Famous Brands Limited · JSE:FBR

Famous Brands — FY2010 Earnings Presentation

73 slides from Famous Brands's earnings presentation, May 11, 2010

1. Slide 1: Results presentation for the year ended 28 February 2010

   Results presentation for the year ended 28 February 2010 11 May 2010

2. Slide 2: Agenda

   2 Agenda  Highlights  Company overview  Key trends and developments  Operational performance  Financial results  Strategy and prospects  Board changes

3. Slide 3: Highlights

   3 Highlights  Record turnover and profits  Strong recovery in operating margin to 18.2% (2009:16.9%)  Operating profits exceed R300 million  Earnings break through R2.00 per share level  Cash generated by operations increased to R346 million  Settlement of UK debt and HBOS minority interest re

4. Slide 4: Highlights (continued)

   4 Highlights (continued)  Successful acquisition and rapid integration of Mugg & Bean business  125 new restaurants opened  Wimpy opens 500th restaurant and FishAways 100th  Same store growth marginally behind menu price increase inflation  Acquired Blacksteer business  Major strides made rega

5. Slide 5: Company Overview

   Company Overview famous | brands LIMITED

6. Slide 6: Strategic intent

   6 Strategic intent Our business is focused on growth and development of best in class franchised leisure brands, supported by a business model which maximises stakeholder value creation

7. Slide 7: Business model

   7 Business model Franchising Franchising Franchising Division - Division - Development New Business Manufacturing Logistics Food Services Division - Domestic Corporate Domestic Division Division Division Division Division International [Theatre of [Mainstream] Foods] Steers Sauces & Planning and Sit

8. Slide 8: Key trends and developments

   Key trends and developments famous | brands LIMITED

9. Slide 9: Frequency of usage: take-away

   9 Frequency of usage: take-away PROJECT DINING Rolling 8 weekly data 100 80 65 60 58% Once a week 40 34% 2-3 times a week 20 27 8 6% 4-5 times a week 0.0 0.0% 6 times or more 0 J05990 SLF701 J J A SOND J FMAM J J A SOND J FMAM J J A SOND J FMAM J J A S 2007 2008 2009 Source: Milward Brown

10. Slide 10: Frequency of usage – casual dining

    10 Frequency of usage – casual dining FREQUENCY OF USAGE - CASUAL DINING PROJECT DINING Rolling 8 weekly data 100 80 60 44% Once a month 40 40 32 28% Twice a month 23 24% 3-4 times a month 20 3% 5-6 times a month 0.5% 7 times a month 0 2 J J A SO ND J FM AM J J A SO ND J FM AM J J A SO ND J FM AM J

11. Slide 11: Average frequency of visits in past 4 weeks

    11 Average frequency of visits in past 4 weeks Source: Nielson Omnibus

12. Slide 12: Category shifts in past 4 weeks

    12 Category shifts in past 4 weeks -13% +9% +10% +14% % Source: Nielson Omnibus

13. Slide 13: Operational performance: Franchising division

    Operational performance Franchising division

14. Slide 14: System-wide sales growth

    14 System-wide sales growth Average 9% 250% 183% 195% 200% 150% 100% 50% 28% 15% 5% 6% -3% 6% 0% Steers Wimpy Debonairs FishAways HOC Brazilian tashas Mugg & Pizza Café Bean -50%

15. Slide 15: Like-on-like sales growth

    15 Like-on-like sales growth Average 4% 30% 26% 25% 20% 15% 15% 9% 10% 3% 5% 2% 3% -5% 1% 0% Steers Wimpy Debonairs FishAways HOC Brazilian tashas Mugg & Pizza Café Bean -5% -10%

16. Slide 16: New restaurants openings

    16 New restaurants openings Total 125 40 35 35 30 26 25 21 22 20 15 15 10 5 1 2 2 1 0 Steers Wimpy Wimpy UK Debonairs FishAways HOC Brazilian tashas Mugg & Pizza Café Bean

17. Slide 17: Global footprint

    17 Global footprint Total 1,779 600 519 506 500 400 297 300 171 200 106 99 100 44 33 4 0 Steers Wimpy Wimpy UK Debonairs FishAways Mugg & Brazilian HOC tashas Pizza Bean Café

18. Slide 18: Highlights

    18 Highlights  Steers and Wimpy brands caught in the cross fire of highly competitive set, fierce battle for market share  Debonairs Pizza and FishAways trade very much in “spaces of their own”  Mugg & Bean remains at the forefront of mainstream coffee based casual dining  tashas defies all econ

