Photo-Me International
Annual Report 2024

Plain-text annual report

ME Group International plc Annual Report 2024 Laundry driving growth and diversification Who we are We are an international market leader in automated instant-service equipment with operations across 18 countries. Contents Strategic report Business at a Glance 4 Our Business  6 Why invest? 8 Evolution of business mix 10 Chairman’s Statement 18 Chief Executive’s Report 22 Innovation and Diversification 30 Review of Performance by Geography 32 Section 172(1) Statement 36 Principal Risks 42 Sustainability at ME Group 46 Specific Sustainability Metrics and Reporting  52 TCFD Report  57 Longer-term Viability Statement 66 Corporate Governance Directors’ Report 70 Board of Directors and Company Secretary 72 Corporate Governance 80 Statement of Directors’ Responsibilities 92 Directors’ Remuneration Report 94 Remuneration Policy Report 98 Annual Report on Remuneration 104 Financial Statements Independent Auditor’s Report to the Members of Me Group International plc 114 Group Statement of Comprehensive Income 122 Group Statement of Financial Position 123 Group Statement of Cash Flows 124 Group Statement of Changes in Equity 125 Notes to the Consolidated Financial Statements 126 Company Statement of Financial Position 181 Company Statement of Cash Flows 182 Company Statement of Changes in Equity 183 Notes to the Company Financial Statements 184 Glossary 198 Company Information & Advisers 199 Shareholder Information 200 Navigation We use the various icons shown here to help you navigate through the document and its content   Contents page   Pages within this report ME Group plc Annual Report 2024 Summary of 2024 1 EBITDA is profit before tax, depreciation, amortisation, non-operating income/expense and finance cost and income. 2 Net cash excludes investments in convertible bonds (£3.7 million) and lease liabilities (£11.8 million). See note 20 for details of net cash. 3 Interim Dividend of 3.45p per ordinary share paid on 29 November 2024 amounting to £13.0 million. Recommended Final Dividend of 4.45p per ordinary share will be paid on 23 May 2025, subject to approval at the Annual General Meeting. 4 Constant currency is 2024 results translated using the prior year’s foreign exchange rates. Refer to the Glossary for details of the calculation. This excludes the impact from foreign exchange rate movements (“FX impact”) during FY 2024, particularly the Japanese yen which saw a 12% decrease in value against pound sterling (average rate of exchange used in FY2024 was Yen/£ 191.71 vs FY 2023: 171.68), and a 2.1% decrease in the euro against pound sterling (average rate of exchange used in FY 2024 was €/£ 1.173 vs FY 2023: 1.149). Key financials for the 12 months ended 31 October 2024 2024 REVENUE £307.9m Reported £317.8m Constant Currency4 2023 Reported: £297.7m EBITDA1 £114.2m Reported £117.5m Constant Currency4 2023 Reported: £106.6m PROFIT BEFORE TAX £73.4m Reported £74.1m Constant Currency4 2023 Reported: £67.1m GROSS CASH £86.1m Reported £89.8m Constant Currency4 2023 Reported: £111.1m NET CASH2 £38.2m Reported £41.8m Constant Currency4 2023 Reported: £33.9m CASH GENERATED FROM OPERATIONS £107.4m Reported n/a Constant Currency4 2023 Reported: £109.9m DILUTED EARNINGS PER SHARE 14.27p Reported 14.41p Constant Currency4 2023 Reported: 13.31p TOTAL DIVIDENDS PER ORDINARY SHARE3 7.90p Reported n/a Constant Currency4 2023 Reported: 7.39p Another record year of profitability Rapid expansion of laundry operations across key geographies Innovation strategy showcased through the launch of new automated Kee.ME key cutting service Strong cash generation through operations Ongoing rollout of next- generation photobooths Return of cash to shareholders with 6.8% increase in total dividend ME Group plc Annual Report 2024 1 Business at a Glance 4 Our Business  6 Why invest? 8 Evolution of business mix 10 Chairman’s Statement 18 Chief Executive’s Report 22 Innovation and Diversification 30 Review of Performance by Geography 32 Section 172(1) Statement 36 Principal Risks 42 Sustainability at ME Group 46 Specific Sustainability Metrics and Reporting  52 TCFD Report  57 Longer-term Viability Statement 66 Strategic report ME Group plc Annual Report 2024 2 Unattended 24/7 laundry services and laundrettes. Growing network of large-capacity unattended laundry services, offering a range of machine formats for partners and end consumers. Wash ME Group plc Annual Report 2024 3 UK & Republic of Ireland MACHINES IN OPERATION 6,321 REVENUE £49.2m EBITDA £19.2m EBITDA MARGIN 39.0% Key partnerships Continental Europe MACHINES IN OPERATION 26,909 REVENUE £209.0m EBITDA £94.5m EBITDA MARGIN 45.2% Key partnerships Unattended laundry services and launderettes  High-quality digital printing kiosks  Photobooths and integrated biometric identification solutions  Photo Print Wash Primarily vending equipment for the food service market (Feed.ME), children’s rides (Amuse.ME), and photocopying (Copy.ME)  Other Vending Business at a Glance CORE ACTIVITIES ANCILLARY ACTIVITIES Our business services ME Group plc Annual Report 2024 4 STRATEGIC REPORT 2 R&D CENTRES Primary facilities in France and Vietnam, In-house team of more than 50 engineers OPERATIONS IN 18 countries Australia, Austria, Belgium, China, Finland, France, Germany, Ireland, Italy, Japan, Morocco, the Netherlands, Portugal, Singapore, Spain, Switzerland, United Kingdom and Vietnam 3 CORE GEOGRAPHIES Continental Europe, UK & Republic of Ireland and Asia Pacific UK listed business with a global presence Asia Pacific MACHINES IN OPERATION 15,000 REVENUE £49.7m EBITDA £11.0m EBITDA MARGIN 22.1% Key partnerships VENDING UNITS IN OPERATION 48,230 ME Group plc Annual Report 2024 5 Our Business Core activities Photo.ME Wash.ME Ancillary activities Print.ME Feed.ME Other Vending Innovation & Diversification In-house R&D team Our business is focused on three main areas: What does ME Group do? ME Group is an international market leader in automated self-service equipment, aimed primarily at the consumer sector. Our core activities are photobooth and laundry operations and our machine estate comprises high quality and user-friendly design across 18 countries. The Group operates most of its vending equipment and a percentage of the machine turnover or a fixed fee, or a combination of these is paid to the site owner. Our long-term contracts with site owners provide predictable year-on-year recurring revenue streams and visibility. We are highly focused on maximising return on capital across our services by offering best-in-class automated solutions and a disciplined approach to operational efficiencies. Strategic Report ME Group plc Annual Report 2024 6 OUR BUSINESS MODEL Supports our market-leading position and growth strategy FURTHER DETAIL ON PAGE 11  INNOVATION & DIVERSIFICATION In-house R&D capability to diversify products and services CORE ACTIVITIES Core activities include our two largest business areas by number of machines and revenue, EBITDA and profit before tax contribution. Our core activities offer significant geographic scale, growth opportunities and / or revenue contribution. These services are sought by our customers, as they offer complementary benefits including increased site footfall and repeat business, and by consumers. FURTHER DETAIL ON PAGE 12  Photo Wash Print Other Vending The Group has a dedicated approach to innovation which supports the diversification of our products and services. Our in-house R&D team of 50+ engineers is focused on creating new complementary services and evolving the services offered across our existing estate in response to ever-changing consumer needs, whilst maximising our return on investment. ANCILLARY ACTIVITIES Ancillary activities include our smaller businesses in terms of contribution to the Group, which are cash generative and profitable. These machines are often located alongside our core activities, benefitting from our ability to leverage existing site owner relationships, and are maintained by our network of field engineers. FURTHER DETAIL ON PAGE 16  Digital printing kiosks Food service vending equipment Children’s rides Photocopier services Photobooth operations Revolution laundry operations ME Group plc Annual Report 2024 7 Why invest? ME Group has a significant competitive advantage across its key markets. Its dominant market position and high barriers to entry position the Group for long-term success. OUR VALUES Through our strong and collaborative teams, we meet the needs of our partners and consumers by delivering efficient and reliable services, whilst contributing positively to the localities, communities and the environment in which we operate. OUR VISION To be the global market leader for automated self-service equipment. OUR MISSION To service the needs of customers and consumers across multiple different touch-points. OUR PURPOSE Providing local services that make everyday life easier. Strategic Report ME Group plc Annual Report 2024 8 Asset lifecycle 5. Our machines are designed to operate over an extensive lifecycle which, in turn, generates long-term profitable performance, supported by low incremental costs for maintenance and technological upgrades to provide a high standard of service and best-in-class user experience for consumers. Our key strengths include: Long-standing site partnerships 2. We have well-established long-term partnerships and long-term contracts with site owners in attractive, high-footfall locations, enabling us to offer multiple products and services onsite as well as providing good revenue visibility. Our machines are maintained by our 650-strong network of field engineers, minimising downtime and giving us operational leverage. Laundry opportunity 3. Our laundry operations are rapidly growing, with further opportunities for expansion across existing and new markets, underpinned by a market- leading offer and strong customer demand, whilst providing site owners with a unique opportunity to expand available services which drive site footfall. A record number of machines were installed in 2024, with a long term target of installing 20,000+ machines globally. Established photobooths estate 4. Our network of photobooths offers consumers market-leading digital photo ID services for official documents. Our photobooth estate is highly cash-generative. Strong financial position 1. Our strong financial position and highly cash generative operations, provide predictable cash flows and allow us to fund our capital expenditure programme and invest in future growth, alongside creating value for our shareholders. In 2024, £107.4 million of cash was generated from operations. Entrepreneurial spirit 6. Proven track record of innovation and diversification of services in response to the evolving needs of our customers and consumers. Our two R&D centres are pivotal in driving the advancement of new products and technologies, supported by investment from our strong levels of cash flow, helping to create long-term value for investors. ME Group plc Annual Report 2024 9 Evolution of business mix Growth of ME Group and the evolution of products and services over the last five years. Since 2019, the proportion of Group revenue from laundry operations has increased significantly to 32.1% in 2024 from 18.3% in 2019. In 2024, laundry operations contributed 41.2% of Group EBITDA, compared with 23.4% in 2019. During this period, Wash.ME EBITDA margin has increased to 51.4%, from 44.4% in 2019. Laundry operations contribute nearly three times more EBITDA than they did in 2019. Vending Revenue EBITDA Photo.ME Wash.ME Print.ME Other vending (including Feed.ME) Corporate costs 2024 £114.2m £61.6m £47.0m £4.9m £11.2m1 £(10.5m) 2024 2019 £69.7m £41.3m £16.3m £6.8m £6.5m £(3.4m) 2019 £200.9m £147.7m £36.7m £13.3m £3.2m £285.4m £91.5m £10.9m £9.8m £173.2m 1 EBITDA for other vending also includes revenue from the sale of food vending equipment and the sale of other equipment, spare parts, consumables & services. Strategic Report ME Group plc Annual Report 2024 10 Our growth strategy Our growth strategy is primarily focused on growing our core business areas, which are laundry and photobooth operations, as we utilise and reinvest cash generated from our operations to drive future growth and returns through: Entering new market segments; expanded our UK Revolution laundry footprint at petrol forecourts through a new partnership agreement with MFG New product and technology innovation; the launch of Kee.ME, our new automated key-cutting service as we continue to diversify our operations Expansion in existing and new geographic territories; entry into Finland and Australia, including the trialling of 11 photobooths in Australia, our newest geographic region Strategic mergers and acquisitions; integration of Japanese photobooths estate acquired under FUJIFILM transaction. Sale of SEMPA SAS to prioritise growth of core activities Continued expansion and diversification of services; installation of new proprietary software to upgrade the user experience and services within our existing photobooth estate Proportion of Group revenue from laundry operations: Laundry operations contribution to Group EBITDA: Wash.ME EBITDA margin has increased: 2019 18.3% 2024 32.1% 2019 23.4% 2024 41.2% 2019 44.4% 2024 51.4% ME Group plc Annual Report 2024 11 Photo Established, stable and profitable estate generating strong cash flow, through long- standing contracts with site owners, which support investment in the Group’s growth strategy and new product development. The Group pays the site owner a percentage of machine turnover or a fixed fee or a combination of these. Our photobooths offer ▪Integrated proprietary software to conform to International Standards Organisation (ISO) and International Civil Aviation Organisation (ICAO) photo ID regulations ▪Secure digital photo ID technology to improve and digitalise security ID, working closely with national institutions to ensure compliance with Photo ID standard and security requirements, offering secure integrated solutions including biometric data capture, secure and direct transfer of data and 3D facial image capture ▪Portraits and fun photos provide fun user experiences such as beautifying, vintage, portrait editing features, video capture etc. Photobooths with integrated biometric photo identification solutions. A global leader in the photobooth market for instant photo ID, portraits and fun photographs. Our services are primarily aimed at the consumer market, with machines typically located in convenient, high-footfall locations such as travel hubs, shopping centres and supermarkets. 10 1 For the 12 months ended 31 October 2024 2 Vending revenue is earned from machines in operation and excludes revenue from the sale of equipment, consumables, spare parts and services. This has previously been referred to as operating revenue. Core business area % OF GROUP TOTAL VENDING ESTATE 2023: 64.7% PHOTOBOOTH UNITS IN OPERATION 30,613 2023: 30,762 OPERATIONS IN 18 countries Australia, Austria, Belgium, China, Finland, France, Germany, Ireland, Italy, Japan, Morocco, the Netherlands, Portugal, Singapore, Spain, Switzerland, United Kingdom, Vietnam KEY FINANCIALS 1 VENDING REVENUE 2 £173.2m 2023: £172.5m CHANGE +0.4% Constant currency: +4.5% EBITDA £61.6m 2023: £61.8m CHANGE -0.3% Constant currency: +2.8% EBITDA MARGIN 35.6% 2023: 35.8% CHANGE -0.3%/bps Constant currency: -0.6%/bps AVERAGE REVENUE PER MACHINE (EXCL . VAT) £5,644 2023: £5,869 CHANGE -4.5% Constant currency: -0.7% 63.5% Strategic Report ME Group plc Annual Report 2024 12 Rollout of next-generation photobooths Our latest photobooths offer consumers a multi- functional booth providing a range of services in addition to our core photo ID product. Features include: ▪Photo ID for official documentation with secure upload technology ▪User personalisation services, using AI and photo filter technology for fun images ▪‘Mobile to print’ functionality for photographs Deployment strategy: ▪2,000 next-generation photobooths installed as at 31 October 2024 ▪Capital expenditure for photobooths was £17.1million ▪Plans to install 8,000 next-generation photobooths by the end of FY 2027 ▪Installation of new cloud-based proprietary software to upgrade to existing photobooth estate. Target installations: 3,200 machines in France in 2025, followed by a Europe-wide deployment to a further 4,600 machines in 2026 Photo ID for official documentation with secure upload technology ‘Mobile to print’ functionality for photographs User personalisation services, using A1 and photo filter technology for fun images Photo Features include: ME Group plc Annual Report 2024 13 % OF GROUP TOTAL VENDING ESTATE 2023: 11.6% LAUNDRY UNITS DEPLOYED 1 7,892 2023: 6,870 OPERATIONS IN 12 countries Austria, Belgium, China, France, Germany, Ireland, Japan, the Netherlands, Portugal, Spain, Switzerland, United Kingdom KEY FINANCIALS 2 VENDING REVENUE 3 £91.5m 2023: £77.3m CHANGE +18.4% Constant currency: +20.4% EBITDA £47.0m 2023: £39.5m CHANGE +19.0% Constant currency: +21.0% EBITDA MARGIN 51.4% 2023: 51.1% CHANGE +0.3%/bps Constant currency: +0.2%/bps AVERAGE REVENUE PER MACHINE (EXCL . VAT) £15,204 2023: £15,454 CHANGE +2.1% Constant currency: +3.7% 13.4% Wash Why consumers use our laundry machines ▪Large capacity – up to 20KG capacity machines to wash items too large for domestic washing machines – for example duvets and horse blankets ▪Speed – offering energy-efficient quick wash and dry options ▪Corporate and communal use – small businesses such as hairdressers and restaurants; other users such as local sports teams Unattended 24/7 laundry services and launderettes. Rapidly expanding network of large capacity self-service laundry services, in high footfall locations through new and existing partnerships with strategic site owners offering a range of machine formats for partners and end consumers. The Group pays the site owner a percentage of machine turnover or fixed fee, or a combination of these. Laundry is increasing as a proportion of total Group revenue and EBITDA. 10 1 Laundry units owned, sold and acquired. 2 For the 12 months ended 31 October 2024. 3 Vending revenue is earned from machines in operation and excludes revenue from the sale of equipment, consumables, spare parts and services. This has previously been referred to as operating revenue. Core business area Strategic Report ME Group plc Annual Report 2024 14 Rollout of Revolution laundry machine ▪A record 1,168 Revolution laundry machines were installed in FY 2024 in France and the United Kingdom, including full range of formats e.g. the compact ‘Flex’ model. ▪Exceeded target of an average of 80-90 units installed per month. ▪900 net machines installed, after the relocation of machines to maximise quality and profitability of estate. ▪Capital expenditure was £25.4 million. ▪At 31 October 2024, the Group operated 6,433 Revolution laundry machines. New Partnerships Motor Fuel Group (“MFG”), the UK’s largest independent forecourt operator. ME Group can install and operate up to 300 Wash. ME Revolution laundry machines across MFG sites over the next five years. Wash.ME Revolution laundry machines give consumers access to self-service, large-capacity (9kg and 20kg drums), energy-efficient, high- speed washing and drying laundry services, 24 hours a day, seven days a week. Morrisons, one of the UK’s largest supermarket chains, with more than 490 sites nationwide. Extended existing relationship with a key strategic partner WM Morrisons Supermarket Limited (“Morrisons”) under which ME Group operates 488 photobooths, 424 children’s rides and 37 Revolution laundry machines at Morrisons locations in the UK. Under the new five-year contract, ME Group will install at least 200 Revolution laundry machines at Morrisons locations, which are expected to be installed over the next three years. 1,000th Revolution laundry milestone achieved in the UK In 2024, the Group installed its 1,000th Revolution laundry machine in the UK, following the rapid expansion of its self-service laundry machines. In the year, more than 330 machines were installed in convenient, high-footfall sites, including petrol forecourts and supermarkets across the UK, building on its long-term relationships and contracts with site owners alongside new partnerships. At the year end, the Group operated 1,650 machines in the UK and Republic of Ireland. ME Group plc Annual Report 2024 15 Our digital printing offer ▪Industry-leading technology offering a wide range of competitively-priced, high-quality printing formats and personalised products from smartphones. ▪Fully integrated with major social media networks, providing consumers with convenient, easy-to-use, reliable services for a seamless customer experience. High-quality digital printing kiosks. Convenient, affordable and easy-to-use instant-printing services for consumers, positioned in attractive high-footfall locations across Europe. The Group pays the site owner a percentage of machine turnover or fixed fee or a combination of these. 10 Print % OF GROUP TOTAL VENDING ESTATE 2023: 10.0% UNITS IN OPERATION 4,526 2023: 4,734 OPERATIONS IN 9 countries Belgium, China, France, Germany, Japan, the Netherlands, Portugal, Spain, Switzerland, United Kingdom KEY FINANCIALS 1 VENDING REVENUE 2 £10.9m 2023: £11.3m CHANGE -3.5% Constant currency: -1.8% EBITDA £4.9m 2023: £4.2m CHANGE +16.7% Constant currency: +21.4% EBITDA MARGIN 45.0% 2023: 37.2% CHANGE +7.8%/bps Constant currency: +8.8%/bps AVERAGE REVENUE PER MACHINE (EXCL . VAT) £2,354 2023: £2,374 CHANGE -0.8% Constant currency: +1.0% 9.4% 1 For the 12 months ended 31 October 2024. 2 Vending revenue is earned from machines in operation and excludes revenue from the sale of equipment, consumables, spare parts and services. This has previously been referred to as operating revenue. Ancillary business areas Strategic Report ME Group plc Annual Report 2024 16 Other vending (Including Feed.ME) Typically situated at high-footfall sites where the Group has an existing relationship with the site owner and can benefit from operating synergies, such as using its field engineer and maintenance network. The Group pays the site owner a percentage of machine turnover or a fixed fee or a combination of these. The Group also sells self-service fruit juice machines (B2C) and pizza machines (B2B). Contracts typically include a maintenance agreement for the Group to service the equipment for the duration of the contract. In May 2024, the Group disposed of its commercial self-service fresh fruit juice equipment business, SEMPA SAS. As SEMPA SAS contributed a large share of Feed.ME revenue (2023: £4.8m), the remaining Feed.ME business has now been incorporated into the Other Vending ancillary business area. The comparative figures for Other Vending have been adjusted to include Feed.ME. Operations primarily include: ▪Feed.ME vending equipment for food and fruit juice service market. ▪Amuse.ME self-service traditional amusement and interactive children’s rides. ▪Copy.ME photocopiers which enable consumers to reproduce physical documents, safely and securely, using the latest technology. 1 For the 12 months ended 31 October 2024. 2 Total revenue is vending revenue from the operation of Other Vending machines plus revenue from the sale of equipment, consumables, spare parts and services. % OF GROUP TOTAL VENDING ESTATE 2023: 14.4% UNITS IN OPERATION 6,629 2023: 6,496 FRESH ORANGE JUICE MACHINES 460 in Japan and Australia OPERATIONS IN 14 countries Australia, Austria, Belgium, China, France, Germany, Ireland, Japan, the Netherlands, Portugal, Spain, Singapore, Switzerland, United Kingdom KEY FINANCIALS 1 TOTAL REVENUE 2 £28.0m 2023: £32.3m CHANGE -13.3% Constant currency: -9.9% EBITDA £11.2m 2023: £12.6m CHANGE -11.1% Constant currency: -8.7% EBITDA MARGIN 40.0% 2023: 39.0% CHANGE +1.0%/bps Constant currency: +0.5%/bps 13.7% ME Group plc Annual Report 2024 17 Sir John Lewis OBE Non-executive Chairman Driving value to our shareholders I am pleased to report the Group’s financial results for the 12 months ended 31 October 2024, which was yet another year of record profitability. ME Group plc Annual Report 2024 18 Strategic Report  |  CHAIRMAN’S STATEMENT In 2024, the Group delivered a strong performance across its key financial metrics including a 3.4% increase in revenue (up 6.8% excluding FX impact4), a 7.1% increase in EBITDA (up 10.2% FX impact4) and, most encouragingly, a 9.4% increase in reported profit before tax (up 10.4% excluding FX impact4). Profit before tax during the period reached a record level of £73.4 million. This performance was achieved despite foreign exchange headwinds through the financial year (“FX impact4”) which saw the value of the Japanese yen and the euro against the British pound sterling decline by 12.0% and 2.1% respectively compared with 2023. Given the FX headwinds throughout 2024, the Group is exploring options to mitigate its exposure to currency risk. This includes hedging its large GBP commitments, such as dividends. However, as the Group earns a large share of its revenue in foreign currencies, its consolidated results will be impacted by exchange rate fluctuations to some extent. This strong performance reflects robust demand for our products and services as well as the significant competitive advantages that ME Group holds which position the Group for long-term success. In 2023, we were pleased to have been included as a constituent of the FTSE 250 index and, since then, the Group has continued to deliver on its growth strategy and build on our position as a leader in instant-service vending equipment, primarily aimed at the consumer market. Our growth strategy The Group’s growth strategy is primarily focused on laundry expansion as we continue to diversify our operations and drive attractive levels of return on invested capital. This is reflected by our strong performance against our targeted payback periods and return on capital, which significantly exceeds our cost of capital. Our core activity is to install and operate automated vending equipment, primarily photobooths and laundry machines, in high footfall areas in return for commission and/or a fixed fee. We benefit from an established and dominant market position and high barriers to entry, underpinned by the Group’s key strengths which include long-standing partnerships with site owners; growth of our laundry operations; stable cash flows from our established photobooth estate; and the extended lifecycle of our assets. Our innovative approach allows us to refresh and diversify the services available through our machines, alongside a disciplined financial approach and a focus on minimising production and operational costs, enabling us to capitalise on operating leverage as we grow our machine estate. The Board Post-period end, the Group announced two changes to the composition of its Board of Directors. On 6 November 2024, Emmanuel Olympitis (Non-executive Director) informed the Board of his decision to step down from his role and leave the Board with effect from 30 November 2024. Emmanuel served as Senior Independent Director, Chair of the Remuneration Committee and was a member of the Audit and Nomination Committees. Following Emmanuel’s departure, René Proglio, an Independent Non-executive Director and Chair of the Audit Committee, became the Senior Independent Director and Françoise Coutaz-Replan, an Independent Non-executive Director and member of the Audit and Remuneration Committees, became Chair of the Remuneration Committee and she joined the Nomination Committee. REPORTED REVENUE £307.9m 12 months ended 31 October 2024 NET CASH POSITION £38.2m As at 31 October 2024 2024 Overview ME Group plc Annual Report 2024 19 On 3 December 2024, Camille Claverie (Non-executive Director) informed the Board of her decision to step down, with effect from 4 December 2024. On behalf of the Board, I would like to thank Emmanuel and Camille for their hard work and valuable contributions over the years and we wish them all the best for the future. The Board of Directors continues to believe the Company has a strong leadership team in place to continue delivering on the Group’s long-term growth strategy. Given that two Non-executive Directors stepped down after the year end, the Nomination Committee is considering the composition of the Board in the current financial year. Dividends The Company’s dividend policy seeks to pay annual dividends in excess of 55% of the Group’s annual profits after tax, subject to market and capital requirements. Typically, one-third of this is paid as an interim dividend (paid in November) and the remaining two-thirds is paid as a final dividend (paid in May). In line with this policy and the strong financial performance, the Board declared an interim dividend in respect of FY2024 of 3.45 pence per Ordinary share (the “Interim Dividend”), an increase of 16.2%, which amounted to £13.0 million, paid to shareholders on 29 November 2024, for those on the register on 7 November 2024. The Board has recommended a final dividend for 2024 of 4.45 pence per Ordinary share (“Final Dividend”) amounting to £16.8 million. Together with the Interim Dividend, this brings the total dividend for FY 2024 to 7.90 pence per Ordinary share (£29.8 million), an increase of 6.8% and representing 55.3% of the Group’s earnings per share for FY24. Subject to approval at the Company’s annual general meeting on 25 April 2025, the Final Dividend will be paid on 23 May 2025 to shareholders on the register at close of business on 25 April 2025. The ex-dividend date will be 24 April 2025. Chairman’s Statement continued Strategic Report ME Group plc Annual Report 2024 20 Cancellation of Treasury Shares On 12 July 2024, the Board passed a resolution to cancel all of its 2,368,626 ordinary shares of 0.5 pence each held in treasury with effect from the same date. These shares held in treasury were purchased via the previously announced buyback at an average price of 133.17 pence per ordinary share. As of 31 October 2024, the total issued share capital comprised 376,763,753 ordinary shares of 0.5p each and the total number of voting rights is 376,763,753. Defined benefit pension scheme The Company runs a defined benefit pension scheme, the Photo-Me International Plc Pension and Life Assurance Fund. In November 2024, the Trustee of the Fund entered into an insurance contract with Legal & General that provides pensions for certain members of the Fund. As a result, the benefits for all members of the Fund are now secured with an insurance company, via policies in the name of the Trustee. The intention is that in due course these policies will be transferred into the name of the individual members and the Fund wound-up. To provide additional security to the Fund, the Company previously set up an Escrow account which the Fund could call upon in certain circumstances. This has a value of circa £1 million and once the Fund has been wound-up the Escrow funds can be released to the Company. Sustainability We remain committed to strengthening our sustainability activity to deliver our goals through inventing eco-responsible local services to support growth by integrating social, environmental, and economic expectations into our strategy and operations. Details of our Sustainability approach and KPIs are set out on pages 46 to 65. Looking ahead We are focused on delivering our long-term growth strategy, driven by further progress in our core photobooth and laundry activities. We will continue our journey to modernise and upgrade our machine estate as we rollout our next generation photobooth, and at the same time continue to evolve our business mix through the rapid expansion of our laundry operations. Furthermore, we will further diversify the products and services we offer our strategic partners and end consumers through our innovation strategy. In FY 2025 year-to-date, we have continued to make progress in expanding our Revolution laundry estate, with Revolution laundry installations progressing as planned. In FY 2025, we anticipate installing a total of 1,200 net Revolution laundry machines across our target geographies and expect to install 3,200 next- generation photobooths. As a result, the Board anticipates profit before tax to be between £76 million and £80 million. The Board remains confident in the Group’s growth strategy and strong financial position, which provide a platform for future growth opportunities. Sir John Lewis OBE Non-executive Chairman 24 February 2025 Our strong performance reflects robust demand for our products and services as well as the significant competitive advantages that ME Group holds. ME Group plc Annual Report 2024 21 Serge Crasnianski Chief Executive Officer & Deputy Chairman Another year of record profitability Our core business areas have once again delivered good growth across our geographies, which in turn delivered Revenue, EBITDA and Profit before tax growth for the Group. ME Group plc Annual Report 2024 22 Strategic Report  |  CHIEF EXECUTIVE’S REPORT We are pleased to report another year of strong performance and record profitability in 2024. The positive trading momentum throughout H1 2024 continued in H2 2024 and reflected further strategic progress from the Group’s core automated photobooth and laundry operations which are both exceptionally profitable and highly cash generative. We remained focused on profitability, returns and cash generation, with these metrics being key performance indicators for the Group. Our core business areas have once again delivered good growth across our geographies, which in turn delivered revenue, EBITDA and Profit Before Tax growth for the Group. Financial performance In line with the Group’s strategic focus, our core business areas of Photo.ME and Wash.ME continued to be the main driver. Our photobooth operations (Photo.ME) continued to deliver stable cash flow which supported our investments across our business, whilst laundry operations (Wash.ME) further expanded in terms of the number of units and their financial contribution to the Group. Total revenue increased by 3.4% to £307.9 million (2023: £297.7 million). However, excluding the FX impact4 revenue grew by 6.8%. This performance was mainly driven by strong growth in our Wash.ME Revolution laundry business which delivered a 19.1% increase to vending revenue year-on-year (up 21.2% excluding the FX impact4) as we continued to expand our laundry operations in key geographies, with Wash.ME vending revenue in Continental Europe up 19.8% and up 15.7% in the UK & Republic of Ireland. By geography, our largest region Continental Europe, reported revenue growth of 1.9% (up 3.8% excluding FX impact4) and the UK & Republic of Ireland reported revenue growth of 2.1% (up 2.7% excluding FX impact4). Asia Pacific revenue increased by 12.2% (up 24.6% excluding FX impact4) following integration of the recent photobooth acquisition in Japan. As a result of the above, Group EBITDA increased by 7.1% to £114.2 million (up 10.2% excluding FX impact4), and delivered an expanding Group EBITDA margin of 37.1% (2023: 35.8%). Reported profit before tax improved by £6.3 million to £73.4 million (2023: £67.1 million), an increase of 9.4% (up 10.4% excluding FX impact4). The Group’s corporation tax charge for the year was £2.9 million higher at £19.3 million, resulting in an effective tax rate of 26.3%. In 2023, the tax charge was £16.4 million, an effective tax rate of 24.5%. Capital expenditure was £54.6 million, primarily related to laundry (£25.4 million), photobooths (£17.1 million), kiosks (£0.7 million), and plant, machinery and vehicles (£4.5 million). REVENUE £307.9m 12 months ended 31 October 2024 PROFIT BEFORE TA X £73.4m 12 months ended 31 October 2024 Business review ME Group plc Annual Report 2024 23 Cashflow and net cash position 31 October 2024 31 October 2023 Opening net cash £33.9m £34.0m Cash generated from operations £107.4m £109.9m Payments in relation to provisions and pensions £(0.8)m £(0.9)m Net interest paid £(1.9)m £(1.2)m Taxation £(17.5)m £(20.2)m Net cash generated from operating activities £87.2m £87.6m Net cash used in investing activities £(47.6)m £(57.0)m Net cash used in financing activities £(34.7)m £(30.8)m Net cash generated / (utilised) £4.9m £(0.2)m Impact of exchange rates £(0.6)m £0.1m Net cash inflow / (outflow) £4.3m £(0.1)m Closing net cash £38.2m £33.9m Consisting of: Cash and cash equivalents £86.1m £111.1m Non-current borrowings £(28.5)m £(50.2)m Current borrowings £(19.4)m £(27.0)m Closing net cash £38.2m £33.9m Chief Executive’s Report continued The Group remains highly cash generative, with cash generated from operations amounting to £107.4 million (2023: £109.9 million). In the year the Group disposed of property and other fixed assets for £3.3m and a subsidiary, SEMPA SAS, for £3.7m. These proceeds offset with capital expenditure of £54.6m resulting in lower net cash used in investing activities of £47.6m. The Group remains well capitalised and in a strong financial position, with net cash of £38.2 million as at 31 October 2024 (2023: £33.9 million), up 12.7%, and excluding FX impact4, net cash increased by 23.3%. Further details of the Group’s performance by business area and geographic region are set out on pages 25 to 35. Strategic Report ME Group plc Annual Report 2024 24 Photobooths and secure integrated biometric photo ID solutions (Core business) 12 months ended 31 October 2024 12 months ended 31 October 2023 Number of units in operation 30,613 30,762 Percentage of total group vending estate (number of units) 63.5% 64.7% Vending Revenue1 £173.2m £172.5m Capex £17.1m £8.9m EBITDA £61.6m £61.8m 1 Vending revenue is earned from machines in operation and excludes revenue from the sale of equipment, consumables, spare parts and services. This has previously been referred to as operating revenue. Our established photobooth operations remain the Group’s largest business by number of units, revenue and EBITDA contribution. This core business area delivered solid demand and stable cash flow. Part of the cash generated from photobooths is reinvested to support the Group’s growth strategy, including the ongoing expansion of Wash.ME. Photobooth activities performed as expected with total vending revenue up 0.4% at £173.2 million (up 4.4% excluding FX impact4). While Continental Europe is the largest contributor of vending revenue by region, Asia Pacific delivered the strongest growth, up 15.6% year-on-year (up 28.7% excluding FX impact4), which reflected the expansion of the photobooth service in Japan following the Group’s acquisition in October 2023. Vending revenue in the UK and Ireland was down by 10.6% due to end of a high commission contract that has had an impact on revenues but a much more limited impact on profits due to the high commission rate. In total, Photo.ME represented 56.3% of Group revenue. The average revenue per machine (excluding VAT) was £5,644 per year (2023: £5,908). However, this reduction was mainly due to currency impact alongside slightly lower demand in H1 2024. Excluding the FX impact4, the average revenue per machine reduced by 0.7%. EBITDA was broadly flat at £61.6 million (2023: £61.8 million) and represented 53.9% of total Group EBITDA. The EBITDA margin was 35.6%. Capex increased to £17.1 million, up 92.1%, as the Group progressed with its rollout of next-generation photobooths, with more than 1,980 installed during 2024, primarily in France, prioritising the replacement of older machines in high-footfall locations. At 31 October 2024, the number of photobooths in operation was 30,613, in line with the prior year (2023: 30,762). Photobooths represented 63.5% of the Group’s total vending estate. Growth strategy update The photo ID market across existing and new geographic markets remains attractive for longer-term opportunities. In 2025, we plan to invest between £10.0 million and £12.0 million in our photobooth operations, with the majority of this investment targeted on replacing old machines. In France, which accounts for more than half of the Group’s photobooth revenue, the Group is progressing deployment of its next-generation photobooth, with a total of 1,980 machines installed to date. These machines offer consumers enhanced services in addition to core official photo ID secure upload technology, such as user personalisation through AI, photo filter technology for fun images and ‘mobile to print’ functionalities. While installations have been slightly slower than anticipated, partly due to some technical issues, the Group plans to have installed 8,000 next-generation photobooths by the end of financial year 2027. The Group’s operations are categorised into core activities (photobooths and laundry) and ancillary activities (digital printing and other vending). Below is an overview of each of the Group’s business areas. Overview of principal business areas ME Group plc Annual Report 2024 25 Chief Executive’s Report continued In addition, the Group is modernising the hardware of its existing photobooth estate by installing new proprietary software. This includes additional features and improved consumer functionality which is being installed across our Starbooth estate in France. The upgrade programme is expected to be completed by October 2025 and will see c3,200 Starbooths upgraded. Last year, we announced a trial of 11 photobooths across Sydney and Melbourne, having entered the Australian market in 2021 via a small acquisition. The trial is ongoing and operations in Australia remain at an early stage. Unattended Revolution laundry services and laundrettes (Core Business) 12 months ended 31 October 2024 12 months ended 31 October 2023 Total Laundry units deployed (owned, sold and acquisitions) 7,892 6,870 Total revenue from Laundry operations1 £95.8m £81.6m Total Laundry EBITDA £47.0m £39.5m Revolution   Number of Revolutions in operation 6,433 5,533   Percentage of total group vending estate (number of units) 13.3% 11.6%   Vending revenue from Revolutions2 £90.6m £76.1m   Revolution capex £25.4m £24.7m 1 Revenue from the operation of laundry machines plus revenue from the sale of laundry machines. 2 Vending revenue is revenue earned from machines in operation and excludes revenue from the sale of equipment, consumables, spare parts and services. This has previously been referred to as operating revenue. Our estate of Wash.ME unattended laundry services offer consumers affordable, large- capacity washing machines in convenient locations, whilst driving repeat business to partner sites and increasing dwell time. This core business area is the Group’s fastest-growing business by number of machine installations, revenue and EBITDA. Total revenue from laundry operations grew by 17.4% to £95.8 million (up 19.5% excluding FX impact4), driven by the expansion of our Revolution laundry operations which generate a higher level of turnover. At 31 October 2024, the total number of laundry units deployed (owned and sold) was up 14.9% at 7,892. Total laundry EBITDA increased by 19.0% to £47.0 million (up 21.0% excluding FX impact4). Total laundry EBITDA margin was 49.1%, compared with 48.4% in 2023. Revolution laundry operations driving growth During 2024, a record number of Revolution machines were installed, with 1,168 machines (consisting of 900 new machines and 268 relocations) added across key regions including France and the UK. This resulted in a 16.3% increase in the total number of Revolution machines to 6,433, in line with our target rate of 80-90 installations each month. Revolution laundry machines accounted for 13.3% of the Group’s total estate by number of machines, up from 11.6% in 2023. Vending revenue from Group-operated Revolution laundry machines grew by 19.1% to £90.6 million (up 21.2% excluding the FX impact4). This growth reflected an increase in consumer demand and estate expansion across our key focus markets, with laundry vending revenue in Continental Europe up 19.8% (up 22.2% excluding FX impact4) and up 15.7% in the UK and Republic of Ireland (up 17.0% excluding FX impact4). Revolution laundry operations represented 29.4% of Group revenue, up from 25.6% in 2023. The average revenue per machine (excluding VAT) increased by 2.3% to £15,143 per year (2023: £14,795). Excluding the FX impact4, the average revenue per machine increased by 4.2%. Revolution Capex increased 2.8% to £25.4 million, which was almost solely related to the costs associated with deploying Revolution machines, including purchase and installation costs. Growth strategy update The expansion of laundry operations is a key growth driver for the Group as we continue to expand operations through new and existing Strategic Report ME Group plc Annual Report 2024 26 partnerships in target territories and convenient, high-footfall locations. During 2024 we secured several new strategic partnerships, including with leading independent forecourt operator Motor Fuel Group (“MFG”). Under the agreement with MFG, the Group will be able to install and operate up to 300 Wash.ME Revolution laundry machines across MFG sites in the UK over the next five years. We signed a new agreement with Morrisons Supermarket Limited (“Morrisons”) to extend our existing partnership. Under the existing relationship, the Group operates and maintains 500 photobooths, 250 children’s rides and 37 Revolution laundry machines across Morrisons sites in the UK. The new five-year agreement will see the Group install at least 200 Revolution laundry machines at these supermarket locations over the next two years. These large scale roll-out partnerships help to increase visibility over installations and these high quality locations ensure that our Revolution Laundry units perform exceptionally well on a revenue basis. During 2025 the Group plans to install circa 1,200 net Revolution laundry machines in key territories, at an investment of between £28.0 million and £32.0 million, with a target return on investment in approximately 18 months. High-quality digital printing services (Ancillary business) 12 months ended 31 October 2024 12 months ended 31 October 2023 Number of units in operation 4,526 4,734 Percentage of total group vending estate (number of units) 9.4% 10.0% Vending Revenue1 £10.9m £11.3m Capex £0.7m £3.1m EBITDA £4.9m £4.2m 1 Vending revenue is revenue earned from machines in operation and excludes revenue from the sale of equipment, consumables, spare parts and services. This has previously been referred to as operating revenue. Our estate of digital printing kiosks offers a wide range of competitively priced print formats and personalised products, with operations in France, where most machines are situated, the UK and Switzerland. Print.ME is an ancillary business area. Vending revenue was 3.5% lower at £10.9 million (2023: £11.3 million), due to some FX impact4 and the redeployment of 240 machines to a new contract with FNAC, a leading French multinational retail chain. This contract employs a different business model and the revenue earned from it is recognised in sales of consumables, outside of the Print.ME segment. This has contributed to the like-for-like drop in vending revenue. Excluding the FX impact4 vending revenue was reduced by 1.8%. ME Group plc Annual Report 2024 27 Chief Executive’s Report continued The average revenue per machine (excluding VAT) was stable at £2,354 per year and excluding the FX impact4 it was £2,397 per year (2023: £2,374). Capex during the period amounted to £0.7 million (2023: £3.1 million) primarily focused on a programme of installing new lower-cost and compact Speedlab machines in France. EBITDA increased by 16.7%% to £4.9 million (2023: £4.2 million) and it represented 4.3% of Group EBITDA. The EBITDA margin increased to 45.0% (2023: 37.2%). Excluding the FX impact4, EBITDA was 21.4% higher than in 2023. At 31 October 2024, the Group had 4,526 digital printing kiosks in operation (2023: 4,734) which account for 9.4% of the Group’s total vending units in operation (2023: 10.0%). While Group capex is focused on growing its core activities, it continues to invest in ancillary activities where target returns can be achieved. In 2025, the Group plans to invest between £5.0 to £10.0 million of capex in the Print.ME business to further roll out its new Speedlab machines, initially in France. Other Vending (including Feed.ME) (Ancillary business) On 22 May 2024 the Group announced that, following a review of operations, its subsidiary company ME GROUP GSS had sold its entire interest in SEMPA SAS (“Sempa”) to Food Machine Invest. While the Feed.ME business area remains attractive, it has developed more slowly post- pandemic than anticipated. Subsequently, the Board is prioritising investment in the Group’s core activities, laundry and photobooths, where there are attractive long-term opportunities, particularly in the growth of its laundry operations. Under Feed.ME the Group operates 460 freshly squeezed orange juice vending machines and continues to sell a small number of pizza vending equipment. Subsequently, reflecting its size, Feed. ME business area has been incorporated into the Group’s ancillary business area of Other Vending. In 2023 SEMPA contributed £4.8 million revenue. The comparative figures for Other Vending have been adjusted to include Feed.ME. Strategic Report ME Group plc Annual Report 2024 28 Other Vending 12 months ended 31 October 2024 12 months ended 31 October 2023 Number of units in operation 6,629 6,496 Percentage of total group vending estate (number of units) 13.7% 13.6% Vending revenue1 £9.8m £10.6m Revenue from the sale of equipment £18.2m £21.7m Capex £2.7m £2.4m EBITDA £11.2m £12.6m 1 Vending revenue is revenue earned from machines in operation and excludes revenue from the sale of equipment, consumables, spare parts and services. This has previously been referred to as operating revenue. At 31 October 2024, the Group operated 6,629 Other Vending units (2023: 6,496), which represented 13.7% of the Group’s total vending estate by number of units. These included 2,400 children’s rides (Amuse.ME), 3,388 photocopiers (Copy.ME), 460 freshly squeezed orange juice vending machines (Feed.ME) and 381 other miscellaneous machines. These services are ancillary activities with machines typically located in high-footfall locations alongside the Group’s principal activities, there by benefiting from existing site owner relationships and operating synergies. Feed.ME units are mostly situated in Japan and Australia. Amuse.ME units are mostly situated in the United Kingdom and the Netherlands. Copy.ME units are mostly situated in France. The Group will continue to operate Other Vending units where profitable. In addition, the Group sells pizza-vending equipment in Continental Europe and the UK, albeit on a small scale, with 29 pizza machines sold in 2024. It is expected this will remain a small financial contributor to the Group going forward. Vending revenue from Other Vending was £9.8 million (2023: £10.6 million) and represented 3.2% of the Group’s total revenue. In addition, the Group earned £18.2 million of revenue from the sale of food vending equipment and the sale of other equipment, spare parts, consumables & services (2023: £21.7 million). EBITDA for Other Vending was £11.5 million (2023: £12.6 million), with an EBITDA margin of 41.1%. Excluding the FX impact4, total revenue was £29.1 million and EBITDA was £11.7 million. Serge Crasnianski Chief Executive Officer & Deputy Chairman 24 February 2025 Ancillary activities include machines typically located in high- footfall locations alongside the Group’s core activities,there by benefiting from existing site owner relationships and operating synergies. ME Group plc Annual Report 2024 29 Innovation and Diversification The Group has a dedicated approach to innovation which supports the diversification of our products and services. An in-house R&D team of 50+ engineers is focused on creating new complementary services and evolving the services offered across our existing estate in response to ever-changing consumer needs, whilst maximising return on investment. Strategic Report ME Group plc Annual Report 2024 30 Alongside its core activities, the Group continues to explore new services which can address ever changing consumer needs. Our latest developments include Kee.ME, a new automated key cutting booth, which builds on the heritage of the Company’s Grenoble- based subsidiary, KIS (Key Independent Systems), founded in 1963, commercialised the first automatic key cutting machine. To date, the Group has three machines in operation in France and, whilst at an early trial stage, the initial results are positive and have shown good interest from our customers and from consumers. ME Group plc Annual Report 2024 31 Review of Performance by Geography Commentary on the Group’s financial performance is set out below, in line with the segments as operated by the Board and the management of the Group. These segmental breakdowns are consistent with the information prepared to support the Board’s decision-making. Although the Group is not managed around product lines, some commentary below relates to the performance of specific products in the relevant geographies. Vending units in operation At October 2024 At October 2023 Number of units % of total estate Number of units % of total estate Continental Europe 26,909 55.8% 26,232 55.1% UK & Republic of Ireland 6,321 13.1% 6,297 13.2% Asia Pacific 15,000 31.1% 15,037 31.6% Total 48,230 100% 47,566 100% The total number of vending units in operation at 31 October 2024 increased by 1.4% to 48,230 (2023: 47,566), predominantly driven by laundry installations across Continental Europe and the UK & Republic of Ireland. Key financials The Group reports its financial performance based on three geographic regions of operation: (i) Continental Europe; (ii) the UK & Republic of Ireland; and (iii) Asia Pacific. Revenue by geographic region 12 months ended 31 October 2024 12 months ended 31 October 2023 Continental Europe £209.0m £205.2m UK & Republic of Ireland £49.2m £48.2m Asia Pacific £49.7m £44.3m Total £307.9m £297.7m Strategic Report ME Group plc Annual Report 2024 32 Analysis of revenue by geographic region 12 months ended 31 October 2024 Continental Europe United Kingdom & Ireland Asia Pacific Total Photo.ME £111.6m £19.3m £42.3m £173.2m Wash.ME £64.1m £27.2m £0.2m £91.5m Print.ME £10.7m £0.1m £0.1m £10.9m Other Vending (including Feed.ME) £1.8m £1.6m £6.4m £9.8m Total Vending Revenue £188.2m £48.2m £49.0m £285.4m Sales of equipment, spare parts, consumables & services £20.8m £1.0m £0.7m £22.5m Total Revenue £209.0m £49.2m £49.7m £307.9m 12 months ended 31 October 2023 Continental Europe United Kingdom & Ireland Asia Pacific Total Photo.ME £114.3m £21.6m £36.6m £172.5m Wash.ME £53.5m £23.5m £0.3m £77.3m Print.ME £11.1m £0.1m £0.1m £11.3m Other Vending (including Feed.ME) £2.1m £1.8m £6.7m £10.6m Total Vending Revenue £181.2m £47.0m £43.5m £271.7m Sales of equipment, spare parts, consumables & services £24.0m £1.2m £0.8m £26.0m Total Revenue £205.2m £48.2m £44.3m £297.7m Operating profit by geographic region 12 months ended 31 October 2024 12 months ended 31 October 2023 Continental Europe £68.1m £62.6m UK & Republic of Ireland £13.0m £12.4m Asia Pacific £4.1m £4.3m Corporate costs £(10.8)m £(11.8)m Total £74.4m £67.5m Total revenue increased by 3.4% to £307.9 million (2023: £297.7 million) and operating profit by 10.2%, reflecting continued strong demand for our core photobooth and laundry services, particularly across Continental Europe and the UK & Republic of Ireland in 2024. Excluding FX impact4, total revenue was up 6.8% and Operating profit was up 13.2%. Continental Europe remains the Group’s largest region by both number of machines and contribution to Group revenue. ME Group plc Annual Report 2024 33 Continental Europe is the Group’s largest region by both number of machines and contribution to Group revenue. The reported performance was impacted by a 2.1% decrease in the value of the euro against the pound sterling. Total revenue increased by 1.9% to £209.0 million (2023: £205.2 million) driven primarily by a strong laundry performance, although this increase was up 3.8% when excluding FX impact4. The 13.3% decline in sales of equipment, spare parts, consumables & services is due to the disposal of SEMPA in May 2024. Vending revenue was up 3.9% year-on-year. Continental Europe contributed 67.9% of total Group revenue. Wash.ME achieved revenue of £67.9 million, an increase of 18.5% (2023: £57.3 million), as the Group continued to expand the number of Revolution units in operation primarily in France. Excluding FX impact4 the increase was 20.9%. Photobooth operations continued to be a key contributor of total Group revenue, with vending revenue from Photo.ME at £111.6 million (2023: £114.3 million), a reduction of 2.4% primarily due to FX impact4. Excluding FX impact4, the reduction was 0.5%. France remained a key focus for the ongoing next-generation photobooth rollout programme and during the year the Company installed 1,200 units, slightly behind the target level, taking the total number of machines in operation in France to 1,600. The installation of next-generation photobooths remains a key focus for the Group and in 2025 the Group expects to install 2,600 machines. At 31 October 2024, 26,909 units were in operation in Continental Europe which represented 55.8% of the Group’s total estate. Revenue increased by 2.1% to £49.2 million driven by a continued strong performance for laundry in the region and contributed 16.0% of total Group revenue. Wash.ME revenue in the UK & Republic of Ireland increased by 15.4% to £27.7 million (2023: £24.0 million) reflecting significant expansion, with the Group marking the installation of its 1,000th Revolution laundry machine in the UK, a key milestone in the laundry growth strategy. ME Group will continue to expand its Wash.ME operations in the region. As detailed above, the Group secured a number of new agreements including a new partnership agreement with Motor Fuel Limited (“MFG”), the UK’s largest independent forecourt operator, and an extended agreement with Morrisons, a leading UK supermarket. Photo.ME vending revenue declined by 10.6% due to end of a high commission contract that has had an impact on revenues but a much more limited impact on profits due to the high commission rate. Operating profit increased by 4.8% to £13.0 million (2023: £12.4 million), which reflected the higher level of revenue for the region due to the large expansion of the laundry business. The UK & Ireland contributed 17.5% of Group operating profit. As at 31 October 2024, there were 6,321 units in operation, an increase of 0.4% (2023: 6,297), representing 13.1% of the Group’s total vending estate. Review of Performance by Geography continued UK & Republic of Ireland Continental Europe Strategic Report ME Group plc Annual