at 2MP) In 2008, more than 50% of camphones are expected to have a minimum resolution of 3 mega pixels Camphone resolution improvement (North America) Other markets Growth in 3m+ pixels resolution 55% Source: PMA Marketing Research (February 2005)

  29. THE MARKET – DIGITAL PRINTS Imaging market–USA Today Source: PMA Marketing Research (February 2005)

  30. KEY POINTS OF BUSINESS REVIEW Vending - increased revenue and profit Manufacturing – did not repeat last year’s outstanding result, notwithstanding much improved H2

  31. CONCLUSION

  32. Board confident in both Vending and Manufacturing Vending should benefit from recent capex and regulatory requirements in Japan and France Manufacturing: wholesale labs will benefit from AgfaPhoto acquisition minilabs prospects uncertain as market in state of flux, but excellent new third-generation DKS3 product CURRENT YEAR OUTLOOK

  33. BUSINESS STRENGTHS Digital market • well positioned to benefit from trends in the digital market with growth in digital capture devices and digital printing Technological advantage • PMI has a long history of technical leadership and has remained at the forefront of technological advancement in photo-processing Unrivalled network of sites • A worldwide network of 35,200 sites - the imaging world’s largest – in high footfall locations Strength of customer relationships • Established customer relationships, supported contractually Limited direct competition • in both Vending and Manufacturing Low-cost manufacture • by sub-contractors, of both vending equipment and equipment for re-sale Product diversification • A policy of diversification into alternative coin-operated equipment, benefiting from operational efficiencies associated with its service organisation Growth potential • Growing need for identification • Potential from the leisure market • Expansion into new markets

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