19. Slide 19: Steers

    19 Steers  Minor market share gain whereby like-on-like sales growth at 3% ahead of menu price inflation of 0.77%  Wins “best burger” and “best chips” for 14th and 12th year respectively (Leisure Options)  32 new restaurant openings forecasted for F2011

20. Slide 20: Wimpy

    20 Wimpy  Like-on-like growth at 2.3% marginally behind menu price increase of 4.7%  Wins “best breakfast” (Leisure Options) and 2nd position “coolest place to eat out” (Sunday Times Generation Next)  Opened 500th restaurant  19 new restaurant openings forecasted for F2011

21. Slide 21: Debonairs Pizza

    21 Debonairs Pizza  Remains at the forefront of emerged market pizza consumption per capita growth  Passes R1 billion annual retail turnover mark  Five out of top ten turnover restaurants in the heart of Black market  40 new restaurant openings planned for F2011 (30 in SA and 10 rest of Africa)

22. Slide 22: Wimpy UK

    22 Wimpy UK  Market remains in grip of protracted recession, pressure on top line growth and margins  Turnover 8% down on last year  Store “churn” representative of 7% of network  Revamp and new store opening programme slowed – function of access to finance  Steers brand opening in Earlsfield p

23. Slide 23: FishAways

    23 FishAways  Market share gains continue, like-on-like growth at 14.7%, twice that of menu price increase inflation  Continues to demystify consumer perceptions about quality take out sea food  100th restaurant opened during the year  12 new restaurant openings planned for F2011

24. Slide 24: Mugg & Bean

    24 Mugg & Bean  Early extraction of synergies and supply of product well underway  Strong presence secured at all major airports  Revamp programme progressing well and will ramp up in F2011  Signed exclusivity with Total Petroleum re forecourt “Grab and Go” offering  Voted “best coffee shop” (L

25. Slide 25: tashas

    25 tashas  Average turnover per restaurant in excess of R1 million every month, 12 months of the year  Melrose Arch company store sold to franchisee  2 new restaurants added during the year i.e. Morningside and Melrose Arch  4 new restaurants planned for F2011

26. Slide 26: Coffee Brands

    26 Coffee Brands  Brazilian Café and Shell alliance continues to gain momentum represented at 34 sites  Further 15 sites planned for F2011  Work in progress to convert existing House of Coffee restaurants to Mugg & Bean

27. Slide 27: Operational performance: Manufacturing division

    Operational performance Manufacturing division

28. Slide 28: Gross revenue % growth – Manufacturing

    28 Gross revenue % growth – Manufacturing 10% Growth 20% 19% 15% 13% 12% 10% 10% 8% 6% 5% -0.65% 0% Sauce & Meat Bakery Baltimore Ice TruFruit WCP Bakery WCP MPP Spice Plant Processing Cream Plant -5%

29. Slide 29: Highlights

    29 Highlights  Strong margin recovery across all production centres and best ever overall operating margin of 9.7% achieved  Significant gains made regarding factory, machine and operating efficiencies (asset utilisation)  Recovery in planned maintenance and subsequent sharp drop off in breakdown

30. Slide 30: Highlights (continued)

    30 Highlights (continued)  Excellent job done of managing and balancing bulk meat stocks and ability to subsidise menu price increases  Take back of previously outsourced Eastern Cape soft serve manufacturing business  Commissioning of new sauce sachet plant and take on of Wimpy sachet business

31. Slide 31: Operational performance: Logistics division

    Operational performance Logistics division

32. Slide 32: Gross revenue % growth – Logistics

    32 Gross revenue % growth – Logistics 13% Growth 30% 27% 25% 21% 19% 20% 16% 15% 10% 8% 5% 0% JHB KZN ECP OFS WCP

33. Slide 33: Highlights

    33 Highlights  Turnover exceeds R1 billion first time ever  Operating margin at 3.0%, best ever  Successful re–location of Western Cape logistics centre and annualised rental savings of R1 million  Commissioning of Warehouse Management System (WMS) at Midrand “hub” and resultant improved warehou

34. Slide 34: Highlights (continued)

    34 Highlights (continued)  Conclusion of take on of Wimpy chilled business in KwaZulu- Natal and Eastern Cape  Successful take on of Wimpy “dry” out of Bloemfontein  Successful take on of Mugg & Bean dry (1 November 2009)

35. Slide 35: Operational performance: Food Services division

    Operational performance Food Services division

36. Slide 36: Highlights

    36 Highlights  Deliberate exit from wider hospitality and food services business  Outsourced to Caterplus (Bidvest Group)  Steers retail range records 13.3% growth in case sales  Wimpy Tomato Sauce and Mustard variants exceed 100,000 cases per annum sales (1.2 million units)  Successful launch