Report 2024 34 Revenue increased by 12.2% to £49.7 million compared to £44.3 million in 2023, driven by a strong photobooth performance in the region. The reported performance was impacted by a 12.0% decrease in the value of the Japanese yen against the pound sterling. Excluding FX impact4, revenue increased by 24.6%. Vending revenue for photobooth services increased by 15.6% to £42.3 million (2023: £36.6 million), which reflected the expanded portfolio of photobooths following the full integration of 3,548 traditional photobooths acquired in October 2023. Excluding the FX impact4, revenue was up 28.7%. In addition, the Group continues to operate 460 freshly squeezed orange juice vending machines in Japan and Australia, and this market remains a growth opportunity for the Group. Operating profit decreased by 4.7% to £4.1 million, an increase of 48.8% excluding FX impact4. Key Performance Indicators (KPIs) The Group’s growth strategy (set out on page 11 of the 2024 Annual Report) is focused on growing its core business areas of laundry and photobooth operations. The Group measures its strategic and operational performance using different types of indicators. The main objective of these KPIs is to monitor the Group’s cash generation, long-term profitability, preservation of the value of its assets, and returns to shareholders. Description Relevance Performance 12 months ended 31 October 2024 12 months ended 31 October 2023 Total Group revenue at actual rate of exchange £307.9m £297.7m Group Profit before tax £73.4m £67.1m Increase in number of photobooths (149) 3,137 Net increase in number of Laundry units (operated) The increase in number of Revolutions is a constant priority and a main driver for growth 900 779 Asia Pacific ME Group plc Annual Report 2024 35 Section 172(1) Statement Engagement therefore is crucial to ensuring that Directors fully understand stakeholder needs and can make well-informed decisions that have addressed differing and sometimes conflicting priorities. Our overview of stakeholder engagement that has taken place during the year can be found on pages 38 to 40. Below is set out our section 172(1) statement in which we explain how the Board has fulfilled its duty in section 172 whilst having regard to the matters set out in that section. How the directors fulfil their duty under Section 172(1) of the Companies Act 2006: Diverse set of skills, knowledge and experience The Board has a diverse set of skills, knowledge and experience which help the Directors to make informed decisions that promote the long-term success of the Company whilst considering the needs of the Company’s stakeholders. Further information on the Board’s composition, including the skills and experience of the individual Directors appears on pages 72 to 74 and 80 to 83. Board information and monitoring The Board receives detailed papers and in- person updates from management which they question challenge and debate, to ensure conflicting views are carefully considered. Management also gives regular updates on the progress of the implementation of actions and decisions to allow the Board to review and if appropriate, course-correct, as situations (and stakeholder priorities) inevitably evolve. Further information on the Board’s activities can be found on pages 80 to 91. Board discussion All Directors are expected to constructively challenge and contribute to discussions, as well as offer additional perspectives, advice and strategic guidance. Strategic direction and culture The Board is responsible for setting the strategic direction, values and culture of the Company. It sets the tone of how business is done throughout the Group. Stakeholder considerations are central to decision-making at all levels of the Group. Further information on corporate strategy can be found on pages 6 to 17. Directors are required to act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard, amongst other matters, to the factors listed in section 172(1) (a) to (f) of the Companies Act 2006. Strategic Report ME Group plc Annual Report 2024 36 The Board has a diverse set of skills, knowledge and experience which help the Directors to make informed decisions that promote the long-term success of the Company whilst considering the needs of the Company’s stakeholders. These matters permeate the entire range and gamut of the Directors’ considerations, deliberations and actions. The table below outlines other main areas of this report which detail how the Directors have had regard to the section 172(1) limbs. Section 172 duty Where you can find more information (a) The likely consequence of any decisions in the long term Our Business Model: pages 6 to 7 Strategic Report: pages 4 to 67 Stakeholder Engagement: pages 38 to 40 Principal risks (primarily steps taken in mitigation): pages 42 to 45 (b) The interests of the Company’s employees Stakeholder Engagement: pages 38 to 40 Remuneration Committee Report: pages 94 to 111 (c) The need to foster the Company’s business relationships with suppliers, customers and others Our Business Model: pages 6 to 7 Stakeholder Engagement: pages 38 to 40 (d) The impact of the Company’s operations on the community and the environment Strategic Report: pages 4 to 67 Sustainability at ME Group; pages 46 to 65 TCFD Report: pages 57 to 65 Also, visit: https://me-group.com/our-ambition/ (e) The desirability of the Company maintaining a reputation for high standards of business conduct Our Business Model: pages 6 to 7 TCFD: pages 57 to 65 Risk Management: page 91 Audit Committee Report: page 84 Our various policies including our Anti-corruption and Bribery Policy (see: https://me-group.com/company- documents/) (f) The need to act fairly as between members of the Company Stakeholder Engagement: pages 38 to 40 The Board has a diverse set of skills, knowledge and experience which helps the Directors to make informed decisions that promote the long-term success of the Company ME Group plc Annual Report 2024 37 Consumers How we engage How this engagement influenced Board discussions and decision-making Senior management considers the needs of the consumer and how to provide the best-in-class service for the most competitive price. A number of the changes we have made to our products are in response to consumer needs. In making its decisions, the Board pays regard to the need to balance consumer needs with customer and commercial outcomes. Some examples of the product changes include photobooths that are designed to allow easy access and use for persons with a disability. Customers How we engage How this engagement influenced Board discussions and decision-making Continual contact with customers through customer-relation managers. Feedback can be shared with the Executive Directors and the Board. Employees How we engage How this engagement influenced Board discussions and decision-making Briefings from management as to how the Company is doing. The Executive Directors and the CFO* have regular briefings with senior management and through the medium of these meetings are able to learn about employee concerns and views so that they can be taken into account in making decisions which are likely to affect their interests. There are open forums for staff to come forward with any queries. Consultations required by law are complied with (e.g. in cases of redundancy). The Company operates an executive share option scheme, and rewards senior management with bonuses. The Company encourages a common awareness on the part of all employees of the financial and economic factors affecting the performance of the Company; this is achieved through the regular meetings referred to above. Application of our Equality, Diversity and Inclusion Policy See page 88 * Although the CFO is a not a statutory director of the Company, he regularly attends board meetings (and Audit Committee meetings) and interacts closely with the Board, particularly the audit committee. Section 172(1) Statement continued Stakeholder Engagement Strategic Report ME Group plc Annual Report 2024 38 Shareholders How we engage How this engagement influenced Board discussions and decision-making Regular engagement by the Chairman and the Senior Independent Director with major shareholders. In July 2022, the Company announced it was adopting a new distribution policy under which for the foreseeable future it would pay annual dividends in excess of 55% of its annual profits after tax subject to market and capital requirements. This total would be split between interim dividends (1/3) (generally to be paid in the month of November) and final dividends (2/3) (generally to be paid in the month of May). In August 2023, with members’ approval, the Company embarked on a share buyback programme. This resulted in the Company’s buying back a total of 2,368,626 ordinary shares of 0.5p each all of which were cancelled on 12 July 2024. As at the date of this statement, the Company does not hold any of its shares in treasury. Partners and suppliers How we engage How this engagement influenced Board discussions and decision-making Regular engagement with suppliers and partners, including through our: ▪Supplier/procurement processes engaged at the time of appointment and during the relationship ▪Regular monitoring and reviews of financial and operating resilience ▪Reporting on payment of suppliers The Executive Directors plus the CFO (and where necessary the Non-executive Directors) review and approve material contracts with suppliers and partners, joint ventures and acquisitions. ME Group plc Annual Report 2024 39 The community and environment How we engage How this engagement influenced Board discussions and decision-making The Board relies on regular updates from the Executive Team who in turn rely on direct or indirect feedback from senior management and other colleagues and customers, as well as general observations on current best practices and individual customer recommendations. These provide useful insights and guides to help shape the Group’s activities. See section headed ‘Sustainability at ME Group’: pages 46 to 65 Investors How we engage How this engagement influenced Board discussions and decision-making Comprehensive investor relations programme including formal presentations to investors and analysts on the half-year and full-year results; formal investor roadshows in the UK; and an ongoing programme of one-to- one meetings and group meetings with institutional investors, fund managers and analysts. Meetings which relate to governance are attended by the Chairman or another Non-executive Director: ▪Annual Report and Annual General Meeting (AGM) ▪Corporate website and market announcements ▪Active consultation on remuneration framework and policies The Remuneration Committee consults with major investors and external remuneration specialists before introducing, and then updating, any changes to the implementation of the remuneration policy. In discharging its duties, the Remuneration Committee takes advice from external remuneration consultants to ensure that it is up to date with market trends, expectations and best practises. The Board reviews the Group’s dividend. Involvement of the Chairman including his meeting with major shareholders highlights the importance of governance from the top down. The AGM in particular provides a convenient forum for shareholders to question the Board, give useful feedback and make helpful suggestions. It is normally very well attended and constructive. Section 172(1) Statement continued Strategic Report ME Group plc Annual Report 2024 40 ME Group plc Annual Report 2024 41 Principal Risks These risks are accepted as inherent to the Group’s business. The Board recognises that the nature and scope of these risks can change; it therefore regularly reviews the risks faced by the Group as well as the systems and processes to mitigate them. The table below sets out what the Board believes to be the principal risks and uncertainties, their impact, and actions taken to mitigate them. Economic Nature of risk Description and impact Mitigation Global economic conditions Economic growth has a major influence on consumer spending. A sustained period of economic recession and a period of high inflation could lead to a decrease in consumer expenditure in discretionary areas. The Group focuses on maintaining the characteristics and affordability of its needs-driven products. Like most businesses around the world, the Group has had to face a significant increase in supply chain and raw material costs, however, its strong position in the markets in which it operates gives the Group significant pricing power. The Group has no exposure to the invasion of Ukraine by Russia and other conflict areas. Volatility of foreign exchange rates The majority of the Group’s revenue and profit is generated outside the UK, and the Group’s financial results could be adversely impacted by an increase in the value of sterling relative to those currencies. The Group hedges its exposure to currency fluctuations on transactions, as relevant. However, by its nature, in the Board’s opinion, it is very difficult to hedge against currency fluctuations arising from translation in consolidation in a cost-effective manner. As with any business, the Group faces risks and uncertainties that could impact the achievement of the Group’s strategy. Strategic Report ME Group plc Annual Report 2024 42 Regulatory Nature of risk Description and impact Mitigation Centralisation of the production of ID photos In many European countries where the Group operates, if governments were to implement centralised image capture, for biometric passport and other applications, or widen the acceptance of self-made or home-made photographs for official document applications, the Group’s revenues and profits could be affected. The Group has developed new systems that respond to this situation, leveraging 3D technology in ID security standards, and securely linking our booths to the administration repositories. Solutions are in place in France, Ireland, Germany, Switzerland and the UK. Furthermore, the Group also ensures that its ID products remain affordable and of a high-quality. Strategic Nature of risk Description and impact Mitigation Identification of new business opportunities The failure to identify new business areas. This may impact the ability of the Group to grow in the long-term. Management teams constantly review demand in existing markets and potential new opportunities. The Group continues to invest in research in new products and technologies. Inability to deliver anticipated benefits from the launch of new products The realisation of long-term anticipated benefits depends mainly on the continued growth of the laundry business and the successful development of integrated secure ID solutions. Failure in this regard could lead to a lack of competitiveness. The Group regularly monitors the performance of its entire estate of machines. New technology-enabled secure ID solutions are subjected to intensive trials before launch and the performance of operating machines is continually monitored. ME Group plc Annual Report 2024 43 Market Nature of risk Description and impact Mitigation Commercial relationships The Group has well-established, long- term relationships with a number of site- owners. The deterioration in the relationship with, or ultimately the loss of, a key account would have an adverse, albeit contained, impact on the Group’s results, bearing in mind that the Group’s turnover is spread over a large client base and none of the accounts represent more than 2% of Group turnover. To maintain its performance, the Group needs to have the ability to continue trading in good conditions in France and the UK. The Group’s major key relationships are supported by medium- term contracts. The Group actively manages its site-owner relationships at all levels to ensure a high-quality service. The Group continues to monitor the situation in both the French and the UK markets. Operational Nature of risk Description and impact Mitigation Reliance on foreign manufacturers The Group sources most of its products from outside the UK. Consequently, the Group is subject to risks associated with international trade. This could impact competitiveness and profitability. Conducting research into quality and ethics before the Group procures products from any new country or supplier. The Group maintains very close relationships with both its suppliers and shippers to ensure that risks of disruption to production and supply are managed appropriately. Reputation The Group’s brands are key assets of the business. Failure to protect the Group’s reputation and brands could lead to a loss of trust and confidence. This could result in a decline in our customer base. The protection of the Group’s brands in its core markets is sustained with certain unique features. The appearance of the machine is subject to high maintenance standards. Furthermore, the reputational risk is diluted as the Group also operates under a range of brands. Product and service quality The Board recognises that the quality and safety of both its products and services are of critical importance and that any major failure could affect consumer confidence and the Group’s competitiveness. The Group continues to invest in its existing estate, to ensure that it remains contemporary, and in constant product innovation to meet customer needs. The Group also has a programme in place to regularly train its technicians. Principal Risks continued Strategic Report ME Group plc Annual Report 2024 44 Technological Nature of risk Description and impact Mitigation Failure to keep up with advances in technology The Group operates in fields where upgrades to new technologies are critical. Failure to exceed or keep in step could result in a lack of ability to compete. The Group mitigates this risk by continually focusing on R&D. Cyber risk: Third party attack on secure ID data transfer feeds The Group operates an increasing number of photobooths capturing ID data and transferring these data directly to government databases. The rising threat of cybercrime could lead to business disruption as well as to data breaches. The Group undertakes an ongoing assessment of the risks and ensures that the infrastructure meets the security requirements. Environmental Nature of risk Description and impact Mitigation Increased potential legislation and the rising cost of waste disposal. Energy consumption, water scarcity, and rising car fuel prices (for employees, suppliers, transportation and final consumers) and raising awareness of the climate crisis amongst consumers The rising costs associated with compliance with such increased demands could impact on overall profitability. The Group focuses on reducing the amount of waste produced; and the recovery, refurbishment and resale of electrical equipment such as children’s rides which promote the principle embodied in recent legislation of reuse before recycling. ME Group plc Annual Report 2024 45 Sustainability at ME Group Statement from CEO I believe that for ME Group, sustainability is a responsibility and must be embedded within every aspect of the business. Sustainability can be a driver of innovation and an opportunity for growth. Our focus on sustainability is helping us to reduce our environmental impact while also delivering benefits to society. I believe that the progress we have made this past financial year in part reflects the commitment of our teams worldwide and our vision for a sustainable future. Serge Crasnianski CEO and Deputy Chairman Non-financial and sustainability information statement Strategic Report ME Group plc Annual Report 2024 46 Executive summary ME Group’s Commitment to Sustainability Sustainability remains a cornerstone of ME Group’s corporate strategy. It aims to deliver eco-responsible solutions that integrate seamlessly into the daily lives of the Group’s customers. The Group’s operations are designed to be efficient, inclusive, and aligned with the needs of its stakeholders and the environment. From enhancing energy efficiency in facilities to creating products that minimise resource consumption, sustainability is at the heart of every decision made. Key achievements and highlights from the 12 months to 31 October 2024 Enhanced corporate governance with the establishment of a Sustainability Committee. Significant development of employee training, delivering over 500 hours of technical education to the workforce. Launched modularisation technology, enabling remote updates to vending machines, reducing travel emissions significantly. KPI Snapshot Training Hours: 500+ hours delivered. Renewable Energy: solar panels provide up to 30% of energy for laundry kiosks. Sustainability at ME Group Sustainability governance In 2024, ME Group established its Sustainability Committee which ensures that environmental, social, and governance principles are embedded across all levels of the Group’s operations. This committee is chaired by Laurent Levy, Director of Corporate Sustainability Reporting Directive (“CSRD”) (a non-board position) and comprises senior executives, including the CFO and Group Head of Investor Relations. It meets quarterly to review progress, address challenges, and set strategic priorities. Ethics and policies are central to the governance framework. The Group adheres to robust anti- corruption measures, complies with international standards for cybersecurity, and engages regularly with stakeholders to ensure its practices are transparent and inclusive. Material topics and stakeholder engagement ME Group is committed to regular engagement with all stakeholder groups, both internal and external. It provides employees, customers, and suppliers with regular updates on the business and the progress it is making. It also conducts regular surveys, forums, and direct consultations to ensure its strategy aligns with their expectations. Stakeholder feedback was fundamental to the identification of the Group’s material topics. The materiality assessment was conducted in 2021, since then the findings have been guiding all aspects of ME Group’s operations and its corporate and sustainability priorities. There are 25 priority material topics which have been grouped into five key focus areas: environmental impact, social inclusion, operational innovation, customer satisfaction, and community engagement. These five areas are the basis of the Group’s sustainability framework, and it remains focused on delivering on all of them. ME Group plc Annual Report 2024 47 Operational innovation Operational innovation is critical to ME Group’s culture of advancement. It ensures that improved energy efficiency reduces costs and improves the Group’s emissions profile. Innovation also drives the development of new services to meet evolving customer demands and ensures that the business focuses on increasing accessibility for all potential consumers. Product optimisation The business continues to enhance its product lines to reduce energy and water consumption. The Revolution Laundries are a prime example, with built-in efficiency measures that reduce water use by up to three times compared with domestic washing. Cloud operating system Cloud-based management system enables remote diagnostics and updates for vending machines, reducing the need for physical interventions and associated emissions. R&D As a business that is driven by product innovation, research and development remains a priority. This year, the Group focused on improving solar panel efficiency and optimising energy use in kiosks. Cybersecurity Cybersecurity measures have been strengthened through partnerships with certified international experts, ensuring the protection of customers’ sensitive data. Global digital transition Digital transformation initiatives include upgrading systems to enhance efficiency and customer experience, further improving ME Group’s market leadership position. Sustainability Framework The sustainability framework is structured around five key focus areas: 1. Operational Innovation: driving improved efficiency through technology. 2. Strategy and development: embedding sustainability into our corporate strategy 3. Services and clients: Delivering solutions that address consumers’ evolving needs 4. HR and Employees: Ensuring our people have the opportunity to maximise their potential 5. CSR approach: protecting the environment and supporting society Timeline of Progress 2023 enhanced recycling and energy efficiency initiatives. 2024 established Sustainability Committee and started to establish CSRD reporting standards. 2025 planned launch of expanded modularisation efforts and additional renewable energy projects. Sustainability at ME Group continued Strategic Report ME Group plc Annual Report 2024 48 Case study: To comply with the French Climate and Resilience Act, ME Group is transitioning its largest vehicle fleet in France to low- emission alternatives. By adhering to quotas for electric and hybrid vehicles—10% by 2022, 20% by 2024, and 50% by 2030— it is supporting sustainable mobility while meeting regulatory requirements. In addition to this, at the KIS site, it is installing 10 electric vehicle terminals (2x22kW and 8x7kW) to provide charging facilities for both the Group and personal electric vehicles. Case Study Revolution Laundry: by combining advanced spinning technology and renewable energy, the Group’s laundry machines offer an efficient, eco-friendly alternative to traditional laundry methods. boosting brand recognition and strengthening consumer trust. By highlighting eco-friendly practices, ME Group is positioned as a leader in sustainable innovation. Sustainability of the ID and Photo Range The Group’s ID and photo vending machines have been improved to reduce energy use and incorporate recyclable materials, aligning with circular economy principles. These efforts have not only reduced negative environmental impacts but also enhanced the durability and appeal of the products. Case Study Upgrades at KIS, the Group’s research and development centre based in Grenoble, France: ME Group has undertaken a comprehensive energy efficiency overhaul at its KIS site in alignment with the Tertiary Sector Decree. Key upgrades include installing condensing boilers, insulating heating and hot water networks, roof thermal insulation across 15,000m², and replacing windows and doors. These efforts will contribute to a target of 30% energy reduction by 2030 which will positively impact costs and emissions. Strategy and development International development ME Group has expanded its global presence by establishing operations in key markets across Asia and Europe, leveraging sustainability-driven product innovations to penetrate new territories. This approach integrates market-specific insights allowing it to effectively adapt solutions to meet local needs. Financial performance Sustainability has proven to be a growth driver, with measurable contributions to revenue through the adoption of energy-efficient products and processes. The Group’s eco-responsible offerings, such as solar-powered laundries, have attracted environmentally conscious consumers and enhanced profitability. Key accounts coordination To better serve its largest clients, the business has streamlined its coordination efforts across multiple regions. This ensures consistency in service quality and adherence to sustainability objectives, reinforcing its commitment to responsible business practices. Brand Awareness The Group’s sustainability initiatives have featured in some of its communication campaigns, ME Group plc Annual Report 2024 49 These programmes are designed to empower employees and align their career progression with organisational objectives. Induction The Group’s induction process is continually reviewed and updated to ensure new hires understand the business, its strategy, its approach to sustainability and embrace its corporate values from day one. This work will continue in 2025. Case Study Employee Development Programmes: by providing targeted training and development opportunities, the Group has equipped its workforce with the skills and motivation needed to excel. Its commitment to developing its people illustrates a firm commitment to employee growth and satisfaction. Equality, diversity, and inclusion ED&I remains central to ME Group’s ethos. The Board is committed to creating a culture where all employees can flourish. See page 88 of the Annual Report to read about the Group’s approach to ED&I, its policy and its performance over the reporting period. Gender diversity The table below shows the gender diversity of the Group’s employees as at 31 October 2024 with corresponding figures as at 31 October 2023. As at 31 October 2024 Total Male Female The Board of ME Group 8 5 3 Senior managers in the Group (excluding directors of ME Group) 18 16 2 Employees (excluding above) 1,101 906 195 Total 1,127 927 200 As at 31 October 2023 Total Male Female The Board of ME Group 8 5 3 Senior managers in the Group (excluding directors of ME Group) 21 15 6 Employees (excluding above) 1,172 968 204 Total 1,201 988 213 Services and clients Optimisation of the Commercial Relationship with B2B The Group has strengthened its relationships with B2B clients by offering customised solutions that align with their sustainability goals. Regular feedback loops and tailored offerings have enhanced client satisfaction and retention. Strength of network technicians The network of technicians has been expanded and upskilled to provide prompt and efficient support, ensuring minimal downtime and consistent service quality. Growth of the laundromat range The laundromat range has seen significant growth, driven by consumer demand for sustainable and convenient laundry solutions. Features such as self-metered ecological detergents and energy-efficient drying systems have been key differentiators. Increased flow of customers Improved customer experience, driven by digital innovations and enhanced service delivery, has led to increased footfall across the Group’s locations. Loyalty programmes and eco-conscious branding have further strengthened customer relationships. HR and employees Pride of Belonging The Group recognises that employees take pride in being part of a Group that is sensitive to sustainability. Initiatives such as employee recognition programmes and team-building activities have reinforced a sense of community and purpose. HR Policy/Collaborative Management The Group HR policies promote inclusivity and collaborative management, ensuring that all voices are heard and valued. Flexible working arrangements and mental health support programmes have been introduced to enhance employee well-being. Training Policy Over 500 hours of training were delivered this year, focusing on technical skills, sustainability practices, and leadership development. Sustainability at ME Group continued Strategic Report ME Group plc Annual Report 2024 50 Communities User satisfaction Enhanced customer feedback mechanisms have allowed the Group to better understand and address user needs, leading to improved satisfaction scores across all markets. CSR Approach The CSR approach focuses on creating shared value through community partnerships, such as the Group’s work with companies and organisations supporting individuals with disabilities, encouraging their participation in economic and social life. An example of this is the appointment of two suppliers of fruit for the Group’s Paris offices that employ people with disabilities. Collaborations such as these reinforce ME Group’s role as a socially responsible enterprise. Attractiveness of the employer brand ME Group’s reputation as a sustainability leader has established the company as an employer of choice. Initiatives promoting diversity, inclusion, and employee well-being have strengthened its employer brand. Case Study ME Group’s commitment to social inclusion is brought to life through its collaboration with the Chateauroux prison in France. By sourcing fabrics directly and enabling inmates to learn the process of producing curtains, including accessory procurement and finishing, it is supporting rehabilitation through skill development and employment. Since 2018, this programme has produced 21,631 curtains, with a growing volume in 2023 (3,394 curtains) and 2024 (3,737 curtains). CSR approach Environmental Stewardship Circular Economy ME Group has embraced circular economy principles by prioritising recycling and resource efficiency. Initiatives such as refurbishing vending machines and repurposing materials have significantly reduced waste and extended product lifecycles. Case Study At ME Group Japan, as part of our efforts to reduce wastage and contribute to a sustainable environment and promote a circular economy, we set the goal to recycle all our food waste. With our fresh orange and apple juice vending machines, we produce yearly over 500t of peels and fruit leftovers. In FY24 we started partnering with Alveare based in Kyoto to recycle food waste to become part of high-quality products such as orange soap, oils or fragrances. Other exciting products and collaborations with other companies will be starting this business year and help us to scale up the volume further. Case study The Group’s Revolution Laundries embody environmental stewardship through innovative features like professional-grade detergent injection systems, which are Ecolabel certified, and efficient water heating tanks that save 720 litres annually per kiosk. In addition, new photovoltaic panels generate up to 1.2 kW per machine, achieving energy savings of 10-30%. ME Group plc Annual Report 2024 51 Specific Sustainability Metrics and Reporting Reporting GHG emissions In accordance with the disclosure requirements for listed companies, the table below shows the Group’ s greenhouse gas emissions for the current and preceding financial year. The Group is required to report the emissions it is responsible for (as defined below), and to provide at least one intensity ratio together with an explanation of methodology used. The table below explains what data has been included in this report and why. Assessment Parameters ME Group Comments Consolidation approach The figures below are based on subsidiary companies owned by ME Group, except for those non-material subsidiary companies whose vending estate comprises less than 50 machines. This is because it would not be practicable for the Group to include those subsidiary companies in the data. For those investments where the Group has less than 50% of the issued share capital, the Group does not have operational control for day-to-day activities and these entities are not included in the above figures. Boundary summary The Group has included vending estates which are owned by the Group even though it does not directly control the operational use (i.e. period of operation) for these assets. Emission factor source Department of Business, Energy & Industrial Strategy, 2016 GHG Conversion Factors for Company Report (2016: DEFRA 2014). Methodology The Group followed the Greenhouse Gas Protocol Corporate Standard. Materiality threshold As mentioned above, subsidiary companies with less than 50 units of operating equipment have been excluded, as have depots and other property units where the total amount spent on heating, lighting and power is less than £50,000 per annum per site. It would not be practicable for the Group to include sites where the consumption is below this threshold. Fugitive emissions The Group has not reported fugitive emissions (which include leakages from refrigerants used in air conditioning units, etc.) because no data were available and, given the low number of such units in the Group, management did not consider such emissions to be material. Intensity ratio The GHG intensity ratio is calculated as the total GHG emissions in tons of CO2e (including Scope 1, 2, and 3 based on the availability of the data) per unit of operating equipment Greenhouse gas (GHG) and energy consumption Strategic Report ME Group plc Annual Report 2024 52 Global GHG Emissions Breakdown of GHG Emissions UK and Offshore 12 months ended 31 October 2024 12 months ended 31 October 2023 Scope CO2 emissions items (Tons of CO2e) (Tons of CO2e) Scope 1 Energy – Gas 241 241 Scope 2 Energy – Electricity 2 3 Scope 3 Use (machines operation) 4,081 3,573 Scope 3 Travel No data No data Scope 3 Inputs for machine production No data No data Scope 3 Car fleet 280 241 Scope 3 Purchasing for the Group No data No data Scope 3 Inputs for machine user No data No data Scope 3 Direct Waste 43 43 Total 4,647 4,100 Number of machines 5,444 5,708 Intensity ratio 0.8536 0.7183 Overseas 12 months ended 31 October 2024 12 months ended 31 October 2023 Scope CO2 emissions items (Tons of CO2e) (Tons of CO2e) Scope 1 Energy – Gas 14 230 Scope 2 Energy – Electricity 300 282 Scope 3 Use (machines operation) 28,148 25,279 Scope 3 Travel 230 107 Scope 3 Inputs for machine production No data No data Scope 3 Car fleet 3,457 3,457 Scope 3 Purchasing for the Group No data No data Scope 3 Inputs for machine user No data No data Scope 3 Direct Waste 80 79 Total 32,229 29,434 Number of machines 42,005 38,538 Intensity ratio 0.7672 0.7637 Group 12 months ended 31 October 2024 12 months ended 31 October 2023 Scope CO2 emissions items (Tons of CO2e) (Tons of CO2e) Scope 1 Energy – Gas 255 471 Scope 2 Energy – Electricity 303 285 Scope 3 Use (machines operation) 32,230 28,852 Scope 3 Travel 230 107 Scope 3 Inputs for machine production No data No data Scope 3 Car fleet 3,737 3,698 Scope 3 Purchasing for the Group No data No data Scope 3 Inputs for machine user No data No data Scope 3 Direct Waste 123 122 Total 36,878 33,535 Number of machines 47,449 44,246 Intensity ratio 0.7772 0.7579 * 2023 CO2 emission data have now been restated based on improvements in our data collection and verification software During the year ended 31 October 2024, the Group used emissions equal to 36,878 tonnes of carbon dioxide resulting from the purchase of electricity, heat, steam or cooling for its own use, as well as indirect emissions (including emissions from business traveling, car fleet, supply chain, etc). ME Group plc Annual Report 2024 53 Energy Consumption During the year ended 31 October 2024, the Group’s energy consumption was equal to 156,662 MWh resulting from the purchase of electricity, heat, steam or cooling by the company for its own use. UK and Offshore 12 months ended 31 October 2024 12 months ended 31 October 2023 Type of Energy Consumed in Mwh (MWh) (MWh) Gas 1,035.1 1,031.8 Electricity – HQ 10.1 10.7 Electricity – Machines 17,506.0 15,324.6 Heating - - Cooling - - Other type of fuel (Petrol & Diesel for cars) 1,202 1,034.3 Total 19,753.3 17,401.4 Overseas 12 months ended 31 October 2024 12 months ended 31 October 2023 Type of Energy Consumed in Mwh (MWh) (MWh) Gas 59.8 987.7 Electricity – HQ 1,288.6 1,209.8 Electricity – Machines 120,736.5 108,429.1 Heating - - Cooling - - Other type of fuel (Petrol & Diesel for cars) 14,823.7 14,826.2 Total 136,908.7 125,452.9 Group 12 months ended 31 October 2024 12 months ended 31 October 2023 Type of Energy Consumed in Mwh (MWh) (MWh) Gas 1,094.9 2,019.5 Electricity – HQ 1,298.7 1,220.6 Electricity – Machines 138,242.5 123,753.8 Heating - - Cooling - - Other type of fuel (Petrol & Diesel for cars) 16,025.9 15,860.5 Total 156,662.0 142,854.3 * 2023 CO2 emission data have now been restated based on improvements in our data collection and verification software Methodology used to calculate energy and GHG emissions data: ▪The data detailed in the table above represents the emissions and energy used for which ME Group is responsible and is incorporated by reference in the Corporate Governance section on pages 80 to 91 ▪Data based on actual utilities invoices for Head Office consumption ▪Kilometres travelled by cars, multiplied by the CO₂ emissions (by kilometre) for every car in the Group fleet ▪Theoretical consumption by machines, multiplied by average number of machines for each country of operation. Mainly it is the partners who pay for the electricity consumed by the Group’s operating machines, not the Group. A theoretical consumption has therefore been calculated based on an average hourly consumption and an average number of hours of uptime per day ▪12 months ended 31 October 2024 compared with the 12 months ended 31 October 2023 Specific Sustainability Metrics and Reporting continued Strategic Report ME Group plc Annual Report 2024 54 GHG targets for 2024-2026 Carbon footprint ME Group has partnered with Grant Thornton on its journey to CSRD reporting and is currently working to deliver a comprehensive carbon footprint report in 2025 to highlight the Group’s continued commitment to emissions reduction. Energy consumption of the machine parks 2022 2023 2024 2025 2026 Actions 24,674 tons of CO2 (=81% of ME Group’s global carbon footprint) ▪Held discussion group on the energy and electricity consumption of machines ▪Developed the areas for improvement detected during the 1st discussion group in 2022: adaptation of the number of cycles and weight of linen, shorten the rinsing cycle ▪Reported energy consumption of machines ▪Integrated CSR in the product design process – Launched CSRD reporting cycle process ▪Reporting of energy consumption of machines ▪Integration of CSR in the product design process ▪Review of ways to reduce machine consumption linked to CSRD: new machines, recycling of elements of machines in operations ▪Reporting of energy consumption of machines ▪Integration of CSR in the product design process ▪Review of ways to reduce machine consumption linked to CSRD: new machines, recycling of elements of machines in operations KPIs ▪Generalisation of the Stop and Go device on all machines, equip machines with LEDs ▪460 photobooth in operations currently utilise neon light compared to LEDs. R&D has been working to find an ecological solution to change them. ▪230 photobooths with neon lights to be fitted with LEDs ▪322 photobooths with neon lights to be fitted with LEDs Offsetting ME Group’s carbon footprint 2022 2023 2024 2025 2026 Actions Investment in Carbon offset projects KPIs ▪400 tons compensated with Microsol in 2022 ▪600 tons compensated with Microsol Going4Zero in 2023 ▪800 tons Compensated with Going4Zero in 2024 ▪1,000 tons compensated ▪1 ,200 tons compensated In 2024, ME Group offset 800 tons of CO2 emissions supporting a project that ensures the protection the Bale eco-region in Ethiopia by developing new activities to limit deforestation and diversify sources of income. The project supports the supply of alternative fuels to wood and the strengthening of local institutions for the management of forest land. Supporting this project was aimed at offsetting emissions resulting from the transportation of our machinery. ME Group plc Annual Report 2024 55 Renewable energies 2022 2023 2024 2025 2026 Actions Laundry units with solar panels represent 10% of the laundry estate ▪Utilisation of solar panels across laundry units ▪Created a customer interview highlighting the advantages of solar panels from a profitability and communication point of view ▪Utilisation of solar panels across laundry units ▪Conducted testing of solar heaters ▪Utilisation of solar panels across laundry units ▪Utilisation of solar panels across laundry units KPIs – ▪Laundry units with solar panels will represented 11% of the laundry estate ▪With a goal of achieving 20% of the laundry units in our laundry estate powered by solar, we exceeded our goal and achieved 39% ▪With an ever- expanding business, we aim to achieve 40% of the laundry units in our laundry estate utilising solar with increased solar panel capacity ▪With an ever- expanding business, we aim to maintain 40% of the laundry units in our laundry estate utilising solar with increased solar panels capacity Transport of People 2022 2023 2024 2025 2026 Actions ▪Reduction in fuel consumption ▪Driver training with the lowest eco-driving ratings KPIs – ▪2% reduction in Liters of fuel consumed in France ▪With a goal of training 10% of French drivers on fuel conservation practices, we achieved 2% ▪With a goal of achieving 4% reduction in litres of fuel consumed in France and Europe, we achieved a 2% reduction as the size of group car fleet increased by 1% ▪With a goal of training 20% of French drivers and 5% European drivers, we trained 5% of French drivers and 2% of the European drivers ▪3% reduction in litres of fuel consumed in France and Europe ▪25% of French drivers and 10% European drivers trained ▪3% reduction in litres of fuel consumed in France and Europe ▪30% of French drivers and 15% of European drivers trained Specific Sustainability Metrics and Reporting continued Strategic Report ME Group plc Annual Report 2024 56 TCFD Report Reporting GHG emissions Amidst the growing impacts of climate change evident worldwide, it is crucial for ME Group to assess the climate-related risks and opportunities it faces. By doing so, the Group can effectively mitigate potential risks while strategically capitalising on emerging opportunities. ME Group is in the early stages of its journey toward becoming a carbon-neutral enterprise. While climate risks are currently assessed as relatively low for its operations, it is taking proactive measures to reduce its carbon footprint and minimise its environmental impact. The Group is reporting on climate-related issues in line with the UK Listing Rule 6.6.6., the Task Force on Climate- related Financial Disclosures (“TCFD”) framework and the Companies Act 2006. The Group’s disclosure is aligned to the four pillars of TFCD below: ▪Governance – an overview of ME Group governance structure on climate risks and opportunities ▪Strategy – discussion on the impact of climate-related risks and opportunities on ME Group’s business strategy and financial planning. ▪Risk Management – description of processes for identifying, assessing, and managing climate-related risks. ▪Metrics and Targets – detailed metrics and targets used to assess and manage climate-related risks and opportunities, including GHG emissions data and energy consumption figures. It is essential for ME Group to understand its impact on the climate and environment, enabling it to prioritise efforts to minimise these effects. As a responsible business, it recognises that addressing environmental impacts is a fundamental obligation. ME Group plc Annual Report 2024 57 Compliance statement and progress In the third year of TCFD reporting for FY2024, ME Group acknowledges that it is not fully compliant with all the TCFD recommended disclosures. Despite the identified gaps, it is committed to achieving full disclosure in FY2027. The Group has summarised its progress towards full compliance in the last year and detailed disclosures are available in the TCFD Compliance Index table. The business has updated timelines under strategy and risk management pillars to enable it to consolidate its reporting requirements and align with set timelines for our CSRD reporting. The Group’s experience with TCFD disclosures has enhanced its awareness of climate-related risks and reinforced its commitment to effectively managing them with a focus on setting greenhouse gas emissions and financial climate-related targets. Recommended disclosure FY 2024 compliance Steps to be undertaken to achieve full compliance Commitment to full compliance Governance a) Describe the Board's oversight of climate-related risks and opportunities Full – b) Describe management’s role in assessing and managing climate-related risks and opportunities Full – Strategy a) Describe the climate-related risks and opportunities the Company has identified over the short, medium and long term Partial (In progress) Conduct deep-dive analysis of identified risks and opportunities over the short, medium and long term. FY2026 b) Describe the impact of climate- related risks and opportunities on the Company's businesses, strategy and financial planning Partial (In progress) Enhance assessment of its climate-related risks and opportunities to evaluate the financial impact on the business, along with the effects on the Group’s strategy, business model, and all stages of the supply chain. FY2026 c) Describe the resilience of the Company's strategy, taking into consideration different climate scenarios, including a 2°C or lower scenario Non-compliant Currently, the Group has not conducted climate resilience testing under different scenarios due to the expansion of its reporting scope to include the Corporate Sustainability Reporting Directive (CSRD) and the need for timeline alignment across reporting requirements. However, it acknowledges the importance of incorporating climate resilience into its risk management practices. As part of its commitment to continuous improvement, it intends to integrate climate resilience testing into its strategic framework by FY2027. FY2027 TCFD Report continued Strategic Report ME Group plc Annual Report 2024 58 Recommended disclosure FY 2024 compliance Steps to be undertaken to achieve full compliance Commitment to full compliance Risk Management a) Describe the Company's processes for identifying and assessing climate-related risks. Full b) Describe the Company's processes for managing climate-related risks. Full c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the Company's overall risk management. Partial (In progress) ME Group will continue to review its risk management framework to identify the most effective ways to integrate climate-related risks into its processes. This approach considers how climate change may influence the Group’s Principal Risks, even though it is not classified as a principal risk itself. FY 2026 Metrics and Targets a) Disclose the metrics used by the Company to assess climate-related risks and opportunities in line with its strategy and risk management process. Partial (In progress) The Group is in the process of identifying relevant metrics in line with its business strategy and risk management processes and has long term plans of developing additional metrics). FY 2026 b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks. Full c) Describe the targets used by the Company to manage climate- related risks and opportunities and performance against targets. Full TCFD Disclosures Recommended disclosure FY 2024 compliance Description, location of disclosure progress to date and reason for omission (if appropriate) Governance Disclosure of the Company’s governance around climate-related risks and opportunities a) Describe the Board’s oversight of climate-related risks and opportunities Full The Board holds primary responsibility for environmental stewardship and exercises oversight of climate-related risks and opportunities through: ▪Quarterly Senior management updates on climate related matters ▪Keeping abreast on industry best practices ▪recommendations (if any) from major shareholders and other stakeholders including customer recommendations From the results of the materiality assessment conducted in 2021, related risks and opportunities were not found to be material and therefore not integrated into the Group’s strategic planning and financial considerations. It’s essential to highlight that its governance framework indicates that, should any climate-related issues emerge as material concerns, they will be duly considered by the Board. This approach ensures that the decision-making process is consistent with the Group’s commitment to effective risk management and responsible governance. ME Group plc Annual Report 2024 59 Recommended disclosure FY 2024 compliance Description, location of disclosure progress to date and reason for omission (if appropriate) Governance Disclosure of the Company’s governance around climate-related risks and opportunities b) Describe management’s role in assessing and managing climate- related risks and opportunities Full At ME Group, the Board, The Executive Team and the Sustainability Committee are responsible for managing climate-related risks and opportunities Oversight of the risk management and health, safety and environmental functions ultimately sit with the Chief Operating Officer with delegated authority through line management. The Sustainability Committee comprising the Group Human Resources Director and a global network of CSR representatives is responsible for providing guidance and climate risk and opportunities related recommendations to the Executive Team. A more detailed overview of the Group’s corporate governance and organisational structure is included within the Corporate Governance section on pages 80 to 91 The Group operates in very different national markets with differing national laws, preferences and cultures. As a result, operational direction and management of sustainability lie primarily with national business managers, who are best placed to ensure compliance with their national legislation and market customs and expectations. The Executive Team, who report to the Board, therefore take a holistic approach to overseeing sustainability and take responsibility for assessing climate-related risks and opportunities. Strategy Disclosure of the actual and potential impacts of climate-related risks and opportunities on the Company’s material business, strategy, and financial planning a) Describe the climate-related risks and opportunities the Company has identified over the short, medium and long term Full In accordance with the Group’s corporate governance and organisational structure, The Group, through its risk monitoring process has identified the following as potential areas of future risks ▪Increased potential legislation – As efforts towards mitigating the effects of climate change continue globally, it is expected that governments would introduce and heighten policies to achieve this goal which could significantly affect businesses ▪The increasing awareness of the climate crisis amongst consumers – As customer expectations shift towards more environmentally conscious goods and services and align with brands that represent these ideals, demand for certain products would shift resulting in financial impacts to the business. ▪Energy consumption – As several companies globally work towards increased energy efficiency therefore reducing energy consumption, it is expected that companies will continue to increase their efforts to reduce their energy consumption in the coming years ultimately reducing their carbon footprint ▪Rising car fuel prices – The price of fuel remains a relevant factor for organisations as this affects the transportation costs associated with their business and profitability in the long run ▪Water scarcity- Due to climate change, certain parts of the world are already experiencing water scarcity. The impact of water scarcity is expected to increase ultimately affecting several sectors of the economy. Water intensive companies like ME Group need to anticipate and work towards mitigating these effects. TCFD Report continued Strategic Report ME Group plc Annual Report 2024 60 Recommended disclosure FY 2024 compliance Description, location of disclosure progress to date and reason for omission (if appropriate) Strategy Disclosure of the actual and potential impacts of climate-related risks and opportunities on the Company’s material business, strategy, and financial planning In progress The Group has identified a number of further key opportunity focus areas which are explained in this Sustainability Statement on pages 46 to 65. The future risks highlighted above have been categorised based on the Group’s definitions of short-, medium- and long-term considering the impact of these risks, which are subject to change should the need arise. Type of climate risk Risk Impact timeline Transitional risks Increased potential legislation (in climate change area) Short-term (1-3 years) The increasing awareness of the climate crisis amongst consumers Short-term (1-3 years) Rising car fuel prices Mid-term (3-10 years) Physical risks Water scarcity (due to the climate change Mid-term (3-10 years) The Group has identified its main climate-related risks through its existing governance framework. However, it does not consider these to be material risks. Given the need to respond and adapt to climate change, ME group is well-prepared to tackle these emerging challenges. Supported by its long-term transformation initiative, the Group is committed to constantly improving its competitiveness, performance, and resilience throughout its value chain. As part of this transformation, it will continue to monitor short, medium and long-term climate- related risks and opportunities to ensure full disclosure in the future. b) Describe the impact of climate- related risks and opportunities on the Company’s businesses, strategy and financial planning In progress While the Group is not currently facing material climate-related risks, it is actively taking steps to ensure efficient and optimal usage of natural resources, such as energy and water. The Group mitigates its exposure to these risks, and the emissions which the business generates, by taking the actions detailed in the Environment section on page 45 et seq. The Group recognises the broader impact of climate-related issues on the entire business, which has led to the adoption of a systemic approach to sustainability. This approach supports the Group’s growth strategy and operations by integrating social, environmental, and economic expectations into its strategy and operations. In addition to the work undertaken to formulate the Group Sustainability Materiality Matrix disclosed on the next page, The Group remains committed to continuous assessment of climate-related topics in order to understand their impact on the business financially, on its strategy and business model, as well as on all stages of the supply chain. c) Describe the resilience of the Company’s strategy, taking into consideration different climate scenarios, including a 2°C or lower scenario Non- compliant. In the current reporting period, the Group did not conduct a climate scenario analysis owing to the expansion of its reporting scope to include the CSRD and the need for timeline alignment across reporting requirements. The Group plans to conduct a scenario analysis by FY2027 while working on reducing its energy consumption and gradually transitioning to renewable energy sources. ME Group plc Annual Report 2024 61 Materiality matrix Pride of belonging/recognition Internal communication HR policy/Collaborative management Training policy Onboarding Brand awareness MODER ATED IMPORTANT VERY IMPORTANT MODER ATED IMPORTANT VERY IMPORTANT For the business For the stakeholders Sustainability of the ID and Photo range Key accounts co-ordination Financial performance International development Optimisation of products Cloud operating system R&D Cybersecurity Global Digtal transition Satisfaction of users Our CSR approach