The One Group Hospitality, Inc. · NASDAQ:STKS
The One Group Hospitality — ONE Group Hospitality — Investor Presentation (July 2014)
37 slides from The One Group Hospitality's investor presentation, Jul 23, 2014
Slide 1: The ONE Group Investor Presentation July 2014
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Slide 2: Cautionary Statements
Cautionary Statements In addition to historical information, this presentation contains statements relating to the Company’s future business and financial performance and future events or developments that may constitute “forward-looking statements” within the meaning of the “safe harbor” provisions
Slide 3: The ONE Group
The ONE Group We are a global hospitality company that develops and operates upscale, high-energy restaurants and turn-key food & beverage services for hospitality venues including hotels, casinos and other high end locations
Slide 4: Investment Highlights
The ONE Group Investment Highlights Category Leading Restaurant Brand with Global Reach Premier and Differentiated High-Energy Restaurant and Hospitality Concepts Strong Performance and Industry-Leading Growth Metrics Capital Efficient Model Drives Positive Returns Attractive Food & Beverage Offerin
Slide 5: Our Company
Our Company Opened our first venue in 2004 Launched STK – Meatpacking in NYC, September 2006 11 STKs currently open & under construction Launched ONExperience™, our hospitality program, in 2010 Currently contracted in 5 hospitality venues Growing global footprint Since 2006 food and beverage sales C
Slide 6: General Information
General Information Operating Cities Operational Landscape Corporate Landscape New York Restaurants 17 Offices Miami Hospitality 5 New York Los Angeles Roof - Pools & Bars 7 London Atlanta Casino Venues 2 Las Vegas Washington DC Management & Employees Chicago 1,500 Orlando London Milan
Slide 7: Venues Open & Under Construction
29 Venues Open & Under Construction STK - Restaurants F & B Restaurants Roofs - Pools & Bars Hospitality STK — Atlanta STK — Los Angeles STK — Las Vegas STK — Mi STK — Downtown NY STK — Midtown NY STK — London STK-DC STK — Disney STK - Chicago STK - Milan Asellina— NY Cucina Asellina - London Bagate
Slide 8: Venues Open & Under Construction
29 Venues Open & Under Construction STK - Restaurants F & B Restaurants Roofs - Pools & Bars Hospitality STK – Atlanta Asellina – NY Radio – London The Perry – S. Beach, FL STK – Los Angeles Cucina Asellina - Atlanta The Rooftop – Miami Gansevoort – Park Ave, NY STK – Las Vegas Cucina Asellina - Lon
Slide 9: STK Overview: A Steakhouse with High Energy and a Great Vibe
STK Overview: A Steakhouse with High Energy and a Great Vibe STK is a reinvention of the traditional steakhouse High-energy dining experience Greater emphasis on social dining by redefining the visitor profile Restaurants built around the bar, featuring DJ played music Targeted demographics High fem
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Slide 11: STK Rebel Overview
STK Rebel Overview: Rebel is a more accessible STK Maintains the unique features, vibe and energy that have proven so successful for STK Broader menu priced to appeal to a wider market Smaller footprint and lower build- out cost Initially targeting primary cities and then focusing on secondary marke
Slide 12: STK Rebel
STK Rebel
Slide 13: STK Rebel
STK Rebel
Slide 14: Hospitality Food & Beverage Services Business
HOSPITALITY FOOD & BEVERAGE SERVICES BUSINESS
Slide 15: F & B Hospitality Overview
F & B Hospitality Overview: Unique opportunity to leverage restaurant and hospitality expertise Manage F&B for hotels, casinos and hospitality venues Utilize company-branded restaurants or tailored concepts Generate high margin fee income with minimal capital expenditure Enables low risk testing of
Slide 16: Turn-Key F & B Solutions for Hospitality Clients
Turn-Key F & B Solutions for Hospitality Clients (1) Hospitality locations open for a full year include The Cosmopolitan Hotel, Gansevoort Park, ME London, The Hippodrome Casino and The Perry Hotel (temporarily closed in 2013). (2) Total food and beverage sales at managed units represents the revenu
Slide 17: A Leading Hospitality Company – ONExperience
A Leading Hospitality Company – ONExperience™ Note: Bagatelle, Gansevoort Park Rooftop, Marconi, Radio M, Asellina, Cucina Asellina and Heliot are jointly-owned and / or licensed brands.