37. Slide 37: Financial Performance

    Financial Performance famous | brands LIMITED

38. Slide 38: Salient Features

    38 Salient Features F2010 % Change Revenue (Rm) 1 674 + 8% Operating profit (Rm) 305 +17% Cash generated by operations (Rm) 346 +25% Earnings per share (cents) 202 +27% Headline earnings per share (cents) 206 +29% Total dividends per share (cents) 114 +50% Dividend cover (times) 1.8 2.1 (PY) ROE 36%

39. Slide 39: Income Statement

    39 Income Statement Rm 2010 2009 % Revenue 1 674 1 549 8 Cost of sales -961 -918 Gross profit 713 631 13 Selling and administrative expenses -408 -369 Operating profit before impairment losses 305 262 17 Impairment losses -4 0 Net interest paid -18 -44 Profit before tax 283 218 30 Taxation -91 -70 P

40. Slide 40: Revenue

    40 Revenue 1800 1 674 1600 1 549 1400 1200 Comp. growth 1 190 29% 1000 872 800 669 64% 69% 72% 600 465 400 66% 73% 74% 22% 19% 20% 200 14% 34% 27% 26% 12% 8% 0 2005 2006 2007 2008 2009 2010 International Franchising Local Franchising Supply chain

41. Slide 41: Operating Profit

    Operating Profit (350 25.0% Comp. omy 300 2T %e ee 262 + 20.0% 250 NTT 217 -O% F 15.0% 200 150 151 F 10.0% 111 100 94 ; 5.0% 50 ia) 0.0% 2005 2006 2007 2008 2009 2010 LO (International Franchising @=——m™_Local Franchising @@== Supply Chain —a- Operating Margin a

42. Slide 42: Segmental Analysis

    42 Segmental Analysis % of Total F 2010 Change Revenue Rm % Franchising – Local 20% 341 14 Supply Chain 72% 1 206 11 International 8% 138 -23 Corp, adjustments (11) 100% 1 674 8 Operating Profit Franchising – Local 66% 203 9 Supply Chain 30% 93 52 International 4% 13 -19 Corp, adjustments (4) 100% 3

43. Slide 43: Operating Profit Local Franchising

    43 Operating Profit Local Franchising

44. Slide 44: Operating Profit Supply Chain

    44 Operating Profit Supply Chain

45. Slide 45: Operating Margin Percentages By Segment

    45 Operating Margin Percentages By Segment

46. Slide 46: Operating Margin Percentages Supply Chain

    46 Operating Margin Percentages Supply Chain

47. Slide 47: Balance Sheet

    47 Balance Sheet Rm 2010 2009 Move ASSETS Property, plant and equipment 116 130 (14) Intangibles 613 560 53 Working capital 84 103 (19) 813 793 20 FUNDING Equity 584 492 92 Net borrowings 161 225 (64) Deferred liabilities and current tax balances 68 76 (8) 813 793 20

48. Slide 48: Cash Flow

    48 Cash Flow Int 18 114 Tax Cash from Ops 85 346 Cash Div Flow 13 CAPEX 96 Acq, 3 Intangibles, 129 129 (33) Debt restructure 44 Borr / Sh Cap Closing cash Opening cash 89

49. Slide 49: Ratios

    Oe Ratios RETURN TIMES (— 50.0 4.0 45.2 45.0 42.0 3.4 ww 40.0 S74 37-97 3.5 35.0 By _—— 38.0 _ : 36.1 = 36.1 33.7 34.5 30.0 NS 33.4 3.0 25.0 28 20.0 2.5 oe 2.8 2.2 15.0 a : a —— 21 2.2 iene 10.0 21 m1 2.0 5.0 AO ie . a a 0.0 T 1 1 T 1.5 2005 2006 2007 2008 2009 2010 LO —e—-RONA (%) -8ROE (%) —#—Div

50. Slide 50: Ratios continued …

    50 Ratios continued … DEBT / EQUITY % NAV

51. Slide 51: Strategy and prospects

    Strategy and prospects famous | brands LIMITED

52. Slide 52: Strategy

    52 Strategy  Embark on a 3-year plan which addresses “under investment” in IT  Cautiously invest in new market segments where we are “under represented”  Pursue “theatre of foods” model (move upstream via high turnover density with low store density brands)  Aggressively pursue 1st to market acc