Attractiveness of the employer brand Circular economy Optimisation of the commercials relationship with B2B Strength of the network technicians Increased flow of consumers Growth of the Laundromat range Strategic axes   Services and clients   Operational innovation   CSR approach   HR and employees   Strategy and development TCFD Report continued Strategic Report ME Group plc Annual Report 2024 62 Recommended disclosure FY 2024 compliance Description, location of disclosure progress to date and reason for omission (if appropriate) Risk Management Disclosure of how the Company identifies, assesses, and manages climate-related risks. a) Describe the Company's processes for identifying and assessing climate-related risks. Full The Group has identified its key climate-related risks through its established governance framework. A broad range of economic, environmental and social risks were considered, with each risk prioritised according to its importance to the Group and in relation to its short and long-term ambitions, and the expectations of key stakeholders. Regarding the identified risk of increased potential legislation (including in relation to climate reporting), the Group ensures it keeps abreast of new and upcoming policies and procedures to ensure continued regulatory compliance. As part of this effort, the Group has continued reporting on climate-related risks and mitigation actions, with a firm commitment to fully comply with TCFD recommendations in future reporting periods. b) Describe the Company's processes for managing climate-related risks. Full Given the nature of the Group’s business, it is not presently exposed to material risks related to climate change. However, steps are being taken to mitigate any exposure to the risks highlighted above, and the emissions which the business generates. Further details in relation to mitigating actions are outlined in the Sustainability Statement to be found on pages 46 to 65 c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the Company’s overall risk management. In Progress Since 2021, the Group has been integrating a systemic sustainability approach globally to help achieve carbon neutrality by 2040. This systemic environmental approach and focus on inventing eco-responsible local services together supports the Group’s growth strategy and operations by integrating social, environmental, and economic expectations into the Group’s strategy and operations. The Group’s materiality matrix is centered on the Group’s key challenges in relation to its short and long-term ambitions. The materiality analysis identified 25 issues corresponding to five strategic areas: (i) operational innovation; (ii) strategy and development; (iii) services and customers; (iv) HR and employees; and (v) communities and CSR, with sustainability of the ID and the Photo range ranking as very important for stakeholders and the business. For further details of the Group’s integrated corporate governance and organisational structure, please see the Corporate Governance section on pages 80 to 91. ME Group will continue to review its risk management framework to identify the most effective ways to integrate climate-related risks into its processes. This approach considers how climate change may influence the Group’s Principal Risks, even though it is not classified as a principal risk itself. Metrics and Targets Disclosure of the Company's metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material. a) Disclose the metrics used by the Company to assess climate-related risks and opportunities in line with its strategy and risk management process. In progress The Group adheres to the Greenhouse Gas Protocol Corporate Standard for calculating its Scope 1 and Scope 2 emissions. See pages 52 to 54 for the assessment parameters and detailed methodology. ME Group is in the process of identifying and developing metrics in line with its business strategy and risk management processes and will develop other relevant metrics over time. ME Group plc Annual Report 2024 63 TCFD Report continued Recommended disclosure FY 2024 compliance Description, location of disclosure progress to date and reason for omission (if appropriate) Metrics and Targets Disclosure of the Company's metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material. b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks. Full See page 53 for Scope 1 and Scope 2 emissions related to the Group’s operations in line with the GHG Protocol methodology and page 52 for the assessment parameters. The Group has not reported fugitive emissions (which include leakages from refrigerants used in air conditioning units, etc.) because no data were available and, given the low number of such units in the Group, management did not consider such emissions to be material. The Group’s current climate change strategy has been formulated based on its Scope 1 and Scope 2 emissions. Scope 3 emissions are calculated based on the data obtained from third parties (suppliers, partners), which increases the scale and complexity of collating such data. However, The Group is planning to improve the completeness and accuracy of scope 3 emissions in line with best practice and estimation techniques in the coming year. The Group will keep the appropriateness of collating Scope 3 emissions data under review each year and will disclose to the market when it has determined that collating such data is appropriate. The evolution in Scope 3 emissions reporting will include evaluating the indirect emissions upstream, the downstream freight transport and distribution, the other downstream indirect emissions and the other upstream indirect emissions of the supply chain. The Group is planning to improve the completeness and accuracy of scope 3 emissions in line with best practice and estimation techniques in the coming two years. c) Describe the targets used by the Company to manage climate- related risks and opportunities and performance against targets. Full In line with its purpose “Create eco-responsible local services that make everyday life easier”, the Group has identified the following materiality focus areas: ▪Carbon footprint reduction ▪Circular economy through eco-design and continuous improvement of its machines ▪Protection of natural resources through reduction of energy and water consumption ▪Reduction of paper consumption Additionally, several KPIs have been identified relating to (i) the Group’s circular economy, (ii) energy saving for Photobooths, (iii) energy saving for laundry machines (iv) organic detergent. The Group uses the following KPIs to track progress on reduction of GHG emissions: ▪Laundry units with solar panels ▪tons of CO2 for the total machine park ▪tons of CO2 for new machines ▪tons of CO2 compensated ▪litres of fuel saved More information on carbon emissions reduction targets can be found in the section on ME Group’s four-year sustainability plan of the current report page 55 et seq. Further information is available on me-group.com (Approach and KPIs). Strategic Report ME Group plc Annual Report 2024 64 Supplementary information for TCFD disclosure Governance of climate-related risks and opportunities Although the Board believes that ME Group faces low risk in the climate change sector, it has implemented a robust environmental strategy, guided by a Steering Committee under the oversight of the Board and Executive Team. Since 2022, Montefiore Investment audited the Group’s environmental approach, including climate change impacts on its business model. Key actions include forming an environmental group in late 2021, integrating sustainability in the 2021 Annual Report’s risk management chapter, and undergoing annual environmental performance audits by Ecovadis. The Group holds regular sustainability strategy review meetings. Process for managing climate-related risks and opportunities At ME Group, the first materiality assessment was conducted In 2021 to identify any climate-related risks and opportunities. This process includes discussions validated by employee groups, business units, and external stakeholders, with key focus areas such as energy consumption, water scarcity, and the effects of rising fuel prices. It will be updating this in 2025. Integration into overall risk management ME Group’s risk management strategy includes training staff in environmental practices, adopting best practices for reducing energy and water consumption, switching to green energy, and exploring hybrid and electric vehicles. Its R&D department in Grenoble, France plays a vital role in advancing green solutions Principal climate-related risks and opportunities ME Group remains focused on increasing green energy usage, improving water efficiency in its laundry machines, and addressing the impact of rising fuel prices. Its strategic locations in shopping centres offer a combined activity advantage for customers. Impact on business model and strategy The ME Group business model is designed to adapt to varying levels of risk, with a particular focus on water scarcity and fluctuations in fuel prices. It aims to encourage the use of its machines through public information and local authority guidance. Resilience of business model R&D is vital in the Group’s strategy, focusing on manufacturing innovation, recycling, and reintegration of machine components. Also, compliance with legal obligations in specific jurisdictions remains a key priority. Targets and KPIs for managing risks and opportunities The Group’s targets include increasing the percentage of laundry units with solar panels annually and expanding the deployment of its Revolution machines. The Group also aims to reduce fuel consumption through eco-driving initiatives. ME Group plc Annual Report 2024 65 Longer-term Viability Statement The Directors have assessed the viability and prospects of the Group in accordance with the Guidance on Risk Management Internal Control and Related Financial and Business Reporting issued by the Financial Reporting Council on September 2014. In doing so, the Directors have considered and taken into account the Group’s present position and the principal risks facing it, the latter being set out in the Strategic Report. The Directors have carried out their assessment by: i. considering the potential repercussions of those principal risks at least annually as well as the risk impact of each major event or transaction; ii. examining the effectiveness of the actions taken to mitigate the principal risks; iii. continually reviewing strategy and market developments through regular executive briefings; and iv. taking into account the Group’s operational processes and financial resources. Based on this robust assessment, the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities over a three-year period to October 2027. In contrast with previous Longer Term Viability Statements, this Statement covers three years (reduced from five years previously). The Board took the decision to reduce the period for various reasons: the Group does not operate in an environment in which liabilities extend so far in the future; the current state of flux in the general geopolitical arena suggests it would be prudent to reduce the period (even though, as partly noted below, nothing in present world events suggests any increase in potential liability on the Company’s operations); and a three-year perspective is sufficiently informative. Furthermore, this shorter period remains fully in line with FRC guidance and is better suited to the current, fast- shifting geopolitical landscape. This assessment included stress tests on the future performance and solvency for changes in the base assumptions over the three years and also for the principal risks facing the business in severe but plausible combination of scenarios together with the effectiveness of any mitigating actions. Consideration has also been given to the risk of regional changes such as Brexit; however, the Board believes that having diverse geographical operations means that the Group is less susceptible to the effects of regional changes. The Directors decided that a three-year period is appropriate for this assessment because it gives a good level of confidence due to a number of factors including: (i) the Group’s considerable financial resources including the high cash generation of its operations; (ii) the inherent unlikelihood of all or even most of the identified potential principal risks materialising simultaneously; (iii) the length of major operating contracts; (iv) the Group’s diverse geographical operations plus its established business relationships with many customers and suppliers in countries throughout the world; and (v) its proven track record in R&D development and its ability to adapt to market trends. To stress test the viability of the Group, the Directors tested three scenarios and their projected financial impact over a three-year period. The three scenarios, and the assumptions used in each, are detailed opposite: Strategic Report ME Group plc Annual Report 2024 66 In all three scenarios tested, the Group continues to comply with its bank covenants and loan repayment terms and is in a strong financial position after three years In all three scenarios, exchange rate assumptions are as per the budget. The forecasts assume payment of dividends commensurate with results and the Group’s dividend policy. In all three scenarios tested, the Group continues to comply with its bank covenants and loan repayment terms and is in a strong financial position after three years. Brexit impact was considered by management to have no significant impact on the business of the Group, nor will the Ukrainian or Israeli conflicts, as the Group has no activity in these regions. Management does not consider interest rate risk to be a threat to the Group’s viability, as all current debt is at fixed rates and the forecasts indicate no requirement for new debt facilities. As a result, the cash flow projections indicate that the Group and the Parent Company will remain within their available banking facilities over the 12 months from signing these financial statements. Serge Crasnianski Chief Executive Officer 24 February 2025 Scenario 1. The budget, elaborated with each country manager and validated by the top management, which we consider as the most likely scenario. Please note that this scenario is the one approved by the Board. Scenario 2. The “mild scenario” is based on the budget, but with the following sensitivities added: ▪A 5% decrease in machine installations due to supply chain issues ▪A 5% price increase in spare parts and consumables ▪A 1% increase in labour costs ▪A 5% increase in paper costs ▪A 1% drop in total revenue due to loss of key accounts ▪A 1% drop in revenue due to the potential impact of a future pandemic or other global event ▪This scenario does not consider the potential impact of new regulations regarding photo identification or permission of selfies as official photos within the three-year forecast ▪In addition we assume in this scenario an additional revenue decrease of 2% the first year (2025) for an unidentified reason as of today Scenario 3. The “worst case” scenario is based on the budget, but with the following sensitivities added: ▪A 10% decrease in machine installations due to supply chain issues, ▪A 10% price increase in spare parts and consumables ▪A 2% increase in labour costs ▪A 10% increase in paper costs ▪A 1% drop in total revenue due to loss of key accounts ▪A 3% drop in revenue due to the potential impact of a future pandemic or other global event ▪Revenue is reduced by 3% each year due to the potential impact of new regulations regarding photo identification or permission of selfies as official photos ▪In addition we assume in this scenario an additional revenue decrease of 3% the first year (2025) for an unidentified reason as of today ME Group plc Annual Report 2024 67 Directors’ Report 70 Board of Directors and Company Secretary 72 Corporate Governance 80 Statement of Directors’ Responsibilities 92 Directors’ Remuneration Report 94 Remuneration Policy Report 98 Annual Report on Remuneration 104 Corporate Governance ME Group plc Annual Report 2024 68 Photobooths with integrated biometric photo identification solutions. It offers consumers a multi- functional booth providing a range of services, alongside our core photo ID product offering. Photo Need different image ME Group plc Annual Report 2024 69 Directors’ Report The Corporate Governance Statement, the Corporate Responsibility Statement, and the section headed Sustainability at ME Group should be read as forming part of this report. In this document, references to the “Group”, the “Company”, “ME Group”, “we”, or “our” and cognates, refer to ME Group International plc, its subsidiary companies and, where applicable, its associated undertakings, or any of them as the context may require. In addition to the powers conferred on the Directors by law, the Company’s Articles of Association also set out powers of the Directors. Under these powers, the Directors may, subject to any statutory provision requiring prior shareholder approval, exercise all powers of the Company to borrow money, issue shares, appoint and remove Directors and recommend dividends and declare interim dividends. A copy of the Articles of Association can be found on the Company’s website at https://me-group. com/wp-content/uploads/2022/01/Photo_Me_ International_Mem_and_aoa_Sep10.pdf. Details of the Directors’ contracts, emoluments and interests in shares and share options are given in the Directors’ Remuneration Report on pages 94 to 111. The Directors submit to the shareholders their report, the audited consolidated financial statements of the Group, and such audited financial statements of ME Group International plc as required by law for the year ended 31 October 2024. Corporate Governance ME Group plc Annual Report 2024 70 ME Group plc Annual Report 2024 71 1 4 2 5 3 6 Board of Directors and Company Secretary The current Directors of the Company, all of whom served throughout the year ended 31 October 2024, are: Directors’ Report continued Corporate Governance ME Group plc Annual Report 2024 72 1  Sir John Lewis OBE Non-executive Chairman Sir John joined the Board in 2008 and was appointed Chairman in 2010. He is Chairman of the Nomination Committee and a member of the Audit and Remuneration Committees. Until early 2019, Sir John was a Consultant to Eversheds Sutherland (International) LLP (as now is). He is a director of Macdonald and Company Holdings Ltd (previously the AIM market company, Prime People plc), as well as various private companies. He was previously a practising solicitor and senior partner in Lewis, Lewis & Co which became part of Eversheds Sutherland (International) LLP (as now is) after a series of mergers. He served as chairman of Cliveden plc and Principal Hotels plc and as vice-chairman of John D Wood & Co plc and Pubmaster Group Ltd. The Board considers Sir John to be non-independent. 2  Serge Crasnianski Chief Executive Officer & Deputy Chairman Mr Crasnianski was appointed to the Board in 2009, having previously served on the Board from 1990 to 2007 (as a Non-executive Director until 1994, and from 1994 as an Executive Director). He is Chief Executive Officer, Deputy Chairman and member of the Executive Team. Mr Crasnianski founded KIS in 1963. 3  Tania Crasnianski Executive Director Miss Crasnianski, the daughter of the CEO, Mr Crasnianski, was appointed to the Board in June 2021. Prior to that, Tania had been an independent legal adviser for seven years and before that held the role of Head of Global Investments at Stratford Capital between 2006 and 2014. She spent 12 years in the legal field, having worked in that time as a Criminal Lawyer for SCP Versini-Campinchi & Associés, Paris. Miss Crasnianski joined the Group on 1 June 2020 as head of legal and general secretary. Miss Crasnianski supervises the Group’s entities in Germany, Austria, UK, Ireland, Switzerland and Finland. Miss Crasnianski is also a member of the Executive Team. 4  Jean-Marc Janailhac Non-executive Director Mr Janailhac joined the Board in 2019. He was designated Executive Director in July 2020. He was the first chairman of Strategic Committee (now called the Executive Team) that is responsible for reviewing and implementing operational decisions across the Group. He chaired that committee until 31 October 2022. He returned to being a Non-executive Director on 1 November 2023. He is a senior adviser of Macquarie Capital (Europe) Limited, which he joined in 2016. His other directorships include SeaFrigo (logistics, France), SFEIR (IA and SSII, France), EUROHOLD (M&A – Spain), and Aeronautical Services (New carbon materials, Italy). He is CEO of Crystal Energy (energy transition, France) and of SFIC development (international advisory – France). He is also financial adviser to Fondation A. Contes (High dilutions, France). The Board considers Mr Janailhac to be non-independent. 5  René Proglio Non-executive Director Mr Proglio was appointed to the Board in June 2021, and appointed chairman of the Audit Committee on 29 April 2022. He assumed the role of Senior Independent Director as of 1 December 2024. Mr Proglio worked at Morgan Stanley for 17 years and during that time he held senior roles, including as Managing Director (2004-2007) and as Head of Investment Banking (2008-2010). He was then country head for France from 2010 to 2020, and he recently joined PJT Partners as a Partner. Before this, he was a Partner at Ernst & Young. The Board considers Mr Proglio to be independent. 6  Françoise Coutaz-Replan Non-executive Director Miss Coutaz-Replan was appointed to the Board in 2009 as Group Finance Director and retired from that executive role in August 2015. Since then she has been a Non-executive Director and was appointed to the Audit Committee in October 2016. Miss Coutaz-Replan joined KIS in 1991. She assumed the position of chair of the Remuneration Committee when Mr Olympitis stepped down and joined the nomination committee at the same time. The Board considers Miss Coutaz-Replan to be independent. ME Group plc Annual Report 2024 73 7 8 9 7  Del Mansi Company Secretary Mr Mansi, a qualified solicitor, joined the Group in 2006. He served as interim Company Secretary from April to July 2008, and was appointed Group General Counsel in 2009, a role he retained on being appointed Company Secretary in May 2013. Former Directors of the Company, both of whom served throughout the year ended 31 October 2024, but have since stepped down are: 8  Emmanuel Olympitis Non-executive Director Mr Olympitis joined the Board in 2009. During the year ended 31 October 2024 he was the Senior Independent Non-executive Director, Chairman of the Remuneration Committee, and a member of the Nomination and Audit Committees. Previous directorships include China Cablecom Holdings Limited (NASDAQ), Canoel International Energy Limited (Canada), Matica plc, Secure Fortress plc, Bulgarian Land Development plc, Norman 95 plc, Pacific Media plc (Executive Chairman) and Bella Media plc (Chairman). Early career in merchant banking and financial services, including as Executive Director of Bankers Trust International Ltd, Group Chief Executive of Aitken Hume International plc, and Executive Chairman of Johnson & Higgins Ltd. Mr Olympitis resigned as a Director with effect from 30 November 2024. He was considered by the Board to be independent up to that date. 9  Camille Claverie Non-executive Director Camille was appointed to the Board in June 2021. She previously held roles at Sagard, latterly as Principal, and at Morgan Stanley and she is a Partner at Montefiore Investment where her responsibilities cover deal origination, and execution and investment monitoring to support companies and management teams in their growth plans. Miss Claverie resigned as a Director on 4 December 2024. The Board considered Miss Claverie to be non-independent because she worked for FPCI Montefiore Investment IV which as at 31 December 2024 was interested in 12.04 % of the issued share capital of ME Group at 31 October 2024. Directors’ Report: Board of Directors and Company Secretary continued Corporate Governance ME Group plc Annual Report 2024 74 Directors’ Report continued Directors’ and Officers’ Liability Insurance The Company maintained directors’ and officers’ liability insurance cover throughout the 12-month period ended 31 October 2024. This insurance cover extends to the Company’s Directors as well as directors and officers of subsidiary undertakings and remains in force. Article 191 of the Company’s Articles of Association allows the indemnification of Directors of the Company and associated companies and of directors of a company that is the trustee of an occupational pension scheme for employees of the Company or an associated company against liability incurred by them in certain situations, and would, if granted, constitute a “qualifying indemnity provision” within the meaning of Section 236 (1) of the Companies Act 2006. No such indemnities have been granted. Results and dividends The results for the year are set out in the Group Statement of Comprehensive Income on page 122 The Directors are recommending a final dividend for the year ended 31 October 2024 of 4.45 pence per ordinary share. The ex-dividend date will be 24 April 2025 and, if approved by shareholders at the Company’s AGM on 25 April 2025, the dividend will be paid on 23 May 2025 to shareholders listed on the register at the close of business on 25 April 2025. On 29 November 2024 the Company paid an interim dividend in respect of the year ended 31 October 2024 of 3.45 pence per ordinary share, totalling £12,998,000. Employees Information on the Company’s employment practices including: its policy regarding applications for employment by persons with disabilities; the continuing employment of employees who have developed disabilities; and the training, career development and promotion of persons with disabilities employed by the Company, as well as employee communication and involvement, is contained within the Sustainability Statement on pages 46 to 65. Employee engagement The Board understands the importance of considering the views of all stakeholders, including its employees. Senior management has held several internal consultations and released internal memoranda outlining the movement of the business throughout the year. These communications also help to achieve a common awareness on the part of all employees of the financial and economic factors affecting the performance of the Company. The Board understands the importance of considering the views of all stakeholders, including its employees. The Executive Directors have regular meetings with all managers. These meetings provide an opportunity for the Executive Directors to learn about the views of the employees at large, and to report back to the Board as a whole so that in making any decisions affecting the employees, the Board can take those views and any decisions made can take into account those employee views. The Company operates an executive share option scheme that was introduced in 2014 (itself replacing an earlier similar scheme) and was renewed in 2024 being approved by members at the AGM held in that year. Senior members of staff receive annual bonuses depending on personal performance and the Group’s performance. The above sets out how Directors have engaged with employees. ME Group plc Annual Report 2024 75 Interests in voting rights Information provided to the Company pursuant to the Financial Conduct Authority’s DTRs is published on a Regulatory Information Service and on the Company’s website. As at 31 October 2024, the following information had been received, in accordance with DTR 5, from holders of notifiable interests in the Company’s issued share capital. The information provided below was correct at the date of notification; however, the date it was received may not have been within the current financial year. It should be noted that these holdings might have changed since the Company was notified. However, notification of any change is not required until the next notifiable threshold is crossed. Shareholder Name % Voting Rights Number of shares Serge Crasnianski1 36.59 137,803,041 Schroders plc 14.48 54, 540,287 FCPI Montefiore Investment IV 12.04 45,355,481 abrdn 4.27 16,103,553 Fidelity Management & Research 3.98 14,978,590 1 Except for 63,750 ordinary shares of 0.5p each held in Mr Crasnianski’s own name, the remaining shares are owned through a nominee by Tibergest PTE LTD, a person closely associated with Mr Crasnianski, and Mr Crasnianski’s interest in those remaining shares is indirect. Since 31 October 2024, Schroders notified the Company under DTR 5 that as at 31 January 2025, it was interested in 10.997995% of the Company’s issued share capital. No other notifications under DTR 5 have been received since that date and the date of this report. Share option grants to persons discharging managerial responsibilities In the year ended 31 October 2024, the Company was notified of the following dealings in its Ordinary Shares under article 19 of the Market Abuse Regulation: Review of business and future developments The Strategic Report describes the activities of the business during the year ended 31 October 2024 as well as recent events (including any important events affecting the Group which have occurred since the end of that period) and gives an indication of likely future developments in the Group’s business. A discussion of the key risks facing the Group and an analysis of key performance indicators are provided in the Strategic Report. The Strategic Report also contains the Board’s Longer-term Viability Statement. Research and development The Group is committed to its research and development programme in order to maintain its introduction of innovative products to the market. The expenditure incurred on the development of new products is shown in notes 1.7 and 12 of the financial statements. Engagement with suppliers, customers and others The Executive Directors (and where necessary the Non-executive Directors, especially the Chairman and the Senior Independent Director) meet suppliers, customers and major shareholders, as do senior management. This gives the Executive Directors an opportunity to learn of their wishes and concerns, thereby acquiring information to which they can have regard when making strategic and other decisions. Corporate responsibility, greenhouse gas emissions, energy consumption and energy efficiency action. A summary of the Company’s approach to corporate social responsibility and environmental matters, including a report on the Group’s greenhouse gas emissions, energy consumption and energy efficiency action for the 12 months ended 31 October 2024, can be found in the section headed Sustainability at ME Group on pages 46 to 65. Directors’ Report continued Corporate Governance ME Group plc Annual Report 2024 76 ▪On 23 April 2024 the Company was notified that that Mr Gibon, Chief Financial Officer (non- Board) exercised an option over 100,000 Ordinary Shares of 0.5p each in the Company (“Ordinary Shares”) under the Company’s Executive Share Option Scheme (2014) at a price of £0.614 per Ordinary Share and subsequently sold the resulting 100,000 Ordinary Shares at a price of £1.643 per Ordinary Share. ▪On 9 May 2024 the Company was notified that Mr Janailhac, Non-executive Director, sold his beneficial interest in 27,000 Ordinary Shares of 0.5p each in the Company at a price of £1.572 per Ordinary Share. ▪On 23 July 2024, the Company was notified that Mr Janailhac, Non-executive Director, sold his beneficial interest in 198,555 Ordinary Shares of 0.5p each in the Company at a price of £1.842 per Ordinary Share. Share capital The issued share capital of the Company, plus details of the movements in the Company’s issued share capital during the year, is shown in note 21 of the financial statements. Each ordinary share of the Company carries one vote at each annual general meeting (AGM) and general meetings of the Company. Continued authority to purchase shares The Company shall seek approval at the 2025 AGM (to be held on 25 April 2025) to renew the authority for the Company to make market purchases of up to 10% of its own ordinary shares at a maximum price per share of not more than the higher of: (a) an amount that is not more than 5% above the average of the closing middle market quotations for an ordinary share (derived from the London Stock Exchange Daily Official List) for the five business days immediately before the date on which that ordinary share is contracted to be purchased; or (b) the higher of the price of the last independent trade or the highest current independent bid on the London Stock Exchange. This authority will expire on the earlier of 15 months from the passing of the relevant special resolution or the conclusion of the following AGM. The Company repurchased 1,260,534 ordinary shares of 0.5p each in the 12-month period ended 31 October 2023 and repurchased a further 1,108,092 ordinary shares of 0.5p each in the following 12-month period ended 31 October 2024. All of these 2,368,626 ordinary shares of 0.5p each held in treasury were cancelled on 12 July 2024 and as at 31 October 2024, the Company did not hold any of its shares in treasury and does not hold any shares in treasury at the date of this report. Additional information Where not provided elsewhere in the Report of the Directors, the following provides the additional information required to be disclosed in the Report of the Directors. The structure of the Company’s share capital, including the rights and obligations attaching to the shares, is set out within note 21 to the financial statements. No person holds securities carrying special rights with regards to control of the Company. There are no restrictions on the transfer of ordinary shares in the capital of the Company other than certain restrictions that may from time to time be imposed by law; for example, insider trading law. In accordance with the Listing Rules of the Financial Conduct Authority, certain employees are required to seek the approval of the Company to deal in its shares. On a show of hands at an AGM or general meeting of the Company, every holder of ordinary shares entitled to vote and who is present in person or by proxy shall have one vote and on a poll, every member present in person or by proxy and entitled to vote shall have one vote for every ordinary share held (except as otherwise stated in Article 81 of the Company’s Articles of Association). Any notice of AGM or general meeting issued by the Company will specify deadlines for exercising voting rights and in appointing a proxy or proxies in relation to resolutions to be passed at the AGM or general meeting. All proxy votes are counted and the numbers for, against or withheld in relation to each resolution are announced at the AGM or the general meeting and published on the Company’s website after the meeting. ME Group plc Annual Report 2024 77 Proxy appointments and voting instructions must be received by the Company’s registrars not less than 48 hours before an AGM or general meeting. Under its Articles of Association, unless the Board otherwise determines, no member shall be entitled to vote in respect of any share unless all calls or other sums presently payable by them in respect of that share shall have been paid. The Company is not aware of any agreements between shareholders that may result in restrictions on the transfer of shares or on voting rights. The rules governing the appointment of Directors are set out in the Corporate Governance Statement on pages 80 to 91. The Company’s Articles of Association may only be amended by a special resolution at an AGM or general meeting of shareholders. The Company is party to a number of agreements with site owners (such as major supermarket chains), which could be terminated by the site owners following a change of control of the Company. There are no agreements between the Company and its Directors or employees which provide for compensation for loss of office or employment (whether through resignation, purported redundancy or otherwise) that occurs because of a takeover bid. The Company is not aware of any contractual or other agreements that are essential to its business which ought to be disclosed in this Report of the Directors. Related-party transactions Details of related-party transactions are set out in note 29 to the financial statements. Financial instruments Details of the financial risk management objectives and policies of the Group and exposure of the Group to foreign exchange risk, interest rate risk and liquidity risk are given in note 16 to the financial statements. Political donations No member of the Group made any political donations during the 12-month period ended 31 October 2024. Directors’ Report continued Important events post balance sheet date On 29 November 2024 the Company paid an interim dividend in respect of the year ended 31 October 2024 of 3.45 pence per ordinary share, totalling £12,998,000. The Company runs a defined benefit pension scheme, the Photo-Me International Plc Pension and Life Assurance Fund. In November 2024, the Trustee of the Fund entered into an insurance contract with Legal & General that provides the pensions for certain members of the Fund. As a result, the benefits for all members of the Fund are now secured with an insurance company, via policies in the name of the Trustee. The intention is that in due course these policies will be transferred into the name of the individual members and the Fund wound-up. On 20 February 2025 the Group disposed of the second, and final, tranche of an office property in Grenoble, France for £4,848,000. At 31 October 2024 the property was recognised in non-current assets classified as held for sale in the Group’s statement of financial position. The Group will recognise a gain on disposal of £1,584,000 in the year ended 31 October 2025. Going concern In adopting the going concern basis for preparing these financial statements, the Directors have considered the Group’s business activities, together with factors likely to affect its future development and performance, as well the principal risks and uncertainties that could affect the Group up to October 2028. Having reviewed forecasts, cash flow, financial resources and financing arrangements and after making enquiries, the Directors consider that the Company and the Group have adequate resources to remain in operation for the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis in preparing the financial statements. The Directors have stress-tested the Group’s going-concern status by assessing several different scenarios. Full details of the scenarios tested and assumptions used are provided in the ‘Longer-term Viability Statement’ and in note 1.1 of the financial statements. Corporate Governance ME Group plc Annual Report 2024 78 Disclosure of information to the auditor The Directors who held office at the date of approval of this Report of the Directors confirm that: As far as they are each aware, there is no relevant audit information of which the Company’s auditor (Forvis Mazars LLP) is unaware; and each Director has taken all the steps that he or she ought to have taken as a director to make himself or herself aware of any relevant audit information and to establish that the Company’s auditor is aware of that information. Controlling shareholder – Relationship Agreement The Company’s majority shareholder is Tibergest PTE Ltd which owns 137,739,291 ordinary shares of 0.5p each representing 36.55% of the issued share capital of the Company and, 36.55% of its total voting rights. Tibergest PTE Ltd is wholly owned by Mr Crasnianski. As used to be required by the previous edition of the Listing Rules, Mr Crasnianski and Tibergest PTE Ltd entered into a relationship agreement with the Company (the “Relationship Agreement”) to ensure that the Group is capable of carrying on its business independently, that transactions and arrangements between the Group, Tibergest PTE Ltd and Mr Crasnianski (and each of their associates) are at arm’s length and on normal commercial terms, and that at all times a majority of the Directors of the Company shall be independent of Tibergest PTE Ltd and Mr Crasnianski. Whilst there is no longer such a requirement under the new edition of the Listing Rules, the Relationship Agreement continues in force for the purposes of good governance. Furthermore, the Company has complied with, and so far as the Company is aware, the controlling shareholder and its associates have complied with the following undertakings: (a) transactions have been conducted at arm’s length and on normal commercial terms; (b) neither the controlling shareholder nor any of its associates will take action that would prevent the Company from complying with the Listing Rules; and (c) neither the controlling shareholder nor any of its associates will propose or procure the proposal of a shareholder resolution which is intended or appears to be intended to circumvent the proper application of the Listing Rules. So far as the Company is aware, the controlling shareholder can and does procure the compliance of its associates with these undertakings. AGM 2025 The Company’s AGM this year will be held on 25 April 2024 at the offices of Hudson Sandler LLP, 25 Charterhouse Square, London EC1M 6AE at 10 a.m. Notice of the AGM is sent to all shareholders of the Company, as well as to persons nominated by a shareholder of the Company to enjoy information rights. The Notice convening the meeting provides full details of all the resolutions to be proposed, together with explanatory notes for both the ordinary and special business. Hard copies of this Annual Report are sent only to shareholders who have requested or request a copy. By order of the Board Sir John Lewis OBE Non-executive Chairman 24 February 2025 ME Group plc Annual Report 2024 79 Corporate Governance Statement of compliance with the UK Corporate Governance Code. The Board has complied with the UK Corporate Governance Code (2018 edition) (the “Code”) except as set out in the table on page 81. The Group’s business model and strategy The Group’s business model and strategy are summarised in the Strategic Report, and describe, amongst other things, how the Company generates and preserves value over the longer term and the strategy for delivering the objectives of the Company. The Board Board composition The Directors who served throughout the financial year ended on 31 October 2024 are: Sir John Lewis OBE, Serge Crasnianski, Tania Crasnianski, Jean-Marc Janailhac, Françoise Coutaz- Replan, René Proglio, alongside Emmanuel Olympitis and Camille Claverie, the two last-mentioned individuals having resigned on 30 November and 4 December 2024 respectively. The Chairman The Chairman has the overall responsibility for managing the Board. The Chief Executive Officer has responsibilities for strategy, operations and results. The Chief Executive Officer also has responsibility for the day-to-day operation of the Group. A clear division of responsibility exists, such that no single individual or group of individuals can dominate the Board’s decision-making process. Throughout the year under review, Sir John Lewis OBE served as Chairman and Mr Crasnianski served as Chief Executive Officer, Deputy Chairman and member of the Executive Team. In the Board’s opinion, even though Sir John Lewis OBE has been a Director since 2008 and Chairman since 2010, it is proposed that he remain in place for the time being. The Board considers Sir John to be a non-independent director. Director independence The Board structure has not complied with the Code provision that requires that at least half the Board, excluding the chairman, should be Non- executive Directors whom the Board considers to be independent. The table on page 81 contains more details on this. The Senior Independent Director Emmanuel Olympitis served as the Company’s Senior Independent Non-executive Director throughout the period. Although Mr Olympitis had been a director since December 2009, he was considered by the Board as independent on the basis that he continued to demonstrate total independence in his behaviour and in his interaction with the rest of the Board. Mr Olympitis resigned as a Director with effect from 30 November 2024 and was replaced as Senior Independent Director by Mr Proglio. Election of new Director If a new Director were to be appointed, the Board would ordinarily appoint someone whom it believes has sufficient knowledge and experience to fulfil the duties of a director. (In doing so, the Board would continue to encourage and give consideration to candidates from a diverse range of backgrounds and experiences as mentioned under the heading Equality, Diversity and Inclusion below.) If this were not the case, an appropriate training course would be provided. An appropriate induction programme is undertaken for all newly appointed Directors. All Directors have access to the advice and services of the Company Secretary. Any Director wishing to do so in furtherance of his or her duties may take independent advice at the Company’s expense. All Directors are required to stand for re-election every three years and newly appointed Directors are subject to election by shareholders at the first AGM after their appointment. However, in order to provide for stability and continuity, and to avoid destabilising the Board, the Directors have unanimously decided not to comply with the Code’s recommendation that all Directors seek annual re-election. Directors’ conflicts of interest During the year ended 31 October 2024, the Directors completed questionnaires in respect of their interests. The Board will continue to monitor and review actual or potential conflicts of interest on a regular basis and will consider whether or not it is appropriate to authorise any such conflicts. The Financial Reporting Council requires listed companies incorporated in the UK to include in their annual financial report: (i) a statement of how they have applied the main principles set out in the Code; and (ii) a statement as to whether they have complied throughout the accounting period with all relevant provisions set out in the Code. Corporate Governance ME Group plc Annual Report 2024 80 The Directors consider that throughout the 12-month period ended 31 October 2024 the Company complied with those provisions of the Code that are applicable to it, except for the following: Point of non-compliance with Code Explanation for non-compliance Less than half the board, excluding the Chair, are Non-executive Directors whom the board considers to be independent. Excluding the Chairman, the Board comprised two Executive Directors and five Non-executive Directors, three of whom were considered independent by the Board. Strict compliance would have required an additional Independent Non-executive Director. The Board considers its composition to be sufficiently close to the Code’s prescription on this point to render its non-compliance in this regard inconsequential. For engagement with the workforce, one or a combination of the following methods should be used: ▪Director appointed from the workforce; ▪formal workforce advisory panel; and ▪designated Non-executive Director. ▪(But none is used.) The Executive Directors meet regularly with the general managers of the Group. This enables both sides to raise any matters of interest to the other. The Non-executive Directors are always available should anyone not be comfortable in dealing with the Executive Directors about anything. Also, the whistle-blowing policy is in place as a further avenue should anyone wish to use it. Therefore, the Board believes that given the size of the Group and its resources, this is appropriate and additional measures to engage are unnecessary and overly cumbersome. There is no annual re-election of all directors. The Board thinks this would distract the Board from its business, and that continuity enables people with deep knowledge of the Company to make more informed, effective and considered judgments. Chairman has been in office for more than nine years. Sir John Lewis OBE is considered by the Board to be an effective and engaged chair. He has the full approval and confidence of the Board. Non-executive Directors do not liaise with work force as a matter of routine. After due consideration, the Board concluded that it was in order for the Executive Directors to liaise with the work force. If anyone felt uncomfortable, for whatever reason, about liaising with the Executive Directors there was recourse to the Non-executive Directors, as well as recourse to the whistleblowing process. Mr Olympitis is considered by the Board to be independent notwithstanding that he fell within several presumptions laid down by the Code as being likely to impair or that could appear to impair, a Non-executive Director’s independence, specifically that he served on the Board for more than nine years from the date of his first appointment and was beneficially entitled to shares of the Company. Mr Olympitis stepped down as a Director on 30 November 2024. The only presumptions of non-independence raised by the Code applicable to Mr Olympitis were that (i) he had been a Director for more than nine years (Mr Olympitis stepped down as a director on 30 November 2024) and (ii) he had a beneficial interest in 45,000 Ordinary Shares of 0.5p each of the Company. The Board found that Mr Olympitis demonstrated total independence in his behaviour and in his interaction with the rest of the Board and that his deep, lived knowledge of the Group resulted in his being able to make positive contributions and constructive challenges rather than diminish his contributions in any way. His interest in the Company’s shares was too minimal to have an impact on his performance as a director. The rest of the Board considered him to be independent in both character and judgment. ME Group plc Annual Report 2024 81 Point of non-compliance with Code Explanation for non-compliance Miss Coutaz-Replan is considered by the Board to be independent notwithstanding that she falls within several presumptions laid down by the Code as being likely to impair or that could appear to impair, a Non-executive Director’s independence, specifically that she has served on the Board for more than nine years from the date of her first appointment and is beneficially entitled to shares of the Company. Miss Coutaz-Replan’s employment as an Executive Director ended in August 2015 since when she has played no executive role in the Group and her dealings with the Executive Directors have been restricted to her role as a Non-executive Director. Miss Coutaz-Replan’s personal shareholding of 200,000 ordinary shares of 0.5p each represents only a very small percentage of the total issued share capital, too minimal to have an impact on her performance as a director. Her knowledge of the Group’s finances and associated systems and controls gives her great insight and the ability to ask pertinent questions and make constructive suggestions and rigorous challenges. The rest of the Board considers her to be independent in both character and judgment. Sir John Lewis OBE is a member of the Audit Committee. Under the predecessor to the Code, there was no restriction on the Chairman of the Board being a member of the Audit Committee and such membership in the case of Sir John Lewis OBE, in the opinion of the Board did not impede that committee’s functioning but enhanced it. There was no external Board evaluation. The Board opted to conduct its own internal review using an anonymised questionnaire. It believes the anonymity was a sufficient safeguard to encourage openness and transparency of feedback. The Nomination Committee consists of one director whom the Board conserved to be independent and one director whom the Board considered to be non-independent. This was contrary to Provision 17 of the Corporate Governance Code which states amongst other things that, ‘majority of members of the committee should be independent non-executive directors’. Until the question of Sir John Lewis’s independence was revisited by the Board, both members of the Nomination Committee were independent and therefore its composition was Code-compliant. The Committee has not met since this time so its composition has not affected anything. It is planned to revisit the composition of this Committee before the AGM in 2026. Mr Crasnianski receives a pension contribution equal to 15% of his basic remuneration. The Code recommends that pension contribution rates for executive directors, or payments in lieu, should be aligned with those available to the workforce. Following a review of Mr Crasnianski’s pension provision and how this compares with that of the general workforce, the Committee has agreed to maintain the CEO’s current pension at 15% of salary going forward. Given the diverse nature and geographies of the Company’s businesses and employees, no single Group-wide pension plan operates and therefore pension contribution rates vary across the Group with pension levels not necessarily reflecting seniority. 