Retail Food Group Limited · ASX:RFG
Retail Food — H1 2019 Earnings Presentation
22 slides from Retail Food's earnings presentation, Feb 28, 2019
Slide 1: 1H19 Results Presentation
1H19 ~ RESULTS PRESENTATION
Slide 2: Disclaimer
DISCLAIMER This Presentation contains summary information about the current activities of Retail Food Group Limited ACN 106 840 082 (RFG) and its subsidiaries as at the date of this Presentation, unless otherwise stated. The information in this Presentation is of a general nature and does not purpor
Slide 3: 1H19 Snapshot
1H19 SNAPSHOT > Underlying NPAT(1) of $6.6m (1H18: $24.7m) impacted by combination of factors. > Statutory net loss after tax of $111.1m (1H18:($87.8m)) recognises $123.7m (pre-tax) in non-cash impairments and write-downs, and provisioning, and reflects forecast sustainable earnings, existing Group
Slide 4: 1H19 Performance Review
1H19 PERFORMANCE REVIEW
Slide 5: 1H19 Performance Summary
1H19 GROUP 1H19 PERFORMANCE PERFORMANCE(1) 1H19 1H18 % Change SUMMARY Revenue (including disc ops)(2) $192.0m $195.5m (1.8%) > 1H19 revenue includes $13.1m arising from adoption of new AASB 15 revenue standard, including consolidating Franchise Marketing Funds. EBITDA (underlying) $23.9m $45.7m (47.
Slide 6: Reconciliation of Underlying to Statutory Results
RECONCILIATION OF UNDERLYING TO STATUTORY RESULTS 1H19 Underlying Statutory > Impairment and provisioning assessments for 1H19 considered RFG’s market capitalisation as at 31 December 2018 compared to the carrying value of EBITDA $m 23.9 (112.5) assets, RFG’s store closure assessment, expected FY19
Slide 7: EBITDA Performance by Division to PCP
EBITDA PERFORMANCE BY DIVISION TO PCP(6) UNDERLYING EBITDA 1H19 1H18 % Change > Domestic Franchise operations EBITDA declines due to: • Cumulative trading revenue impact of FY18/1H19 domestic Bakery / Café Division(1) $11.6m $15.7m (26.2%) outlet closures. • Decline in revenues from new and renewing
Slide 8: Cash Flows
CASH FLOWS 1H19 ($m) 1H18 ($m) Receipts from Customers 246.6 260.7 > Decrease in cash receipts from customers consistent with Payments to Suppliers & Employees (237.9) (242.5) reduced underlying revenues in Franchise and Di Bella Coffee operations. Gross Operating Cash Flows 8.7 18.2 > The Group’s c
Slide 9: Balance Sheet
1H19 FY18 Balance Sheet at 31 December 2018 ($m) ($m) BALANCE SHEET Assets Cash Reserves 20.5 19.0 > Decreases in receivables, PP&E, intangible assets, and Trade Receivables 36.9 52.9 deferred tax balances, and increases in provisioning, primarily Financial Assets 9.8 23.8 attributable to non-cash i
Slide 10: Debt Structure
DEBT STRUCTURE > The Group received a waiver from its senior debt lenders on 21 Senior Debt Facilities 1H19 December 2018, for testing of financial covenants for the period ended 31 December 2018. Net Debt(2) $258.9m > The Group’s debt facility is subject to a review process with the lenders after 2
Slide 11: 1H19 Divisional Performance
1H19 DIVISIONAL PERFORMANCE
Slide 12: Domestic Bakery / Café Division
DOMESTIC BAKERY / CAFÉ 1H19 1H18 % Change DIVISION - New Outlets - 2 - Closures (41) (69) > 1H19 performance influenced by: • Cumulative impact of FY18 & 1H19 outlet closures. Outlets at 31 December 2018(1) 597 700 (14.7%) • Decline in domestic new / renewal activity, Transfers approved 35 45 impact
Slide 13: Domestic Coffee Retail Division
DOMESTIC COFFEE RETAIL 1H19 1H18 % Change DIVISION - New Outlets - 5 - Closures (35) (17) > 1H19 performance influenced by: • Cumulative impact of FY18 & 1H19 outlet Coffee Outlets at 31 December(1) 262 305 (14.1%) closures. Mobile Vans at 31 December (1) 171 193 (11.4%) • Decline in domestic new /
Slide 14: Domestic QSR Division
DOMESTIC QSR DIVISION 1H19 1H18 % Change > 1H19 performance influenced by: - New Outlets 1 1 • Cumulative impact of FY18 & 1H19 outlet closures. - Closures (17) (23) • Decline in domestic new / renewal activity, impacted by prevailing negative sentiment. Outlets at 31 December 2018(1) 222 269 (17.5%
Slide 15: International Franchising Division
INTERNATIONAL FRANCHISING 1H19 1H18 % Change DIVISION New Master Franchise Agreements 2 1 > 1H19 performance influenced by: New Outlets 11 45 • Prevailing negative sentiment surrounding the franchise industry and Outlets at 31 December 2018(1) 738 891 (17.2%) RFG impacting new master licence candida
Slide 16: Di Bella Coffee
DI BELLA COFFEE (formerly Coffee & Allied Beverages Division) 1H19 1H18 % Change > Divisional 1H19 performance influenced by: Revenue $22.2m $32.4m (31.5%) • $2.2 million margin reduction on loss of key customers in the independent contract roasting sector, particularly in Victoria. EBITDA(1) $1.9m
Slide 17: Manufacturing & Distribution Division
MANUFACTURING & DISTRIBUTION DIVISION (formerly Commercial Division) 1H19 1H18(1) % Change Revenue > Divisional performance for 1H19 attributable to: Foodservice $31.3m $42.2m (25.8%) • Foodservice: significant operational challenges arising Dairy Country $50.4m $30.4m 65.9% subsequent to 2H18 integ
Slide 18: 1H19 Strategy and Outlook
1H19 STRATEGY AND OUTLOOK
Slide 19: Six Point Plan
Six Point Plan Business improvement will be driven by successful implementation of a Six Point Plan that focuses on business stabilisation, debt reduction and operational improvement amongst the Company’s business units: 1. Re-focusing the Group on its core retail food franchise and coffee supply op
Slide 20: Outlook
OUTLOOK > A number of measures have been implemented to support the Six Point Plan and stabilise performance, however future results likely to be subdued whilst retail market conditions remain challenging and RFG executes on its restructuring program. > Active consideration of options to reduce debt
Slide 21: Appendices
APPENDICES
Slide 22: Definitions
DEFINITIONS BCD BAKERY/CAFÉ DIVISION: Donut King, Michel’s Patisserie, Brumby’s Bakery CRD COFFEE RETAIL DIVISION: Gloria Jean’s, Café2U, The Coffee Guy, It’s A Grind, bb’s Café, Esquires Coffee Hudson Pacific Foodservice, Associated Foodservice, Bakery Fresh, Dairy Country MANUFACTURING & DISTRIBUT