53. Slide 53: Strategy (continued)

    53 Strategy (continued)  Grow own manufactured franchisee shopping basket: e.g.  Wimpy bakery Western Cape  Mugg & Bean chilled coastal markets  Conclude Midrand Meat Processing Plant to frozen and install back-end primary packaging automation  Introduce 5-day rolling week distribution strategy

54. Slide 54: SOUTH |) AFRICA

    SOUTH |) AFRICA =) See -- TIAN : UM, + = —-— — @ @ a. = om

55. Slide 55: Prospects

    55 Prospects  Fully leverage soccer World Cup event:  Strong presence at national airports, transient motorway sites, shopping centers and coastal resorts  Ensure uninterrupted supply of products  Support with National marketing and promotional activities  Consumer spending to remain under pres

56. Slide 56: Board Changes

    Board Changes famous brands LIMITED

57. Slide 57: Board changes

    57 Board changes  Theofanis Halamandaris appointed Executive Deputy Chairman  Kevin Hedderwick appointed Chief Executive Officer  John Halamandres continues as Non Executive Director

58. Slide 58: Questions

    famous brands LIMITED Questions

59. Slide 59: Company background information

    Company background information

60. Slide 60: Business model: Franchising Division – International

    60 Business model Franchising Division - International This division houses all of the Group’s offshore intellectual property and brands which, besides development of the existing Wimpy brand will, over time be used as a beachhead for the launch of certain of the Group’s other brands in the UK. The

61. Slide 61: Business model: Franchising Division – Domestic (Mainstream)

    61 Business model Franchising Division – Domestic (Mainstream) This division houses all of the Group's South African intellectual property and brands of a mainstream nature, that is those which have wide consumer appeal and are wholly owned trademarks of the Group. Whilst contained within a single b

62. Slide 62: Business model: Franchising Division – Domestic (Theatre of Foods)

    62 Business model Franchising Division – Domestic (Theatre of Foods) This recently installed division houses the Group's niche brand trademarks which are held through joint venture partnerships in which the Group has a controlling interest.

63. Slide 63: Business model: Development Division

    63 Business model Development Division This division exists in order to provide a full turnkey service to all of the brands and their respective franchise partners. It provides a full bouquet of services which covers the drawing of plans, appointing of contractors and project management of all new r

64. Slide 64: Business model: New Business Division

    64 Business model New Business Division This recently created division provides a “one stop shop” to all landlords and property developers as well as the Group's petroleum strategic alliance partners.

65. Slide 65: Business model: Manufacturing Division

    65 Business model Manufacturing Division This division represents a key part of the Group’s backward integration model, tasked with the manufacture of a range of licensed products and brands for use both by the franchise network as well as the greater food services and hospitality industry.

66. Slide 66: Business model: Logistics Division

    66 Business model Logistics Division This division represents the Group’s route-to-market, delivering, to the franchise network, a complete basket of products required to deliver against brand specific menus but specifically excludes the distribution of carbonated soft drinks and fresh fruit and veg

67. Slide 67: Business model: Food Services Division

    67 Business model Food Services Division This divisions core thrust is the extension of the Group's trademarks into the FMCG retail and wholesale markets. A secondary market is that of sourcing quality food service and catering business where there exists spare manufacturing capacity to do so.

68. Slide 68: Business model: Corporate

    68 Business model Corporate The division houses all of the Group’s “back of house” functions which provide a service to the various operating business units.

69. Slide 69: Current shareholding

    69 Current shareholding as at Feb 2010 Coronation Life Managers Limited Peter Halamandaris 26% 30% Theofanis Halamandaris Perikles Halamandaris 5% John Halamandres 7% 12% 9% 11% Enderle SA (Pty) Ltd Other

70. Slide 70: Share price and volumes

    Share price and volumes s zg es Bo Ze za > a =} =} =} =} =) So So So °°. i=} =} i=} So So So So 2 S S S i=} i=} i=} i=} o o oy oS 3S S °S 3S iat oc 2 Q 2 2 a a i) wo a N °o u L 1 1 1 L n I T T T T T t =] =] o So So So o =} oO =} oO i=] So S a S a S a a NC i d a OT-ARIN-TE 60-das-0€ 60-EW-TE 80-das-0

71. Slide 71: Share price and market capitalisation

    71 Share price and market capitalisation

72. Slide 72: Contact information

    Contact information Kevin Hedderwick  Chief Operating Officer  011 651 5812 Stan Aldridge  Group Financial Director  011 651 5902 Keyter Rech  Investor Relations Investor Solutions  011 447 8656  011 447 5204

73. Slide 73: Thank you

    Thank you www.famousbrands.co.za

Famous Brands — FY2010 Earnings Presentation on 6ix