1 The Code and associated guidance are available on the Financial Reporting Council website at https://media.frc.org.uk/documents/UK_Corporate_ Governance_Code_2018.pdf. Corporate Governance continued Corporate Governance ME Group plc Annual Report 2024 82 Board evaluation The Chairman and Chief Executive Officer review the performance of other Executive Director. The Chairman reviews the performance of the Chief Executive, the other Executive Director(s) and each Non-executive Director. The Non-executive Directors, led by the Senior Independent Non- executive Director evaluate the performance of the Chairman, taking into account the views of the Executive Directors. During the year, the Chairman meets with the Non-executive Directors without the Executive Directors being present. Under the guidance and supervision of the Company Secretary, the Board undertakes an internal process to assess the effectiveness of the Board during each financial year. This consists of a confidential survey. Areas identified in which there is considered to be room for improvement are usually addressed by the Board during the current year. Operation of the Board The Board is normally scheduled to meet four or five times a year, with ad hoc meetings (including by way of conference and video calls) convened to deal with urgent matters. The Board has a formal schedule of matters reserved to it for decision. These include: the approval of the financial statements; dividend policy; major acquisitions, disposals and other transactions; significant changes in accounting policies; the constitution of Board Committees; risk management; and Corporate Governance policy. The Board has delegated various matters to Committees, as detailed below. These Committees of the Board meet regularly (the Nomination Committee meets as required. The Committees deal with specific aspects of the management of the Company. The Board has delegated authority to the Committees and they have defined terms of reference; those of the Nomination, Audit and Remuneration Committees are available on the Company’s website (https:// me-group.com/governance/#tab-board- committees-1). Decision-making relating to operational matters is handled by the Executive Directors and senior management. Board and Committee papers are circulated in advance of each meeting and are supplemented by reports and presentations to ensure that Board members are kept fully informed. Regular communication between the Directors also takes place outside the formal forum of Board and Committee meetings. The Board had five meetings during the year under review. A committee of the Independent Directors meeting alone had one meeting in that period. Attendance of Directors at Board and Committee meetings is set out below: Board Audit committee Remuneration committee Nomination committee J Lewis 5(5) 3(3) 3(3) 0(0) S Crasnianski 5(5) – – – T Crasnianski 5(5) – – – J-M Janailhac 5(5) – – – F Coutaz-Replan 4(5) 3(3) – – E Olympitis 5(5) 3(3) 3(3) 0(0) C Claverie 5(5) – – – R Proglio 5(5) 3(3) – – ME Group plc Annual Report 2024 83 Audit Committee This comprised Mr Proglio (Committee Chairman), Mr Olympitis (Senior Independent Director), Sir John Lewis OBE (Chairman of the Board), and Miss Coutaz-Replan (the Group’s former Finance Director). The Board considers that Miss Coutaz- Replan and Sir John Lewis OBE have suitable recent and relevant financial experience to satisfy the requirements of the Corporate Governance Code (2018 edition). The Board also considered the same of Mr Olympitis during his membership of the Committee. (As Mr Olympitis stepped down after the year end, the Board are considering the composition of that Committee.) Meetings are normally held at least twice a year. Three meetings were held during the year ended 31 October 2024. Other Directors, together with the Chief Financial Officer (currently a non-Board position) and representatives of the external auditor are generally invited to attend meetings. The Audit Committee aims to meet with the external auditor, at least twice a year. On behalf of the Board, the Committee reviews the Group’s accounting and financial reporting practices, the reports of the internal auditor and external auditor, and compliance with policies, procedures and applicable legislation. In addition, the Committee monitors the effectiveness of both the external and internal audit functions and reviews the Group’s internal financial control systems and reporting processes, and risk-management procedures. The Committee considers the appointment of the external auditor and makes a recommendation on the audit fee to the Board; it usually assesses the effectiveness of the external auditor by means of an internal review process, assisted by a confidential questionnaire; it sets a policy for safeguarding the independence of the external auditor; and reviews the external auditor’s work outside of the audit itself, taking into account the nature of the work, the amount of the fees and whether it is appropriate for Key matters considered In February 2025, the Committee met to review this Annual Report and to receive the external auditor’s update and report on its audit activity. The Committee’s primary areas of focus were: ▪Considering how and when the Committee should exercise (and evidence) their oversight of management, notably in relation to their review of the effectiveness of internal controls, acquisitions and disposals, investments outside the normal course of business and approval of budgets and plans. ▪The need for management to develop expertise in relation to sustainability either internally or externally to address the forthcoming challenges of more demanding sustainability reporting. ▪The requirement to address other matters under ISA (UK) 260 to communicate with those charged with governance as a result of forthcoming changes to the Corporate Governance Code 2018 as a result of the new iteration in the 2024 edition. ▪During 2024, the FRC’s Audit Quality Review (AQR) team carried out an inspection of the external audit of our financial reporting for the 31 October 2023 financial year as part of their routine inspection activity. The FRC has provided a copy of their confidential report to the chairman of the committee, which has been reviewed and discussed by the committee and with Forvis Mazars. The findings of the review highlighted limited improvements were required in the documentation of certain aspects of the audit pertaining to management override of controls, group audit oversight and archiving. The committee is content that the matters raised do not give it concerns over the quality, objectivity or independence of the 2023 audit and have been addressed by Forvis Mazars in the context of the audit for the year ended 31 October 2024. Board Committees Corporate Governance continued Corporate Governance 84 ME Group plc Annual Report 2024 the external auditor to carry out such work. Details of the audit and non-audit fees are provided in note 5 to the financial statements. External auditor Forvis Mazars LLP has been the external auditor of the Group since the AGM in October 2019. The audit partner is David Herbinet. The Audit Committee is satisfied with the effectiveness, objectivity and independence of the external auditor. Accordingly, a resolution will be proposed at the forthcoming AGM for Forvis Mazars LLP’s re-election as auditor for the coming year. The Board is committed to putting the audit contract out to tender at least once every ten years. It conducted a tender process for the external audit role in 2019 in which it invited three firms to tender for the role of external auditor; Forvis Mazars LLP was the successful tenderer. The Audit Committee has obtained confirmation from Forvis Mazars LLP that no non-audit services were provided by Forvis Mazars LLP during the year. The Audit Committee is satisfied that Forvis Mazars LLP remains independent. Remuneration Committee During the year ended 31 October 2024, the Remuneration Committee comprised Mr Emmanuel Olympitis (Committee Chairman) and Sir John Lewis OBE (Chairman of the Board). Mr Olympitis resigned as a Director with effect from 30 November 2024 and Miss Coutaz-Replan replaced him as Chair of the Remuneration Committee. The Committee meets at least once a year. It met three times in the year ended 31 October 2024. The Committee makes recommendations to the full Board in respect of the Group’s remuneration policy. The Committee also keeps under review the remuneration of the Chairman and the Group’s Executive Directors (the Chairman would not play a part in deciding his own remuneration), to ensure that they are rewarded fairly for their contribution. The Committee also makes awards under the Executive Share Option Scheme. The Committee’s Terms of Reference are available on the Company’s website. The Remuneration Report on pages 94 to 111 provides details of how the Committee applies the directors’ remuneration principles of the Code. As two Directors stepped down after the year end, one of whom was a member of the Remuneration Committee, the Board are considering the composition of that Committee. Nomination Committee During the year ended 31 October 2024, the Nomination Committee comprised Sir John Lewis OBE (Committee Chairman and member of the Audit and Remuneration Committees) and Emmanuel Olympitis (Senior Independent Director, member of the Audit Committee and Chair of the Remuneration Committee). The Chairman of the Board would not chair the Nomination Committee when it addresses the appointment of his successor. Mr Olympitis resigned as a Director with effect from 30 November 2024 and Miss Coutaz-Replan replaced him as a member of the Nomination Committee. The Committee is not compliant with the applicable provisions of the Code which requires that a majority of members of the Committee are Independent Non-executive Directors because the Board only considers Miss Coutaz-Replan to be independent, not Sir John Lewis. The Committee, which meets as required, makes recommendations to the Board on the appointment of new directors. The Committee did not meet in the year ended 1 October 2024 but its members speak frequently even in the absence of formal meetings in order to keep board composition under review and to ensure that a proper succession plan is in place at all times. The Nomination Committee is committed to the pursuit of diversity, including gender diversity, throughout the business. Appointments to the Board are made on merit, against objective criteria and with due regard for the benefits of diversity on the Board, including gender diversity. The Nomination Committee does not commit to any specific targets, therefore. The Group’s Diversity Policy also recognises the benefits of diversity. The Nomination Committee will ensure that its development in this area is consistent with the Group’s current and future requirements, ME Group plc Annual Report 2024 85 1 2 3 4 Corporate Governance continued Executive Team As part of actions to further stabilise executive governance, the Group has taken the decision to evolve what was the Strategic Committee into a new Executive Team. The Group believes this is the correct Committee to provide coherence, optimise synergies, share best practices and support the Group’s succession process. Led by key operational management, the Executive Team provides sustainable management and allows the Group to better plan for the future. The Executive Team meets once a month to decide all strategies, resources and Group actions. Each member of the operational management team is responsible for, and in charge of, implementing the decisions from within their business area. A larger Group Managers Committee meets periodically, gathering country managers together with the Executive Team in order to discuss and review the implementation of communication, decisions and actions that have been decided by the Executive Team meetings. The Executive Team comprises: 1 Serge Crasnianski Chief Executive Officer, Deputy Chairman 2 Tania Crasnianski Executive Director 3 Stéphane Gibon Chief Financial Officer 4 Charlotte Delbès Chief Marketing Officer enhances Board effectiveness, and reflects the Company’s UK listing and the international activity of the Group. During the year ended 31 October 2024, no vacancies for the Board arose, therefore no appointments were required. As turnover of Board members is low, as mentioned above, the Nomination Committee has not set any targets but as and when vacancies do arise, the Nomination Committee and the Board are committed to giving consideration to all interested and available candidates regardless of age, disability, sex, sexual orientation, pregnancy and maternity, race or ethnicity, religion or belief, gender identity, or marital or civil partnership status. As two Directors stepped down after the year end, one of whom was a member of the Nomination Committee, the Board are considering the composition of that Committee and the board as a whole. Corporate Governance ME Group plc Annual Report 2024 86 Our commitment The Board of ME Group is a supporter of gender and ethnic diversity as part of the Company’s commitment to diversity and inclusion in the broadest sense. We are committed to attracting and retaining the best people who reflect the diverse experiences and characteristics of the customers we serve. This is central to our core values, which include a commitment to the following ethics driving our behaviour: courage, creativity, solidarity, eco-responsibility and commitment. This encompasses, but goes beyond, gender and ethnic diversity. For example, we are focused on supporting those people who may be disadvantaged or marginalised in connection with their educational background, socio- economic background or caring responsibilities, as well as characteristics which are protected under equality law. The Company has long been – and remains – an equal opportunities employer. It has had embedded a comprehensive equality, diversity and inclusion policy, the latest revision of which was made in 2022 (but which originates as far back as 2011) covering the entire employment lifecycle and emphasising our commitments and expected behaviours. A statement by the Company on its approach to this topic can be found here: https://me-group. com/company-documents/. The Board considers it a matter of the utmost importance in the best interests of shareholders and other stakeholders to fill positions with the best possible candidates regardless of their gender, ethnic origin or other attributes. It believes this is what investors want and that it is in the best interests of the Company. Listing rules: board targets regarding gender and ethnicity As at 31 October 2024 (the Company’s chosen reference date for reporting under Listing Rules 6.6.(9) and (10): ▪37.5% of the Board consisted of women. None of the Chair, CEO, SID, and CFO (the last of which is not a statutory board position) is a woman, although from 2009 to 2015 the CFO (that office being then a statutory board position, and one Equality, diversity and inclusion of only two statutory directors during that period) was a woman. Whilst this falls short of the ‘40%’ and ‘senior position’ targets set out in the Listing Rules, it exceeds the 33% target set by the Hampton-Alexander Review and the 30% Club Investor Group in their widely adopted guidance. It also represents material compliance as the 2.5% shortfall represents less than one person owing to the numbers on our Board ▪None of the Board members was from an ethnic minority background as defined under the Listing Rules, although the Board comprised individuals of five different nationalities. The Board would point out the following by way of explanation and important context: ▪The Board was (and remains) relatively small and at the reference date consisted of two Executive Directors, one of whom was a woman, and five Non-executive Directors, of whom two were women. (The roles of Chief Marketing Officer and Head of HR are not board level positions at the Company, but if they were (as is common in other organisations), we would well have exceeded the 40% target set by the Listing Rules.) ▪The composition of the Board has remained relatively steady over the last few years (although two Directors stood down after 31 October 2024). That is by design: the Group has undergone significant changes, making consistency and clarity of thought at Board level vitally important ▪The Board comprises 37.5% female members, representing (i) two Non-executive Directors one of whom sits on the audit committee and (i) one Executive Director, who is head of legal and general secretary, and is also responsible for supervising the Group’s entities in Germany and Austria. As mentioned above, this is higher than the 33% target set by the 30% Club Investor Group and is close to 40% ▪As at 31 October 2024, 50% of the Company’s Executive Team comprised women. ▪When Mr Olympitis stepped down as a Director at the end of November 2024, the percentage of female directors on the Board was 42.86%. After Miss Claverie stepped down as a Director on 4 December 2024, it decreased to 33.33%. ME Group plc Annual Report 2024 87 ▪It is important to recognise that the Group has a large presence in, and the Company draws many of its leaders from, countries where the cultural and legal approach to ensuring Diversity & Inclusion is very different. For example, in France and Germany asking candidates and employees to disclose their ethnicity can amount to a criminal offence, and it is counter-cultural to suggest the introduction of targets or quotas for improving representation. Whilst the Company and the Board will continue to strive for improvement, it must do so in a way that remains respectful of, and sensitive to, differing expectations in our main markets and the rule of law in other jurisdictions ▪As an equal opportunities employer, the Company is committed to providing equal career opportunities for all its employees without discrimination, and pursuing fair and equitable policies and procedures for recruitment, training and development. It gives full consideration to all applications from persons with protected characteristics and more broadly from a diverse range of backgrounds, with due regard to their aptitudes and abilities. Indeed, we have a paragraph stated on all our job postings as follows ‘As an equal opportunity’s employer, ME Group is committed to the equal treatment of all current and prospective employees and does not condone discrimination on the basis of age, disability, sex, sexual orientation, pregnancy and maternity, race or ethnicity, religion or belief, gender identity, or marriage and civil partnership.’ We aspire to have a diverse and inclusive workplace and strongly encourage suitably qualified applicants from a wide range of backgrounds to apply and join our Company. The Board recognises the risks of applying hard short-term targets, which can give rise to a perception of an uneven playing field, and which can discourage qualified applicants and existing employees from seeking positions. However, the Board will continue to encourage and give consideration to candidates from a diverse range of backgrounds and experiences when seeking out the best talent whenever a position comes up to be filled. The Board does not believe that positions should be created for the ad hoc purpose of meeting targets, and therefore another reason for not meeting the 40% level stipulated by the Listing Rule and other targets set out in the Listing Rules is simply that positions have not arisen requiring to be filled partly as a result of the Group’s relatively low turnover of officers. More broadly, the Board actively supports the roll- out of initiatives under the Equality, Diversity, and Inclusion Policy, referred to below, to broaden the diversity of the Company’s workforce, and to ensure the Company’s culture is as inclusive as possible. We collected the data which informs this part of our report by questionnaires sent to all the relevant persons and which were adapted to ensure compliance with local laws. Equality, diversity and inclusion policy The Board supported the Company’s embedding of its comprehensive Equality, Diversity and Inclusion Policy (ED&I Policy) in July 2022. The ED&I Policy applies to anyone who works in the Company, including the Board (and its committees). It seeks to emphasise the Company’s commitments to equality, diversity and inclusion (ED&I), sets expectations in respect of employees’ behaviour and sets out steps the Company is taking to ensure an inclusive culture. The ED&I Policy deliberately takes a broad and ambitious approach to diversity and commits to trying to ensure that recruitment, promotion and retention procedures do not result in less favourable treatment because of someone’s disability, gender, gender identity or gender reassignment status, marital status, race, racial group, ethnic or national origin, or nationality, religion or belief, sexual orientation, age, civil partnership status, pregnancy or maternity, paternity, educational background, socio-economic background, caring responsibilities, part-time status or fixed-term status. The ED&I policy is shared with all our workers on the UK HR system available to all UK employees via self-service and easy access on laptops and mobile phones; it requires acknowledgement. There is an Equality and Diversity training programme which can be rolled out to all employees in the UK through our WorkWize training portal. The ED&I Policy also dedicates a section specifically to the ways in which the Corporate Governance continued Corporate Governance ME Group plc Annual Report 2024 88 Company seeks to ensure inclusion of disabled people, to give tangible examples of the Company’s approach and to showcase its focus on disability inclusion. We are asked to report on the results of the ED&I Policy in the reporting period. It is difficult to point to quantitative evidence of improvements in concepts like inclusion which are inherently difficult to measure, especially where progress on such matters is inevitably incremental. However, we are encouraged to actively follow this policy to create a more inclusive workplace, which helps the business attract candidates with a wide range of skills from diverse backgrounds. We believe that this helps keep the Company successful, and that our employees are motivated and reassured by the fact that we are an equal opportunities employer. We are also required to report on the gender and ethnicity data in relation to our Board and executive management in tables prescribed under the Listing Rules. These are set out below. We collected this information by asking each member of the Board and executive management, where permitted by law to do so, to complete a questionnaire to confirm which of the below categories describes them. Table for reporting on gender identity or sex Role Number of Board members % of the Board Number of senior positions on the Board (CEO, CFO, SID and Chair Number in executive management (plus company secretary) % of executive management (plus company secretary) Men 5 62.5 3 3 60 Women 3 37.5 – 2 40 Not specified/prefer not to say – – – – – Table for reporting on ethnic background Role Number of Board members % of the Board Number of senior positions on the Board (CEO, CFO, SID and Chair Number in executive management (plus company secretary) % of executive management (plus company secretary) White British or other White (including minority – white groups) 2 17 – 1 20 Mixed/Multiple Ethnic Groups – – – – – Asian/Asian British – – – – – Black/African/Caribbean/ Black British – – – – – Other ethnic group, including Arab – – – – – Not specified/prefer not to say 5 83 – – – Notes 1 Data were acquired by using questionnaires seeking the information required by the Listing Rules. Having sought legal advice, the Company was informed that it could not lawfully ask questions around ethnicity to French nationals therefore it did not do so. 2 As at 31 October 2024, the Board consists of French, Greek, German, Swiss and UK nationals. The Executive Management (which the Company calls its Executive Team) comprised French, Swiss and German nationals. ME Group plc Annual Report 2024 89 Shareholder communication and engagement The Chief Executive Officer has regular meetings with the Company’s major institutional shareholders to help ensure, amongst others, that the Board develops an understanding of the views of major shareholders about the Company and the Group. The Chairman also meets with major shareholders and has contact with them as and when required. The Senior Independent Non-executive Director and, where appropriate, other Non-executive Directors, are also made available to meet with major shareholders on request. Any pertinent feedback arising from such meetings is reported to the Board at its regular meetings and/or by correspondence or dialogue. In normal circumstances, private investors are encouraged to attend the AGM and have the opportunity to question the Board. All members of the Board usually attend the AGM. Shareholders are given the opportunity to vote on each separate issue. The number of proxy votes lodged is given at the meeting after the vote on a show of hands for each resolution and is published on the Company’s website after the meeting. Corporate Governance continued Corporate Governance ME Group plc Annual Report 2024 90 Accountability and internal control The Board is ultimately responsible for the Group’s systems of internal control and risk management, and for reviewing their effectiveness. This is effected by receiving reports from the Audit Committee following its review. The Board confirms that it has reviewed the effectiveness of the systems of internal control and risk management for the year under review. The Board is generally satisfied that such systems have operated adequately throughout the period. The system of internal control is designed to manage, rather than eliminate, the risk of failure to achieve business objectives. Such a system can, however, provide only reasonable and not absolute assurance against material misstatement or loss. The Group has in place processes for identifying, evaluating and managing the significant risks that are applicable to the business. The Board regularly reviews these processes. The Chief Executive Officer is ultimately responsible for risk management. Executive Managers of individual Group companies are responsible for the identification, evaluation and management of the key risks applicable to their areas of responsibility. These risks are assessed on a regular basis. The Managers of Group companies are aware of their responsibility to operate systems of internal control that are effective and efficient for their businesses, to provide reliable financial information and to ensure compliance with local laws and regulations. The Group has a comprehensive budgeting system, with an annual budget approved by the Board. Actual results are reported monthly through the Group’s financial systems, and variances are reviewed. The Audit Committee receives reports from the external auditor and reports its conclusions to the Board. A whistle-blowing procedure by which staff may raise concerns about possible improprieties in matters of financial reporting or other matters was in place throughout the year. The whistle- blowing policy can be found on the Company’s website at: https://me-group.com/wp-content/ uploads/2022/01/Photo-Me-Whistleblowing- Policy.pdf. Internal control and risk management in relation to the financial reporting process The Group has a thorough assurance process in place in respect of the preparation, verification and approval of periodic financial reports. This process includes: ▪The involvement of qualified, professional employees with an appropriate level of experience (both in Group finance and throughout the business) ▪Formal sign-offs from appropriate business segment managing directors and finance directors ▪Comprehensive review and, where appropriate, challenge from key internal Group functions ▪A transparent process to ensure full disclosure of information to the external auditor ▪Engagement of a professional and experienced firm as external auditor ▪Oversight by the Audit Committee, involving (amongst other things): i, A detailed review of key financial reporting judgments that have been discussed by management ii, Review and, where appropriate, challenge on matters including: the consistency of, and any changes to, significant accounting policies and practices during the year; significant adjustments arising as a result of the external audit; the going concern assumption; and the Company’s statement on internal control systems, before endorsement by the Board The above process, plus the review by the Audit Committee of a comprehensive note that sets out the details of the preparation, internal verification and approval process for the Annual Report and Accounts, provides comfort to the Board that the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable, and give the information necessary for shareholders to assess the Group’s position and performance, business model and strategy. In connection with the audit for year ended 31 October 2024, the above process and review did not result in any adverse findings, and the Audit Committee found the process and associated controls sufficient and adequate for their purpose. Control & Risk ME Group plc Annual Report 2024 91 Statement of Directors’ Responsibilities Sir John Lewis OBE, Serge Crasnianski, Tania Crasnianski, Françoise Coutaz-Replan, Jean-Marc Janailhac and René Proglio are the Directors of the Company and are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.1 Company law requires the Directors to prepare financial statements for the Group and the Company for each financial year. Under that law, the Directors are required to prepare the Group financial statements in accordance with UK-adopted international accounting standards and applicable law and have elected to prepare the Company’s financial statements on the same basis. Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of their respective profit or loss for that period. In preparing each of the Group and the Company’s financial statements, the Directors are required to: ▪Select suitable accounting policies and then apply them consistently; ▪Make judgments and accounting estimates that are reasonable and prudent; ▪State whether they have been prepared in accordance with UK-adopted international accounting standards, subject to any material departures disclosed and explained in the Group and Company financial statements respectively; and ▪Prepare the financial statements on the going-concern basis unless it is inappropriate to presume that the Group and the Parent Company will continue in business. 1 The functions of the persons named here can be found on pages 72 to 73. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that their financial statements and the Directors’ Remuneration Report comply with the Companies Act 2006 and as regards the Group’s financial statements, Article 4 of the IAS Regulation. The Directors have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors’ Report, Directors’ Remuneration Report and Corporate Governance Statement that comply with that law and those regulations. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Corporate Governance ME Group plc Annual Report 2024 92 Responsibility Statement of the Directors in respect of the annual financial report Each of the Directors of the Company, whose names and functions are listed on page 72, confirms that, to the best of his or her knowledge: ▪The financial statements, which have been prepared in accordance with UK-adopted international accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and ▪The Strategic Report and Directors’ Report in the Annual Report include a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. Fair, balanced and understandable In accordance with the principles of the UK Corporate Governance Code (2018 edition), the Directors have arrangements in place to ensure that the information presented in the Annual Report is fair, balanced and understandable; these are described on page 91. The Board considers, on the advice of its Audit Committee, that the Annual Report, taken as a whole, is fair, balanced and understandable, and provides the information necessary for shareholders to assess the Company’s and the Group’s position and performance, business model and strategy. Significant accounting policies, critical estimates and key judgments Our significant accounting policies are set out on pages 126 to 135 of the consolidated financial statements and conform to UK-adopted international accounting standards. These policies and applicable estimation techniques have been reviewed by the Directors who have confirmed them to be appropriate for the preparation of the 2023/2024 consolidated financial statements. Statement of Compliance with the UK Listing Rule 5.4 The Company has in place a written and legally binding agreement and constitution to enable it to comply with Listing Rule 5.4. As one independent Non-executive Director, René Proglio, is being proposed for re-election at the Company’s AGM to be held on 25 April 2025, his re-election will be conducted in accordance with Listing Rules 6.2.8 and 6.2.9. By order of the Board Sir John Lewis OBE Non-executive Chairman 24 February 2025 In accordance with the principles of the UK Corporate Governance Code (2018 edition), the Directors have arrangements in place to ensure that the information presented in the Annual Report is fair, balanced and understandable. ME Group plc Annual Report 2024 93 Françoise Coutaz-Replan Chair of the Remuneration Committee Directors’ Remuneration Report In the 12 months ended 31 October 2024, the Committee’s work has largely been focused on operating the new Directors’ Remuneration Policy which was approved by shareholders at the 2024 AGM, ensuring that Executive Directors and senior executives remain appropriately incentivised and rewarded in respect of the Company’s performance. Corporate Governance ME Group plc Annual Report 2024 94 Annual Statement Dear Shareholder, On behalf of the board, I am pleased to present my first Directors’ Remuneration Report as Chair of the Committee, having taken over the role from Emmanuel Olympitis (Manoli) on 30 November 2024. Manoli had chaired the Committee since July 2010 and I would like to take this opportunity to thank him on behalf of the Board for his hard work and dedication over the years. (The Remuneration Committee and the Board are considering the composition of the Committee in the light of Manoli’s departure.) This report, which covers the 12 months ended 31 October 2024, has been prepared in line with the provisions of the Companies Act 2006 and Schedule 8 of the Large and Medium- sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended). The report has also been prepared in line with the recommendations of the 2018 UK Corporate Governance Code and the requirements of the FCA’s UK Listing Rules. This report is divided into three sections being: This Annual Statement, which summarises the work of the Committee, remuneration outcomes in 2023/24 and how the Remuneration Policy will be operated in 2024/25; The Remuneration Policy Report, which details the Company’s Remuneration Policy for the remuneration of Executive and Non-executive Directors as approved by shareholders at the 2024 AGM; and The Annual Report on Remuneration, which discloses details of the Committee, how the Policy was implemented in the year ended 31 October 2024, and how the Policy will operate for the year ending 31 October 2025. The Annual Statement and Annual Report on Remuneration will be subject to an advisory shareholder vote at the AGM on 25 April 2025. Work of the committee during the 12 months ended 31 October 2024 The Committee’s main activities during the period were as follows: ▪Agreeing the performance against the targets for the 2022/2023 annual bonus awards; ▪Agreeing the approach in respect of the 2023/2024 annual bonus awards; ▪Agreeing the targets for the 2023/2024 annual bonus; ▪Agreeing the award levels and performance targets for the 2024 ESOS awards; ▪Seeking shareholder approval for the Directors’ Remuneration Policy at the 2024 AGM, given that it was reaching the end of its three-year shareholder approved term; and ▪Seeking shareholder approval for the ME Group Executive Share Option Scheme (2024) at the 2024 AGM given that the previous scheme (Photo-Me Executive Share Option Scheme 2014) was reaching the end of its ten-year shareholder approved life. In addition, the Committee sought to ensure that the Policy and practices were (and continue to be) consistent with the six factors set out in Provision 40 of the 2018 UK Corporate Governance Code: Clarity – The current Policy is understood by our senior executive team and we have sought to articulate it clearly to our shareholders and representative bodies (both on an ongoing basis and during consultation when material changes are being made). Simplicity – The Committee is mindful of the need to avoid overly complex remuneration structures which can be misunderstood and deliver unintended outcomes. Therefore, a key objective of the Committee is to ensure that our executive remuneration policies and practices are straightforward to communicate and operate. Risk – Our current Policy has been designed to ensure that inappropriate risk-taking is discouraged and will not be rewarded via: (i) the balanced use of both short-term incentives and market value share options which employ a blend of financial, non-financial and share price hurdles; (ii) the significant role played by equity in our incentive plans; and (iii) malus/ clawback provisions. ME Group plc Annual Report 2024 95 Directors’ Remuneration Report continued Predictability – Our incentive plans are subject to individual caps, with our share plans also subject to market standard dilution limits. Proportionality – There is a clear link between individual awards, delivery of strategy and our long-term performance. Alignment to culture – Our executive pay policies are aligned to culture through the use of metrics in both the annual bonus and share options that measure how we perform against our KPIs and the long-term performance of the share price. Remuneration outcomes in 2023/24 The performance of the Group is summarised on page 1, and in the financial statements on pages 122 to 197. In respect of the annual bonus for the year ended 31 October 2024, performance against the profit and strategic targets resulted in bonus awards of 150% of salary for Mr Crasnianski and 34% of salary for Miss Tania Crasnianski. Further details of the target set, and the performance against those targets are set out in the Annual Report on Remuneration. Based on an EPS for the year ended 31 October 2024 of 14.36p against a target range of 10.5p to 13p, ESOS awards granted on 12 May 2022 are expected to vest in full on 12 May 2025. Details of the awards vesting, and their pre-tax intrinsic value as at 31 October 2024, are detailed in the Annual Report on Remuneration. Implementation of the remuneration policy for 2024/25 The Committee proposes to operate the Policy for the year ending 31 October 2025 as follows: ▪Executive Directors’ current base salaries, together with prior year comparators (split between Euro and GBP where salaries are split into two currencies) are shown below: ▪Benefit provision will be in line with the approved Policy ▪Mr Crasnianski’s pension provision will continue at 15% of salary going forward. Given the diverse nature and geographies of the Company’s businesses and employees, no single Group- wide pension plan operates and therefore pension contribution rates vary across the Group with pension levels not necessarily reflecting seniority. Miss Crasnianski does not receive a pension provision ▪The annual bonus for the year ending 31 October 2025 will continue to be capped at 150% of salary, with the majority of the targets based on pre-tax profit growth and a minority based on a number of key personal/strategic targets. The bonus targets are currently considered to be commercially sensitive and as such, the targets and performance against the targets will be disclosed retrospectively in next year’s Directors’ Remuneration Report ▪Future grants of ESOS awards to Executive Directors will be kept under review. Use of discretion In determining remuneration outcomes for the year ended 31 October 2024, the Committee has not exercised discretion. Executive Directors’ current base salaries, together with prior year comparators split between Euro and GBP Salary from 1/11/2024 Salary from 1/11/2023 Role Name € £ € £ CEO Serge Crasnianski – 560,211 – 560,211 Executive Director Tania Crasnianski1 290,000 50,000 290,000 50,000 1 Ms Crasnianski is paid €290,000 under a contract with ME Group GSS (previously known as Photo Me France SAS), and £50,000 under a contract with Photo-Me Limited. Corporate Governance ME Group plc Annual Report 2024 96 Shareholder engagement The Committee takes an active interest in shareholder views on our Executive Directors’ Remuneration Policy and is mindful of the concerns of shareholders and other stakeholders. This is reflected in the Company’s voting results at the 2024 AGM (approval of the current Remuneration Policy) and recent AGMs in respect of the Annual Statement and Remuneration Report resolutions which were supported by a significant majority of shareholders. The Committee hopes that shareholders continue to support the Remuneration Committee, and specifically the resolution in respect of the Annual Statement and Annual Report on Remuneration at the 2025 AGM. Yours faithfully, Françoise Coutaz-Replan Chair of the Remuneration Committee 24 February 2025 ME Group plc Annual Report 2024 97 Remuneration Policy Report A summary of the Policy approved by shareholders at the 26 April 2024 AGM is set out below. The full Policy which was approved by shareholders is set out in the Annual Report for the year ended 31 October 2023. The Committee’s Remuneration Policy for the Executive Directors is to have regard to the directors’ experience and the nature and complexity of their work in order to provide a competitive remuneration package that attracts, retains and motivates high-calibre executives from whom first-class performance is expected. The Remuneration Policy is also intended to be consistent with the Company’s business objectives, risk profile and shareholder interests. In order to align the interests of shareholders and Executive Directors, a significant proportion of the remuneration of Executive Directors is performance-related, through an annual bonus plan and the grant of share options. The Committee will ensure that the incentive structures for Executive Directors and senior managers will not raise environmental, social or governance (“ESG”) risks by inadvertently motivating irresponsible behaviour. More generally, with regard to overall remuneration structures, there is no restriction on the Committee that prevents it from taking into account ESG matters, nor do these remuneration structures encourage inappropriate operational risk-taking. Component Purpose and link to strategy Operation Maximum Performance measures Salary Reflects the value of the individual and their role Reflects skills and experience over time Provides an appropriate level of basic fixed income, avoiding excessive risk arising from over-reliance on variable income Normally reviewed annually, effective 1 May Normally paid in cash; pensionable Comparison against companies with similar characteristics and comparators taken into account in review The Committee is guided by the requirements of the Company and prevailing market levels However, no Executive Director will receive a base salary increase in excess of 10% p.a., except to reflect the fact that their salary was set at a lower level initially, with the intention that the salary be increased to a more market-reflective level as the individual gains experience (subject to performance) N/A Benefits Provides insured benefits to support the individual and their family during periods of ill health or death Gives allowances to support individuals in their relevant roles Includes company car and private medical insurance, and may include an overseas housing allowance for a director working outside of his or her country of normal residence Other benefits may be offered where appropriate Benefits will not normally be provided with a value per Executive Director in excess of £75,000 p.a. N/A Corporate Governance ME Group plc Annual Report 2024 98 Component Purpose and link to strategy Operation Maximum Performance measures Annual Bonus Incentivises delivery of specific Company, divisional and personal annual goals Maximum bonus only payable for achieving specified targets Normally payable in cash; non- pensionable Committee has the discretion to defer up to 50% of the bonus in shares for three years Up to 150% of base salary p.a. Performance is assessed on an annual basis, based on the achievement of objectives relating to financial performance, progress of strategic priorities and/or personal targets. The specific measures used in the bonus and their weighting may vary each year depending on business context and strategy Withholding and recovery provisions are operated Pension Provides competitive retirement benefits Defined contribution Executive Directors may be offered cash in lieu of pension Workforce aligned (noting that no single Group wide pension plan operates and therefore pension contribution rates vary across the Group with pension levels not necessarily reflecting seniority) N/A Executive Share Option Scheme (ESOS) Aligns Executive Directors’ interests with those of shareholders Retention Annual awards of market value options may be granted The Committee reviews the quantum of awards annually and monitors the continuing suitability of the performance measures Awards vest after three years and a two year post vesting holding period will operate Up to 150% of base salary p.a. The Remuneration Committee may set such performance conditions on awards as it considers appropriate (whether financial or non- financial; and whether corporate, divisional or individual) EPS (based on sliding scale vesting targets) is currently the sole performance metric used Up to 25% of salary vests at threshold, increasing to 150% vesting at maximum Withholding and recovery provisions are operated ME Group plc Annual Report 2024 99 Remuneration Policy Report continued Component Purpose and link to strategy Operation Maximum Performance measures Share Ownership Guidelines Provides alignment of interests between Executive Directors and shareholders In employment: Executive Directors are required to build and maintain a shareholding equivalent to at least two years’ base salary through the retention of 50% of the net-of-tax vested share awards or through open-market purchases Post cessation: Executive Directors will be required to retain a shareholding for two years post cessation of employment In employment: 200% of salary Post cessation: 100% of the in-employment guideline (or actual shareholding if lower) excluding: (i) own shares purchased/shares currently held; and (ii) shares vesting from any share award granted prior to the 2021 AGM Non- executive Directors Provides fees reflecting time commitments and responsibilities, in line with those provided by similarly sized companies Cash fee paid on a monthly basis; fees are reviewed annually Not entitled to participate in any Group pension scheme. No awards to be granted under the annual bonus or ESOS No Non-executive Director receives any benefits in kind (other than in respect of the expenses relating to the performance of that individual’s duties, such as travel to/from Board meetings) The Committee is guided by market rates, time commitments and responsibility levels However, aggregate annual fees will not exceed £750,000 or such other figure as provided for in the Company’s Articles of Association from time to time The Board may request that a Non-executive Director undertake services not within the normal scope of his or her role. Should this be the case in the future, a commercial rate would be paid and full disclosure would be provided in the relevant Directors’ Remuneration Report N/A Corporate Governance ME Group plc Annual Report 2024 100 Choice of performance measures The Committee has given careful consideration to the performance measures applicable to both the annual bonus and the Executive Share Option Scheme. The choice of the performance metrics applicable to the annual bonus scheme reflects the Committee’s belief that any incentive compensation should be appropriately challenging, with the majority (or the entirety) linked to the achievement of profit-related targets. The Committee may also link a proportion of the annual bonus to strategic and/or personal objectives if it deems this appropriate with regard to the Company’s key objectives. The earnings per share (EPS) performance condition, applicable to the Executive Share Option Scheme, was selected by the Committee on the basis that it incentivises the delivery of sustainable long-term financial performance and rewards management for growing the Company while retaining an appropriate profit margin. The use of share options retains a robust link between management and shareholders by incentivising management to deliver long-term growth in the Company’s share price. The Committee retains discretion over the use of other financial/ share price-based performance metrics and the calculation of EPS in order to appropriately adjust for any material one-off items including (but not limited to) major acquisitions, changes in accounting policies and major share issues. The Committee operates the Executive Share Option Scheme in accordance with the scheme rules, the Listing Rules and HMRC legislation. The Committee, consistent with market practice, retains discretion over a number of areas relating to the operation and administration of the plan. How employees’ pay is taken into account The Committee is aware of the general pay and conditions in the Group as a whole when determining the directors’ Remuneration Policy and its implementation. However, reflecting standard practice, employees are not consulted in the formulation of the policy. How shareholders’ views are taken into account The Committee continues to take an active interest in shareholder views on our executive Remuneration Policy and is mindful of the concerns of shareholders and other stakeholders. This is reflected in the voting result at the AGM held on 26 April 2024, with 96.44% shareholder support (of votes cast) in respect of the current Directors’ Remuneration Policy. Approach to recruitment and promotions The remuneration package for a new Executive Director would be set in accordance with the terms of the Company’s prevailing approved Remuneration Policy at the time of appointment and takes into account the skills and experience of the individual, the market rate for a candidate of that experience and the importance of securing the relevant individual. Service contracts will be subject to any mandatory provisions of foreign laws where such laws govern a director’s contract of employment providing that the use of such foreign law is not deliberately used to circumvent this policy. The salary would be provided at such a level as required to attract the most appropriate candidate, and may be set initially at a below mid-market level on the basis that it may progress towards the mid-market level once expertise and performance have been proven and sustained. Pension provision will be in line with the Company’s prevailing approved Remuneration Policy at the time of appointment. Consistent with Part 4 of the Large and Medium- sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 as amended, the cap on benefit provisions does not apply to new recruits, although the Committee would not envisage exceeding this caps in practice unless absolutely necessary. The annual bonus potential would be limited to 150% of salary, and grants under the Executive Share Option Scheme would be limited to 150% of salary. In addition, the Committee may offer additional cash and/or share-based elements to replace deferred or incentive pay forfeited by an executive leaving a previous employer. ME Group plc Annual Report 2024 101 Remuneration Policy Report continued It would seek to ensure, where possible, that these awards would be consistent with awards forfeited, in terms of vesting periods, expected value and performance conditions. For an internal Executive Director appointment, any variable pay element awarded in respect of the prior role may be allowed to pay out according to its original terms. For external and internal appointments, the Committee may agree that the Company will meet certain relocation and/or incidental expenses, as appropriate. Fee structure and quantum for Non-executive Director appointments will be based on the prevailing Non-executive Director fee policy. Approach to leavers No Executive Director has the benefit of provisions in his or her service contract for the payment of predetermined compensation in the event of a termination of employment. It has been the Committee’s general policy that the service contracts of Executive Directors (none of which is for a fixed term) should provide for termination of employment by giving notice or by making a payment of an amount equal to base salary (and in the case of the CEO and other Executive Directors, an additional amount equal to the cost of providing any benefits for the period of notice) in lieu of any unserved notice period. It is the Committee’s general policy that no Executive Director should be entitled to a notice period or payment on termination of employment in excess of the levels set out in his or her service contract. In determining amounts payable on termination, the Committee also considers, where it is able to do so, appropriate adjustments to take into account accelerated receipt and the Executive Director’s duty to mitigate his or her loss. An annual bonus may be payable for a good leaver (e.g. death, ill health, disability, redundancy or other circumstances at the discretion of the Committee) with respect to the period of the financial year served, although it will be prorated for time served and paid at the normal pay-out date. The treatment of any share awards granted to an Executive Director will be determined based on the relevant scheme rules. The default treatment under the Executive Share Option Scheme is that any outstanding awards or unexercised options lapse on cessation of employment. However, in certain prescribed circumstances (e.g. death, injury, disability or other circumstances at the discretion of the Committee), “good leaver” status can be applied at the discretion of the Committee or shall apply in relation to HMRC tax-favoured options as relevant. In this scenario, any outstanding options will normally be exercisable on the date of cessation and remain exercisable for a period of six months (or 12 months in the case of death). Alternatively, in the case of non-tax favoured options, the Committee has the discretion to determine that good leavers’ awards should continue to be exercisable based on the normal timetable. The extent to which outstanding option awards become exercisable for good leavers will depend on the satisfaction of any applicable performance conditions (over a curtailed or full performance period, as relevant). Time pro rating of options will apply to good leavers’ awards unless the Committee determines that time prorating is inappropriate. The Company has the power to enter into settlement agreements with Directors and to pay compensation to settle potential legal claims. In addition, and consistent with market practice, in the event of the termination of an Executive Director, the Company may make a contribution towards that individual’s legal fees and fees for outplacement services as part of a negotiated settlement. Any such fees will be disclosed as part of the detail of termination arrangements. For the avoidance of doubt, the policy does not include an explicit cap on the cost of termination payments. No payments for loss of office were made to any Directors in the year ended 31 October 2024. Corporate Governance ME Group plc Annual Report 2024 102 Service contracts Details of the Executive Directors’ service contracts are as follows: Executive Director Date of contract Notice period Serge Crasnianski1 01/05/2010 12 months2 Tania Crasnianski 23/06/2021 12 months2 All Non-executive Directors are appointed for specified terms, subject to re-election at the AGM immediately following their appointment, and every three years thereafter. None of the Non-executive Directors will ordinarily be entitled to compensation upon termination of their involvement with the Company. However, if a Non-executive Director should be removed as a result of a resolution duly proposed and resolved by members of the Company during the Non-executive Director’s normal term of appointment, he or she will be entitled to compensation equal to three months’ fees, and in the case of the chairman, six months’ fees. The relevant appointment letter and term dates of the Non-executive Directors are set out below: Director Appointment letter date Year of last election Expected year of expiry of current Sir John Lewis3 03/07/2008 2024 2027 Françoise Coutaz-Replan4 27/08/2015 2024 2027 Emmanuel Olympitis 11/11/2009 2022 2025 Camille Claverie5 23/06/2021 2022 2025 René Proglio6 23/06/2021 2022 2025 Jean-Marc Janailhac7 01/11/2023 2022 2025 1 Mr Crasnianski’s contract is with Photo-Me Limited, a wholly-owned subsidiary of the Company. Mr Crasnianski’s services are also made available under a consultancy agreement with Photo-Me Limited and a third party that makes Mr Crasnianski’s services available to the Company. 2 Where served by the Company; six months, notice where served by the Director or where applicable their service company. 3 Appointed Chairman on 26 July 2010. 4 First appointed to the Board as Group Finance Director on 24 September 2009, and resigned as an Executive Director on 27 August 2015. Miss Coutaz-Replan has remained as a Non-executive Director since that date. 5 First appointed to the Board on 23 June 2021. Ms Claverie’s contract is with Photo-Me Limited, a wholly-owned subsidiary of the Company. 6 First appointed to the Board on 23 June 2021, Mr Proglio’s services are made available under a consultancy agreement with Photo-Me Limited and a third party that makes Mr Proglio’s services available to the Company. 7 Appointed to the Board on 22 July 2019 as a Non-executive Director, he became an Executive Director on 27 July 2020 and reverted to being a Non- executive Director on 1 November 2023. External appointments The Board may allow Executive Directors to accept appropriate outside commercial Non-executive Director appointments provided the aggregate commitment is compatible with their duties as an Executive Director. Whether or not the Executive Director concerned may retain fees paid for these services will be considered on a case-by-case basis, and will be subject to approval by the Board. ME Group plc Annual Report 2024 103 Annual Report on Remuneration Implementation of the Remuneration Policy for the year ending 31 October 2025. As summary of how the Committee intends to operate the Policy for the Executive Directors for the year ending 31 October 2025 is set out in the Annual Statement. Non-executive Directors The fees for Non-executive Directors are reviewed at least once every three years, the last increase having taken place in 2022. Current Non-executive Director fee levels are as follows (with prior year comparators also presented): Non-executive Director Role Committee chairman 1 November 2024 £ 1 November 2023 £ Sir John Lewis Chairman Nomination Committee 145,000 145,000 Emmanuel Olympitis1 Senior Independent Director Remuneration Committee 67,500 67,500 Françoise Coutaz-Replan2 Non-executive Director – 47,500 47,500 René Proglio Non-executive Director Audit Committee 57,500 57,500 Jean-Marc Janailhac Non-executive Director – 45,000 45,000 1 Mr Olympitis resigned from the Board (and hence Remuneration Committee) on 30 November 2024 2 Miss Coutaz-Replan’s fee rose from £47,500 to £52,500 as of 1 December 2025 as she took on the position of chair of the Remuneration Committee as from that date. Single total figure of remuneration (audited) The detailed emoluments received by the Executive and Non-executive Directors for the 12 months ended 31 October 2024 (with prior year comparatives) are shown below: Executive Directors Year Salary/ Fees £ Benefits1 £ Bonus2 £ LTI3 £ Pension4 £ Total Total fixed remuneration Total variable remuneration Serge Crasnianski5 2024 560,212 33,320 840,318 – 84,032 1,517,882 677,564 840,318 2023 560,212 23,183 840,318 771,800 84,032 2,279,545 667,427 1,612,118 Jean-Marc Janailhac6 2024 – – – – – – – – 2023 222,564 – – 308,720 – 531,284 222,564 308,720 Tania Crasnianski7 2024 297,256 – 102,313 126,365 – 525,934 297,256 228,678 2023 293,716 – 60,058 74,690 – 428,464 293,716 134,748 Non-executive Directors Year Salary/Fees £ Benefits1 £ Bonus2 £ LTI3 £ Pension4 £ Total Total fixed remuneration Total variable remuneration Sir John Lewis8 2024 145,000 - N/A - - 145,000 145,000 – 2023 145,000 – – – – 145,000 145,000 – Françoise Coutaz-Replan9 2024 47,500 – – – – 47,500 47,500 – 2023 47,500 – – – – 47,500 47,500 – Emmanuel Olympitis 2024 67,500 – – – – 67,500 67,500 – 2023 67,500 – – – – 67,500 67,500 – Camille Claverie10 2024 – – – – – – – – 2023 – – – – – – – – René Proglio11 2024 57,500 – – – – 57,500 57,500 – 2023 57,500 – – – – 57,500 57,500 – Jean-Marc Janailhac6 2024 45,000 – – – – 45,000 45,000 – 2023 – – – – – – – – 1 Taxable benefits comprise the provision of private medical insurance and, where appropriate, an accommodation allowance. 2 The annual bonus for 2024 is in respect of the year ended 31 October 2024 (see annual bonus section below) while the annual bonus for 2023 is in respect of the year ended 31 October 2023. 3 The EPS for the year ended 31 October 2024 was 14.36p against a target range of 10.5p to 13p, therefore the ESOS award granted on 12 May 2022 to Miss Tania Crasnianski will vest in full post year end (see Scheme Interests Vesting Based on Performance to 31 October section below). The values shown in the table above for 2023 in respect of the ESOS awards granted on 5 August 2021 which vested in full during 2024 (£771,800, £74,690 and £308,720 for Mr Crasnianski, Ms Crasnianski and Mr Janailhac respectively) are based on the 3 -month average share price to 31 October 2023 of 154.68p less the 77.5p exercise price. The intrinsic value of the awards based on the share price at the vesting date (£1.85) resulted in pre-tax gains of £1,075,000, £104,032 and £430,000 for Mr Crasnianski, Ms Crasnianski and Mr Janailhac respectively. 4 The pension payment to Mr Crasnianski in the financial period ended 31 October 2024 represented 15% of base salary which was paid as a salary supplement. Miss Tania Crasnianski does not receive any pension provision. 5 The emoluments of Mr Crasnianski shown above for the 12 months ended 31 October 2024 include fees totalling £405,969 (£405,969 for the 12 month-period ended 31 October 2023), payable to a third party in respect of making available the services of Mr Crasnianski to the Company. 6 Mr Janailhac was appointed to the Board on 22 July 2019 as a Non-executive Director. He became an Executive Director on 27 July 2020 and reverted to being a Non-executive Director on 1 November 2023. 7 Ms Crasnianski was paid €290,000 under a contract with ME Group GSS (formerly called Photomaton France SAS), and £50,000 under a contract with Photo-Me Limited. The euro amount has been translated at the exchange rate set out in note 12. 8 The emoluments of Sir John Lewis shown above include fees of £62,500 paid to a third party in respect of making available the services of Sir John Lewis to the Company (£62,500 for the 12 month-period ended 31 October 2023). 9 Ms Coutaz-Replan stepped down as an Executive Director on 27 August 2015, and was appointed as a Non-executive Director on the same date. 10 Ms Claverie, who stepped down from the Board on 4 December 2024, chose not to receive any fees for her role on the Board. 11 The emoluments of Mr Proglio shown above were paid to a third party in respect of making available the services of Mr Proglio to the Company. 12 Exchange rate: €1.17287: £1. Corporate Governance ME Group plc Annual Report 2024 104 Annual Bonus for the year ended 31 October 2024 Details of the performance against the profit before tax targets and personal/strategic targets for the CEO for the year ended 31 October 2024 annual bonuses are as follows: Financial Targets (80% of CEO’s Bonus Potential) Executive 2023/24 Annual Bonus (% of salary) Group pre-tax profit between 100% and 105% of prior year Committee discretion depending Group pre-tax profit 5% more but less than 10% higher that of prior year 60% Group pre-tax profit 10% or more than prior year 120% Prior year profit £67.1m Current year actual profit result (constant currency) £74.1m % of bonus payable (out of 120% of salary) Target met in full In assessing the financial target on a constant currency basis (to neutralise any unusual and unexpected foreign currently fluctuations), the Remuneration Committee noted the record level of pre-tax profit achieved and was satisfied that the target for a maximum pay out for this part of the annual bonus had been achieved. Personal/Strategic Targets (20% of CEO’s Bonus Potential) Details of performance against the personal/strategic targets are as follows: Targets Weighting Committee Assessment Continue to drive the expansion of the Company’s business activities through identifying and negotiating acquisitions One third Met in full. The Committee noted the expansion of laundry operations through new and existing partnerships in target territories and convenient, high-footfall locations. During 2024, several new strategic partnerships were secured, including with: (i) leading independent forecourt operator Motor Fuel Group where we will be able to install and operate up to 300 Wash.ME Revolution Laundry machines across in the UK over the next five years; and (ii) Morrisons Supermarket Limited to extend our existing partnership (whereby we operate and maintain 500 photobooths, 250 children’s rides and 37 Revolution Laundry machines) with the installation of at least 200 Revolution Laundry machines over the next two years. Actively invest in R&D to drive technological innovation to further diversify and expand the breadth of products and services offered One third Met in full. The Committee noted the significant R&D investment during the year which was focused on creating new complementary services and evolving the services offered across our existing estate in response to consumer needs, whilst maximising return on investment. Connected to this, the Committee noted Kee.ME, the new automated key cutting booth which builds on the Company’s KIS heritage which has had positive results and has shown good interest from our customers and from consumers. Continue to make material progress against the delivery of Company’s sustainability strategy One third The Committee noted the continued progress made in the year under review in respect of reducing the amount of waste produced; and the recovery, refurbishment and resale of electrical equipment such as children’s rides which promote the principle embodied in recent legislation of reuse before recycling Target met in full Note, while the CEO’s bonus potential was set at 80% financial and 20% personal/strategic targets, a weighting of 77% financial and 23% personal/strategic targets was set for Tania Crasnianski for the year ended 31 October 2024. Mr Crasnianski and Miss Tania Crasnianski shared the same personal and strategic targets. ME Group plc Annual Report 2024 105 Annual Report on Remuneration continued Following the Committee’s assessment of the financial and personal/strategic targets, the Committee awarded: ▪Mr Crasnianski a bonus of 150% of salary based on performance against both the financial targets (80% of bonus potential) and the personal/strategic targets (20% of bonus potential) ▪Miss Tania Crasnianski a bonus of 34% of salary (i.e. 23% of bonus potential) based on performance against the personal/strategic targets as detailed for the CEO above. As was the case last year, Miss Crasnianski was not eligible to participate in that part of the annual bonus determined by financial targets and as such, no bonus was awarded in this regard (relating to 77% of bonus potential). ESOS (Audited) Scheme Interests Vesting Based on Performance to 31 October 2024 (Audited) The following options, which were originally granted on 12 May 2022, are due to vest in full in 2025 as a result of the performance period ending 31 October 2024: Executive Director Granted Vesting (100%)1 Pre-tax Intrinsic Gain at 31 October 20242 Tania Crasnianski 100,000 100,000 £126,365 1 EPS for the year ended 31 October 2024 was 14.36 pence compared against a target range of 10.5p to 13p. 2 Based on the 3 month average share price to 31 October 2024 of 195.095p less the 68.73p exercise price. Scheme interests awarded in the year (Audited) The Company did not grant any options to Directors during the year ended 31 October 2024. Directors’ interests in shares (audited) According to the records kept by the Company, the Directors had interests in the share capital of the Company as shown below. Beneficially owned at Executive Director 31 October 2024 31 October 2023 ESOS Awards1 ESOS Awards2 Requirement (% of salary) Shareholding (% of salary)³ Guideline Serge Crasnianski4 137,803,041 137,803,041 1,564,752 – 200% 52,272% Yes Tania Crasnianski Nil – 96,774 200,000 200% 0% No Beneficially owned at Non-executive Director 31 October 2024 31 October 2023 Sir John Lewis 25,000 25,000 Françoise Coutaz-Replan5 200,000 200,000 Emmanuel Olympitis 45,000 45,000 Jean-Marc Janailhac Nil 225,555 1 Options with no further performance conditions attached that have not been exercised. 2 Options with outstanding performance conditions attached. 3 Executive Directors are required to build and maintain a shareholding equivalent to at least 200% of base salary through the retention of 50% of the net-of-tax vested share awards or through open-market purchases. Calculated using the closing share price on the last trading day in October 2024 (212.5p) and current salary levels. The shareholding guideline is calculated using only beneficially owned shares. 4 Of the shares beneficially owned by Mr Crasnianski, 63,750 shares (2022: 63,750) were registered in his name, the balance in other names. 5 Miss Françoise Coutaz-Replan stepped down as an Executive Director on 27 August 2015, continuing as a Non-executive Director. Corporate Governance ME Group plc Annual Report 2024 106 Directors’ interests in share options (audited) Details of outstanding share awards held by Directors are set out below. Executive Director Number of options as at 1 Nov 2023 Granted during period Exercised during period Lapsed during period As at 31 Oct 2024 Exercise price Exercisable from Expiry date Serge Crasnianski 27 August 2019 564,752 – – – 564,752 101.4p 27 Aug 22 27 Aug 26 5 August 2021 1,000,000 – – – 1,000,000 77.5p 5 Aug 24 4 Aug 28 Jean-Marc Janailhac 5 August 2021 400,000 – – – 400,000 77.5p 5 Aug 24 4 Aug 28 Tania Crasnianski 5 August 2021 96,774 – – – 96,774 77.5p 5 Aug 24 4 Aug 28 12 May 2022 100,000 – – – 100,0001 68.7p 12 May 25 11 May 29 4 April 2023 100,000 – – – 100,000 126.7p 4 Apr 26 3 Apr 30 1 See the Scheme Interests Vesting Based on Performance to 31 October 2024 (Audited) section above. Relative importance of the spend on pay The following table sets out the percentage change in distributions to shareholders and employee remuneration costs: Paid during FY 2024 Pence per share £’000 Interim (paid 29 November 2023) 2.97 11,203 Final for FY 2023 (paid 23 May 2024) 4.42 16,640 Total 7.39 27,843 1 Based on the cash returned to shareholders through dividends, as shown in note 10 to the Financial Statements. The Company purchased 1,108,092 of its own shares into treasury in the financial period ended 31 October 2024, returning a further £1,419,000 to shareholders. On 12 July 2024, the Company cancelled a total of 2,368,626 held in treasury as at that date. As at 31 October 2024, the Company held no shares in treasury. Group (£’000) 2024 2023 Total employee remuneration costs 55,595 56,864 1 Based on the figure shown in note 7 to the Financial Statements TSR performance graph The graph below shows the Company’s performance, measured by total shareholder return (TSR) (share price growth plus dividends reinvested) compared with the performance of both the FTSE 250 and FTSE SmallCap Index (calculated on the same basis) from 1 May 2014. As the Company has been a constituent of either the FTSE 250 or SmallCap Index for all of the relevant period, these indexes are considered appropriate forms of “broad equity market index” against which the Company’s performance should be compared. ME Group plc Annual Report 2024 107 Annual Report on Remuneration continued Total shareholder return ME Group plc FTSE SmallCap FTSE 250 Source: Datastream (an LSG product) 0 50 100 150 200 250 300 30 April 2014 30 April 2015 30 April 2016 30 April 2017 30 April 2018 30 April 2019 30 April 2020 30 April 2021 30 April 2022 30 April 2023 30 April 2024 Percentage increase in the remuneration of the members of the Board The table below shows the change in the salary, benefits and annual bonus for the members of the Board who served in both the period just ended and the previous financial year in full, compared with the change in remuneration for the UK employee population. Comparative numbers for the year to 31 October 2023, 2022 and 2021 are also presented. Year to 31 October 2024 Year to 31 October 2023 Year to 31 October 2022 Year to 31 October 2021 Base salary Benefits Annual bonus Base salary Benefits Annual bonus Base salary Benefits Annual bonus Base salary Benefits Annual bonus Executive Directors Serge Crasnianski 0% 0% 0% 0% 23% 0% 18% 14% 0% 0% 0% 0% Jean-Marc Janailhac N/A N/A N/A (22%) 0% 0% 46% 0% 100% 27% 0% 100% Tania Crasnianski 1% 0% 70% 20% 0% 2% 176% 0% 100% N/A N/A N/A Non-executive Directors Sir John Lewis 0% N/A N/A 10% N/A N/A 21% N/A N/A 0% N/A N/A Françoise Coutaz-Replan 0% N/A N/A 8% N/A N/A 18% N/A N/A 0% N/A N/A Emmanuel Olympitis 0% N/A N/A 23% N/A N/A 18% N/A N/A 0% N/A N/A René Proglio 0% N/A N/A 0% N/A N/A 218% N/A N/A 0% N/A N/A Camille Claverie N/A N/A N/A N/A N/A N/A 0% N/A N/A 0% N/A N/A Jean-Marc Janailhac N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A UK Employee Population 3% 44% -23% 1% 26% 60% 11% 0% 16% 11% 1% 16% Corporate Governance ME Group plc Annual Report 2024 108 CEO remuneration The table below shows the total remuneration for the CEO over the same 10.5-year period as the TSR chart on the previous page. Non-executive Director CEO Total (£) Annual (% of max) Long-term incentives (% of max)1 2024 (12 months to 31 October 2024) Serge Crasnianski 1,517,882 100% – 2023 (12 months to 31 October 2023) Serge Crasnianski 2,279,545 100% 100% 2022 (12 months to 31 October 2022) Serge Crasnianski 1,503,336 100% 69% 2021 (12 months to 31 October 2021) Serge Crasnianski 1,404,423 100% – 2020 (18 months to 31 October 2020) Serge Crasnianski 984,248 0% – 2019 (12 months to 30 April 2019) Serge Crasnianski 650,380 0% – 2018 (12 months to 30 April 2018) Serge Crasnianski 681,954 0% – 2017 (12 months to 30 April 2017) Serge Crasnianski 1,498,113 100% – 2016 (12 months to 30 April 2016) Serge Crasnianski 1,429,209 100% 100% 2015 (12 months to 30 April 2015) Serge Crasnianski 1,031,628 100% – 2014 (12 months to 30 April 2014) Serge Crasnianski 914,278 100% – 1 Shows the number of share options that vested as a percentage of the maximum number of share options that could have vested. For the years ended 30 April 2011 to 30 April 2019 (but excluding 2016) and 2024, Mr Crasnianski did not have any outstanding share option awards that could have vested in the relevant years. CEO pay ratio The data shows how the CEO’s single figure remuneration for the year ended 31 October 2024 compares with equivalent single figure remuneration for full-time equivalent UK employees, ranked at the 25th, 50th and 75th percentile. The 2020 salary and total pay and benefits data (18 months) have been annualised to aid with year-on-year comparison. Period Method 25th percentile pay ratio Median pay ratio 75th percentile pay ratio 2024 Option A 54:1 47:1 38:1 2023 Option A 80:1 71:1 57:1 2022 Option A 58:1 53:1 42:1 2021 Option A 74:1 58:1 41:1 2020 Option A 44:1 30:1 24:1 No components of pay and benefits have been omitted for the purpose of the above calculations. Option A was selected given that this method of calculation was considered to be the most statistically robust approach in respect of gathering the required data for 2024. The respective quartile salary and total pay and benefits numbers are as follows: Salary Total pay and benefits Period 25th percentile Median 75th percentile 25th percentile Median 75th percentile 2024 £25,599 £30,000 £35,851 £28,060 £31,779 £39,344 2023 £26,599 £29,217 £35,000 £28,652 £31,970 £39,991 2022 £25,094 £26,662 £34,795 £25,847 £28,555 £36,189 2021 £18,309 £23,533 £32,187 £18,858 £24,286 £34,336 2020 £14,410 £21,185 £25,687 £14,825 £21,824 £28,579 ME Group plc Annual Report 2024 109 Annual Report on Remuneration continued Committee role and membership The Remuneration Committee comprised two Non-executive Directors during the year ended 31 October 2024: Emmanuel Olympitis (Committee Chairman, member of the Audit and Nomination Committees, and Senior Independent Director), and Sir John Lewis (Chairman of the Board and the Nomination Committee, and member of the Audit Committee). The Board considered Mr Olympitis to be independent, and also considers Sir John Lewis to have been independent on his appointment as Chairman. As announced on 6 November 2024, Emmanuel Olympitis stepped down as a Non-executive Director of the Company and left the Board on 30 November 2024. Miss Coutaz-Replan, an Independent Non- executive Director and member of the Audit, Remuneration and Nomination Committees, took over as Chair of the Remuneration Committee on 30 November 2024. Biographies of the current members of the Committee are set out on page 72. Details of the Committee members and attendance at the meetings during the year are as follows. Name Position Appointment date Number of Meetings attended (Maximum possible) Françoise Coutaz-Replan Committee Chairman1 30 November 2024 n/a Emmanuel Olympitis Committee Chairman2 11 November 2009 2 (2) Sir John Lewis Committee Member 3 July 2008 2 (2) 1 From 30 November 2024 2 To 30 November 2024 It remains the Committee’s policy that it will meet on an ad hoc basis when the needs of the Company require it. At the invitation of the Chairman, the CEO and other Executive Directors and Non-executive Directors may attend meetings of the Committee, except when their own remuneration is under consideration. No Director is involved in determining his or her own remuneration. The Company Secretary acts as the Secretary to the Committee. The members of the Committee can, where they judge it necessary to discharge their responsibilities, obtain independent professional advice at the Company’s expense. The Committee’s terms of reference are published on the Company’s website at: https://me-group.com/ wp-content/uploads/2022/01/REMUNERATION-COMMITTEE.pdf. Payments to past Directors No payments were made to past Directors were made in the year ended 31 October 2024. Advisers FIT Remuneration Consultants LLP advised the Committee during the period ended 31 October 2024 in respect of the preparation of this Remuneration Report and advised management in respect of the renewal of the ESOS at the 2024 AGM. Fees paid to FIT in respect of advice to the Remuneration Committee for the year ended 31 October 2024 totalled £13,449 (exclusive of VAT). The Committee is satisfied that the advice provided by FIT is objective and independent, and fees were charged based on time and material. The Committee also receives advice from the CEO in relation to the remuneration of certain senior executives, but not in relation to his own remuneration. Corporate Governance ME Group plc Annual Report 2024 110 Statement of shareholder voting The table below shows the advisory vote on the Directors’ Remuneration Report for the year ended 31 October 2023 and the binding vote on the Remuneration Policy both of which were passed at the 2024 AGM held on 26 April 2024. Total Votes For % Total Votes Against % Total Votes Cast (excluding withheld) % of total votes cast/ issued capital Votes Withheld1 Directors’ Remuneration Report (excluding the Remuneration Policy) 291,299,852 96.44% 10,748,092 3.56% 302,047,944 79.73 % 218,553 Directors’ Remuneration Policy 294,625,449 97.49% 7,582,979 2.51% 302,208,428 79.77 % 58,069 1 A vote withheld is not a vote in law and is not counted in the calculation of the proportion of votes cast ‘for’ and ‘against’ a resolution. By order of the Board Françoise Coutaz-Replan Chair of the Remuneration Committee 24 February 2025 ME Group plc Annual Report 2024 111 Financial Statements Independent Auditor’s Report to the Members of Me Group International plc 114 Group Statement of Comprehensive Income 122 Group Statement of Financial Position 123 Group Statement of Cash Flows 124 Group Statement of Changes in Equity 125 Notes to the Consolidated Financial Statements 126 Company Statement of Financial Position 181 Company Statement of Cash Flows 182 Company Statement of Changes in Equity 183 Notes to the Company Financial Statements 184 Glossary 198 Company Information & Advisers 199 Shareholder Information 200 ME Group plc Annual Report 2024 112 Digital printing kiosks with industry-leading technology offering a wide range of printing formats and personalised products. Our kiosks provide easy, competitively priced, high-quality digital printing from smartphones. Print Need different image ME Group plc Annual Report 2024 113 Independent Auditor’s Report to the Members of Me Group International plc Opinion We have audited the financial statements of Me Group International plc (the ‘parent company’) and its subsidiaries (together the ‘group’) for the year ended 31 October 2024 which comprise the Group Statement of Comprehensive Income, the Group Statement of Financial Position, the Company Statement of Financial Position, the Group Statement of Cash Flows, the Company Statement of Cash Flows, the Group Statement of Changes in Equity and the Company Statement of Changes in Equity, and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards and, as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006. In our opinion, the financial statements: ▪give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 October 2024 and of the group’s profit for the year then ended; ▪have been properly prepared in accordance with UK-adopted international accounting standards and, as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006; and ▪have been prepared in accordance with the requirements of the Companies Act 2006. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the “Auditor’s responsibilities for the audit of the financial statements” section of our report. We are independent of the group and the parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities and public interest entities and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to going concern In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our audit procedures to evaluate the directors’ assessment of the group’s and the parent company’s ability to continue to adopt the going concern basis of accounting included but were not limited to: ▪Undertaking an initial assessment at the planning stage of the audit to identify events or conditions that may cast significant doubt on the group’s and the parent company’s ability to continue as a going concern; ME Group plc Annual Report 2024 114 FINANCIAL STATEMENTS ▪Obtaining an understanding of the relevant controls relating to the directors’ going concern assessment; ▪Making enquiries of the directors to understand the period of assessment considered by them, the assumptions they considered and the implication of those when assessing the group’s and the parent company’s future financial performance; ▪Challenging the appropriateness of the directors’ key assumptions in their cash flow forecasts, as described in note 1.1, by reviewing supporting and contradictory evidence in relation to these key assumptions and assessing the directors’ consideration of severe but plausible scenarios; ▪Testing the accuracy and functionality of the model used to prepare the directors’ forecasts; ▪Assessing the historical accuracy of forecasts prepared by the directors; ▪Assessing and challenging key assumptions and mitigating actions put in place in response to wider global economic conditions; ▪Considering the consistency of the directors’ forecasts with other areas of the financial statements and our audit; and ▪Evaluating the appropriateness of the directors’ disclosures in the financial statements on going concern. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group’s and the parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorized for issue. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. In relation to Me Group International plc’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the director’s considered it appropriate to adopt the going concern basis of accounting. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We summarise below the key audit matter in forming our opinion above, together with an overview of the principal audit procedures performed to address this matter and our key observations arising from those procedures. ME Group plc Annual Report 2024 115 Independent Auditor’s Report to the Members of Me Group International plc continued Key Audit Matter How our scope addressed this matter Risk of fraud and error in revenue recognition The Group’s accounting policy in respect of revenue recognition is set out in note 1.4 ‘Revenue recognition’. Total revenue during the year is £307.8m which derives from three sources: ▪Vending machine revenue: £285.4m ▪Sales of equipment, spare parts and consumables: £18.6m ▪Sales of services: £3.8m There is a presumption under the International Auditing Standards that there is a significant risk of fraud in the recognition of revenue, which could result in a material misstatement of revenue. There is also a risk of error in recognising revenue arising from the group’s cash collection process and IT controls, as well as in recognising sale of products and services in the appropriate period. For ME Group International Plc, we see the risk of fraud or error in revenue recognition as being principally in relation to: ▪Completeness of vending machine revenue from cash collections ▪Recognition of revenue on uncollected cash at year-end ▪The quality and reliability of IT systems and controls underpinning the accounting for vending revenue Our audit procedures included, but were not limited to: ▪Performing walkthroughs to develop an understanding of the procedures associated with revenue recognition and evaluating the design and implementation of the relevant controls in place ▪Performing tests of controls notably on key IT systems to ensure that the controls operated effectively during the period. ▪Where IT General Controls were concluded to be effective, testing IT Automated Controls to support the occurrence and completeness of vending revenue. Where IT General Controls were concluded to be ineffective, testing of appropriate mitigating controls to support the same. ▪Tracing of cash collections against bank statements to confirm the occurrence of revenue from vending machines. ▪Confirming that revenue relating to uncollected cash at the year-end is correctly estimated by tracing it to post year-end collections. ▪Tracing cash collection from a sample of active machines through to the general ledger. ▪Ensuring completeness of vending machines in the revenue management system through physical verifications and other analytical procedures. ▪Obtaining IFRS 15 assessment from management and ensuring this is appropriate and compliant with the IFRS requirements. ▪Performing detailed review of revenue disclosures in the financial statements. Our observations Our audit procedures did not identify any material matters regarding the recognition of revenue. Revenue has been recorded in accordance with UK-adopted international accounting standards. This matter, together with our findings, was communicated to those charged with governance through our Audit Completion Report. ME Group plc Annual Report 2024 116 FINANCIAL STATEMENTS Our application of materiality and an overview of the scope of our audit The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing, and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and on the financial statements as a whole. Based on our professional judgement, we determined materiality for the financial statements as a whole as follows: Group materiality and Parent company materiality Group Parent company Overall materiality £3,500,000 £1,620,000 How we determined it Our materiality has been determined with reference to a benchmark of profit before tax of which it represents 5%. Materiality has been determined with reference to a benchmark of net assets, of which it represents 2%. Rationale for benchmark applied We used profit before tax as, in our view, this provides us with the most relevant performance measure of the group. We used net assets as, in our view, this provides us with the most relevant performance measure of the company, being primarily the parent company of the group. Performance materiality Performance materiality is set to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements in the financial statements exceeds materiality for the financial statements as a whole. We set performance materiality at £2,400,000, which represents 70% of overall materiality. This was based on our risk assessments, together with our assessment of the group’s overall control environment. Performance materiality is set to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements in the financial statements exceeds materiality for the financial statements as a whole. We set performance materiality at £1,134,000, which represents 70% of overall materiality. Reporting threshold We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £104,000 for the group, which is set at 3% of overall materiality, as well as misstatements below those amounts that, in our view, warranted reporting on qualitative reasons. We also reported to the Audit Committee disclosure matters that we identified during the course of assessing the overall presentation of the financial statements. We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £49,000 for the parent company, which is set at 3% of overall materiality, as well as misstatements below those amounts that, in our view, warranted reporting on qualitative reasons. We also reported to the Audit Committee disclosure matters that we identified during the course of assessing the overall presentation of the financial statements. ME Group plc Annual Report 2024 117 As part of designing our audit, we assessed the risk of material misstatement in the financial statements, whether due to fraud or error, and then designed and performed audit procedures responsive to those risks. In particular, we looked at where the directors made subjective judgements, such as assumptions on significant accounting estimates. We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial statements as a whole. We used the outputs of our risk assessment, our understanding of the group and the parent company, their environment, controls, and critical business processes, to consider qualitative factors to ensure that we obtained sufficient coverage across all financial statement line items. Our group audit scope included an audit of the group and parent company financial statements. Based on our risk assessment, our audit procedures for both Component 1 and Component 2 of the Group provided 100% coverage for profit before tax (relevant materiality benchmark). Where we relied on work performed by component auditors, we issued audit instructions, directed component audit teams, reviewed component audit files, and maintained appropriate oversight throughout the audit. At the parent company level, the group audit team also tested the consolidation process and carried out substantive analytical procedures to confirm our conclusion that there were no significant risks of material misstatement of the aggregated financial information. Other information The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Opinions on other matters prescribed by the Companies Act 2006 In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006. In our opinion, based on the work undertaken in the course of the audit: ▪the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements and those reports have been prepared in accordance with applicable legal requirements; ▪the information about internal control and risk management systems in relation to financial reporting processes and about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Guidance and Transparency Rules sourcebook made by the Financial Conduct Authority (the FCA Rules), is consistent with the financial statements and has been prepared in accordance with applicable legal requirements; and ▪information about the parent company’s corporate governance code and practices and about its administrative, management and supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules. ME Group plc Annual Report 2024 118 Independent Auditor’s Report to the Members of Me Group International plc continued FINANCIAL STATEMENTS Matters on which we are required to report by exception In light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the: ▪strategic report or the directors’ report; or ▪information about internal control and risk management systems in relation to financial reporting processes and about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA Rules. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: ▪adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or ▪the parent company financial statements and the part of the directors’ remuneration report to be audited are not in agreement with the accounting records and returns; or ▪certain disclosures of directors’ remuneration specified by law are not made; or ▪we have not received all the information and explanations we require for our audit; or ▪a corporate governance statement has not been prepared by the parent company. Corporate governance statement The Listing Rules require us to review the directors’ statement in relation to going concern, longer- term viability and that part of the Corporate Governance Statement relating to Me Group International plc’s compliance with the provisions of the UK Corporate Governance Statement specified for our review. Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit: ▪Directors’ statement with regards the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified, set out on page 78; ▪Directors’ explanation as to its assessment of the entity’s prospects, the period this assessment covers and why they period is appropriate, set out on page 66; ▪Directors’ statement on fair, balanced and understandable, set out on page 93; ▪Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks, set out on page 42; ▪The section of the annual report that describes the review of effectiveness of risk management and internal control systems, set out on page 91; and; ▪The section describing the work of the audit committee, set out on page 84. Responsibilities of Directors As explained more fully in the statement of the directors’ responsibility set out on page 92, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so. ME Group plc Annual Report 2024 119 Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. Based on our understanding of the group and the parent company and their industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment and tax legislation, health and safety regulation and anti- money laundering regulation. To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to: ▪Gaining an understanding of the legal and regulatory framework applicable to the group and the parent company, the industry in which they operate, and the structure of the group, and considering the risk of acts by the group and the parent company which were contrary to the applicable laws and regulations, including fraud; ▪Inquiring of the directors, management and, where appropriate, those charged with governance, as to whether the group and the parent company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations; ▪Inspecting correspondence with relevant regulatory authorities; ▪Reviewing minutes of directors’ meetings in the year; and ▪Discussing amongst the engagement team the laws and regulations listed above, and remaining alert to any indications of non-compliance. We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation and the Companies Act 2006. In addition, we evaluated the directors’ and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of management override of controls, and determined that the principal risks related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to recognition, valuation and impairment of intangible assets, including goodwill, revenue recognition (which we pinpointed to the manipulation of vending machine revenue), and significant one-off transactions. Our procedures in relation to fraud included but were not limited to: ▪Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud; ▪Gaining an understanding of the internal controls established to mitigate risks related to fraud; ▪Discussing amongst the engagement team the risks of fraud; ME Group plc Annual Report 2024 120 FINANCIAL STATEMENTS Independent Auditor’s Report to the Members of Me Group International plc continued ▪Addressing the risks of fraud through management override of controls by performing journal entry testing, including consolidation journals; ▪Reviewing accounting estimates and financial statement disclosures for management bias; and ▪Reviewing transaction outside of normal course of business. The primary responsibility for the prevention and detection of irregularities, including fraud, rests with both those charged with governance and management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls. The risks of material misstatement that had the greatest effect on our audit are discussed in the “Key audit matters” section of this report. A further description of our responsibilities is available on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Other matters which we are required to address Following the recommendation of the audit committee, we were appointed by the directors on 3 September 2019 to audit the financial statements for the period ending 31 October 2020 and subsequent financial periods. The period of total uninterrupted engagement is 5.5 years, covering the years ending 2020 to 2024. No non-audit services prohibited by the FRC’s Ethical Standard were provided to the group or the parent company and we remain independent of the group and the parent company in conducting our audit. Our audit opinion is consistent with our additional report to the audit committee. Use of the audit report This report is made solely to the company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body for our audit work, for this report, or for the opinions we have formed. As required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these financial statements form part of the ESEF- prepared annual report filed on the National Storage Mechanism of the Financial Conduct Authority in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditor’s report provides no assurance over whether the annual report has been prepared using the single electronic format specified in the ESEF RTS. David Herbinet (Senior Statutory Auditor) for and on behalf of Forvis Mazars LLP Chartered Accountants and Statutory Auditor London 24 February 2025 ME Group plc Annual Report 2024 121 Notes 31 October 2024 £’000 31 October 2023 £’000 Revenue 4 307,886 297,662 Cost of Sales 5 (198,394) (194,413) Gross Profit 109,492 103,249 Other Operating Income 5 209 194 Administrative Expenses 5 (35,617) (35,351) Reversal of impairment of trade receivables/(impairment) 17 303 (604) Share of Post‑Tax Profits from Associates 15 3 14 Operating Profit 74,390 67,502 Non‑operating income – net 6 982 701 Finance Income 8 670 1,401 Finance Cost 8 (2,621) (2,537) Profit before Tax 73,421 67,067 Total Tax Charge 9 (19,331) (16,401) Profit for the year 54,090 50,666 Other Comprehensive Income Items that are or may subsequently be classified to Profit and Loss: Exchange differences arising on translation of foreign operations (4,839) 454 Exchange differences reclassified to income statement on disposal of subsidiaries 76 – Total Items that are or may subsequently be classified to profit and loss (4,763) 454 Items that will not be classified to profit and loss: Remeasurement (loss)/gains in defined benefit obligations and other post‑employment benefit obligations (520) (220) Deferred tax on remeasurement loss/(gains) 118 48 Total Items that will not be classified to profit and loss (402) (172) Other comprehensive income for the year net of tax (5,165) 282 Total Comprehensive income for the year 48,925 50,948 Profit for the Year Attributable to: Owners of the Parent 54,090 50,666 Non‑controlling interests – – 54,090 50,666 Total comprehensive income attributable to: Owners of the Parent 48,925 50,948 Non‑controlling interests – – 48,925 50,948 Earnings per Share Basic Earnings per Share 11 14.36p 13.41p Diluted Earnings per Share 11 14.27p 13.33p All results derive from continuing operations. The notes on pages 126 to 180 are an integral part of these consolidated financial statements. Group Statement of Comprehensive Income For the 12 months ended 31 October 2024 FINANCIAL STATEMENTS ME Group plc Annual Report 2024 122 Notes 31 October 2024 £’000 31 October 2023 (Restated) £’000 Assets Goodwill 12 11,006 18,888 Other intangible assets 12 14,362 17,822 Property, plant & equipment 13 136,332 118,124 Investment in associates 15 37 35 Financial instruments held at FVTPL 16 1,619 5,886 Other receivables 17 2,814 3,005 Non‑Current Assets 166,170 163,760 Inventories 18 38,065 32,501 Trade and other receivables 17 19,292 12,261 Current tax 97 7,962 Cash and cash equivalents 19 86,147 111,091 Current assets 143,601 163,815 Non‑Current Assets Classified as Held for Sale 14 2,869 4,947 Total assets 312,640 332,522 Equity Share capital 21 1,882 1,891 Share premium 11,510 11,083 Treasury shares 21 – (1,969) Capital redemption reserve 12 – Translation and other reserves 7,990 11,958 Retained earnings 158,477 136,025 Total Shareholders’ funds 179,871 158,988 Liabilities Financial liabilities 23 35,957 58,447 Post‑employment benefit obligations 24 4,402 4,063 Deferred tax liabilities 26 7,202 8,566 Non‑current liabilities 47,561 71,076 Financial liabilities 23 23,806 32,063 Provisions 25 1,306 1,884 Current tax 3,253 10,590 Trade and other payables 27 56,843 57,921 Total equity and liabilities 312,640 332,522 The notes on pages 126 to 180 are an integral part of these consolidated financial statements. The accounts were approved by the Board on 21 February 2024 and signed on its behalf by: Serge Crasnianski Sir John Lewis OBE Chief Executive Officer Non‑executive Chairman Registration number: 00735438 Group Statement of Financial Position As at 31 October 2024 ME Group plc Annual Report 2024 123 Notes 31 October 2024 £’000 31 October 2023 (restated) £’000 Cash flow from operating activities Profit before tax 73,421 67,067 Finance costs 1,046 1,286 Interest of lease liabilities 1,575 1,251 Finance income (670) (1,401) Non‑operating income – net (982) (701) Operating profit 74,390 67,502 Amortisation and impairment of intangible assets 5 7,425 6,586 Depreciation of property, plant and equipment net of reversal of impairments 5 32,409 32,552 Loss on sale property, plant and equipment and intangible assets 263 555 Exchange differences 1,081 (129) Non‑cash movements in provisions and post‑employment benefit obligations 541 1,243 Share based compensation charge 795 345 Other non cash items 268 (378) Changes in working capital: Inventories (5,564) (7,010) Trade and other receivables (3,099) 2,975 Trade and other payables (1,078) 5,673 Cash generated from operations 107,431 109,914 Payments made in respect of provisions and post‑employment benefit obligations (796) (881) Interest paid (2,621) (2,537) Interest received 670 1,401 Taxation paid (17,518) (20,203) Net cash generated from operating activities 87,166 87,693 Cash flows from investing activities Acquisition of subsidiaries 31 – (4,790) Net proceeds from disposal of subsidiaries 3,673 209 Purchase of intangible assets (2,511) (3,798) Purchase of property, plant and equipment (52,103) (45,842) Capital expenditure on non‑current assets classified as held for sale 14 – (4,362) Proceeds from sale of property, plant and equipment 1,523 1,539 Proceeds from sale of non‑current assets classified as held for sale 14 1,852 – Net cash utilised in investing activities (47,566) (57,044) Cash flows from financing activities Issue of ordinary shares to equity shareholders 430 458 Purchase of treasury shares 21 (1,425) (1,969) Repayment of principal of leases (5,932) (5,857) Repayment of borrowings 20 (27,049) (30,961) New borrowings drawn 20 1,152 4,817 Dividends paid to owners of the Parent 10 (27,842) (23,443) Net cash utilised in financing activities (60,666) (56,955) Net decrease in cash and cash equivalents (21,067) (26,304) Cash and cash equivalents at beginning of year 111,091 136,185 Exchange gain on cash and cash equivalents (3,877) 1,210 Cash and cash equivalents at end of year 86,147 111,091 The notes on pages 126 to 180 are an integral part of these consolidated financial statements. Group Statement of Cash Flows For the period ended 31 October 2024 FINANCIAL STATEMENTS 124 Share capital £’000 Share premium £’000 Treasury shares £’000 Capital Redemption Reserve £’000 Other reserves £’000 Translation reserve £’000 Retained earnings £’000 Total £’000 At 1 November 2022 1,889 10,627 – – 2,665 8,494 108,974 132,649 Profit for the period – – – – – – 50,666 50,666 Other comprehensive income/(expense): Exchange differences – – – – – 454 – 454 Remeasurement losses in defined benefit pension scheme and other post-employment benefit obligations – – – – – – (220) (220) Deferred tax on remeasurement losses – – – – – – 48 48 Total other comprehensive income/(expense) – – – – – 454 (172) 282 Total comprehensive income – – – – – 454 50,494 50,948 Transactions with owners of the Parent: Shares issued in the period (note 21) 2 456 – – – – – 458 Purchase of treasury shares (note 21) – – (1,969) – – – – (1,969) Share options (note 22) – – – – 345 – – 345 Dividends (note 10) – – – – – – (23,443) (23,443) Total transactions with owners of the Parent 2 456 (1,969) – 345 – (23,443) (24,609) At 31 October 2023 1,891 11,083 (1,969) – 3,010 8,948 136,025 158,988 At 1 November 2023 1,891 11,083 (1,969) – 3,010 8,948 136,025 158,988 Profit for the period – – – – – – 54,090 54,090 Other comprehensive income/(expense): Exchange differences – – – – – (4,839) – (4,839) Translation reserve taken to income statement on disposal of subsidiaries – – – – – 76 – 76 Remeasurement losses in defined benefit pension scheme and other post‑employment benefit obligations – – – – – – (520) (520) Deferred tax on remeasurement losses – – – – – – 118 118 Total other comprehensive (expense) – – – – – (4,763) (402) (5,165) Total comprehensive expense/(income) - - - - - (4,763) 53,688 48,925 Transactions with owners of the Parent: Shares issued in the period (note 21) 3 427 – – – – – 430 Purchase of treasury shares (note 21) – – (1,425) – – – – (1,425) Cancellation of treasury shares (note 21) (12) – 3,394 12 – – (3,394) – Share options (note 22) – – – – 795 – – 795 Dividends (note 10) – – – – – – (27,842) (27,842) Total transactions with owners of the Parent (9) 427 1,969 12 795 – (31,236) (28,042) At 31 October 2024 1,882 11,510 – 12 3,805 4,185 158,477 179,871 The notes on pages 126 to 180 are an integral part of these consolidated financial statements Group Statement of Changes in Equity For the period ended 31 October 2024 ME Group plc Annual Report 2024 125 General Information ME Group International plc (the “Company”) is a public limited company incorporated and registered in England and Wales and whose shares are quoted on the London Stock Exchange, under the symbol MEGP. The registered number of the Company is 735438 and its registered office is at Unit 3B, Blenheim Rd, Epsom, KT19 9AP. The principal activities of the Company and its subsidiaries (together referred to as the “Group”) continue to be the operation, sale, and servicing of a wide range of instant‑service equipment. The Group operates coin‑operated automatic photobooths for identification and fun purposes, and a diverse range of vending equipment, including digital photo kiosks, laundry machines, and business service equipment, and amusement machines. Authorisation of the financial statements and statement of compliance with IFRSs The consolidated financial statements of ME Group International plc for the period ended 31 October 2024 were authorised for issue by the directors on 21 February 2025 and the statements of financial position were signed by S. Crasnianski, Chief Executive Officer and J. Lewis, Non‑executive Chairman. The consolidated financial statements have been prepared in accordance with UK‑adopted international accounting standards and in conformity with the requirements of the Companies Act 2006. 1 Material accounting policies The material accounting policies adopted in the preparation of the Group’s consolidated financial statements are set out below. The policies have been consistently applied, unless otherwise stated, to all of the statements presented. New standards adopted for this financial period are shown in note 2 on page 133. 1.1 Basis of preparation The consolidated financial statements have been prepared in accordance with UK‑adopted international accounting standards, using the historical cost convention except for certain financial instruments held at FVTPL, share‑based payments and defined benefit pension obligations that have been measured at fair value. The consolidated financial statements are presented in Pounds Sterling, being presentational currency of the Group and all values are shown in £’000 except where indicated. Further details are provided in note 1.3. The following restatements have been made to the comparative figures for the year ending 31 October 2023; ▪Reclassification from prepayments to non-current assets classified as held for sale (see notes 14 and 17) ▪IFRS remeasurements of goodwill and intangibles following an acquisition (see note 12) ▪Reallocation of VAT to components of revenue following a change in allocation methodology (see note 4) ▪Reclassifications between categories of property, plant and equipment (see note 13) Going concern The consolidated financial statements of the Group have been prepared on the going concern basis. In reaching this conclusion the Directors have reviewed detailed budgets, which reflect, where applicable, the current economic conditions, with regard to the level of demand for the Group’s manufactured products, the level of consumer confidence and cash flow forecasts for at least the next twelve months. The Directors assessed the Group’s going concern basis by stress testing three scenarios and their projected financial impact over a three‑year period. The Directors’ have used the three‑year business plan in this assessment which covers a period of 12 months after the date of signing of the financial statements for the assessment of going concern and a period of three years for the assessment of viability. The following scenarios were tested: Scenario 1: The budget, elaborated with each country manager and validated by the top management, which we consider as the most likely scenario. Please note that this scenario is the one approved by the Board. Scenario 2: The “mild” scenario is based on the budget, but with the following sensitivities added: ▪A 5% decrease in machine installations due to supply chain issues ▪A 5% price increase in spare parts and consumables ▪A 1% increase in labour costs ▪A 5% increase in paper costs ▪A 1% drop in total revenue due to loss of key accounts ▪A 1% drop in revenue due to the potential impact of a future pandemic or other global event. ▪This scenario does not consider the potential impact of new regulations regarding photo identification Notes to the Consolidated Financial Statements For the period ended 31 October 2024 FINANCIAL STATEMENTS ME Group plc Annual Report 2024 126 or permission of selfies as official photos within the three‑year forecast ▪In addition we assume in this scenario an additional revenue decrease of 2% the first year (2025) for an unidentified reason as of today. Scenario 3: The “worst case” scenario is based on the budget, but with the following sensitivities added: ▪A 10% decrease in machine installations due to supply chain issues, ▪A 10% price increase in spare parts and consumables ▪A 2% increase in labour costs ▪A 10% increase in paper costs ▪A 1% drop in total revenue due to loss of key accounts ▪A 3% drop in revenue due to the potential impact of a future pandemic or other global event. ▪Revenue is reduced by 3% each year due to the potential impact of new regulations regarding photo identification or permission of selfies as official photos. ▪In addition we assume in this scenario an additional revenue decrease of 3% the first year (2025) for an unidentified reason as of today. In all three scenarios, exchange rate assumptions are as per the budget. The forecasts assume payment of dividends commensurate with results and the Group’s dividend policy. In all three scenarios tested, the group continues to comply with its bank covenants and loan repayment terms and is in a strong financial position after three years. Neither the Ukrainian nor Israeli conflicts are expected by management to have a significant impact on the business of the Group. The Group has no activity in these regions. Management does not consider interest rate risk to be a threat to the Group’s going concern, as all current debt is at fixed rates and the forecasts indicate no requirement for new debt facilities. As a result, the cash flow projections indicate that the Group will remain within its available banking facilities over the 12 months from signing these financial statements. Additional information on these facilities is provided in note 16. 1.2 Basis of consolidation The Group consolidates the financial statements of the Company and all of its subsidiaries, and includes associates under the equity method, as at each year end. Subsidiaries Subsidiaries are all entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable. The acquisition date is the date on which control is transferred to the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date on which control ceases. Losses applicable to non‑controlling interests in a subsidiary are allocated to the non‑controlling interests even if doing so causes the non‑controlling interests to have a negative balance. The principal subsidiaries affecting the results and financial position of the Group are shown in note 19 of the Parent Company Financial Statements. Changes in ownership of subsidiaries and loss of control Changes in the Group’s interest in a subsidiary that do not result in loss of control are accounted for as equity transactions. Where the Group loses control of a subsidiary, the assets and liabilities are derecognised along with any related non controlling interest and other components of equity. Any resulting gain or loss is recognised in profit and loss. Any interest retained in a subsidiary is measured at fair value when control is lost. The Group uses the acquisition method to account for business combinations. Acquisition costs for business combinations are expensed as incurred. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets acquired, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are initially measured at their fair values on acquisition date. The Group recognises any non‑controlling interest in the acquiree on an acquisition‑by‑acquisition basis, either at fair value or at the non‑controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets. ME Group plc Annual Report 2024 127 1 Material accounting policies continued If the business combination is achieved in stages, the carrying value of the acquirer’s previously held interest in the acquiree is re‑measured to fair value at the acquisition date, with such gains or losses arising from remeasurement recognised in profit and loss. Transactions eliminated on consolidation Inter‑company transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated. Material intercompany transactions which are eliminated include sales between subsidiaries and recharges of corporate costs to subsidiaries. 1.3 Foreign currency translation The consolidated financial statements are presented in Pounds Sterling, being the presentational currency of the Group and all values are shown in £’000 except where indicated. Transactions in foreign currencies are translated into the respective functional currencies of the Group’s subsidiaries at the exchange rate ruling on the date the transaction is recorded. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rates ruling at 31 October. Exchange gains and losses resulting from the above translation are reflected in the income statement. For subsidiaries that have a functional currency other than Pounds Sterling, income statements are translated into Pounds Sterling at the weighted average rate of exchange for the year, being a reasonable approximation of actual exchange rates at the date of the transaction. Statements of financial position are translated into Pounds Sterling at the exchange rate ruling at 31 October. Exchange differences arising on the translation of opening net assets are taken to the translation reserve within equity, as is the exchange difference on the translation of the income statement between average and closing exchange rates. For this purpose, net assets includes loans between group companies and any related foreign exchange contracts where settlement is neither planned nor likely to occur in the foreseeable future. Such cumulative exchange differences are released to the income statement on disposal of the subsidiary or associate. 1.4 Revenue recognition There are three types of revenue earned by the Group: a) Vending revenue is recognised when the services are provided which is also when payment is received. Vending revenue is total consideration received during the period including that held in machines at the statement of financial position date. Each vending sale transaction entered into by the Group represents a single performance obligation. Vending revenue is the fair value of consideration received and is measured net of discounts, VAT and other sales‑related taxes. Payment is received immediately before the service is delivered to the customer, with no payment terms offered. b) Revenue from the sale of equipment, spare parts and consumables is recognised upon delivery of products and acceptance, if applicable, by the customer. Each sale of equipment, spare parts and consumables represents a single performance obligation. Sales revenue is the fair value of consideration received or receivable and is measured net of discounts, VAT and other sales‑related taxes. Payment is typically due and received 30 days after the delivery of the product. The Group offers a two year warranty on all machines sold and is responsible for any repairs required in that period c)  Revenue from the provision of services, principally maintenance contracts, is recognised at the time the service is delivered to the customer. Sales of services represents a single performance obligation. Revenue is the fair value of consideration received or receivable and is measured net of discounts, VAT and other sales‑related taxes. Revenue is recognised in a straight line manner over the maintenance contract term. Payment is typically due and received 30 days after the delivery of the service is complete. Contract terms do not exceed one year in length. 1.5 Finance income and costs Finance income and costs are both recognised in the income statement under the effective interest method. Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 128 1.6 Taxation Tax expense for the current period comprises current and deferred tax and is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or equity. The current tax charge is calculated on the basis of the laws enacted or substantively enacted at the statement of financial position date in the countries where the Group operates. Deferred tax is provided in full on temporary differences arising between the tax base of assets and liabilities and their carrying value in the accounts. Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in future periods in which the temporary difference will reverse, based on tax rates and laws enacted or substantively enacted at the year end. Deferred tax assets are recognised to the extent that it is probable that the future taxable profit, against which the deductible temporary differences can be utilised, will be available. Deferred tax is provided, or an asset recognised, on taxable temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Current tax assets and liabilities are measured at the amounts expected to be recovered from, or paid to, the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at year end. 1.7 Intangible assets Goodwill Goodwill represents the excess of cost of an acquisition of a subsidiary over the fair value of the Group’s share of net identifiable assets at the date of acquisition. Goodwill is not amortised but is tested annually for impairment or more frequently if events or changes in circumstances indicate that the carrying amounts may be impaired and is carried at cost less any impairment. On disposals, goodwill is included in the calculation of gains or losses on the sale of the previously acquired entity. For the purposes of impairment testing, goodwill is allocated to cash‑generating units. Each of these units represents the Group’s investment in an operating subsidiary. Where an acquisition creates a gain on bargain purchase (negative goodwill), the gain is recognized directly in the income statement. Internally generated research and development expenditure Research and development costs are accounted for in line with all relevant criteria as mandated by IAS 38 Intangible Assets. Research expenditure is expensed as incurred. Costs incurred in developing projects are capitalised as intangible assets when it is considered that the commercial viability of the project will be a success based on discounted expected cash flows, and the costs can be reliably measured. Development costs that do not meet the capitalization requirements of IAS 38 are expensed and are not recognised as assets. Separately acquired intangible assets Intangible assets (including acquired research and development) acquired as part of a business combination are initially recognised at fair value at the date of acquisition. Other intangibles are initially recognised at cost. Intangible assets with finite useful lives are carried at cost less accumulated amortisation and impairment. The amortisation policies applied to the Group’s intangible assets are summarised as follows: Capitalised research and development Software Customer related Patents and licences Droit au Bail Useful lives Finite Finite Finite Finite Indefinite Amortisation Straight‑line basis, with a maximum life of four years from commencement of commercial production, with no residual value Straight‑line basis, with a maximum life of three years, with no residual value Straight‑line basis, over their useful lives of between three and ten years, with no residual value Straight‑line basis, over their useful lives of between seven and ten years, with no residual value Not amortised regularly, but subject to impairment testing Internally generated or acquired Internally generated Acquired Acquired Acquired Acquired ME Group plc Annual Report 2024 129 1 Material accounting policies continued Separately acquired intangible assets with indefinite useful lives Droit au bail, which occur in France, are rights to occupy a space to site vending equipment. According to French law, droit au bail contracts are tacitly extended, hence the determination of an indefinite useful life. The carrying amount of droit au bail assets at 31 October 2024 was £172,000. Amortisation of capitalised development costs are included in the cost of sales. Amortisation of other intangible assets categories is included in both the cost of sales and administration expenses in the income statement. 1.8 Property, plant and equipment Property, plant and equipment is shown at cost, less accumulated depreciation and any impairment. Subsequent expenditure on property, plant and equipment is capitalised, either as a separate asset, or included in the cost of the asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost can be measured reliably. The carrying amount of any parts of the assets that are replaced are derecognised. All other costs are recognised in the income statement as an expense as incurred. Freehold land is not depreciated. Other assets are depreciated on a straight‑line basis, to reduce cost to the estimated residual value over the estimated useful life of the asset at the following rates: Freehold buildings & vending machine sites 2% – 12.5% straight‑line Photobooths and vending machines 10% – 33.33% straight‑line Right of use assets Depreciated over the lease term Plant, machinery, furniture, fixtures and motor vehicles 12.5% – 33.33% straight‑line. The assets’ residual values and useful lives are reviewed at each year end and adjusted, if appropriate. 1.9 IFRS 16 leases The Group has arrangements across three main categories that meet the definition of a lease under IFRS 16: site agreements, property and motor vehicles. The Group assesses whether a contract is or contains a lease at inception of the contract. The Group recognizes a right‑of‑use asset and corresponding lease liability at the lease commencement date, except for short term leases and leases of low value. For short term and low value leases, the lease payments are recognized as an operating expense on a straight‑line basis over the term of the lease. The right‑of‑use asset is initially measured at cost, which comprises the initial amount of the lease liabilities adjusted for any lease payments made at or before the commencement date, plus any initial costs incurred. The right‑of‑use assets are subsequently measured at cost less accumulated depreciation and impairment losses. The right‑of‑use assets are from the commencement date depreciated over the shorter period of lease term and useful life of the underlying asset. The estimated useful lives of right‑of‑use assets are determined on the same basis as those of property and equipment. The lease liabilities are initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the relevant country discount rate. Lease Liabilities are adjusted for certain re‑measurement events, e.g. revised discount rate, change in the lease term or change in future lease payments resulting from a change in an index. Discount rates are determined using the Group’s external cost of borrowing adjusted for timing of borrowing, lease term, country and currency impacts. An asset specific adjustment is also applied to tailor the discount rate to the specific characteristic of the leased asset. For the purpose of determining asset specific adjustments leases have been organised into pools of similar leased asset types. Site agreements The Group operates vending units which are deployed under a fee‑paying agreement with the site owner. These agreements vary widely in their terms and conditions. The Group examines, on an individual basis, the degree to which these agreements meet the definition of a lease under IFRS 16, with particular regard to the presence of an identified asset with no substitution rights. While the standard sets out the definition of a lease, judgement is required in assessing the degree to which those criteria are met, particularly with regard to the presence of an identified asset with no substitution rights. Contracts outside of the scope of IFRS 16 Some of the Group’s lease arrangements do not meet the criteria for IFRS 16 treatment (e.g. variable rent, site owners have control over the machine location or ME Group can stop a contract with a short period notice at any time) and are de facto accounted for as operating costs Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 130 1.10 Impairment of non‑financial assets For goodwill and intangible assets with indefinite lives, the carrying value is reviewed annually for impairment or more frequently if events or changes in circumstances indicate that the carrying amounts may be impaired. Other intangible assets and property, plant and equipment are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying value of the asset is higher than the recoverable amount of the asset an impairment loss is recognised. Impairments charges are included in ‘Adminstration expenses’ in the income statement. In carrying out such impairment evaluations the recoverable amount is the higher of the asset’s value in use or its fair value less costs to sell. Assets that do not generate largely independent cash inflows are grouped at the lowest level for which separately identifiable cash inflows exist (cash-generating units) and the recoverable amount is determined for the cash-generating unit (CGU). For the purposes of impairment testing goodwill and intangible assets, the Group defines a CGU as an operating company. For property, plant and equipment, impairment testing is performed at the individual asset level. Reversal of impairment Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that it does not exceed the carrying amount that would have been determined had no impairment loss been recognised. No impairment loss is reversed for goodwill or intangible assets with indefinite lives. 1.11 Financial instruments (i) Financial assets Classification of financial assets Financial instruments are classified based on the Group’s business model for managing financial assets and the contractual cash flow characteristics of the financial asset. (a) Trade receivables Trade receivables are initially measured at fair value, and subsequently at their amortised cost as reduced by appropriate allowances for expected credit losses. (b) Cash and cash equivalents Cash and cash equivalents are measured at amortised costs. Bank overdrafts are included within borrowings in current liabilities in the statements of financial position. (c) Financial assets at fair value through profit or loss Financial assets in this category are initially recorded and subsequently valued at fair value, with changes in fair value recognised in the income statement. For investments designated as financial assets at fair value through profit or loss, the fair values of quoted investments are based on current bid prices. For unlisted investments the Group uses various valuation techniques to determine fair values. Investments in convertible bonds are valued on a discounted cashflow basis and by reference to the issuing company’s equity value, where necessary. (ii) Financial liabilities (a) Borrowings Borrowings are recorded initially at the fair value of the consideration received net of directly attributable transaction costs. After initial recognition, borrowings are subsequently measured at amortised cost using the effective interest rate method. This method includes any initial issue costs and discounts or premiums on settlement. Finance costs on the borrowings are charged to the income statement under the effective interest rate method. Financial liabilities are derecognised when the obligation under the liability is cancelled, discharged or has expired. (b) Trade and other payables Trade payables are initially recorded at fair value and subsequently recorded at amortised cost using the effective interest rate method. 1.12 Inventories Inventories are stated at the lower of cost and net realisable value. Cost includes costs incurred in bringing inventories to their present location and condition. The cost of work‑in‑progress and finished goods includes an appropriate proportion of production overheads. Finished goods also include operating equipment not yet sited. Raw materials and consumables are valued on a first‑in first‑out basis or on an average cost basis where average cost is not significantly different to first‑in first‑out due to the fast turnaround of consumables. The Group uses standard costs to value inventory and these standard costs are regularly updated to reflect current prices. Inventories are stated net of provisions for slow moving and obsolete inventory based on expected future usage. ME Group plc Annual Report 2024 131 1 Material accounting policies continued 1.13 Cash and cash equivalents Cash and cash equivalents are carried in the statements of financial position at amortised cost. Bank overdrafts are included within borrowings in current liabilities in the statements of financial position. For the purposes of the statements of cash flows, cash and cash equivalents comprises cash on hand, restricted and unrestricted deposits held at banks and other highly liquid investments with an original maturity of three months or less, less bank overdrafts. The Group operates a zero balancing cash pooling arrangement, which physically sweeps cash from subsidiary bank accounts to central clearing bank accounts on a daily basis. Any overdrawn balances in subsidiaries are not offset against positive balances. 1 Material accounting policies continued 1.14 Share capital and reserves Share capital Ordinary shares of the Company are classified as equity. Where the Company acquires its own equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of tax relief), is deducted from equity attributable to the Company’s equity shareholders until the shares are either cancelled or subsequently reissued. The amount is shown in equity as treasury shares. Where treasury shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders. Where treasury shares are subsequently cancelled, share capital is reduced by the nominal value of the shares cancelled, with a corresponding credit entry made to the capital redemption reserve. The consideration originally paid to acquire the shares is recognized as a reduction in retained earnings. Share premium Any excess received for shares issued over their nominal value is recorded in the share premium account. Capital redemption reserve The capital redemption reserve is a statutory, non- distributable reserve into which amounts are transferred following the purchase and cancellation of the Company’s own shares. Translation reserve The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries and associates. In accordance with the options allowed under IFRS 1, only exchange rate differences arising on translation after the date of transition, 1 May 2004, are shown in this reserve. Other reserves Share options reserve Used to accrue the grant date fair value of options issued, in accordance with IFRS 2. Other reserve accounts arising in subsidiaries Generally not distributable and arise as a result of local legislation regarding capital maintenance. 1.15 Employee benefits Pension obligations Group companies have various pension schemes in accordance with local conditions and practices in the countries in which they operate. The Group operates both defined benefit and defined contribution schemes. The Company operates a defined benefit pension scheme, which is closed to new entrants, with contributions made by employees and the Company with defined benefits being based upon the employee’s length of service and final pensionable salary. The Company also operates a defined contribution pension scheme. Defined benefit schemes Details of the pension schemes are included in note 24. The net obligation for the Group’s defined benefit pension schemes is calculated for each scheme separately by estimating the future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value amount of plan assets. The calculation is performed by independent actuaries using the projected unit credit actuarial method. If this calculation results in a potential asset for the Group, this asset is only recognised to the present value of the economic benefits available in the form of a refund of contributions paid to the fund or reductions in future contributions. In calculating the present value of any economic benefit consideration is given to any minimum funding requirements. Re‑measurement of the net liability, which comprises actuarial gains and losses, the return on plan assets (excluding interest) and the effects of any asset ceiling, are recognised in other comprehensive income. The Group determines the net interest expense (income) on the net liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the period to the then net defined liability (asset), taking into account changes in the Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 132 period as a result of contributions and pension benefits paid. Other expenses are charged to profit and loss. When plan benefits are changed or the plan curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised in profit and loss. Gains and losses on settlement of any plan are recognised when settlement occurs. Defined contribution schemes Contributions to defined contribution schemes are expensed as incurred. Other post‑employment benefits In addition to the pension schemes noted above, contracts of employment in certain Group companies require provision to be made for employee retirements. These provisions are based on local circumstances, length of service and salaries of the employees concerned. They are included in post‑employment benefit obligations and shown in note 24 as other retirement provisions. Share‑based payments The cost of equity‑settled transactions with employees is measured by reference to the fair value at the date of grant, determined using the Black‑Scholes model. The fair value is expensed on a straight‑line basis over the vesting period, based on management’s estimate of the number of shares that will eventually vest. The Group does not have options with market conditions. On exercise of the option the proceeds received are allocated to share capital (nominal value of shares) and share premium. The grant by the Parent Company of options over its ordinary shares to the employees of subsidiary undertakings in the Group is treated as a capital contribution. The fair value of the employee services received, measured by reference to the grant date fair value, is recognised over the investing period as an increase to the investment in subsidiary undertakings with a corresponding credit to other reserves in equity. Details of share‑based payments are included in note 22. Termination benefits Termination benefits are recognised in the income statement in the period when the Group is demonstrably committed to the termination of employment or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Short‑term employee benefits The Group recognises a liability and an expense for short‑term employee benefits (such as holiday pay, bonuses and profit sharing) where these obligations contractually arise (for example, as a result of employment contracts) or where a constructive obligation has arisen from past practice. 1.16 Dividend distributions Final dividends to the Company’s shareholders are recognised as a liability and deducted from shareholders’ equity in the period in which the dividends are approved by shareholders. Interim dividends are recognised as a liability when paid. 1.17 Non‑current assets classified as held for sale The Group classifies a non‑current asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. Non‑current assets transferred to held for sale are recognised at the lower of their carrying amount and fair value less costs to sell and presented separately on the Statement of Financial Position. Non‑current assets classified as held for sale are not depreciated. 1.18 Guarantees issued by parent company The parent company of the Group’s has issued guarantees over certain bank loan liabilities of subsidiary companies in France and Japan. Under these guarantees, the Company would be liable for the subsidiaries’ loan liabilities in the event of a default. The outstanding balance of guaranteed loan liabilities at 31 October 2024 was £12,054,000. The Company is required to recognise expected credit losses provisions (ECL) based on unbiased forward- looking information in relation to these guarantee contracts. The ECL is measured using two main components: probability of default and loss given default. Management have assessed the probability of default and considered the following factors: the Group operates a cash pooling arrangement, which ensures that all subsidiaries have access to sufficient cash to meet their obligations as they fall due; at the reporting date the Group holds cash of £86,147,000, which exceeds the balance of guaranteed loans; and cash forecasts indicate that the Group will continue to hold sufficient cash to cover the guaranteed loans for the next three years. The loss given default value would be the outstanding value of the guaranteed loan liabilities. Given the facts set out above, management determined that no ECL provision is required. ME Group plc Annual Report 2024 133 2 New standards, amendments and interpretations New accounting standards Adopted by the Group The Group has adopted the following new standards and amendments for the first time in these financial statements with no material impact: ▪Definition of Accounting Estimates – Amendments to IAS 8 ▪Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) ▪Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction – Amendments to IAS 12 ▪Amendments to IAS 12 – International Tax Reform – Pillar Two Model Rules ▪IFRS 17 Insurance Contracts (issued May 2017) and Amendments to IFRS 17 Insurance Contracts (Issued June 2020) ▪Amendments to IFRS 17 Insurance Contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative Information (Issued December 2021) 2 New standards, amendments and interpretations continued Not yet adopted by the Group Certain new accounting standards and interpretations have been published which are endorsed in the UK that are not mandatory for the current period and have not been early adopted by the Group. These new standards and interpretations, which are not expected to have a material effect on the Group, are set out below. Description Date required to be adopted by the Group Lease Liability in a Sale and Leaseback – Amendments to IFRS 16 1 January 2024 Classification of liabilities as Current or Non‑Current and Non‑current Liabilities with Covenants – Amendments to IAS 1 1 January 2024 Disclosure of Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7 1 January 2024 Lack of Exchangeability – Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates 1 January 2025 3 Key judgements, critical accounting estimates and other accounting estimates The following are the critical judgements, apart from those involving estimations (which are dealt with separately below), that the Directors have made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements. 1) Development costs – notes 1.7 and 12. Judgement is required to determine whether development expenditure meets the criteria for capitalization as an intangible asset, in accordance with IAS 38. Specifically, management must determine that it is probable that future economic benefits that are attributable to the asset will flow to the Group, and that the cost of the asset can be reliably measured. Management assesses whether an asset under development will be a commercial success, and therefore generate economic benefit, through the use of discounted cashflow analysis. This judgement has been applied consistently year to year. 2) Application of IFRS16 to site agreements – note 1.9 The Group operates vending units which are deployed under a fee‑paying agreement with the site owner. These agreements vary widely in their terms and conditions. Due to the high volume of such agreements, the accounting impact is material to the Group. Management assesses, on agreement‑by‑agreement basis, whether the criteria for recognition as a lease under IFRS 16 has been met. While the standard sets out the definition of a lease, judgement is required in assessing the degree to which those criteria are met, particularly with regard to the presence of an identified asset with no substitution rights. This judgement has been applied consistently year to year. The following are areas of estimation uncertainty: Critical estimates: 1) Goodwill and other intangible assets – notes 1.7, 1.10 and 12. Impairment The recoverable amount of cash generating units (CGUs) has been determined by management on a value‑in‑use basis. These calculations require estimates by management, including management’s expectations of future growth in revenue, costs and profit margins, cash flows and discount rates. The carrying value of goodwill and intangible assets at the period end were £11,006,000 and £14,362,000 respectively. Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 134 For both goodwill and intangible assets, value in use was determined by discounting the future cash flows of the CGU. Cash flows include a forecast period of five years, based on actual operating results, budgets and economic market research with a terminal value based on a long‑term growth rate applied thereafter. The Growth rate assumption for all CGUs was 1% (2023: 1%). WACC discount rates were calculated for each territory and ranged between 11.4% and 14.3% (2023: 11.0%-14.1%). Further details of impairment testing, including assumptions and sensitivities, are disclosed in note 12. Goodwill impairments are not reversed or adjusted. Purchase price allocation (PPA) In accordance with IFRS, purchase price allocation is completed within one year of the acquisition date. Resulting adjustments to prior year balances are shown as an opening balance remeasurement in the current year. 2) Useful lives of property, plant and equipment (UEL) – notes 1.8 and 13. Useful lives (UEL) Management make estimates of the useful life of property, plant and equipment as disclosed in note 1.8. Photobooths and vending machines are the most material category of property, plant and equipment to the Group (carrying value of £107,920,000). UELs for photobooths and vending machines are determined through analysis of the historic cash generation lifecycle of the vending estate. Technological developments and regulatory changes can impact on the UELs of the vending estate. Management consider these factors in assessing the UELs of the assets. The key inputs in determining asset UELs are actual historic and expected forward‑looking cash generation lifecycle data. If the average period of cash generation for photobooths and vending machines increased by one year, causing a one year increase in UELs, the annual depreciation charge would reduce by £3,654,000. If the average period of cash generation for photobooths and vending machines decreased by one year, causing a one year decrease in UELs, the annual depreciation charge would increase by £5,038,000. 3) Valuation of pension obligations – note 1.15 and 24 The Group operates pension and other retirement and post‑employment schemes including both funded defined benefit schemes, and defined contribution schemes. The schemes’ assets and liabilities are valued annually by third party actuaries, in accordance with IAS19. Pension valuations are subject to estimation and uncertainty due to the complex nature of actuarial assumptions. Management reviews the appropriateness of the actuaries’ assumptions each year as part of the valuation process. The carrying value of the Group’s pension and retirement obligations at the period end was £4,402,000. Other estimates 1) Impairment of property, plant and equipment – notes 1.8, 1.10 and 13. Significant impairment charges were made against property, plant and equipment in the year ended 31 October 2020. The Covid 19 pandemic had impacted the trading and outlook of the Group, indicating reduced value in use of the vending estate and therefore impairment. In the subsequent years the Group continued to subject these assets to annual impairment tests. Previously recognised impairment losses were reversed where testing indicated increased value in use. At 31 October 2024 management considers that the original indicator of impairment, caused by the Covid 19 pandemic, no longer exists. This conclusion is supported by increased cash generation of the assets since 2020. A key input to the determination of value in use is the revenue generated by each machine. This metric has increased significantly post-Covid, as the Group’s trading performance has recovered. Accordingly, management have increased their estimate of the future revenue generation of all machines. This increases the service potential of the assets, increasing value in use, and therefore recoverable amount, above the carrying value (excluding impairment). Consequently, all remaining impairments were reversed in the current year, with care taken to ensure that the closing net book value did not exceed what it would have been had the original impairment never occurred. Impairments to property, plant and equipment with a total value of £1,668,000 were reversed in the year. Further details are disclosed in note 13. The carrying value of property, plant and equipment at the period end was £136,332,000. ME Group plc Annual Report 2024 135 3 Key judgements, critical accounting estimates and other accounting estimates continued 2) Determination of discount rates for lease accounting – notes 1.9 and 13 To calculate the value of right of use assets and lease liabilities recognised in the Statement of Financial Position, management must determine an appropriate discount rate to apply to the cashflows of each lease agreement. Discount rates are subject to uncertainty and estimation as they are based on numerous external inputs and assumptions. Management determines discount rates using the Group’s external cost of borrowing adjusted for timing of borrowing, lease term, country and currency impacts. Management obtained expert external advice on the determination of appropriate discount rates for the year ended 31 October 2024. The discount rates used range between 0.26% and 4.46%. The key input in determining the discount rates is the Group’s external cost of borrowing. A 10% increase in the Group’s external cost of borrowing would result in a discount rate range of 0.39% to 4.58%. 4 Segmental analysis IFRS 8 requires operating segments to be identified based on information presented to the Chief Operating Decision Maker (CODM) in order to allocate resources to the segments and monitor performance. For ME Group the Board is considered to be the CODM. The Group reports its segments on a geographical basis: Continental Europe, United Kingdom & Ireland and Asia Pacific. Individual operating companies are aggregated into the three geographic segments. The Board believe that the similar economic characteristics of the operating companies, together with the fact that they are similar in terms of operations, use common systems and the nature of the regulatory environment allow them to be aggregated into geographic reporting segments. The key segmental performance indicators considered by the CODM are revenue and operating profit. Segmental results are reported before intra‑group transfer pricing charges. The following tables provide analysis of performance by geographic segment: 31 October 2024 Continental Europe £’000 United Kingdom & Ireland £’000 Asia Pacific £’000 Corporate £’000 Total £’000 Photo.ME 111,646 19,288 42,296 – 173,230 Wash.ME 64,084 27,207 166 – 91,457 Print.ME 10,657 116 85 – 10,858 Other Vending (including Feed.ME) 1,889 1,587 6,426 – 9,902 Total Vending Revenue 188,276 48,198 48,973 – 285,447 Sales of equipment, spare parts, consumables 17,406 841 378 – 18,625 Sales of services 3,305 150 360 – 3,815 Total Revenue 208,987 49,188 49,711 – 307,886 EBITDA 94,490 19,205 10,979 (10,450) 114,224 Depreciation and amortisation (27,000) (6,482) (5,327) (392) (39,201) (Impairment)/reversal of impairment 585 312 (1,530) - (633) Operating profit/(loss) 68,075 13,035 4,122 (10,842) 74,390 Operating profit 74,390 Non operating income - net 982 Finance income 670 Finance costs (2,621) Profit before tax 73,421 Tax (19,331) Profit for the period 54,090 Capital expenditure (excluding Right of Use assets) 38,582 12,764 2,487 781 54,614 Non‑current assets 108,727 32,265 23,667 1,511 166,170 Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 136 31 October 2023 Continental Europe (restated) £’000 United Kingdom & Ireland (restated) £’000 Asia Pacific (restated) £’000 Corporate (restated) £’000 Total (restated) £’000 Photo.ME 114,297 21,624 36,573 – 172,494 Wash.ME 53,454 23,539 251 – 77,244 Print.ME 11,147 122 65 – 11,334 Other Vending (including Feed.ME) 2,179 1,757 6,653 – 10,589 Total Vending Revenue 181,077 47,042 43,542 – 271,661 Sales of equipment, spare parts, consumables 20,441 966 386 – 21,793 Sales of services 3,639 165 404 – 4,208 Total Revenue 205,157 48,173 44,332 – 297,662 EBITDA 90,109 18,545 9,475 (11,490) 106,639 Depreciation and amortisation (26,079) (6,785) (5,126) (355) (38,345) (Impairment)/reversal of impairment (1,395) 639 (37) – (793) Operating profit/(loss) 62,635 12,399 4,312 (11,844) 67,502 Operating profit 67,502 Non operating income - net 701 Finance income 1,401 Finance costs (2,537) Profit before tax 67,067 Tax (16,401) Profit for the period 50,666 Capital expenditure (excluding Right of Use assets) 37,494 7,380 8,846 733 54,453 Non‑current assets 107,994 26,508 28,134 1,124 163,760 The comparative figures for total vending revenue, sales of equipment, spare parts, consumables and sales of services have been reclassified from those reported in the prior year financial statements. This is to reflect a change in the method of allocating VAT to gross revenues. This reclassification brings the comparatives in line with the method applied to current year figures. The Parent Company is domiciled in the UK. There were no major customers, defined as a single customer contributing at least 10% of the Group’s revenue, in the period ended 31 October 2024 (2023: none). ME Group plc Annual Report 2024 137 5 Operating profit Costs and overhead items charged/(credited) in arriving at operating profit for the period, include the following: Cost of sales 31 October 2024 £’000 31 October 2023 £’000 Depreciation of owned assets (note 13) 27,348 27,196 Depreciation of right of use assets (note 13) 5,584 6,036 Amortisation of previously capitalised research and development expenditure (note 12) 2,168 1,259 Amortisation of intangible assets other than research and development (note 12) 1,921 3,017 Impairment of previously capitalised research and development expenditure (note 12) 771 – Reversal of impairment of property, plant and equipment (note 13) (919) (1,352) Total depreciation, amortisation and impairment 36,873 36,156 Commissions 72,517 67,766 Consumables, spare parts and site costs 20,501 19,049 Employment costs (note 7) 40,873 43,446 Non capitalised research and development costs (excluding employment costs) 183 185 Property costs 1,051 2,343 Transportation freight costs 4,768 5,932 Short term and low value lease rentals 2,224 1,989 Cost of inventories recognised as an expense 9,689 9,476 Provisions charged against obsolete inventory 401 572 Foreign exchange loss/(gain) 1,767 (195) Loss on disposal of property, plant and equipment 250 468 Other cost of sales 7,297 7,226 Cost of Sales 198,394 194,413 Other operating income 31 October 2024 £’000 31 October 2023 £’000 Rental income 124 79 Other non‑trading income 85 115 Other Operating Income 209 194 Administrative expenses 31 October 2024 £’000 31 October 2023 £’000 Employment costs (note 7) 21,819 20,619 Depreciation of owned assets (note 13) 1,144 601 Amortisation of intangible assets other than research and development (note 12) 1,036 235 Impairment of intangible assets other than research and development (note 12) 516 1,445 Impairment of goodwill (note 12) 1,014 701 Reversal of impairment of property, plant and equipment (note 13) (749) – Foreign exchange (gain)/loss (305) 959 Legal, audit and professional fees 3,438 4,147 Travel and entertaining costs 1,092 1,146 Other administrative costs 6,612 5,498 Administrative Expenses 35,617 35,351 Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 138 Audit and non‑audit services The following fees for audit and non‑audit services were paid or are payable to the Group’s auditor, Forvis‑Mazars (2023: Forvis‑Mazars) and its associates. 31 October 2024 £’000 31 October 2023 £’000 Fees for the audit of the company and the group – Forvis Mazars 420 317 Fees for the audit of the company and the group – Forvis Mazars (overrun in prior year) 40 80 Fees for the audit of the subsidiaries – other Forvis Mazars 141 120 Fees for audit related services (interim review) – Forvis Mazars 55 50 Non audit related services – Forvis Mazars – – Fees for the audit of the subsidiaries – Other firms – 50 656 617 In order to maintain the independence of the external auditors, the Board has determined policies as to what non‑audit services can be provided by the Group’s external auditors and the approval processes related thereto. This function is performed by the Audit Committee. Such services will only be approved if there are clear efficiencies and added value benefits to the Group. In addition to the audit fees payable to the Group’s auditor and its associates, certain Group subsidiaries are audited by other firms. 6 Non‑operating income – net Non‑operating income – net comprises transactions relating to financial instruments held at FVTPL, acquisition and disposal of subsidiaries and disposal of property. They have been disclosed separately in order to improve a reader’s understanding of the financial statements and are not disclosed within operating profit as they are non‑trading in nature. 31 October 2024 £’000 31 October 2023 £’000 (Loss)/gain on disposal of subsidiary (339) 57 Gain on disposal of property 378 – Gain on bargain purchase 1,120 – Fair value (loss)/gain on financial instrument held at FVTPL (334) 586 Other gain 157 58 Non‑operating income – net 982 701 Period ended 31 October 2024 The Group made a loss on disposal of £339,000 from the disposal of its French subsidiary Sempa SAS in May 2024. The Group generated a gain of £378,000 from the partial disposal of an office building, previously held as non-current assets classified as held for sale. See note 14 for details. The Group recognised a gain on bargain purchase of £1,120,000 in the relation to the Fujifilm acquisition. See note 31 for details. Period ended 31 October 2023 The Group generated a profit on disposal of £57,000 from the disposal of its Korean subsidiary Photo‑Me Korea Company Limited. ME Group plc Annual Report 2024 139 7 Employees Employment costs 31 October 2024 £’000 31 October 2023 £’000 Wages and salaries 44,389 45,723 Social security costs 9,269 10,178 Share options granted to directors and employees 795 345 Post‑employment benefit costs – defined benefit schemes 359 417 – defined contribution schemes 783 201 55,595 56,864 Number of employees The average number of employees during the period (including executive directors) comprised: 31 October 2024 31 October 2023 Full – time 968 1053 Part – time 151 140 1,119 1,193 UK : Full – time 154 154 UK : Part – time 3 3 Continental Europe : Full – time 651 730 Continental Europe : Part – time 40 29 Asia and rest of the world : Full – time 163 169 Asia and rest of the world : Part – time 108 108 1,119 1,193 Employees by category As at 31 October 2024 As at 31 October 2023 Senior managers in the Group (excluding directors of ME Group) 18 21 Employees– Sales 108 136 Employees‑Administration 181 194 Employees‑Operating 812 842 Total 1,119 1,193 The cost of sales employees and operating employees are recognised in the income statement in Cost of Sales. The cost of administration employees is recognised in the income statement in Administrative Expenses. The cost of senior managers is recognised in the income statement in either Cost of Sales or Administrative Expenses, dependent on the function they perform. Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 140 8 Finance income and costs 31 October 2024 £’000 31 October 2023 £’000 Finance income Interest income 670 1,401 670 1,401 Finance costs Bank loans and overdrafts at amortised cost (1,037) (1,168) Interest on lease liabilities (1,575) (1,251) Other finance costs (9) (119) (2,621) (2,537) Interest income, interest cost on bank loans and overdrafts and interest on lease liabilities are all recognised on an effective interest rate basis. Interest income is earned on short term deposits. Group earned interest on deposits at rates between 2.90% and 4.75% in the year (2023: 2.90% to 2.93%). 9 Taxation expense Tax charges/(credits) in the statement of comprehensive income 31 October 2024 £’000 31 October 2023 £’000 Taxation Current taxation UK Corporation tax – current period 10,081 9,833 – prior periods (156) (1,068) 9,925 8,765 Overseas taxation – current period 7,702 6,916 – prior periods 125 (212) 7,827 6,704 Total current taxation 17,752 15,469 Deferred taxation Origination and reversal of temporary differences – current period – UK 2,239 677 – current period – overseas (803) (663) Adjustments in respect of prior periods – UK 143 843 Impact of change in rate – 75 Total deferred tax 1,579 932 Tax charge in the income statement 19,331 16,401 Tax relating to items (credited)/charged to other components of comprehensive income Corporation tax – – Deferred tax (118) (48) Tax charge in other comprehensive income (118) (48) Total tax charge in the statement of comprehensive income 19,213 16,353 ME Group plc Annual Report 2024 141 9 Taxation expense continued Reconciliation of total tax charge The difference between the Group tax charge and the standard UK corporation tax rate of 25% (2023: 22.5%) is explained below: 31 October 2024 £’000 31 October 2023 £’000 Profit before tax 73,421 67,067 Tax using the weighted average UK corporation tax rate of 25% (2023: 22,5%) 18,355 15,090 Effect of: – non‑taxable items (349) 449 – overseas tax rates 975 580 – remeasurement of deferred tax for changes in tax rates – 75 – non‑deductible expenses 197 8 – adjustments to tax in respect of prior periods 112 (436) – foreign exchange movements – – – other adjustments 41 635 Total tax charge 19,331 16,401 Effective tax rate 26.3% 24.5% The Group tax charge of £19.3m (2023: £16.4m) corresponds to an effective tax rate of 26.3% (2023: 24.5%). The UK Corporation Tax rate increased from 19% to 25% with effect from 1 April 2023. The weighted average UK Corporation Tax rate for the prior year ended 31 October 2023 was 22.5%. The Group undertakes business in multiple tax jurisdictions. 10 Dividends paid and proposed 31 October 2024 £’000 31 October 2023 £’000 Declared and paid during the year Final dividend for 2023: 4.42p (2022: 3.00p) 16,640 11,345 Interim dividend for 2023: 2.97p (2022: 2.60p) 11,202 9,829 Special dividend for 2023: Nil (2022: 0.60p) – 2,269 27,842 23,443 Declared but paid after the year end Interim dividend for 2024: 3.45p (2023: 2.97p) 12,998 11,202 12,998 11,202 Proposed for approval by shareholders at the AGM (Not recognised as a liability at 31 October) Final dividend for 2024: 4.45p (2023: 4.42p) 16,751 16,640 16,751 16,640 Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 142 Declared and paid during the year The Board proposed a final dividend of 4.42p per ordinary share in respect of the year ended 31 October 2023, which was approved by shareholders at the Annual General Meeting held on 26 April 2024 and paid on 23 May 2024. The Board approved an interim dividend of 2.97p per ordinary share for the six month period ended 30 April 2023, at its 11 July 2023 meeting. The interim dividend was paid on 23 November 2023. Declared but paid after the year end The Board approved an interim dividend of 3.45p per ordinary share for the six month period ended 30 April 2024, at its 12 July 2024 meeting. The interim dividend was paid on 29 November 2024. Proposed for approval by shareholders at the AGM The Board proposed a final dividend of 4.45p per ordinary share in respect of the year ended 31 October 2024. Subject to approval by shareholders at the Annual General Meeting on 25 April 2025, the final dividend will be paid on 23 May 2025. 11 Earnings per share Basic earnings per share amounts are calculated by dividing net earnings attributable to shareholders of the Parent Company of £54,090,000 (2023: £50,666,000) by the weighted average number of shares in issue during the period. Diluted earnings per share amounts are calculated by dividing the net earnings attributable to shareholders of the Parent Company by the weighted average number of shares outstanding during the period plus the weighted average number of shares that would be issued on conversion of all the dilutive potential shares into shares. The Group has only one category of dilutive potential shares being share options granted to senior staff, including directors, as detailed in note 22. The earnings and weighted average number of shares used in the calculation are set out in the table below: 31 October 2024 31 October 2023 Earnings £’000 Weighted average number of shares ‘000 Earnings per share pence Earnings £’000 Weighted average number of shares ‘000 Earnings per share pence Basic earnings per share 54,090 376,605 14.36 50,666 378,110 13.40 Effect of dilutive share options – 2,566 (0.09) – 2,490 (0.09) Diluted earnings per share 54,090 379,171 14.27 50,666 380,600 13.31 ME Group plc Annual Report 2024 143 12 Goodwill and other intangible assets Goodwill £’000 Cost: At 1 November 2022 16,935 Exchange differences 3 Additions 3,268 At 31 October 2023 20,206 IFRS remeasurement (2,999) At 1 November 2023 (restated) 17,207 Exchange differences (540) Disposals (3,357) At 31 October 2024 13,310 Impairment charges: At 1 November 2022 615 Exchange differences 2 Impairment charge in the period 701 At 31 October 2023 1,318 At 1 November 2023 1,318 Exchange differences (28) Impairment charge in the period 1,014 At 31 October 2024 2,304 Net book value: At 1 November 2022 16,320 At 1 November 2023 (restated) 15,889 At 31 October 2024 11,006 The amount of impairment losses is recognised in Administrative costs. IFRS remeasurements IFRS remeasurements represent the finalisation of purchase price allocation on acquisitions. In the period the purchase price allocation was completed for the Fujifilm acquisition. Customer related intangible assets with a total value of £4,181,000 were identified and transferred from goodwill to intangible assets. The acquisition generated a gain on bargain purchase of £1,120,000, which has been recognised in non‑operating income in the Group’s Income Statement. Further details of the purchase price allocation and gain on bargain purchase are provided in note 31. Disposals In the period the Group disposed of its French subsidiary Sempa SARL. Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 144 Goodwill by segments The table below shows the allocation of goodwill acquired through business combinations between segments. Goodwill has been allocated for impairment testing purposes to seven (2023: eight) cash‑generating units (CGUs). 31 October 2024 £’000 31 October 2023 (Restated) £’000 Carrying amount UK & Ireland CGU 1 – ME Group Ireland Supplies Limited 154 154 CGU 2 – Photo‑Me Northern Ireland 14 14 Total UK & Ireland 168 168 Continental Europe CGU 1 – ME Group France SAS 300 312 CGU 2 – ME Group Germany GmbH 1,926 2,005 CGU 3 – Sempa SARL – 3,423 CGU 4 – Dreamakers 888 925 Total Continental Europe 3,114 6,665 Asia CGU 1 – ME Group Japan* (restated for IFRS remeasurement) 7,724 8,017 CGU 2 – Now Retail Group – 1,039 Total Asia 7,724 9,056 Total 11,006 15,889 * Asia CGU 1 includes goodwill from the acquisition of Photo Plaza Co Ltd, which was merged into ME Group Japan on 15th March 2021. Goodwill impairment assessment The Group tests annually, for impairment, or more frequently if there are indications that goodwill might be impaired. The recoverable amount of all CGUs has been determined on a value in use basis. Value in use was determined by discounting the future cash flows of the CGU. Cash flows include a forecast period of five years, based on actual operating results, budgets and economic market research with a terminal value based on a long‑term growth rate applied thereafter. As a result of the impairment tests, the goodwill relating to the Now Retail Group CGU was fully impaired (£1,014,000). This is due to a reduction in forecast cash generation. The impairment charge was recognised in the income statement line “Administrative expenses”. In the year ended 31 October 2023, the goodwill relating to the pizza vending division (formerly SGER) was fully impaired (£701,000). This is due to a reduction in forecast cash generation. ME Group plc Annual Report 2024 145 12 Goodwill and other intangible assets continued Key assumptions for impairment tests of goodwill and other intangible assets Growth rate 1% (2023: 1%) The Growth rate assumption for all Group CGUs was 1%. The growth rate has been determined based on a conservative basis for expected annual growth in EBITDA for each CGU and takes into account revenue, volumes, selling prices and operating costs. It is based on past experience and expected future developments in markets, operations and economic conditions. Discount rate 11.4%-14.3% (2023: 11.0%-14.1%) The post‑tax discount rates applied to the cash flow forecasts for the CGUs are derived from the pre‑tax weighted average cost of capital for the Group adjusted for country specific risks, local risk free borrowing rates and local tax rates for the specific country concerned. The changes in discount rate assumptions from the prior year reflect the change in economic conditions, in each territory, over the period. The rates used are: United Kingdom 14.3%, (2023: 14.1%), Ireland 12.5% (2023: 13.0%), France 12.8% (2023: 12.8%), Germany 11.4% (2023: 11.6%), Japan 11.4% (2023: 11.0%) and Australia 13.6% (2023: 13.5%). The Board is confident, overall, that these discount rates reflect the circumstances in each region and are in accordance with IAS 36. Sensitivity to key assumptions As at the measurement date, the recoverable amount of all CGUs, based on their value in use, is significantly higher than the carrying amount relevant for the impairment test. Management considers that a reasonably pessimistic revision of key assumptions which can rationally be expected would still result in the recoverable amount of the CGUs exceeding their carrying amount. The headroom of recoverable amount over carrying value for each CGU range between £3,337,000 and £481,815,000 (2023: £921,000 to £504,083,000). Discount rate A 1% increase in the discount rate assumption for each territory would not generate any additional impairments. Aggregate headroom across all CGUs would be reduced by £64,196,000 (2023: £66,110,000). For the CGU with the lowest headroom, the 1% increase in discount rate would reduce headroom by a further £544,000 (2023: £332,000). Growth rate A 1% decrease in the growth rate assumption for each territory would not generate any additional impairments. Aggregate headroom across all CGUs would be reduced by £39,626,000 (2023: £45,769,000). For the CGU with the lowest headroom, the 1% decrease in growth rate would reduce headroom by a further £333,000 (2023: £224,000). Future growth in revenue, costs and profit margins CGUs were subjected to an impairment test under a worst case scenario, with decreased revenue and increased costs. The details of the sensitivity assumptions used are disclosed in the going concern section of the accounting policies (note 1.1 Basis of preparation). In this worst case scenario, no additional CGUs were impaired. However, headroom across the remaining unimpaired CGUs would be reduced by £134,443,000 (2023: two further CGUs would be impaired: Asia CGU 1 £1,331,000 and Asia CGU 2 £243,000. Headroom across the remaining unimpaired CGUs would be reduced by £263,703,000). For the CGU with the lowest headroom, using the worst case scenario would reduce headroom by a further £761,000 (2023: £334,000). Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 146 Other intangible assets Capitalised development costs £’000 Software £’000 Brands £’000 Customer related £’000 Patents £’000 Droit au Bail £’000 Total £’000 Cost: At 1 November 2022 11,822 3,855 1,280 20,362 1,500 3,553 42,372 Exchange differences (95) (17) 11 (274) 27 52 (296) Additions 2,337 437 – – – 39 2,813 Additions work in progress 985 – – – – – 985 Additions new subsidiary – 49 – – – – 49 Transferred to property, plant and equipment (note 13) – – – (120) – (24) (144) Disposals – (163) – (6) – (37) (206) At 31 October 2023 15,049 4,161 1,291 19,962 1,527 3,583 45,573 IFRS remeasurement – – – 4,181 – – 4,181 At 1 November 2023 (restated) 15,049 4,161 1,291 24,143 1,527 3,583 49,754 Exchange differences (483) (172) (51) (780) (73) (126) (1,685) Additions 918 661 – 4 1 6 1,590 Additions work in progress 921 – – – – – 921 Transfers (59) (186) – 168 42 35 – Disposal of subsidiary – – – (10,874) – – (10,874) Disposals (123) (146) – (848) (2) (41) (1,160) At 31 October 2024 16,223 4,318 1,240 11,813 1,495 3,457 38,546 Amortisation: At 1 November 2022 6,864 2,465 190 8,791 411 3,433 22,154 Exchange differences (105) 4 6 (88) 13 50 (120) Provided during the period 930 473 190 2,673 174 – 4,440 Impairment charge – – 577 57 811 – 1,445 Transferred to property, plant and equipment (note 13) – – – (23) – – (23) Disposals – (104) – (4) – (37) (145) At 31 October 2023 7,689 2,838 963 11,406 1,409 3,446 27,751 IFRS remeasurement – – – 40 – – 40 At 1 November 2023 7,689 2,838 963 11,446 1,409 3,446 27,791 Exchange differences (247) (128) (39) (466) (67) (135) (1,082) Provided during the period 2,168 646 59 2,211 – – 5,084 Impairment charge 771 – – 516 – – 1,287 Transfers (57) (74) – 116 – 15 – Disposal of subsidiary – – – (7,774) – – (7,774) Disposals (123) (146) – (810) (2) (41) (1,122) At 31 October 2024 10,201 3,136 983 5,239 1,340 3,285 24,184 Net book value: At 1 November 2022 4,958 1,390 1,090 11,571 1,089 120 20,218 At 1 November 2023 (restated) 7,360 1,323 328 12,696 118 137 21,962 At 31 October 2024 6,022 1,182 257 6,574 155 172 14,362 ME Group plc Annual Report 2024 147 12 Goodwill and other intangible assets continued Capitalised research and development expenditure is amortised over a maximum of four years, with no residual value. The remaining amortisation periods for material categories of other intangible assets are: ▪Capitalised development costs – between two and four years ▪Customer related – between three and nine years Impairment charges Current year An impairment charge of £771,000 was recognised against the capitalised development costs relating to the Group’s pizza vending machines. With the Group’s food division performing below expectations, the pizza development costs are no longer expected to generate economic benefit, so the carrying amount has been fully impaired. The impairment charge was recognised in the income statement line “Cost of sales”. The impairment charge was made against an asset in the Continental Europe operating segment. An impairment charge of £516,000 was recognised against customer related intangible assets. The impairment charge was recognised in the income statement line “Administrative expenses”. The entire impairment charge relates to the Now Retail Group CGU and is due to a reduction in forecast cash generation. The impairment charge was made against an asset in the Asia Pacific operating segment. The recoverable amount of the impaired asset is nil, determined by value in use. The discount rate used in determining the value in use was 13.6%. Prior year In the year ended 31 October 2023, impairment charges were recognised in the year against the following categories of intangibles assets: brands (£577,000); customer related (£57,000); and patents (£811,000). All impairments charges were made against the intangible assets of KIS SAS and related to the pizza vending division (formerly SGER) CGU. The impairment charges were made against assets in the Continental Europe operating segment. The impairment charges were recognised in the line “Administrative expenses”. Impairment charges were due to a reduction in forecast cash generation of the pizza vending division. The recoverable amount of the impaired assets was nil, determined by value in use. The discount rate used in determining the value in use was 12.8%. Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 148 13 Property, plant and equipment Land & Buildings £’000 Photobooth  & vending machines £’000 Plant, machinery, furniture, fixtures  & motor vehicles £’000 Right of Use Land  & Buildings £’000 Right of Use Plant, machinery, furniture, fixtures £’000 Right of Use Motor vehicles £’000 Total £’000 Cost: At 31 October 2022 15,303 276,924 30,165 5,009 14,486 6,462 348,349 Correction of error - reclassification 20,291 (1,427) (18,864) - - - - At 1 November 2022 (restated) 35,594 275,497 11,301 5,009 14,486 6,462 348,349 Exchange difference 232 (891) 86 123 352 157 59 Additions 2,678 39,109 4,055 639 421 2,456 49,358 Additions - new subsidiary - 1,496 - - - - 1,496 Transfer from intangible assets - 16 128 - - - 144 Transfers 15 481 (496) - - - - Disposals (985) (17,133) (2,511) - (2,419) (1,348) (24,396) At 31 October 2023 37,534 298,575 12,563 5,771 12,840 7,727 375,010 Exchange difference (1,117) (12,277) (747) (207) (461) (277) (15,087) Additions 2,154 45,878 4,071 1,337 334 2,566 56,340 Transfers (124) (74) 198 214 (176) (38) - Disposal of subsidiary (23) - (312) - - - (335) Disposals (596) (13,421) (1,178) (769) (2,444) (1,147) (19,556) At 31 October 2024 37,828 318,681 14,595 6,346 10,092 8,831 396,373 Depreciation: At 31 October 2022 6,994 205,301 23,498 2,158 6,880 2,428 247,259 Correction of error - reclassification 13,843 (1,408) (12,435) - - - - At 1 November 2022 (restated) 20,837 203,893 11,063 2,158 6,880 2,428 247,259 Exchange difference 137 (1,268) 94 88 281 99 (569) Provided during the period 1,811 24,542 1,491 1,454 2,384 2,207 33,889 Impairments/(reversal of impairments) (649) (304) (400) - - - (1,353) Transfer from intangible assets - 1 22 - - - 23 Disposals (700) (16,356) (1,540) - (2,419) (1,348) (22,363) At 31 October 2023 21,436 210,508 10,730 3,700 7,126 3,386 256,886 Exchange difference (754) (9,299) (582) (154) (283) (158) (11,230) Provided during the period 3,025 23,235 2,232 1,233 1,770 2,581 34,077 Reversal of impairments (57) (1,434) (177) - - - (1,668) Transfers (39) (74) 113 258 (293) 35 - Disposal of subsidiary (16) - (201) - - - (217) Disposals (284) (12,175) (988) (769) (2,444) (1,147) (17,807) At 31 October 2024 23,311 210,761 11,127 4,269 5,876 4,697 260,041 Net book value: At 31 October 2022 (restated) 14,757 71,604 238 2,851 7,606 4,034 101,090 At 31 October 2023 (restated) 16,098 88,067 1,832 2,071 5,714 4,341 118,124 At 31 October 2024 14,517 107,920 3,467 2,077 4,216 4,134 136,332 The balances of cost and depreciation for land and buildings, photobooth and vending machines and plant, machinery, furniture, fixtures & motor vehicles as at 31 October 2022 and 31 October 2023 have been restated to correct classification errors in the prior year property, plant and equipment note. The impact on cost balances at 31 October 2022 was: land and buildings increase of £20,291,000; photobooth and vending machines reduction of £1,427,000; and plant, machinery, furniture, fixtures & motor vehicles reduction of £18,864,000. The impact on cost balances at 31 October 2023 was: land and buildings increase of £22,002,000; photobooth and vending machines reduction of £1,218,000; and plant, machinery, furniture, fixtures & motor vehicles reduction of £20,784,000. ME Group plc Annual Report 2024 149 13 Property, plant and equipment continued The impact on depreciation balances at 31 October 2022 was: land and buildings increase of £13,843,000; photobooth and vending machines reduction of £1,408,000; and plant, machinery, furniture, fixtures & motor vehicles reduction of £12,435,000.The impact on depreciation balances at 31 October 2023 was: land and buildings increase of £14,201,000; photobooth and vending machines reduction of £1,202,000; and plant, machinery, furniture, fixtures & motor vehicles reduction of £12,999,000. These reclassifications have no impact on the total opening cost or depreciation balances of property, plant and equipment. Accordingly, this restatement had no impact on the group’s statement of financial position, statement of cash flows, total assets, total Shareholders’ funds, statement of comprehensive income and earnings per share for the current or prior year. Property, plant and equipment Impairment assessment Significant impairment charges were made against property, plant and equipment in the year ended 31 October 2020. The Covid 19 pandemic had impacted the trading and outlook of the Group, indicating reduced value in use of the vending estate and therefore impairment. In the subsequent years the Group continued to subject these assets to annual impairment tests, with the impairment value reduced where testing indicated increased value in use. At 31 October 2024 management considers that the original indicator of impairment, caused by the Covid 19 pandemic, no longer exists. This conclusion is supported by increased cash generation of the assets since 2020. A key input to the determination of value in use is the revenue generated by each machine. This metric has increased significantly post-Covid, as the Group’s trading performance has recovered. Accordingly, management have increased their estimate of the future revenue generation of all machines. This increases the service potential of the assets, increasing value in use, and therefore recoverable amount, above the carrying value (excluding impairment). Consequently, all remaining impairments were reversed in the current year, with care taken to ensure that the closing net book value did not exceed what it would have been had the original impairment never occurred. Impairments to property, plant and equipment with a total value of £1,668,000 were reversed in the year. Reversals of impairment to photobooths and vending machines were recognised in the following operating segments: Continental Europe (£1,172,000) and United Kingdom (£262,000). Reversals of impairment to plant, machinery, furniture, fixtures and motor vehicles were recognised in the following operating segments: Continental Europe (£184,000) and United Kingdom (£50,000). Prior year In the year ended 31 October 2023 an impairment charge to land and buildings of £6,000 was recognised in the United Kingdom operating segment. This relates to the impairment of vending machines whereby the site that the machine is located is impaired as well as the equipment. The impairment was due to a reduction in forecast cash generation of the vending machine. 14 Non‑current assets classified as held for sale Property £’000 Net Book Value At 1 November 2022 - Transferred from investment property 585 At 31 October 2023 585 Correction of error – reclassification 4,362 At 1 November 2023 (restated) 4,947 Exchange differences (196) Disposal (1,882) At 31 October 2024 2,869 Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 150 The opening balance of property held for sale at 1 November 2023 has been restated by £4,362,000 to correct an error in the prior year financial statements. The adjustment represents the value of capital additions to the asset held for sale which had previously been reported in prepayments under trade and other receivables. A corresponding adjustment has been made to reduce the balance of prepayments by the same value (note 17). The restatement is reflected in the group statement of financial position at 31 October 2023 as an increase in non‑current assets classified as held for sale and a decrease in trade and other receivables. The group statement of cashflows for the year ended 31 October 2023 has been restated by increasing cash generated from operations by £4,362,000 (movement in trade and other receivables) and increasing net cash utilised in investing activities by the same amount (capital expenditure on non‑current assets classified as held for sale). This restatement had no impact on the group’s total assets, total Shareholders’ funds, statement of comprehensive income and earnings per share for the current or prior year. The impact on the consolidated statement of financial position at 1 November 2022 was immaterial. The non-current asset classified as held for sale is an office building and associated land, located in Grenoble, France. The Group previously earned rental income from the office building but now intends to dispose of the property. The Group has entered an agreement with a buyer to dispose of the property in two tranches. The sale of tranche one was completed on 31 October 2024. The sale of tranche two is expected to complete in the first half of the year ended 31 October 2025. The disposal recognized in the year represents the cost attributable to the sale of tranche one. The Group made a gain of £378,000 on the disposal of tranche one, which has been recognised in non-operating income - net. The non‑current asset classified as held for sale is included in the Continental Europe operating segment. 15 Investments in associates In the current and prior year, the Group held investments in only one associate, Photomaton Maroc. This associate company is incorporated in Morocco and its registered address is 131 Bd D’Anfares Azur Sidi Belyout, Casablanca. £’000 Cost: At 1 November 2022 20 Exchange differences 1 Share of profit 14 At 31 October 2023 35 Exchange differences (2) Share of profit 3 At 31 October 2024 36 The Group’s share of post‑tax profits from associates is recognized within operating profit in the group statement of comprehensive income. This policy is employed as the Group’s only associate investment, Photomaton Maroc, is engaged in the same principal activity as the Group, so the investment is deemed to be part of the Group’s operating activities. Name Assets £’000 Liabilities £’000 Revenue £’000 Profit £’000 Dividends received Share of Interest % At 31 October 2023 141 106 – 14 – 50 141 106 – 14 – 50 At 31 October 2024 159 123 – 3 – 50 159 123 – 3 – 50 ME Group plc Annual Report 2024 151 16 Financial instruments Group Treasury The Group has a centralised treasury function. The primary aim of this function is to manage liquidity and funding arrangements and the Group’s exposure to associated financial and market risks, including liquidy risk, credit risk, interest rate risk and foreign currency risk. The general approach for Group Treasury is one of risk reduction within a framework of delivering total shareholder return. Treasury operations Overview and policy Treasury policy is set by the Board. Group Treasury activities are subject to a set of controls appropriate for the magnitude of the borrowing, investments and group‑wide exposures. To date the treasury function has limited itself to obtaining surplus cash from subsidiaries and depositing this in bank accounts owned by the Group’s to maximise returns on cash. The Board has defined an investment strategy, which dictates the types of products to which the surplus cash may be invested and the financial limits for such investments. The Board monitors the performance of the Treasury function and is responsible for making changes to the personnel and limits of authority of Treasury personnel. The Board has provided written principles for overall risk management of the Treasury function. It has also defined policies and procedures covering such areas as foreign exchange risk, interest rate risk, credit risk, the use of derivative instruments and investment of excess liquidity (surplus funds above the immediate and short–term operational funding needs, such as working capital requirements). The key objectives for Group Treasury are to protect the principal value of cash and cash equivalents, to concentrate cash at the centre to minimise external borrowings, and to maximise the return on cash. 16(A) Fair values of financial instruments by class Generally, there is no material difference between the fair values and the carrying values of financial assets and financial liabilities held in the Group’s statement of financial position. However, given the sharp increase in market interest rates since the Group last financed its fixed rate debt, the fair value of the groups loans liabilities could differ from its carrying value. The estimated fair value of the Groups fixed rate debt at the reporting date is £48,083,000, which is £138,000 higher than its carrying value. Financial instruments held at fair value – Level 1 The Group holds an investment in Max Sight Group Holdings Ltd, which is a listed company. This investment is valued at level 1. The Group owns 109,972,500 Max Sight Group Holdings Ltd’s shares valued at 0,058 HKD per share as at 31 October 2024, giving a value at that date of £637,000. This financial instrument is valued at the reporting date by reference to quoted market prices. Financial instruments held at fair value – Level 2 There are no material Level 2 investments held by the Group. Financial instruments held at fair value – Level 3 The Group holds 125 B shares in Energy Observer Developments SAS, a privately held company, following the conversion of 100,000 convertible bonds to equity on 14 November 2023. This investment is valued at level 3 as its value is linked to the equity value of Energy Observer Developments SAS, which is not observable market data. At 31 October 2024 the investment is valued at £982,000. The 400,000 convertible bonds that were not converted to equity matured on 27 October 2024, with payment due within 120 days of maturity. The total cash due, including accrued interest, of £3,740,000 was presented in other receivables in the Group’s statement of financial position at 31 October 2024. The investment in shares was valued at the reporting date by reference to the latest equity valuation of the issuing company. The equity valuation used was based on a fund raising by the issuing company. This, in effect, gave an external, arms‑length valuation as new investors were purchasing equity based on their valuation of the company. This fund raising information is the key unobservable input to the valuation calculation. Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 152 Sensitivity to key unobservable inputs Equity valuation A 20% decrease in the equity value of Energy Observer Developments SAS would result in a decrease in valuation of £196,000. Movement in level 3 financial instruments value The following table presents the changes in level 3 financial instruments for the years ended 31 October 2023 and 31 October 2024. Convertible Bond £’000 Unlisted Equities £’000 Total £’000 Fair value at 1 November 2022 4,450 – 4,450 Foreign exchange movement recognised in other comprehensive income 65 – 65 Fair value gain recognised in non‑operating income – net 226 – 226 Fair value at 31 October 2023 4,741 – 4,741 Foreign exchange movement recognised in other comprehensive income (150) (41) (191) Conversion of bonds to shares (1,023) 1,023 – Fair value gain recognised in non‑operating income – net 172 – 172 Bonds matured (transferred to receivables) (3,740) – (3,740) Fair value at 31 October 2024 – 982 982 No assets or liabilities were transferred between levels 1,2 and 3 in the year. Financial instruments by category The tables below show financial instruments by category for the Group. At 31 October 2024 Amortised Cost £’000 Fair Value Through Profit & Loss £’000 Total £’000 Assets per statement of financial position Financial instruments held at FVTPL – 1,619 1,619 Financial assets – held at amortised cost: Trade and other receivables 18,240 – 18,240 Cash and cash equivalents 86,147 – 86,147 104,387 1,619 106,006 Other financial liabilities at amortised cost £’000 Total £’000 Liabilities per statement of financial position Borrowings 47,945 47,945 Leases 11,819 11,819 Trade and other payables 56,843 56,843 116,607 116,607 ME Group plc Annual Report 2024 153 16(A) Fair values of financial instruments by class continued At 31 October 2023 Amortised Cost £’000 Fair Value Through Profit & Loss £’000 Total £’000 Assets per statement of financial position Financial instruments held at FVTPL – 5,886 5,886 Financial assets – held at amortised cost: Trade and other receivables 11,286 – 11,286 Cash and cash equivalents 111,091 – 111,091 122,377 5,886 128,263 Other financial liabilities at amortised cost £’000 Total £’000 Liabilities per statement of financial position Borrowings 77,174 77,174 Leases 13,336 13,336 Trade and other payables 57,921 57,921 148,431 148,431 16(B) Financial risk management Financial risk factors and financial risk management Overview The Group is exposed to the following risks arising from financial instruments: (i) Credit risk (ii) Liquidity risk (iii) Market risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. It mainly arises on trade and other receivables and bank balances. Liquidity risk arises from the Group having insufficient cash resources to meet its obligations as and when they fall due for payment. A material and sustained shortfall in the Group’s cash flow could undermine the Group’s credit rating, impair major investor confidence and restrict the ability of the Group to raise new funds. Market risk arises from changes in market prices, such as exchange rates, interest rates and equity prices that will impact on the Group’s statement of comprehensive income or the value of its holding of financial instruments. Listed below are details of these risks, the Group’s objectives, policies and processes for measuring and monitoring risks and the Group’s management of capital. Risk Management Framework The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential risks for the Group. There is a continuous process for identifying, evaluating and managing the key financial risks faced by the Group in line with changing market conditions and the Group’s strategy. If necessary, the Group’s internal audit function may assist in monitoring and assessing the effectiveness of controls and procedures. The Board retains responsibility for ensuring the adequacy of systems for identifying and assessing significant risks, that appropriate control systems and other mitigating actions are in place and that residual exposures are consistent with the Group’s strategy and objectives. Assessments are conducted for all material entities. Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 154 The Group may use derivatives to manage exchange or interest rate risk. Approval for their use is given by the Board and the position is monitored constantly. With regard to management of interest rate risk, the objectives are to lessen the impact of adverse interest rate movements on earnings and shareholders’ funds and to ensure no breach of covenants. This is mainly achieved by reviewing the mix of fixed and floating rate borrowings. The Group’s liquidity risk management involves maintaining sufficient cash and cash equivalents and the availability of funding through an adequate amount of committed credit facilities. (i) Credit risk The Group has no significant concentrations of credit risk. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, and on outstanding trade and other receivables. Cash deposits are limited to high credit quality financial institutions. The Group has policies in place to ensure that sales of products and services are made to customers with an approved credit history. Credit quality of financial assets Cash and cash equivalents Individual Group companies have banking relationships with leading banks in the country in which the Group company operates. Surplus cash is placed with Group Treasury bank accounts, as described above. The Group has procedures in place to ensure that cash is placed with sound financial institutions. Accounts receivable The Group trades with a large number of customers, ranging from quoted companies and state organisations to individual traders. Individual Group companies have credit control procedures in place before making sales to new customers and levels of credit are reviewed in light of trading experience. The normal terms of settlement are in the range 30–90 days. Trade receivables are normally interest free. The collection of outstanding receivables is monitored at both the Group and subsidiary level. Under the Group’s operating model, most revenue is collected at the point of sale. Where credit terms are offered, the Group has a strong record of debtor recovery. The maximum credit risk for financial assets is the carrying value. Expected credit losses (ECL) The Group makes allowances for ECL against trade receivables and contract assets, by applying the simplified ECL model. Due to the low volume of receivables accounts, the Group’s approach is to assess on an account‑by‑account basis, rather than organising accounts into groupings. ECL are determined for each receivables account, by reference to the customer’s past payment performance and latest information on the customer. Where the Group has open work in progress or where technical issues are preventing the proper operation of the vending unit in question, these factors are taken into consideration when determining the ECL. Trade receivables and contract assets are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the group, and a failure to make contractual payments for a period of greater than 120 days past due. ECL allowances against trade receivables and contract assets are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item. The Group does not require collateral in respect of trade and other receivables. The Group does not have trade receivable and contract assets for which no loss allowance is recognised because of collateral. ME Group plc Annual Report 2024 155 16(B) Financial risk management continued The ageing of net current trade receivables is as follows: 31 October 2024 31 October 2023 Gross trade receivables £’000 Allowance for expected credit losses £’000 Trade receivables £’000 Gross trade receivables £’000 Allowance for expected credit losses £’000 Trade receivables £’000 Current 3,709 – 3,709 3,847 – 3,847 Past due – overdue 1‑30 days – – – – – – – overdue 31‑60 days 407 – 407 289 – 289 – overdue 61 days 2,865 (882) 1,983 2,378 (1,326) 1,052 Total past due 3,272 (882) 2,390 2,667 (1,326) 1,341 Total trade receivables 6,981 (882) 6,099 6,514 (1,326) 5,188 The credit quality of trade receivables that are neither past due nor impaired is assessed on an individual basis, based on credit ratings and experience. Management believes an adequate allowance for expected credit losses has been made for trade receivables. Other receivables Other receivables usually consist one‑off non‑trading items. As these balances are low in volume, management assesses their recoverability on an item‑by‑item basis, making provisions for expected non‑recovery as necessary. (ii) Liquidity risk The Group’s liquidity risk management involves maintaining sufficient cash and cash equivalents and the availability of funding through an adequate amount of committed credit facilities. Trading forecasts indicate that the current facilities provide more than sufficient liquidity headroom to support the business for the foreseeable future. The Group’s strong cash generation and net cash position at 31 October 2024 and 31 October 2023 mitigates its liquidity risk. The Group largely finances its working capital and capital expenditure programmes from its own resources. During the current period and prior period surplus cash held by the operating subsidiaries, over and above balances required for working capital management was transferred to Group Treasury. These funds were deposited in interest bearing, centrally managed, bank accounts. The Group has undrawn facilities totalling 2 million euros and having regard to the Group’s cash flow, it is considered that the facilities provide adequate headroom for the Group’s needs. The facilities are generally reaffirmed by the banks annually. These undrawn facilities, if used, will be subject to floating rates of interest and may be subject to the normal covenant conditions attached to such borrowings. Some of the Group’s loans are subject to covenants and, during the years to 31 October 2024 and 31 October 2023, the Group has comfortably complied with such requirements. The nature of the covenants are ratio of EBITDA to debt, ratio of debt to equity, ratio of net interest to EBITDA, free cashflow and profit requirements. Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 156 The table below summarises the maturity profile of the Group’s financial liabilities (including trade and other payables) at 31 October 2024 and 31 October 2023 based on contractual undiscounted payments. Group contractual cashflows Within one year £’000 Year 2 £’000 Year 3 £’000 Year 4 £’000 Year 5 £’000 Over 5 years £’000 Total £’000 At 31 October 2024 Interest bearing loans and borrowings 19,796 16,910 10,342 711 472 428 48,659 Leases 5,195 3,340 1,918 1,281 588 986 13,308 Trade and other payables 56,843 – – – – – 56,843 81,834 20,250 12,260 1,992 1,060 1,414 118,810 At 30 October 2023 Interest bearing loans and borrowings 27,676 20,663 17,655 10,819 771 976 78,560 Leases 6,243 4,061 2,376 1,462 1,026 1,331 16,499 Trade and other payables 57,921 – – – – – 57,921 91,840 24,724 20,031 12,281 1,797 2,307 152,980 Financial instruments held at amortised cost These largely comprise of restricted bank deposit accounts where the cash acts as security against possible shortfalls in Group’s UK pension fund obligation. (iii) Market risk Foreign exchange risk The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than the local functional currency. In addition, the Group faces currency risks arising from monetary financial instruments held in non‑functional currencies. The income statement reflects the impact of realised and unrealised exchange differences on trading items and monetary financial instruments (note 5). The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. The main currency translation risk relates to foreign operations whose functional currency is the Euro, Swiss Franc or Japanese Yen. The investments are not hedged. The translation reserve reflects the exchange differences arising on translation of the opening net assets and results of the foreign operation (note 21). Operational foreign exchange exposure Where possible, the Group tries to invoice in the local currency of the respective entity. If this is not possible, to mitigate exposure, the Group endeavours to buy from suppliers and sell to customers in the same currency. The exposure relating to receivables and payables denominated in the non‑functional currency is normally less than 3 months as this is the normal settlement period for these items. Subject to the requirements of Group Treasury, where possible, the Group tries to hold the majority of its cash and cash equivalent balances in the local currency of the respective entity. Monetary assets and liabilities The Group continues to monitor exchange rates and buy or sell currencies in order to minimise the open exposure to foreign exchange risk. The Group may use derivative financial instruments mainly to reduce the risk of foreign exchange exposure on trading items (sales or purchases in currencies other than the domestic currency of the company concerned) and interest rate movements. The Group does not hold or issue derivative financial instruments for financial trading purposes. Borrowings At 31 October 2024 and 31 October 2023 the majority of the Group’s borrowings were denominated in Euros and held by subsidiaries whose functional currency is the Euro. ME Group plc Annual Report 2024 157 16(B) Financial risk management continued Analysis of monetary assets and liabilities by currency At 31 October 2024 Sterling £’000 Euro £’000 Swiss Franc £’000 Japanese Yen £’000 Other Currencies £’000 Total £’000 Assets per statement of financial position Financial instruments held at FVTPL 637 982 – – – 1,619 Trade and other receivables 3,063 12,972 56 1,430 718 18,239 Cash and cash equivalents 6,805 62,233 4,640 11,264 1,205 86,147 10,505 76,187 4,696 12,694 1,923 106,005 Liabilities per statement of financial position Borrowings and Leases 1,160 52,157 242 6,205 – 59,764 Trade and other payables 6,915 43,225 2,067 3,952 684 56,843 8,075 95,382 2,309 10,157 684 116,607 At 31 October 2023 Sterling £’000 Euro £’000 Swiss Franc £’000 Japanese Yen £’000 Other Currencies £’000 Total £’000 Assets per statement of financial position Financial instruments held at FVTPL 1,145 4,741 – – – 5,886 Trade and other receivables 1,406 6,968 173 2,210 529 11,286 Cash and cash equivalents 17,769 77,828 6,198 8,200 1,096 111,091 20,320 89,537 6,371 10,410 1,625 128,263 Liabilities per statement of financial position Borrowings and Leases 1,635 80,351 296 8,194 34 90,510 Trade and other payables 8,426 42,437 2,415 3,995 648 57,921 10,061 122,788 2,711 12,189 682 148,431 IFRS 7 sensitivity analysis Sensitivity analysis has been performed on the Group’s Euro foreign exchange risk, as its most material foreign currency. A 10% strengthening of Euro against Sterling, at the Statement of Financial Position date, would have caused a £1,253,000 decrease in the Group’s net assets at that date (2023: £2,906,000 decrease in net assets). A 10% weakening of Euro against Sterling would have had the equal and opposite effect on the Group’s net assets. Interest rate risk 2024 Carrying amount £’000 2023 Carrying amount £’000 Net cash Mainly non‑interest bearing current accounts: Cash at bank and in hand 72,669 70,669 Deposit accounts – generally interest bearing: Bank deposit accounts 13,478 40,422 Other items Interest bearing loans (47,945) (77,174) 38,202 33,917 The above table shows which components of net debt are subject to interest. The Group has no exposure to floating rate interest bearing debt and a change in interest rates will not have a material change on interest expense. Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 158 IFRS 7 sensitivity analysis All of the Group’s debt is subject to fixed rates of interest, so interest payable charges would not be materially impacted by a change in interest rates. Consequently, no sensitivity tables have been presented. Details of the Group’s borrowings are shown in the table below. All loans are subject to fixed rates of interest. A theoretical increase of 1% in the fixed rate of interest would result in an extra £479,000 (31 October 2023: £772,000) of interest expense. This sensitivity is purely illustrative as the Groups debt is not subject to an interest rate risk. Terms and debt repayment schedule The table below shows the maturity profile and interest rates of the Groups borrowings at 31 October 2024 and 31 October 2023. Group Status Currency Interest Rate Year of maturity 2024 Carrying amount £’000 2023 Carrying amount £’000 Loans Fixed rate Euro 0,28% – 1,57% 2025 – 2027 42,957 69,975 Loans Fixed rate Japanese Yen 0,54% – 1,15% 2028 – 2030 4,986 7,199 Lease liabilities Fixed rate Various 0,3% – 18.6% 2024 – 2033 11,820 13,336 59,763 90,510 Price risk The Group is exposed to changes in prices on raw materials, consumables and finished goods purchased from suppliers. Wherever possible, price rises are passed on to customers via sales price increases to help manage this risk. The Group’s investments in listed and unlisted equity securities are not material thus the Group does not have any significant exposure to price risk on these equity investments. 16(C) Capital risk management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern and to enhance long‑term shareholder value, by investing in the business so as to improve the return on investment (by increasing profits available for dividends) and by managing the capital gearing ratio (mixture of equity and debt). The Group manages, and makes adjustments to, its capital structure in light of the prevailing risks and economic conditions affecting its business activities. This may involve adjusting the rate of dividends, purchasing the Company’s own shares, the issue of new shares and reviewing the level and type of debt. The Group manages its borrowings by appraising the mix of fixed and floating rate borrowings and the mix of long‑term and short‑term borrowings. Details of how the Group and subsidiaries are funded are shown below. There were no changes to the Group’s approach to capital management during the period. Group The Group is funded by share capital and retained earnings; supplemented by external borrowing as required. The Group has had a strong net cash position throughout the current and comparative period. Subsidiary companies Subsidiary companies are funded by share capital and retained earnings, and where applicable local borrowings by the subsidiaries in appropriate currencies. ME Group plc Annual Report 2024 159 16(C) Capital risk management continued The capital structure of the Group is presented below. 31 October 2024 £’000 31 October 2023 £’000 Cash and cash equivalents 86,147 111,091 Borrowings (47,945) (77,174) Net cash 38,202 33,917 Equity 179,871 158,988 The Group has various borrowings and available facilities that contain certain external capital requirements (covenants) that are considered normal for these types of arrangements. The Group remains comfortably within all such covenants. 17 Trade and other receivables 31 October 2024 £’000 31 October 2023 (restated) £’000 Non‑current assets Other receivables 2,814 3,005 2,814 3,005 Current assets Gross trade receivables 6,981 6,514 Allowance for expected credit losses (882) (1,326) Trade receivables 6,099 5,188 Other receivables 9,327 3,093 Prepayments 3,866 3,980 19,292 12,261 All trade receivables arise from contracts with customers. Non‑current other receivables includes restricted deposits in relation to the Group’s pension schemes. Current other receivables at 31 October 2024 include £3.7m due from the maturity of convertible bonds (2023: nil). See note 16 for further details. 18 Inventories 31 October 2024 £’000 31 October 2023 £’000 Raw materials and consumables 25,794 25,484 Finished goods 12,271 7,017 38,065 32,501 The replacement value of inventories is not materially different from that stated above. Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 160 19 Cash and cash equivalents 31 October 2024 £’000 31 October 2023 £’000 Cash at bank and in hand 72,668 70,669 Deposit accounts 13,479 40,422 Cash and cash equivalents per statement of financial position 86,147 111,091 Deposit accounts have an original maturity term of less than three months. The amounts placed in short‑term deposit accounts depend on the immediate cash requirements of the Group. Interest was earned on deposits at rates between 2.90% and 4.75% in the year (2023: 2.90% to 2.93%). Cash at bank is generally interest free but may earn interest at the applicable daily bank floating deposit rate. 20 Net cash Notes 31 October 2024 £’000 31 October 2023 £’000 Cash and cash equivalents per statement of financial position 19 86,147 111,091 Non‑current borrowings 23 (28,547) (50,137) Current borrowings 23 (19,398) (27,037) Net Cash 38,202 33,917 Net cash is a non‑GAAP measure since it is not defined in accordance with IFRS but is a key indicator used by management in assessing operational performance and financial position strength. The inclusion of items in net cash as defined by the Group may not be comparable with other companies’ measurement of net cash/debt. The Group defines net cash as cash and cash equivalents less current and non‑current borrowings outstanding, excluding lease liabilities of £11,819,000 (2023: £13,336,000). Reconciliation of movement in liabilities arising from financing activities Non cash movements Cash movements 1 November £’000 Exchange differences £’000 New lease liabilities £’000 Other movements £’000 Repayment of liabilities £’000 New loans £’000 31 October £’000 31 October 2024 Non‑current loans 50,137 (2,194) – (18,245) (1,151) – 28,547 Non‑current lease liabilities 8,310 (409) 3,260 (4,061) 310 – 7,410 Non‑current liabilities arising from financing activities 58,447 (2,603) 3,260 (22,306) (841) – 35,957 Current loans 27,037 (1,138) – 18,245 (25,898) 1,152 19,398 Current lease liabilities 5,026 (88) 1,653 4,061 (6,243) – 4,409 Current liabilities arising from financing activities 32,063 (1,226) 1,653 22,306 (32,141) 1,152 23,807 Total liabilities arising from financing activities 90,510 (3,829) 4,913 – (32,982) 1,152 59,764 31 October 2023 Non‑current loans 72,365 778 – (25,243) (744) 2,981 50,137 Non‑current lease liabilities 10,064 157 657 (2,568) – – 8,310 Non‑current liabilities arising from financing activities 82,429 935 657 (27,811) (744) 2,981 58,447 Current loans 29,799 375 – 25,243 (30,216) 1,836 27,037 Current lease liabilities 5,858 (4) 2,462 2,568 (5,858) – 5,026 Current liabilities arising from financing activities 35,657 371 2,462 27,811 (36,074) 1,836 32,063 Total liabilities arising from financing activities 118,086 1,306 3,119 – (36,818) 4,817 90,510 ME Group plc Annual Report 2024 161 21 Share capital and reserves Share Capital 31 October 2024 Number 31 October 2023 Number 31 October 2024 £’000 31 October 2023 £’000 Allotted, issued and fully paid: Ordinary shares of 0.5p each At the beginning of the period 378,454,879 378,051,637 1,891 1,889 Issued in year – share options exercised 677,500 403,242 3 2 Cancellation of shares held in treasury (2,368,626) – (12) – At the end of the period 376,763,753 378,454,879 1,882 1,891 The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. Reserves Treasury shares Number of Shares Cost* £’000 Proportion of ordinary issued share capital Shares held in treasury at 1 November 2022 – – – Purchase of own shares 1,260,534 1,969 – Shares held in treasury at 31 October 2023 1,260,534 1,969 0.33% Purchase of own shares 1,108,092 1,425 – Cancellation of shares held in treasury (2,368,626) (3,394) – Shares held in treasury at 31 October 2024 – – 0.00% * Purchase cost including transaction costs At the Annual General Meeting on 18 August 2023, a shareholders’ resolution was passed permitting the Company to purchase its own shares up to a maximum of 10% of the Ordinary shares in issue. In the year ended 31 October 2024 the Company purchased, on various dates and at various prices, 1,108,092 shares at a combined cost of £1,425,000 including £6,000 transaction costs, bringing the total number of shares purchased since the resolution to 2,368,626 at a combined cost of £3,394,000. The shares were purchased at an average price of 133.17 pence per ordinary share. On 12 July 2024 the Board of the Company passed a resolution to cancel all of its 2,368,626 ordinary shares of 0.5 p each held in treasury. The cancellation took place on the same date. The cancellation is reflected in the statement of financial position as a reduction in share capital and retained earnings. The treasury shares had no voting or dividend rights. Share premium Share premium reserve is the cumulative value of the excess received for shares above their nominal value. Capital redemption reserve The capital redemption reserve is a statutory, non-distributable reserve into which amounts are transferred following the purchase and cancellation of the Company’s own shares. Other reserves Includes the share‑based payment reserve on equity settled schemes. The share‑based payment reserve is generally distributable. The other reserve accounts included within this category mainly arise in subsidiaries, are generally not distributable, and arise as a result of local legislation regarding capital maintenance. Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 162 Translation reserve The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries and associates. In accordance with the options allowed under IFRS 1, only exchange rate differences arising on translation after the date of transition, 1 May 2004, are shown in this reserve. When an overseas subsidiary or associate is disposed, the cumulative exchange difference relating to the entity disposed is recycled through the statement of comprehensive income as part of the profit or loss on sale in other net gains/(losses) and is shown as a movement in other comprehensive income. 22 Share‑based payments Share options, which have been granted to senior staff, including directors, to purchase Ordinary shares of 0.5p each, are as follows: Date options granted At 31 October 2023 Exercise price Granted during year Lapsed or forfeited during year Exercised during year At 31 October 2024 Date from which exercisable Last date on which exercisable 27‑Aug‑19 594,752 101.40p – – – 594,752 27‑Aug‑22 26‑Aug‑26 19‑Apr‑21 925,000 61.40p – (40,000) (625,000) 260,000 19‑Apr‑24 19‑Apr‑28 05‑Aug‑21 1,799,774 77.50p – (143,000) (37,500) 1,619,274 05‑Aug‑24 05‑Aug‑28 12‑May‑22 1,750,000 68.73p – (212,500) (7,500) 1,530,000 12‑May‑25 12‑May‑29 04‑Apr‑23 1,939,947 126.70p – (50,000) – 1,889,947 04‑Apr‑26 03‑Apr‑30 19‑Jul‑23 357,500 163.10p – – (7,500) 350,000 19‑Jul‑26 19‑Jul‑30 22‑Aug‑24 – 192.33p 1,115,000 – – 1,115,000 22‑Aug‑27 22‑Aug‑34 23‑Sep‑24 – 192.33p 90,000 – – 90,000 23‑Sep‑27 22‑Sep‑34 7,366,973 1,205,000 (445,500) (677,500) 7,448,973 All options can be exercised, in normal circumstances, within a period of between four and seven years from the exercise of option date, providing that the performance criterion or performance condition has been achieved. The subscription price for all options is based upon the average market price on the three days prior to the date of grant. Options are restricted, or may lapse, if the grantee leaves the employment of the Group before the first exercise date. All options are equity settled options. Options granted after 2005 are covered by the new Me Group Executive Share Option Scheme. The vesting of options is subject to an EPS‑based performance condition relating to the extent to which the Group’s basic EPS for the third financial year, following the date of grant, reaches a sliding scale of challenging EPS targets. Options are normally granted over shares worth up to 150% of a participant’s salary each year. In exceptional cases as part of the terms of attracting senior management, options in excess of that number may be granted. The weighted average exercise price of all options outstanding at 31 October 2024 is 112.213p (2023: 88.83p) and the weighted average exercise price of options exercisable at 31 October 2024 is 81.55p (2023: 101.40p). The weighted average share price for options exercised during the period ended 31 October 2024 was 173.82p (31 October 2023: 154.43p). The weighted average remaining years for options outstanding at the period‑end date is 6.3 years (2023: 5.2 years). ME Group plc Annual Report 2024 163 22 Share‑based payments continued Share‑based payments expense In accordance with IFRS 2 Share‑based Payments, share options granted to senior management including directors after November 2002 have been fair‑valued and the Group has used the Black‑Scholes option pricing model. This model takes into account the terms and conditions under which the options were granted. The following table lists the inputs to the model used for the years ended 31 October 2024 and 31 October 2023: Date of grant 4 October 2019 5 October 2020 19 April 2021 Vesting period 3 years 3 years 3 years Share price volatility 32.59% 31.64% 51.40% Share price on date of grant 92.80p 42.30p 63.20p Option price 93.30p 93.30p 61.40p Expected term 3.25 years 3.25 years 3.25 years Dividend yield 3.98% 0.00% 0.00% Risk free interest rate 0.00% 0.00% 0.17% Fair value 41.99p 22.97p 34.89p Date of grant 5 August 2021 5 October 2021 12 May 2022 Vesting period 3 years 3 years 3 years Share price volatility 77.50% 49.48% 49.91% Share price on date of grant 77.50p 65.50p 65.20p Option price 77.50p 61.10p 68.73p Expected term 3.25 years 3.25 years 3.25 years Dividend yield 0.00% 0.00% 4.43% Risk free interest rate 0.15% 0.56% 1.24% Fair value 28.18p 24.47p 25.17p Date of grant 4 April 2023 19 July 2023 22 August 2024 Vesting period 3 years 3 years 3 years Share price volatility 52.91% 40.51% 35.96% Share price on date of grant 127.40p 159.00p 191.80p Option price 126.70p 163.10p 192.33p Expected term 3.25 years 3.25 years 3.25 years Dividend yield 4.40% 4.14% 4.10% Risk free interest rate 3.35% 4.53% 3.84% Fair value 59.25p 60.26p 62.93p Date of grant 23 September 2024 Vesting period 3 years Share price volatility 35.74% Share price on date of grant 190.20p Option price 192.33p Expected term 3.25 years Dividend yield 3.75% Risk free interest rate 3.69% Fair value 60.62p The charge for share‑based payments is £795,000 (2023: £345,000). Share price volatility is based on historical data. Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 164 23 Financial liabilities 31 October 2024 £’000 31 October 2023 £’000 Non‑current liabilities Non‑current instalments due on bank loans 28,547 50,137 Current liabilities Current instalments due on loans 19,398 27,037 Bank loans bear fixed rates of interest and vary between 0.28% and 1.57%. Further details are provided in note 16. Lease Liabilities In addition to bank loans, the Group has lease liabilities of £11,819,000 (2023: £13,336,000). The Group has lease arrangements across three main categories: site agreements, property and motor vehicles. The key quantitative information regarding the lease portfolio is shown below: As at 31 October 2024 Site agreements Property Motor vehicles Number of lease agreements 481 7 600 Average lease term (months) 103 100 39 Average remaining term (months) 43 47 20 As at 31 October 2023 Site agreements Property Motor vehicles Number of lease agreements 618 9 507 Average lease term (months) 80 74 41 Average remaining term (months) 50 41 22 The maturity profile of lease liabilities is shown below: Within one year £’000 Year 2 £’000 Year 3 £’000 Year 4 £’000 Year 5 £’000 Over 5 years £’000 Total £’000 At 31 October 2024 Leases 5,195 3,340 1,918 1,281 588 986 13,308 At 31 October 2023 Leases 6,243 4,061 2,376 1,462 1,026 1,331 16,499 24 Post‑employment benefit obligations The Parent Company and its principal subsidiaries (the “Group”) operate pension and other retirement and post‑employment schemes including both funded defined benefit schemes, and defined contribution schemes. Defined benefit plans A defined benefit plan is a pension arrangement under which participating members receive a benefit at retirement. The amount is determined by the plan rules and is dependent on such factors as age, years of service and pensionable pay and is not dependent on contributions made by the employing company or members. The income statement service cost, in respect of defined benefit plans represents the increase in the defined benefit liability arising from pension benefits accrued by members in the current experience being different to those assumptions and the return on plan assets above the amount included in net pension interest. Defined contribution plans are arrangements in which the benefits paid to participants are linked to the amount of contributions paid and the performance of the scheme. Such plans are independent of the Group and the Group has no exposure to investment and experience risks. The income statement charge for these plans represents the contributions paid by the Group based on a percentage of employees’ pay. ME Group plc Annual Report 2024 165 24 Post‑employment benefit obligations continued The Group’s defined benefit pension schemes are included in the statement of financial position under employment benefit obligations, as are other overseas retirement provisions. The amounts charged to profit and loss for all post‑employment benefits are shown in note 7. The amount shown in the statement of financial position is detailed as follows: 31 October 2024 £’000 31 October 2023 £’000 Overseas employment benefit obligations 4,119 3,847 Defined benefit schemes 283 216 4,402 4,063 Me Group International plc defined benefit pension scheme The Parent Company (the “Company”) runs a defined benefit pension scheme, the Photo‑Me International Plc Pension and Life Assurance Fund (the “Fund”). This note covers the pension obligations provided from the Fund. The Fund is administered by a corporate Trustee, with Trustee Directors, which is legally separate from the Company. The Trustee Directors include representatives of both the Company and Fund members. The Trustee Directors are required by law to act in the interest of all relevant beneficiaries and are responsible for the investment policy with regard to the assets plus the day to day administration of the benefits. The level of benefits provided by the Fund depends on a member’s length of service and salary at date of leaving or retiring from the Fund. Annual pension increases between leaving the Fund and retirement are linked to increases in the Retail Prices Index (RPI). After retirement, annual pension increases are at 3.0% pa for pension accrued before April 1997 and in line with increases in the Retail Prices Index (RPI), up to a maximum of 5.0% pa, for pension accrued from April 1997. The benefit payments are from a trustee administered fund containing assets held in trust and governed by UK regulations and practice. The amount of Company contributions is decided jointly by the Trustee Directors and the Company. The Fund’s investment strategy is decided by the Trustee Directors, in consultation with the Company. The Trustee Directors exercise their powers of investment (or delegation where these powers have been delegated to a fund manager) in a manner calculated to ensure the security, quality, liquidity and profitability of the portfolio as a whole. In order to avoid an undue concentration of risk a spread of assets is held. The diversification is both within and across asset classes. The assets are invested in a manner appropriate to the nature and duration of the expected future retirement benefits payable under the Fund. Day to day selection of stocks is delegated to fund managers appointed by the Trustee Directors. As regards the review and selection of their fund managers, the Trustee Directors take expert advice. The actuarial valuation of the UK Pension scheme has revealed a surplus at 31 October 2024 and at each financial statement date since 30 April 2017. This surplus has not been recognised as an asset, in accordance with IFRIC 14, as in the future the surplus will not be recovered by a reduction in future contributions to the scheme. The scheme has been closed to new members for over 30 years. Profile of the Fund The defined benefit obligation includes benefits for deferred pensioners and current pensioners. The defined benefit obligation is broadly split 99%/1% between pensioners and deferred members. The defined benefit obligation for certain current pensioners is backed by insurance policies. A corresponding asset equal to the defined benefit obligation is included in this note in respect of these members. The Fund duration is an indicator of the weighted‑average time until benefit payments are made. For the Fund as a whole, the duration is around 8 years. Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 166 Funding requirements UK legislation requires that pension schemes are funded prudently. The most recent triennial funding valuation of the Fund was carried out by a qualified actuary with an effective date of 1 June 2021. At this date the Fund had a funding level of 102% and a surplus of approximately £0.2 million on a technical provisions basis. This basis uses actuarial assumptions adopted by the Trustee Directors of the Fund that are consistent with the Fund continuing on an ongoing basis with support from the Company. The last active member ceased employment with the Company in 2020 so contributions are no longer required in respect of the accrual of benefits in the Fund. Risks associated with the Fund The Fund exposes the Company to a number of risks, the most significant of which are described below. Asset volatility The liabilities are calculated using a discount rate set with reference to corporate bond yields; if assets underperform this yield, this will create a deficit. Changes in bond yields A decrease in corporate bond yields will increase the value placed on the Fund’s liabilities for IAS 19, although this will be partially offset by an increase in the value of the Fund’s bond holdings and insurance policies backing pensions in payment. Inflation risk Some of the Fund’s benefit obligations are linked to inflation, and higher inflation will lead to higher liabilities (although, in most cases, caps on the level of inflationary increases are in place to protect against extreme inflation). In addition, increases in expected inflation will be offset by an increase in the value of the Fund’s index‑linked bond holdings and insurance policies backing pensions in payment. Life expectancy The majority of the Fund’s obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the liabilities. Increases in life expectancy will be partially offset by an increase in the value of the insurance policies backing pensions in payment. Reconciliation of the movement in the present value of the defined benefit obligation 31 October 2024 £’000 31 October 2023 £’000 Present value of defined benefit obligation at beginning of the period 3,685 4,364 Current service cost – – Interest cost 197 206 Actuarial (gains) on fund liabilities arising in demographic assumptions (4) (70) Actuarial losses/(gains) from changes in financial assumptions 84 (225) Actuarial losses/(gains) on liabilities from experience 29 (268) Benefits paid (329) (322) Present value of defined benefit obligation at end of the period 3,662 3,685 Reconciliation of the movement in the fair value of plan assets 31 October 2024 £’000 31 October 2023 £’000 Fair value of plan assets at beginning of the period 4,001 4,769 Interest income on fund assets 215 226 Remeasurement gains/(losses) on assets 71 (672) Benefits paid (329) (322) Fair value of plan assets at end of the period 3,958 4,001 ME Group plc Annual Report 2024 167 24 Post‑employment benefit obligations continued Amount to be recognised in the statement of financial position 31 October 2024 £’000 31 October 2023 £’000 Present value of funded obligations 3,662 3,685 Fair value of scheme assets 3,958 4,001 Net surplus (296) (316) Effect of limit of recognition of an asset 296 316 Amount recognised in statement of financial position – – Amount recognised in profit and loss 31 October 2024 £’000 31 October 2023 £’000 Amount recognised in profit and loss Current service cost – – Interest on net defined liability/(asset) – – Total charge – – Pension expense recognised in profit and loss – – Remeasurement in Other Comprehensive Income Return on Scheme assets in excess of that recognised in net interest (71) 672 Actuarial losses/(gains) due to changes in financial assumptions 84 (225) Actuarial (gains) due to changes in demographic assumptions (4) (70) Actuarial losses/(gains)/losses on liabilities arising from experience 29 (268) Adjustment due to the asset ceiling (38) (109) Total expense/(income) amount recognised in Other Comprehensive Income – – Total expense amount recognised in Comprehensive Income – – The amounts shown above are included in staff costs (note 7) and in administrative expenses. An analysis of the assets of the plan is as follows: 31 October 2024 31 October 2023 £’000 % £’000 % Bonds and insurance policies 3,810 96 3,892 97 Other 148 4 109 3 3,958 100 4,001 100 There were no financial instruments of the Company included in the plan assets (2023: none) and there were no property assets occupied by the Company (2022: none). Principal actuarial assumptions 31 October 2024 % 31 October 2023 % Discount rate for scheme liabilities 5.3 5.6 Rate for increase in salaries n/a n/a Price inflation 3.2 3.2 Pension increases 3.0 3.0 Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 168 The mortality tables used for 2024 are S3NXA Light tables for males and S3NXA All lives for females, with CMI 2023 projections and a long‑term rate of improvement of 1.25% pa. The mortality tables used for 2023 were also S3NXA Light tables, but with CMI 2022 projections and a long term rate of improvement of 1.25% pa. The mortality assumptions allow for expected future improvements in mortality rates. 31 October 2024 31 October 2023 Male currently aged 65 23.3 years (age 88.3) 23.3 years (age 88.3) Female currently aged 65 24.8 years (age 89.8) 24.7 years (age 89.7) History of asset values, defined benefit obligation and surplus/deficit in fund 2024 £’000 2023 £’000 2022 £’000 2021 £’000 2020 £’000 Fair value of defined benefit obligation 3,685 3,685 4,364 5,788 6,267 Fair value of assets 3,662 4,001 4,769 6,641 7,040 Surplus/(deficit) 296 316 405 853 773 History of experience gains and losses 2024 £’000 2023 £’000 2022 £’000 2021 £’000 2020 £’000 Experience gains/(losses) on fund assets 71 (672) (1,645) (170) 622 Experience (losses)/gains on plan liabilities (29) 268 (84) 79 (67) Liabilities for 2024, 2023, 2022, 2021 and 2020 relate to gains/(losses) in respect of liability experience only, and excludes any change in liabilities in respect of changes to the actuarial assumptions used. Sensitivity to key assumptions The key assumptions used for the IAS 19 valuation are: discount rate, inflation rate and mortality. If different assumptions were used, this could have a material effect on the results disclosed. The table below shows the sensitivity to the key assumptions noted above. Period ended 31 October 2024 Plan assets £’000 Defined benefit obligation £’000 Surplus £’000 As reported 3,958 3,662 296 Following a 0.1% decrease in the discount rate 3,966 3,691 275 Following a 0.1% increase in the inflation assumption 3,959 3,671 288 Following an increase in the life expectancy of one year 4,046 3,844 202 The sensitivity information shown above has been prepared using the same method as adopted when adjusting the results of the latest valuation to the statement of financial position data. This is the same approach as has been adopted in previous years. ME Group plc Annual Report 2024 169 24 Post‑employment benefit obligations continued Overseas pension schemes The Group’s Swiss subsidiary, Me Group Switzerland AG participates in funded multi‑employer pension schemes. A guaranteed return for such employees’ schemes is mandated by the Swiss state. An actuarial valuation was performed at 31 October 2024 and 31 October 2023 by independent actuaries. Reconciliation of the movement in the present value of the defined benefit obligation 31 October 2024 £’000 31 October 2023 £’000 Present value of defined benefit obligation at start of the period 2,930 2,898 Exchange difference (61) 136 Contribution by members 37 33 Current service cost 130 126 Past service cost (24) (18) Interest cost 56 71 Remeasurement losses/(gains) on plan liabilities 282 (56) Prepaid risk premiums (37) (36) Benefits paid (302) (225) Administration costs 1 1 Present value of defined benefit obligation at end of the period 3,012 2,930 31 October 2024 £’000 31 October 2023 £’000 Fair value of plan assets at start of the period 2,714 2,740 Exchange difference (56) 127 Contributions by company and members 185 166 Expected return on plan assets 52 67 Remeasurement gains/(losses) on plan assets 173 (125) Benefits paid (302) (225) Prepaid risk premiums (37) (36) Fair value of plan assets at end of the period 2,729 2,714 31 October 2024 £’000 31 October 2023 £’000 Net liability at start of the period 216 158 Exchange difference (5) 8 Increase/(decrease) in liability 72 49 Net liability at end of the period 283 216 Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 170 Amounts recognised in comprehensive income 31 October 2024 £’000 31 October 2023 £’000 Amount recognised in profit and loss: Amounts recognised in comprehensive income: Current service cost 130 127 Past service cost (24) (18) Administrative expenses 1 1 Net pension interest 4 4 Total charge 111 114 Amount recognised in other comprehensive income: Gain on scheme assets (173) 125 Actuarial losses on defined benefit obligation 282 (56) Total amount recognised in other comprehensive income 109 68 Total amount recognised in profit and loss and other comprehensive income 220 182 31 October 2024 30 October 2023 £’000 % £’000 % Cash 28 1 27 1 Equities & debt instruments 1,856 68 1,954 68 Other 846 31 733 31 Total plan assets 2,729 100 2,714 100 Principal actuarial assumptions 31 October 2024 % 31 October 2023 % Discount rate 1.10 2.00 Expected return on plan assets at end of year n/a n/a Rate of increase in salaries 1.20 1.20 Price inflation 1.00 1.00 The normal retirement age for males is between 60 – 65 years and for females between 59 – 64 years for both 2024 and 2023. The mortality tables used in 2024, 2023, 2022 and 2021 were the BVG 2020 GT tables The mortality tables used in 2020 were the BVG 2015 GT tables. ME Group plc Annual Report 2024 171 24 Post‑employment benefit obligations continued History of assets, liabilities and actuarial gains and losses 2024 £’000 2023 £’000 2022 £’000 2021 £’000 2020 £’000 Present value of defined benefit obligation 3,012 2,930 2,898 3,621 4,792 Fair value of assets 2,729 2,714 2,740 3,113 3,615 Deficit (283) (216) (158) (508) (1,177) 2024 £’000 2023 £’000 2022 £’000 2021 £’000 2020 £’000 Experience (losses)/gains on plan liabilities (282) 56 658 436 (93) – as a percentage of the present value of plan liabilities (9%) (2%) (23%) (12%) 2% Remeasurement gains/(losses) on plan assets 173 (125) (276) 166 (69) – as a percentage of the present value of plan assets 6% (5%) (10%) 5% (2%) Sensitivity to key assumptions The key assumptions used for the IAS 19 valuation are: discount rate, inflation rate and mortality. If different assumptions were used, this could have a material effect on the results disclosed. The table below shows the sensitivity to the key assumptions noted above. Defined benefit obligation £’000 Increase/ (decrease) in defined benefit obligation £’000 Defined benefit obligation as reported 3,012 – Defined benefit obligation – with discount rate – 0.25% 3,121 109 – with discount rate 0.25% 2,910 (102) – with salary decrease – 0.25% 3,105 93 – with salary increase 0.25% 2,926 (86) – with life expectancy 1 year 3,058 46 – with life expectancy – 1 year 2,965 (47) The Group’s best estimate for contributions to be paid by the Group next year to the scheme is £139,000 (2023: £140,000). The amount recognised in the income statement for this scheme was £111,000 (2023: £114,000). Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 172 Overseas post‑employment benefit obligations Provisions for obligations to make termination payments on retirement, to employees who are not members of the pension and retirement schemes, are as follows: ▪The Group’s Japanese subsidiary undertaking, ME Group Japan, has an unfunded post‑employment retirement provision based on an employee’s length of service with the company and their current salary. The allowance is paid to an employee when they leave the company. This has been provided for in full within the accounts. ME Group Japan, agreed with the employees that 50% of the liability for the retirement provision will be paid in cash to an independently controlled defined contribution scheme, with the balance to be met by the company when the employee leaves. The provision were valued by an independent actuary using the Projected Unit Credit Method at 31 October 2024 and 31 October 2023. This actuarial valuation incorporated the following principal assumptions in arriving at the present value of the obligations: 31 October 2024 31 October 2023 Discount rate 0.97% 0.95% Rate of increase in salaries 0% 0% Retirement age 60 years 60 years Mortality table Standard mortality rates under defined benefit corporation pension plan (the 22nd Life Table for male & female Standard mortality rates under defined benefit corporation pension plan (the 22nd Life Table for male & female Expenses relating to the Japanese post‑employment benefit obligation were recognised in following sections of the statement of comprehensive income: ▪Administration expenses £62,000 (2023: £65,000) ▪Interest expense £8,000 (2023: nil) ▪Remeasurement gains in other comprehensive income £4,000 (2023: £1,000) ▪To meet the legal obligations within France, the Group’s subsidiary undertakings have unfunded retirement provisions, which were valued by an independent actuary using the Projected Unit Credit Method at 31 October 2024 and 31 October 2023. This actuarial valuation incorporated the following principal assumptions in arriving at the present value of the obligations: 31 October 2024 31 October 2023 Discount rate 3.40% 3.80% Rate of increase in salaries 2.00% 2.00% Retirement age 62‑67 years 62‑67 years Inflation rate 2.10% 2.00% Mortality table TGH/TGF 05 TGH/TGF 05 Expenses relating to the French post‑employment benefit obligation were recognised in following sections of the statement of comprehensive income: ▪Administration expenses £74,000 (2023: £16,000) ▪Finance cost £105,000 (2023: £102,000) ▪Remeasurement losses in other comprehensive income £408,000 (2023: remeasurement loss of £151,000) ME Group plc Annual Report 2024 173 25 Provisions Employee related claims £’000 Product warranties £’000 Other £’000 Total £’000 At 31 October 2022 238 635 694 1,567 Exchange differences 5 4 (1) 8 Utilised and other movements (49) (52) (522) (623) Reclassifications – 314 (314) – Charged to income statement 78 – 854 932 At 31 October 2023 272 901 711 1,884 Amount shown as current liability 272 901 711 1,884 Amount shown as non‑current liability – – – – At 31 October 2023 272 901 711 1,884 Exchange differences (20) (14) (41) (75) Utilised and other movements (77) – (296) (373) Disposal of subsidiary – – (303) (303) Charged to income statement 621 (453) 5 173 At 31 October 2024 796 434 76 1,306 Amount shown as current liability 796 434 76 1,306 Amount shown as non‑current liability – – – – Other provisions include amounts for unresolved claims made against the Group by suppliers. 26 Deferred taxation Deferred tax comprises: 31 October 2024 £’000 31 October 2023 £’000 Temporary differences relating to property, plant and equipment 4,408 2,089 Other temporary differences in recognising revenue and expense items in other periods for taxation purposes: – capitalised development costs 989 1,030 – post‑employment benefit provisions (1,269) (1,254) – acquisition related intangibles 916 4,407 – other short‑term temporary differences 2,159 2,294 7,202 8,566 The closing balance comprises: Deferred tax assets (2,668) (1,020) Deferred tax liabilities 9,870 9,586 7,202 8,566 Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 174 The movements on deferred taxation during the period were as follows: 31 October 2024 £’000 31 October 2023 £’000 Opening balance 8,566 7,778 Exchange differences (233) (92) Post‑employment benefit provisions (118) (52) Charge/(credit) for the period in income statement 1,580 932 Disposal of subsidiary (2,593) – Closing balance 7,202 8,566 Temporary differences associated with Group investments Unremitted earnings of overseas affiliates No deferred tax liability has been recognised on the unremitted earnings of overseas subsidiaries as no tax is expected to be payable on them in the foreseeable future based on current legislation or where the Group is able to control remittance of earnings and it is possible that such earnings will not be remitted in the foreseeable future. Unrecognised deferred tax assets The Group has no unrecognised deferred tax assets. Factors that may affect future tax charges The UK Corporation Tax rate increased from 19% to 25% with effect from 1 April 2023. The deferred tax assets and liabilities have been recognised based on the respective corporation tax rates at which they are anticipated to unwind in each jurisdiction. 27 Trade and other payables 31 October 2024 £’000 31 October 2023 £’000 Amounts shown as current liabilities Trade payables 31,179 33,393 Other taxes and social security costs 4,692 2,631 Other payables 11,968 11,184 Accruals and deferred income 9,004 10,713 56,843 57,921 28 Capital commitments and contingent liabilities Contingent liabilities In the opinion of the Directors, adequate provision has been made for claims and legal disputes and the Directors therefore consider that no contingent liability for litigation exists. The Group has no contingent liabilities with regard to its interest in the associated undertakings (2023 none). ME Group plc Annual Report 2024 175 29 Related parties The Group’s related parties are its associated undertakings, subsidiary undertakings and its key management personnel, which comprises the Board of Directors. The following transactions were carried out with related parties: Directors’ compensation 31 October 2024 £’000 31 October 2023 £’000 Salaries, director fees, short term benefits and short term bonuses 2,186 2,318 Share‑based payment charge 105 136 2,291 2,454 The remuneration of the directors, both executive and non‑executive, of the Parent Company, who are the key management personnel of the Group, is set out in the table above. These figures include amounts payable to third party companies for services of the directors. The figures exclude pension related costs and any long‑term incentive costs. Directors of the Company control 36.65% of the Ordinary shares of the Company. 30 Subsidary audit exemption The following company is exempt from the requirements of the Companies Act 2006 relating to the audit of individual accounts for the year ended 31 October 2024 by virtue of Section 479A of the Companies Act 2006: ▪Photo‑Me Limited. 31 Business combinations and disposals Acquisition of the photobooths business of Fujifilm Imaging Systems Co. Ltd. On 30 September 2023 the Group completed the acquisition of 100% of the photobooths business of Fujifilm Imaging Systems Co. Ltd (“Fujifilm”) for total consideration of JPY 965,755,000 (£5,284,000), obtaining control of the business on that date. Fujifilm is a Japanese photobooth owner and operator and the acquisition of its photobooths division adds a further 3,548 photobooth units to the Group’s existing operations in Asia Pacific. This acquisition is in line with the Group’s strategy to expand the number of units in operation. The acquisition was funded by a new loan facility taken by the Group’s Japanese subsidiary, Me Group Japan. In accordance with IFRS 3, this transaction meets the definition of a business combination so has been accounted for using the acquisition method. Acquisition‑related expenses of £146,000 have been recognised in the Group’s statement of comprehensive income. Deferred consideration A portion of the total consideration was deferred and contingent on the total number of photobooth units that were acquired. Post‑closing there followed a six‑month period during which further units could be transferred to the Group, in addition to the 3,318 units transferred at the closing date, and subject to a maximum number of 3,806. The total consideration increases in proportion with the number of photobooths acquired, up to a maximum value of JPY 996,000,000 (£5,466,000). At 31 October 2023, management’s best estimate of the deferred consideration to be paid was JPY 40,039,000 (£220,000). This amount was accrued and included in the total estimated consideration value at that date of JPY 946,000,000 (£5,191,000). Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 176 The six‑month window for the transfer of further units closed on 29 March 2024. The final number of units acquired was 3,548, resulting in a deferred consideration payment of JPY 59,794,000 (£312,000). The additional deferred consideration, in excess of management’s estimate previously accrued (£92,000), has been added to the goodwill balance in the Group’s Statement of Financial Position. Acquired assets and liabilities Due to the proximity of the transaction to the prior period reporting date, the purchase price allocation, including determination of the fair value of intangible assets recognised on consolidation, had not been finalised when the prior period financial statements were approved. With the purchase price allocation now complete, the Group has during the period adjusted the provisional amounts that were recorded in the prior period financial statements by increasing intangible assets by JPY 830,000,000 (£4,181,000) (see note 12). As part of the purchase price allocation, the Group has recognised separately identifiable acquired intangible assets in accordance with IAS 38 and had their fair values assessed by an independent expert. The fair value adjustments in respect of acquired intangible assets are due to the recognition of JPY 830,000,000 (£4,181,000) in respect of Fujifilm’s customer relationships. Gain on bargain purchase Including the identified customer relationships intangible asset, the acquired net assets (JPY 1,180,454,000) exceed the total consideration paid (JPY 965,755,000), generating a gain on bargain purchase of JPY 214,699,000 (£1,120,000). The gain has been recognised in non‑operating income in the Group’s statement of comprehensive income. This acquisition resulted in a gain on bargain purchase for the following reasons: ▪Negotiations for the transaction initially began approximately two years prior to the completion date (September 2023) and Fujifilm’s photobooth business was adversely affected by Covid‑19 in FY21 and FY22, leading to a depressed purchase price being negotiated; ▪Fujifilm had sought to divest its photobooth business, deeming it to no longer core to the group which was focussed on penetrating other markets. Consequently, Fujifilm had stopped investing in this business in the years leading up to the transaction in terms of both capital investment and enacting annual price increases to customers; ▪Following the lack of investment and impact of Covid‑19, the Group needed to invest heavily in the acquired business to turn it around. This represented a risk to the Group, which further supported the purchase consideration being driven by a short payback period. ME Group plc Annual Report 2024 177 31 Business combinations continued Other changes to the composition of the Group Disposal of SEMPA On 20 May 2024 the Group disposed of its interest in its French subsidiary, Sempa SAS, for cash consideration of €4,600,000 (£3,936,000). The Group generated a loss on disposal of £339,000 which is included in non‑operating income in the Group’s statement of comprehensive income. The assets and liabilities which the Group lost control over are detailed below: £’000 Goodwill 3 357 Other intangible assets 3 103 Property, plant & equipment 120 Inventories 462 Trade and other receivables 136 Cash and cash equivalents 263 Total assets 7 441 Provisions (386) Trade and other payables (131) Deferred income tax liability (2 649) Total liabilities (3 166) Net assets 4 275 32 Events after the statement of financial position date Interim dividend On 29 November 2024 the Group paid its interim dividend in respect of the six month period ended 30 April 2024 of 3.45 pence per ordinary share, totalling £12,998,000. UK defined benefit pension scheme The Company runs a defined benefit pension scheme, the Photo‑Me International Plc Pension and Life Assurance Fund. In November 2024, the Trustee of the Fund entered into an insurance contract with Legal & General that provides the pensions for certain members of the Fund. As a result, the benefits for all members of the Fund are now secured with an insurance company, via policies in the name of the Trustee. The intention is that in due course these policies will be transferred into the name of the individual members and the Fund wound‑up. Disposal of an office building On 20 February 2025 the Group disposed of the second, and final, tranche of an office property in Grenoble, France for £4,848,000. At 31 October 2024 the property was recognised in non-current assets classified as held for sale in the Group’s statement of financial position. The Group will recognise a gain on disposal of £1,584,000 in the year ended 31 October 2025. Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 178 33 Period summary (unaudited) Income statement 2024 £’000 2023 £’000 2022 £’000 2021 £’000 2020 £’000 Revenue UK & Ireland 49,188 48,173 41,996 29,644 54,623 Continental Europe 208,987 205,157 177,839 145,009 195,230 Asia 49,711 44,332 39,945 39,751 60,392 Total revenue 307,886 297,662 259,780 214,404 310,245 Operating profit 74,390 67,502 56,681 29,335 3,317 Net finance (cost)/income & non‑operating income (969) (435) (3,327) (780) (2,825) Profit before taxation 73,421 67,067 53,354 28,555 492 Taxation (19,331) (16,401) (14,561) (6,703) (2,844) Profit after taxation 54,090 50,666 38,793 21,852 (2,352) Attributable to: – equity owners of the Parent 54,090 50,666 38,793 21,713 (2,305) – Non‑controlling interests – – – 139 (47) 54,090 50,666 38,793 21,852 (2,352) Earnings per share – Basic 14.36p 13.40p 10.26p 5.78p (0.62)p Earnings per share – Diluted 14.27p 13.31p 10.23p 5.72p (0.62)p Dividends – interim 3.45p 2.97p 2.60p 0.00p 0.00p Dividends – final 4.45p 4.42p 3.00p 2.89p 0.00p Dividends – special 0.00p 0.00p 7.10p 0.00p 0.00p Total dividends 7.90p 7.39p 12.70p 2.89p 0.00p Statement of financial position 2024 £’000 2023 £’000 2022 £’000 2021 £’000 2020 £’000 Intangible assets 25,368 36,710 32,736 34,502 32,739 Property, plant and equipment 136,332 118,124 101,090 91,973 90,937 Other non‑current investments 37 35 21 21 57 Other non‑current assets 4,433 8,891 7,805 3,966 3,743 Current assets 143,601 163,815 184,716 141,688 139,760 Assets held for sale 2,869 4,947 – – – Total assets 312,640 332,522 326,368 272,150 267,237 Share capital 1,882 1,891 1,889 1,889 1,889 Share premium 11,510 11,083 10,627 10,599 10,599 Treasury shares – (1,969) – – – Reserves 166,479 147,983 120,133 115,486 99,693 Equity of the Parent 179,871 158,988 132,649 127,974 112,181 Non‑controlling interests – – – 1,720 1,689 Total equity 179,871 158,988 132,649 129,694 113,870 Total non‑current liabilities 47,561 71,076 94,039 68,900 52,968 Total current liabilities 85,208 102,458 99,680 73,556 100,399 Total equity and liabilities 312,640 332,522 326,368 272,150 267,237 Net cash 38,202 33,917 33,917 34,919 21,877 Note: The figures above have been extracted from the accounts for the relevant period and have not been adjusted for changes in accounting policies as a result of adoption of new accounting standards. ME Group plc Annual Report 2024 179 33 Period summary (unaudited) continued Financial & operating statistics 2024 2023 2022 2021 2020 Capital expenditure – photobooth & vending machines £’000 45,878 39,122 27,205 22,563 38,435 Capital expenditure – research & development £’000 918 2,337 1,418 1,802 2,296 EBITDA £’000 114,224 106,639 92,241 65,077 87,313 EBITDA % of revenue 37.1% 35.8% 35.5% 30.4% 28.1% Number of vending sites 48,200 47,600 43,900 43,800 44,500 Notes to the Group Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 180 Notes 31 October 2024 £’000 31 October 2023 £’000 Assets Intangible assets 4 1 3 Property, plant & equipment 5 22,626 16,329 Investment in subsidiaries 6 45,186 44,616 Financial instruments held at FVTPL 7 637 1,145 Other receivables 8 988 981 Non‑current assets 69,438 63,074 Inventories 9 4,066 1,793 Trade and other receivables 8 32,140 32,662 Current tax – 1,806 Cash and cash equivalents 10 4,907 3,344 Current assets 41,113 39,605 Total assets 110,551 102,679 Equity Share capital 11 1,882 1,891 Share premium 11,510 11,083 Treasury shares 11 – (1,969) Capital redemption reserve 12 – Translation and other reserves 3,868 3,073 Retained earnings 69,830 70,504 Total Shareholders’ funds 87,101 84,581 Liabilities Financial liabilities 13 668 1,026 Deferred tax liabilities 15 3,046 672 Financial liabilities 13 491 609 Current tax – – Trade and other payables 16 19,245 15,791 Current liabilities 19,735 16,400 Total equity and liabilities 110,551 102,679 The notes on pages 184 to 197 are an integral part of these financial statements. As permitted by section 408 of the Companies Act 2006, the Company’s Statement of Profit or Loss has not been included in these financial statements. The company recognised a profit after tax for the period of £30,562,000 (2023: £25,196,462). The accounts were approved by the Board on 21 February 2025 and signed on its behalf by: Serge Crasnianski Sir John Lewis OBE Chief Executive Officer Non‑executive Chairman Registration number: 00735438 Company Statement of Financial Position As at 31 October 2024 ME Group plc Annual Report 2024 181 Notes  31 October 2024 £’000 31 October 2023 £’000 Cash flow from operating activities Profit before tax 32,938 26,634 Interest of lease liabilities 195 167 Finance income (446) (91) Dividends received (31,820) (25,000) Non‑operating income – net 508 (356) Operating profit 1,376 1,354 Amortisation and impairment of intangible assets 2 2 Depreciation of property, plant and equipment net of reversal of impairments 4,097 4,213 Loss on sale of property, plant and equipment 98 182 Share based compensation charge 225 197 Other non cash items 2 6 Changes in working capital: Inventories (2,274) 38 Trade and other receivables 515 (10,501) Trade and other payables 3,452 1,239 Cash generated from/(utilised in) operations 7,493 (3,270) Interest paid (196) (167) Interest received 346 236 Taxation paid 1,804 (1,338) Net cash generated from/(utilised in) operating activities 9,447 (4,540) Cash flows from investing activities Dividends received from investments in financial instruments 100 42 Purchase of property, plant and equipment (10,520) (5,024) Proceeds from sale of property, plant and equipment 188 229 Dividends received from associates and subsidaries 31,820 25,000 Net cash generated from investing activities 21,588 20,247 Cash flows from financing activities Issue of ordinary shares to equity shareholders 430 458 Purchase of treasury shares 11 (1,425) (1,969) Repayment of principal of leases (636) (731) Dividends paid to owners of the Parent 3 (27,842) (23,443) Net cash utilised in financing activities (29,472) (25,685) Net increase / (decrease) in cash and cash equivalents 1,563 (9,977) Cash and cash equivalents at beginning of year 3,344 13,321 Cash and cash equivalents at end of year 4,907 3,344 The notes on pages 184 to 197 are an integral part of these financial statements. Company Statement of Cash Flows For the period ended 31 October 2024 FINANCIAL STATEMENTS ME Group plc Annual Report 2024 182 Share capital £’000 Share premium £’000 Treasury shares £’000 Capital Redemption Reserve £’000 Other reserves £’000 Retained earnings £’000 Total £’000 At 1 November 2022 1,889 10,627 – – 2,728 68,743 83,987 Profit for the period – – – – – 25,196 25,196 Other comprehensive income – – – – – 7 7 Total comprehensive income – – – – – 7 7 Total comprehensive income – – – – – 25,203 25,203 Transactions with owners of the Parent Shares issued in the period (note 11) 2 456 – – – – 458 Purchase of treasury shares (note 11) – – (1,969) – – – (1,969) Share options (note 11) – – – – 345 – 345 Dividends (note 3) – – – – – (23,443) (23,443) Total transactions with the Parent 2 456 (1,969) – 345 (23,443) (24,609) At 31 October 2023 1,891 11,083 (1,969) – 3,073 70,504 84,581 At 1 November 2023 1,891 11,083 (1,969) – 3,073 70,504 84,581 Profit for period – – – – – 30,562 30,562 Other comprehensive income – – – – – – – Total other comprehensive income – – – – – – – Total comprehensive income – – – – – 30,562 30,562 Transactions with owners of the Parent Shares issued in the period (note 11) 3 427 – – – – 430 Purchase of treasury shares (note 11) – – (1,425) – – – (1,425) Cancellation of treasury shares (note 11) (12) – 3,394 12 – (3,394) – Share options (note 11) – – – – 795 – 795 Dividends (note 3) – – – – – (27,842) (27,842) Total transactions with the Parent (9) 427 1,969 12 795 (31,236) (28,042) At 31 October 2024 1,882 11,510 – 12 3,868 69,830 87,101 The notes on pages 184 to 197 are an integral part of these financial statements. Company Statement of Changes in Equity For the period ended 31 October 2024 ME Group plc Annual Report 2024 183 General Information ME Group International plc (the “Company”) is a public limited company incorporated and registered in England and Wales and whose shares are quoted on the London Stock Exchange, under the symbol MEGP. The registered number of the Company is 735438 and its registered office is at Unit 3B, Blenheim Rd, Epsom, KT19 9AP. The principal activities of the Company are the operation, sale, and servicing of a wide range of instant‑service equipment in the United Kingdom. Authorisation of the financial statements and statement of compliance with IFRSs The Company financial statements of ME Group International plc for the period ended 31 October 2024 were authorised for issue by the directors on 21 February 2024 and the statements of financial position were signed by S. Crasnianski, Chief Executive Officer and J. Lewis, Non‑executive Chairman. The Company financial statements have been prepared in accordance with UK‑adopted international accounting standards and in conformity with the requirements of the Companies Act 2006. As permitted by Section 408 of the Companies Act 2006, the Statement of Profit or Loss of the Company is not presented as part of the Company financial statements. 1 Basis of preparation The financial statements have been prepared in accordance with UK‑adopted international accounting standards. The financial statements have been prepared under the historical cost convention except for certain financial instruments held at FVTPL, share‑based payments and defined benefit pension obligations that have been measured at fair value. The financial statements are presented in Pounds Sterling, being the functional and presentational currency of the Company and all values are shown in £’000 except where indicated. Going concern The financial statements have been prepared on a going concern basis. The going concern status of the Company is linked to the financial performance and viability of the Group. The Directors concluded that the Group is a going concern. In reaching this conclusion they have reviewed detailed budgets, which reflect, where applicable, the current economic conditions, with regard to the level of demand for the Group’s and Parent Company’s manufactured products, the level of consumer confidence and cash flow forecasts for at least the next twelve months. At 31 October 2024 company had net assets of £87,101,000 (2023: £84,581,000) Refer to note 1.1 of the Group financial statements for full details of the going concern assessment. Accounting policies The Company’s principal accounting policies applied in the preparation of these financial statements are the same as those set out in note 1 of the Group’s financial statements, with the exception of investments in subsidiaries, which is explained below. These policies have been consistently applied to all the years presented. Investment in Subsidiaries Investments in subsidiaries and associates are stated at cost less impairment. The Company reviews, at least annually, the carrying value of investments and performs an impairment review. An impairment charge is made where there is evidence that the carrying value exceeds the future cash flows of the investment or where its carrying amount will not be recovered from sale. Guarantees issued over subsidiaries’ loan liabilities The Company has issued guarantees over certain bank loan liabilities of subsidiary companies in France and Japan. Under these guarantees, the Company would be liable for the subsidiaries’ loan liabilities in the event of a default. The outstanding balance of guaranteed loan liabilities at 31 October 2024 was £12,054,000. The Company is required to recognise expected credit losses provisions (ECL) based on unbiased forward- looking information in relation to these guarantee contracts. The ECL is measured using two main components: probability of default and loss given default. Management have assessed the probability of default and considered the following factors: the Group operates a cash pooling arrangement, which ensures that all subsidiaries have access to sufficient cash to meet their obligations as they fall due; at the reporting date the Group holds cash of £86,147,000, which exceeds the balance of guaranteed loans; and cash forecasts indicate that the Group will continue to hold sufficient cash to cover the guaranteed loans for the next three years. The loss given default value would be the outstanding value of the guaranteed loan liabilities. Given the facts set out above, management determined that no ECL provision is required. Notes to the Company Financial Statements For the period ended 31 October 2024 FINANCIAL STATEMENTS ME Group plc Annual Report 2024 184 2 Critical accounting estimates and key judgements The key area of estimation and judgement in the preparation of the Company’s financial statements is the assessment of the recoverable value of investment in subsidiaries. The recoverable value of material investments has been determined on a value‑in‑use basis. These calculations require estimates by management, including management’s expectations of future growth in revenue, costs and profit margins, cash flows and discount rates. The carrying value of investment in subsidiaries at the reporting date was £45,186,000. Value in use was determined by discounting the future cash flows of the subsidiary company. Cash flows include a forecast period of five years, based on actual operating results, budgets and economic market research with a terminal value based on a long‑term growth rate applied thereafter. The Growth rate assumption for all subsidiaries was 1% (2023: 1%). WACC discount rates were calculated for each territory and ranged between 9.2% and 14.3% (2023: 9.7%‑15.2%). Further details of impairment testing, including assumptions and sensitivities, are disclosed in note 6. 3 Dividends paid and proposed Please refer to note 10 of the Group’s financial statements. 4 Intangible assets Customer related £’000 Cost: At 1 November 2022 781 At 31 October 2023 781 At 31 October 2024 781 Amortisation: At 1 November 2022 776 Amortisation 2 At 31 October 2023 778 Amortisation 2 At 31 October 2024 780 Net book value: At 1 November 2022 5 At 31 October 2023 3 At 31 October 2024 1 ME Group plc Annual Report 2024 185 5 Property, plant and equipment Land & Buildings £’000 Photobooth  & vending machines £’000 Plant, machinery, furniture, fixtures & motor vehicles £’000 Right of Use Land  & Buildings £’000 Right of Use Plant, machinery, furniture, fixtures £’000 Right of Use Motor vehicles £’000 Total £’000 Cost: At 31 October 2022 572 40,323 3,161 1,011 1,499 1,114 47,679 Correction of error - reclassification - (1,427) 1,427 - - - - At 1 November 2022 (restated) 572 38,896 4,588 1,011 1,499 1,114 47,679 Additions - 3,738 1,286 - - 570 5,594 Disposals - (1,526) (588) - (787) (258) (3,159) At 31 October 2023 572 41,108 5,286 1,011 712 1,426 50,114 Additions - 8,341 2,179 - - 160 10,680 Disposals - (2,821) (575) - (615) (74) (4,084) At 31 October 2024 572 46,628 6,890 1,011 97 1,512 56,710 Depreciation: At 31 October 2022 307 28,768 1,268 376 1,123 473 32,315 Correction of error - reclassification - (1,408) 1,408 - - - - At 1 November 2022 (restated) 307 27,360 2,676 376 1,123 473 32,315 Provided during the period 17 3,448 28 106 289 325 4,213 Disposals - (1,419) (284) - (782) (258) (2,744) At 31 October 2023 324 29,389 2,419 482 630 540 33,785 Provided during the period 18 2,945 768 108 76 459 4,374 Disposals - (2,644) (466) - (615) (74) (3,799) Reversal of impairments - (232) (44) - - - (276) At 31 October 2024 342 29,458 2,677 590 91 925 34,083 Net book value: At 1 November 2022 (restated) 265 11,536 1,911 635 376 641 15,364 At 31 October 2023 (restated) 248 11,718 2,866 529 82 886 16,329 At 31 October 2024 230 17,170 4,213 421 6 587 22,626 The balances of cost and depreciation for photobooth and vending machines and plant, machinery, furniture, fixtures & motor vehicles as at 31 October 2022 and 31 October 2023 have been restated to correct classification errors in the prior year property, plant and equipment note. The impact on cost balances at 31 October 2022 was: photobooth and vending machines reduction of £1,427,000; and plant, machinery, furniture, fixtures & motor vehicles increase of £1,427,000. The impact on cost balances at 31 October 2023 was: photobooth and vending machines reduction of £1,235,000; and plant, machinery, furniture, fixtures & motor vehicles increase of £1,235,000. The impact on depreciation balances at 31 October 2022 was: photobooth and vending machines reduction of £1,408,000; and plant, machinery, furniture, fixtures & motor vehicles increase of £1,408,000. The impact on depreciation balances at 31 October 2023 was: photobooth and vending machines reduction of £1,221,000; and plant, machinery, furniture, fixtures & motor vehicles increase of £1,221,000. These reclassifications have no impact on the total opening cost or depreciation balances of property, plant and equipment. Accordingly, this restatement had no impact on the Company’s statement of financial position, statement of cash flows, total assets or total Shareholders’ funds for the current or prior year. Notes to the Company Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 186 Impairment The Company assesses property, plant and equipment for indicators of impairment annually. Where indicators exist, the relevant assets are subject to impairment testing on a value in use basis. Value in use is determined by discounting the expected cashflows of an asset over the remainder of its useful economic life. At 31 October 2024 no new indicators of impairment were identified. Impairment reversal Significant impairment charges were made against photobooth and vending machines and land and building assets in the year ended 31 October 2020. The Covid 19 pandemic had impacted the trading and outlook of the Company, indicating reduced value in use and therefore impairment. In the subsequent years the Company continued to subject these assets to annual impairment tests, with the impairment value reduced where testing indicated increased value in use. At 31 October 2024 management considers that the original indicator of impairment, caused by the Covid 19 pandemic, no longer exists. This conclusion is supported by increased cash generation of the assets since 2020. A key input to the determination of value in use is the revenue generated by each machine. This metric has increased significantly post-Covid, as the Group’s trading performance has recovered. Accordingly, management have increased their estimate of the future revenue generation of all machines. This increases the service potential of the assets, increasing value in use, and therefore recoverable amount, above the carrying value (excluding impairment). Consequently, all remaining impairments were reversed in the current year, with care taken to ensure that the closing net book value did not exceed what it would have been had the original impairment never occurred. Impairments to photobooths and vending machines with a total value of £232,000 were reversed in the year. Impairments to plant and machinery with a total value of £44,000 were reversed in the year. 6 Investments in associates and subsidiaries Associated undertakings £’000 Subsidiary undertakings £’000 Total £’000 Costs: At 1 November 2022 6 46,386 46,392 Capital increase relating to share‑based payment (net) – 148 148 At 31 October 2023 6 46,534 46,540 At 1 November 2023 6 46,534 46,540 Capital increase relating to share‑based payment (net) – 570 570 At 31 October 2024 6 47,104 47,110 Provision: At 1 November 2022 6 1,918 1,924 At 31 October 2023 6 1,918 1,924 At 1 November 2023 6 1,918 1,924 At 31 October 2024 6 1,918 1,924 Net book value: At 1 November 2022 – 44,468 44,468 At 31 October 2023 – 44,616 44,616 At 31 October 2024 – 45,186 45,186 The net capital increase relating to share‑based payments relates to share options in the Company granted to employees of subsidiary undertakings of the Group. Refer to note 22 of the Group financial statements for further details on the share option schemes. The Company’s subsidiaries and associated are detailed in note 19. ME Group plc Annual Report 2024 187 Impairment At each reporting date, the Directors assess whether any indicators exist that any of the Company’s investments in subsidiaries may be impaired. Where an indicator exists, the investment is subject to an impairment review, with an impairment provision recognised if an investment’s recoverable value is less than its carrying amount. The recoverable value of an investment is determined on a value in use basis, using discounted cash flow projections of the subsidiary. For subsidiaries with an associated goodwill balance in the consolidated financial statements – ME Group Ireland Supplies Limited, ME Group Germany G.m.b.H. and ME Group Japan K.K. – the Company has utilised the recoverable values determined by the Group goodwill impairment review. Details of the methodology and assumptions used are provided in note 12 of the Group financial statements. No impairment charges were recognised in the current or prior year. Key assumptions The key assumptions used in the impairment review are growth rates and discount rates, as described in note 12 of the Group financial statements. Sensitivity As at the measurement date, the recoverable value of all investments in subsidiaries, based on their value in use, is significantly higher than their respective carrying amounts. After considering all key assumptions, management considers that a reasonably pessimistic revision of key assumptions which can rationally be expected would still not result in any impairment to the Company’s investments. 7 Financial instruments 7(A) Fair values of financial instruments by class There is no material difference between the fair values and the carrying values of financial assets and financial liabilities held in the Company’s statement of financial position. Financial instruments held at fair value – Level 1 The Company holds an investment in Max Sight Group Holdings Ltd, which is a listed company. This investment is valued at level 1. The Company owns 109,972,500 Max Sight Group Holdings Ltd’s shares valued at 0,058 HKD per share as at 31 October 2024, giving a value at that date of £637,000. This financial instrument is valued at the reporting date by reference to quoted market prices. Financial instruments held at fair value – Level 2 There are no material Level 2 investments held by the Company. Financial instruments held at fair value – Level 3 There are no material Level 3 investments held by the Company. No assets or liabilities were transferred between levels 1,2 and 3 in the year. Notes to the Company Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 188 7(A) Fair values of financial instruments by class continued Financial instruments by category The tables below show financial instruments by category for the Company: At 31 October 2024 Amortised Cost £’000 Fair Value Through Profit & Loss £’000 Total £’000 Assets per statement of financial position Financial assets held at FVTPL – 637 637 Financial assets – held at amortised cost: Trade and other receivables 31,013 – 31,013 Cash and cash equivalents 4,907 – 4,907 35,920 637 36,556 Other financial liabilities at amortised cost £’000 Total £’000 Liabilities per statement of financial position Leases 1,160 1,160 Trade and other payables 19,244 19,244 20,404 20,404 At 31 October 2023 Amortised Cost £’000 Fair Value Through Profit & Loss £’000 Total £’000 Assets per statement of financial position Financial assets held at FVTPL – 1,145 1,145 Financial assets – held at amortised cost: Trade and other receivables 33,001 – 33,001 Cash and cash equivalents 3,344 – 3,344 36,346 1,145 37,491 Other financial liabilities at amortised cost £’000 Total £’000 Liabilities per statement of financial position Leases 1,635 1,635 Trade and other payables 15,791 15,791 17,426 17,426 ME Group plc Annual Report 2024 189 7(B) Financial risk management Financial risk factors and financial risk management Overview The Company is exposed to the following risks arising from financial instruments: (i) Credit risk (ii) Liquidity risk (iii) Market risk The Company’s financial risks are integrated with the financial risks of the Group, and financial risk management is centrally controlled at Group level. Refer to note 16 of the Group financial statements for the details of the Group’s financial risk management strategy. The specific financial risks to the Company are described below. (i) Credit risk Amounts due from subsidiaries The Company’s most significant credit risk is the recoverability of intercompany balances due from subsidiaries. Intercompany balances with subsidiaries are repayable on demand. At the reporting date, each intercompany counterparty is assessed to determine whether it has sufficient accessible highly liquid assets to cover the intercompany debtor owed to the parent company. If this analysis determines that intercompany balance is not fully recoverable at the reporting date, management will set a recovery strategy and estimate the expected credit loss on the debtor. No provision was recognised against the Company’s intercompany receivables in the year (2023: nil). Cash and cash equivalents The Company’s cash is deposited with sound financial institutions, in line with the Group Treasury Policy. Any surplus cash is transferred to the Group treasury function’s bank accounts, which minimises the Company’s exposure to credit risk on cash. Accounts receivable The nature of the Companies principal activities means that most revenue is received at the point of sale, so accounts receivable balances are immaterial. The normal terms of settlement are in the range 30–90 days. Trade receivables are normally interest free. Where necessary, allowances for expected credit losses (ECL) are made. The Company applies the simplified ECL model. The ageing of net current trade receivables is as follows: 31 October 2024 31 October 2023 Gross trade receivables £’000 Allowance for expected credit losses £’000 Trade receivables £’000 Gross trade receivables £’000 Allowance for expected credit losses £’000 Trade receivables £’000 Current 23 – 23 24 – 24 Past due – overdue 1‑30 days – – – – – – – overdue 31‑60 days 5 – 5 1 – 1 – overdue 61 days 22 (22) – 22 (22) – Total past due 26 (22) 5 23 (22) 1 Total trade receivables 49 (22) 28 47 (22) 25 Notes to the Company Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 190 (ii) Liquidity risk Liquidity risk is managed at Group level by the central treasury function. Part of the Group treasury function’s role is to ensure that the Company always maintains sufficient cash to meet its obligations. The Company has no debt facilities but has access to the Group’s undrawn facilities. The Company’s contractual cashflows are shown below: Within one year £’000 Year 2 £’000 Year 3 £’000 Year 4 £’000 Year 5 £’000 Over 5 years £’000 Total £’000 At 31 October 2024 Leases 700 459 199 149 – – 1,507 Trade and other payables 19,245 – – – – – 19,245 19,945 459 199 149 – – 20,752 At 30 October 2023 Leases 709 597 355 162 149 – 1,971 Trade and other payables 15,791 – – – – – 15,791 16,500 597 355 162 149 – 17,762 (iii) Market risk The Company’s market risk and approach to its management is aligned to that of the Group. Refer to note 16 of the Group financial statements for details. 7(C) Capital risk management Capital risk is managed at Group level. Refer to note 16 of the Group financial statements for details. 8 Trade and other receivables 31 October 2024 £’000 31 October 2023 £’000 Non‑current assets Other receivables 988 981 988 981 Current assets Gross trade receivables 49 47 Allowance for expected credit losses (22) (22) Trade receivables 28 25 Amounts due from subsidiaries 28,017 31,947 Other receivables 1,980 49 Prepayments 2,115 642 32,140 32,662 All trade receivables arise from contracts with customers. Amounts due from subsidiaries are non‑interest‑bearing trading balances and are repayable on demand. Non‑current other receivables consist of restricted deposits related to pension schemes. ME Group plc Annual Report 2024 191 9 inventories 31 October 2024 £’000 31 October 2023 £’000 Raw materials and consumables 2,037 1,249 Finished goods 2,030 543 4,066 1,793 The replacement value of inventories is not materially different from that stated above. 10 Cash and cash equivalents 31 October 2024 £’000 31 October 2023 £’000 Cash at bank and in hand 4,907 3,344 Cash and cash equivalents per statement of financial position 4,907 3,344 Cash at bank is generally interest free but may earn interest at the applicable daily bank floating deposit rate. Reconciliation of movement in liabilities arising from financing activities 1 November £’000 New lease liabilities £’000 Repayment of liabilities £’000 Other movements £’000 31 October £’000 31 October 2024 Non‑current lease liabilities 1,026 92 – (450) 668 Current lease liabilities 609 68 (636) 450 491 Total liabilities arising from financing activities 1,635 160 (636) – 1,160 31 October 2023 Non‑current lease liabilities 741 358 – (73) 1,026 Current lease liabilities 1,060 212 (731) 68 609 Total liabilities arising from financing activities 1,801 570 (731) (5) 1,635 11 Share capital and reserves Share Capital 31 October 2024 Number 31 October 2023 Number 31 October 2024 £’000 31 October 2023 £’000 Allotted, issued and fully paid: Ordinary shares of 0.5p each At the beginning of the period 378,454,879 378,051,637 1,891 1,889 Issued in year – share options exercised 677,500 403,242 3 2 Cancellation of shares held in treasury (2,368,626) – (12) – At the end of the period 376,763,753 378,454,879 1,882 1,891 The holders of Ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. Notes to the Company Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 192 Reserves Treasury shares Number of Shares Cost* £’000 Proportion of ordinary issued share capital Shares held in treasury at 1 November 2022 – – – Purchase of own shares 1,260,534 1,969 – Shares held in treasury at 31 October 2023 1,260,534 1,969 0.33% Purchase of own shares 1,108,092 1,425 – Cancellation of shares held in treasury (2,368,626) (3,394) – Shares held in treasury at 31 October 2024 – – 0.00% * Purchase cost including transaction costs At the Annual General Meeting on 18 August 2023, a shareholders’ resolution was passed permitting the Company to purchase its own shares up to a maximum of 10% of the Ordinary shares in issue. In the year ended 31 October 2024 the Company purchased, on various dates and at various prices, 1,108,092 shares at a combined cost of £1,425,000 including £6,000 transaction costs, bringing the total number of shares purchased since the resolution to 2,368,626 at a combined cost of £3,394,000. The shares were purchased at an average price of 133.17 pence per ordinary share. On 12 July 2024 the Board of the Company passed a resolution to cancel all of its 2,368,626 ordinary shares of 0.5 p each held in treasury. The cancellation took place on the same date. The cancellation is reflected in the statement of financial position as a reduction in share capital and retained earnings. The treasury shares had no voting or dividend rights. Share premium Share premium reserve is the cumulative value of the excess received for shares above their nominal value. Capital redemption reserve The capital redemption reserve is a statutory, non-distributable reserve into which amounts are transferred following the purchase and cancellation of the Company’s own shares. Other reserves The Company’s other reserves include the share‑based payment reserve on equity settled schemes £3,243,000 (2023: £2,673,000). This relates to the fair value of options granted to employees of Group undertakings. The share‑based payment reserve is generally distributable. 12 Shared‑based payments Please refer to note 22 of the Group’s financial statements. ME Group plc Annual Report 2024 193 13 Lease liabilities The Company has lease liabilities of £1,160,000 (2023 £1,635,000). The key quantitative information regarding the lease portfolio is shown below: As at 31 October 2024 Site agreements Property Motor vehicles Number of lease agreements 1 1 122 Average lease term (months) 80 113 41 Average remaining term (months) 5 47 14 As at 31 October 2023 Site agreements Property Motor vehicles Number of lease agreements 44 1 124 Average lease term (months) 52 113 45 Average remaining term (months) 6 60 21 The maturity profile of lease liabilities is shown below: Within one year £’000 Year 2 £’000 Year 3 £’000 Year 4 £’000 Year 5 £’000 Over 5 years £’000 Total £’000 At 31 October 2024 Leases 700 459 199 149 – – 1,507 At 31 October 2023 Leases 709 597 355 162 149 – 1,971 14 Post‑employment benefit obligations The Company runs a defined benefit pension scheme, the Photo‑Me International Plc Pension and Life Assurance Fund. At both the current year and prior year reporting date the scheme was in surplus. In accordance with IFRIC 14, the surplus has not been recognised as an asset in the statement of financial position. Please refer to note 24 of the Group financial statements for details of the scheme. 15 Deferred taxation Deferred tax comprises: 31 October 2024 £’000 31 October 2023 £’000 Temporary differences relating to property, plant and equipment 3,065 702 Other short‑term temporary differences (19) (30) 3,046 672 The closing balance comprises: Deferred tax assets (19) (30) Deferred tax liabilities 3,065 702 3,046 672 The movements in deferred taxation during the period were as follows: 31 October 2024 £’000 31 October 2023 £’000 Opening balance 672 (948) Charge/(credit) for the period in income statement 2,374 1,620 Closing balance 3,046 672 Notes to the Company Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 194 Unrecognised deferred tax assets The Company has no unrecognised deferred tax assets. Factors that may affect future tax charges The UK Corporation Tax rate increased from 19% to 25% with effect from 1 April 2023. 16 Trade and other payables 31 October 2024 £’000 31 October 2023 £’000 Amounts shown as current liabilities Trade payables 2,041 2,246 Amounts owed to subsidiaries 13,212 9,448 Other taxes and social security costs 317 814 Accruals and deferred income 3,675 3,284 19,245 15,791 17 Capital commitments and contingent liabilities The Company has no capital commitments or contingent liabilities. 18 Related parties The following related party transactions took place between the Company and its subsidiaries during the year: 31 October 2024 £’000 31 October 2023 £’000 Transactions with subsidiaries: Purchases 63 74 Intercompany fees charged by/(received from) subsidiaries 7,247 5,255 Property, plant and equipment acquired from subsidiaries 7,607 3,189 Dividend income from subsidiaries 31,820 25,000 Balances with subsidiaries: Amounts owed by subsidiaries 28,017 31,947 Amounts owed to subsidiaries 13,212 9,448 The key management personnel of the Company are its directors, both executive and non‑executive. The remuneration of the directors is borne by subsidiaries of the Company. Details of the directors’ remuneration is provided in note 29 of the Group financial statements. Directors of the Company control 36.65% of the Ordinary shares of the Company. 19 Subsidiary and associate undertakings This disclosure is made in accordance with Section 409 of the Companies Act 2006 and the Large and Medium‑sized Companies and Groups (Accounts and Reports) Regulations 2008, as amended by the Companies, Partnerships and Groups (accounts and reports) Regulations 2015. A full list of subsidiary undertakings and associated undertakings (showing country of incorporation, which is also the main trading location of the company, and the effective percentage of equity shares held) at 31 October 2024 is shown below. Unless indicated otherwise the equity shares held are in the form of ordinary shares or common stock. ME Group plc Annual Report 2024 195 19 Subsidiary and associate undertakings continued Company name Principal Activity Group interest Registered office address Country of incorporation UK & Ireland Jolly Roger (Amusement Rides) Limited In liquidation 100% Unit 3B, Blenheim Road, Epsom, KT19 9AP UK MgInvest Investments Limited In liquidation 100%* Unit 3B, Blenheim Road, Epsom, KT19 9AP UK Me Group International Limited Dormant 100% Unit 3B, Blenheim Road, Epsom, KT19 9AP UK Photo‑Me (Retail) Limited In liquidation 100% Unit 3B, Blenheim Road, Epsom, KT19 9AP UK Photo‑Me Limited Corporate 100% Unit 3B, Blenheim Road, Epsom, KT19 9AP UK Photo‑Me Trustee Company Limited Dormant 100% Unit 3B, Blenheim Road, Epsom, KT19 9AP UK Xpand Investments Limited In liquidation 100% Unit 3B, Blenheim Road, Epsom, KT19 9AP UK Me Group Ireland Supplies Limited Operations 100% Unit A4, Alexander House, Tallaght Cross East, Tallaght, Dublin 24 Republic of Ireland Continental Europe Me Group Austria G.m.b.H. Operations 100% Industriestraße 7/K01 L/10, 2100 Korneuburg Austria Prontophot Belgium NV Operations 100% Boulevard Paepsem 8a, 1070 Anderlecht Belgium Me‑Group SPC Finland Oy Operations 100% Unit 3B Blenheim Road, Epsom, UNITED KINGDOM. KT19 9AP Finland KIS SAS Production 100%* 7 Rue Jean‑Pierre Timbaud, 38130 Echirolles France Me Group France Operations 100%* 8 rue Auber 75009, Paris France Me Group GSS Corporate 100% 8 rue Auber 75009, Paris France SCI Immobilière du 21 Property 100%* 7 Rue Jean‑Pierre Timbaud, 38130 Echirolles France Dreamaker SARL Operations 100% 80 route des Lucioles 06560 Valbourne France Me Group Germany G.m.b.H. Operations 100% Gervinusstraße 15‑17, 60322 Frankfurt am Main Germany Me‑Group Italia Srl Operations 100% Roma (RM) Via Lovanio 1, CAP 00198 Italy KIS Italia Srl Dormant 100% Milano, Via Tiziano 32, CAP 20145 Italy Prontophot Holland B.V Operations 100% Loonseweg 14, 5527 AC Hapert Netherlands KIS Poland s.p.z.o.o. Operations 100% ul. Targowa 46/5, 03‑733 Warszawa Poland Me Group Portugal LDA Operations 100% Industrial do Carvalhinho – Fracção K 2860‑579 MOITA Portugal Me Group Spain Solutions Operations 100% 28224 – Pozuelo de Alarcón (Madrid), Calle de las Dos Castillas, 33, Ático 7 Spain Me Group Switzerland AG Operations 100% Sonnentalstrasse 5, 8600Dübendorf Switzerland Asia & ROW Me Group Australia Pty Ltd Operations 100% 4/24 Philip Street, Hawthorne, Queensland 4171 Australia Now Retail Group Pty Ltd Operations 100% Level 9, 123 Albert Street, Brisbane, Queensland 4000 Australia Photo‑Me (Shanghai) Co Limited Operations 100%* Room 1102 Tongyong Tower, No. 1346 Gong he Xin Road, Zha bei District, Shanghai 200070 China Photo‑Me Beijing Co Limited Operations 100%* Room 1124, Ocean Natural Xintiandi, No.106 East Majiapu Road, Fengtai District, Beijing 100000 China Photo‑Me Chengdu Co Limited Dormant 100%* Room 1124, Ocean Natural Xintiandi, No.106 East Majiapu Road, Fengtai District, Beijing 100000 China ME Group Japan Operations 100% Room 1302, Atlas Tower Roppongi, Roppongi 7‑7‑13,Minato‑Ku, 106 0032 Japan Photomatico (Singapore) Pte Limited Operations 100% 26 Sin Ming Lane, Singapore 573971 Singapore KIS Technology Company Limited Dormant 100% P.1003, Ford Thang Long Building, 105 Lang Ha, Lang Ha Street, Ba Dinh district, Hanoi Vietnam Photomaton Maroc SARL Operations 50% 131 Bd D’Anfares Azur Sidi Belyout,/Casablanca Morocco * Investments in subsidiaries not owned directly by Me Group International plc. Notes to the Company Financial Statements continued FINANCIAL STATEMENTS ME Group plc Annual Report 2024 196 The following companies were in liquation at 31 October 2024 ▪Jolly Roger (Amusement Rides) Limited; ▪Photo‑Me (Retail) Limited; ▪Xpand Investments Limited; and ▪Mginvest Investments Limited. The results of the Group’s subsidiaries and associates are consolidated for the period ended 31 October 2024. Certain subsidiaries and associates have a different statutory year end, sometimes due to legal requirements in the country concerned. The following company is exempt from the requirements of the Companies Act 2006 relating to the audit of individual accounts for the year ended 31 October 2024 by virtue of Section 479A of the Companies Act 2006: ▪Photo‑Me Limited. 20 Events after the statement of financial position date Please refer to note 32 of the Group financial statements. ME Group plc Annual Report 2024 197 Term Definition Rationale Total Revenue Revenue per financial statements. Helps evaluate growth trends and assess operational performance. Revenue by geographic region Total revenue per the Group’s geographical segments. Helps evaluate growth trends and assess operational performance by geography. Vending revenue Revenue earned from machines in operation and excluding revenue from the sale of equipment, consumables, spare parts and services. This has previously been referred to as operating revenue. Helps understand performance and cash generation of the vending estate. Photo.ME vending revenue Vending revenue from photobooth units in operation. Wash.ME vending revenue Vending revenue from laundry units in operation. Print.ME vending revenue Vending revenue from digital printing kiosks units in operation. Other vending revenue Vending revenue from other vending units in operation (food, children’s rides and photocopiers). Total revenue from laundry operations Wash.ME vending revenue from the operation of laundry machines plus revenue from the sale of laundry machines Measures the total revenue contribution of the Wash.ME segment. Like‑for‑like vending revenue Vending revenue excluding that earned from machines installed in the current period. Excludes the effect of new machine installations to measure performance of the existing estate. Average revenue per Machine (excl. VAT) Vending revenue divided the average number of machines in operation. Key measure of the performance of the vending estate. EBITDA Profit before tax, depreciation, amortisation, non‑operating income/expense and finance cost and income. EBITDA is a key profit measure. it shows the results of normal operations exclusive of income or charges that are not considered to represent the underlying operational performance. EBITDA Margin EBITDA divided by revenue. Helps evaluate growth trends and assess operational performance. Constant currency Current year results translated using the prior year’s foreign exchange rates. Statement of financial position items are re-translated at the prior period closing rates. Income statement items are re-translated at the prior period average rates. Material foreign currencies to the Group are the Euro and Japanese Yen. Current year figures were re-translated at the following rates to calculate the constant currency figures: Euro: FY23 closing rate for balance sheet items 1.146 FY23 average rate for income statement items 1.149 Japanese Yen: FY23 closing rate for balance sheet items 183.15 FY23 average rate for income statement items 171.68 Presenting results of the Group excluding foreign exchange volatility. Change excluding FX impact Constant currency compared to prior year actuals. Presenting year on year movements excluding foreign exchange volatility. Cash generated from operations EBITDA less change in net working capital, share‑based payment expense. Measure of cash generated by the Group before investing activities and financing activities. Net cash Cash and cash equivalents minus bank loans. A key indicator used by management in assessing operational performance and financial position strength. Diluted earnings per share Group profit after tax divided by the weighted average number of shares outstanding during the period plus the weighted average number of shares that would be issued on conversion of all the dilutive potential shares into shares. Shows the impact on earnings per share of all potential dilutive shares being converted. Number of units in operation The number of active machines in operation at the reporting date. Helps understand the size and growth of the vending estate. Laundry units deployed Laundry units owned, sold and acquired. Helps evaluate growth trends and assess operational performance. Glossary FINANCIAL STATEMENTS ME Group plc Annual Report 2024 198 Registered in england and wales Number 735438 Registered Office Unit 3B Blenhiem Road Epsom KT19 9AP Tel: 44 (0)1372 453399 Web: https://me‑group.com/ e‑mail: ir@me‑group.com Auditor Forvis Mazars 30 Old Bailey London EC4M 7AU Brokers Berenberg 60 Threadneedle Street London EC2R 8HP Peel Hunt LLP 100 Liverpool Street London EC2M 2AT Bankers Lloyds Bank plc 25 Gresham Street London EC2V 7HN Santander UK plc 2 Triton Square Regent’s Place London NW1 3AN Financial Public Relations Hudson Sandler LLP 25 Charterhouse Square Barbican London EC1M 6AE Registrars MUFG Corporate Markets 10th floor Central Square 29 Wellington Street Leeds LS1 4DL Company Information & Advisers ME Group plc Annual Report 2024 199 Investor relations website Investor relations information, including share price, is available through the Company’s website https://me‑group.com/ Transfer office and registration services MUFG Corporate Markets act on behalf of the Company. All shareholder enquiries, notifications of change of address, dividend mandates, etc. should be referred to them at: MUFG Corporate Markets 10th floor Central Square 29 Wellington Street Leeds LS1 4DL Tel: 0371 664 0300 Overseas Tel: 00 44 371 664 0391 MUFG Corporate Markets also offer a range of shareholder information online at www.capitashareportal.com The Register of directors’ interests is maintained at the registered office at Epsom. Copies of the Annual Report should be requested from: ME Group International plc Unit 3B Blenheim Road Epsom KT19 9AP Tel: 44 (0)1372 453399 E‑mail: ir@me‑group.com Web: www.me‑group.com Financial Calendar Annual General Meeting 25 April 2025 Half year results Announcement in July 2025 (to 30 April 2025) Full year results Announcement in February 2026 (to 31 October 2025) Shareholder Information FINANCIAL STATEMENTS ME Group plc Annual Report 2024 200 ME Group plc Annual Report 2024 201

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