Slide 18: A Clear Market Leader
A Clear Market Leader Open Table Diners Choice Awards 2014 - STK Washingon DC OpenTable aie “ Best American Restaurant” Qinge QQ ioe Sigte Fine Mibront Gar Scone Best in Category CUCINA ASELLINA ‘Condé Nast r “A saucy spin on the steakhouse formula” - Zagat raver VANITY FAIR Restaurant in New York”
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Slide 20: The ONE Group Globally
The ONE Group Globally
Slide 21: Expansion Goals
Expansion Goals Expect to open as many as two to three STKs per year over the next three years 2014 development STK Washington DC opened on April 25 -STK Miami scheduled to reopen in 4Q14 2015 development -STK Disney STK Milan -STK Chicago -ME Milan Hospitality Multiple other development projects in
Slide 22: Seasoned Management Team with Proven Track Record
Seasoned Management Team with Proven Track Record Name Position Michael Serruya Non-Executive Chairman Jonathan Segal Founder, CEO Sam Goldfinger CFO John Inserra COO Celeste Fierro Senior Vice President Corporate Director Sharon Segal (Europe) Senior Director of Quincy Fitzwater Operations (Europe)
Slide 23: Financial Performance
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Slide 24: Strong Revenue Performance
Strong Revenue Performance ($Millions) Total Food & Beverage Sales at Owned & Managed Units (2) (1 ) STK SSS includes all STK restaurants that have been open for 18 months as of that date but excludes STK Miami. (2 ) See footnote 1 on slide 5 for definition of Total Food & Beverage Sales at Owned an
Slide 25: Adjusted EBITDA and Net Income
Adjusted EBITDA and Net Income TOG Adjusted EBITDA(1) (1) See Appendix for definition of Adjusted EBITDA and Adjusted Net Income and for reconciliation to GAAP Net Income (Loss).
Slide 26: Adjusted EBITDA – Owned STKs and F&B Hospitality
Adjusted EBITDA – Owned STKs and F&B Hospitality ($Millions) FY Ended December 31, 2013 Owned % of F&B % of % of STK’s (1 ) Rev Hospitality Rev Others (2) Rev Total Revenues $ 33.6 100.0 % $ 7.3 100.0 % $ 5.0 100 % $ 46.0 Expenses: Food and beverage costs 8.8 26.1 % 1.2 24.3 % 10.0 Unit operating ex
Slide 27: Targeted Unit Economics
Targeted Unit Economics Hospitality TARGETED STK Rebel F&B Services Revenue $ 9.0 mil $ 5.0 mil -- Current EBITDA $ 2.0 mil $ 1.0 mil -- Average Cash Same Store Sales Growth 1 % to 2 % Investment (1) $ 3.8 mil $ 2.5 mil <$ 500,000 ROI 53 % 40 % -- Food & Beverage Costs 26.5 % to 27.0 % 5.0 % to Mana
Slide 28: Delivering Potential Value For Shareholders
Delivering Potential Value For Shareholders Attractive Business Model Strong STK Growth / Launch Rebel Growth in Hospitality Food and Beverage Services Business Strong Top Line Growth Solid Margin Leverage Attractive Earnings Growth
Slide 29: Appendix
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Slide 31: Historical GAAP Income Statement
Historical GAAP Income Statement ($Millions) FYE December 31, 2011 A 2012 A 2013 A Revenues: Owned unit net revenues $ 43.7 $ 56.4 $ 38.6 Management and incentive fee revenue 2.4 3.7 7.3 Total revenue $ 46.1 $ 60.1 $ 46.0 Cost and expenses: Owned operating expenses: Food and beverage costs 10.5 14.3
Slide 32: Historical GAAP Balance Sheet
Historical GAAP Balance Sheet ($Millions) FYE December 31, 2011 A 2012 A 2013 A Assets: Cash and cash equivalents $ 1.7 $ 1.0 $ 11.7 Accounts receivable, net 2.3 3.4 2.9 Inventory 1.2 1.4 1.0 Other current assets 0.1 0.3 0.8 Due from related parties 0.2 0.1 0.2 Total Current Assets $ 5.5 $ 6.2 $ 16.
Slide 33: Reconciliations of Non-GAAP Measures – Cautionary Statements
Reconciliations of Non-GAAP Measures – Cautionary Statements ADJUSTED EBITDA: We define adjusted EBITDA as net income before interest expense, provision for income taxes, depreciation and amortization, non-cash impairment loss, deferred rent, pre-opening expenses, non-recurring gains and losses and
Slide 34: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($Millions) FYE December 31, 2011 A 2012 A 2013 A Net (loss) income attributable to THE ONE GROUP $ 1.0 ($ 2.3 ) ($ 21.5 ) Net (loss) attributable to noncontrolling interest $ 0.9 ($ 0.4 ) ($ 0.4 ) Net (loss) income $ 1.9 ($ 2.8 ) ($ 21.9 ) Interest expense, net of int
Slide 35: Adj. EBITDA – Owned STKs and F&B Hospitality - Reconciliation
Adj. EBITDA – Owned STKs and F&B Hospitality - Reconciliation ($Millions) GAAP Adjusted Owned F&B Total Adj. EBITDA (Owned 2013 Adj. Total STK’s (1 ) Hospitality Other (2) STK and F&B Hosp. Level) Revenues: Owned unit net revenues $ 38.6 $ 38.6 $ 33.6 $ 5.0 Management and incentive fee revenue 7.3 7
Slide 36: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($Millions) FYE December 31, 2011 A 2012 A 2013 A Net (loss) income attributable to THE ONE GROUP $ 1.0 ($ 2.3 ) ($ 21.5 ) Net (loss) attributable to noncontrolling interest $ 0.9 ($ 0.4 ) ($ 0.4 ) Net (loss) income $ 1.9 ($ 2.8 ) ($ 21.9 ) Non- recurring gain (1)
Slide 37: Total Food and Beverage Sales at Owned and Managed Units Reconciliation
Total Food and Beverage Sales at Owned and Managed Units Reconciliation ($Millions) FYE December 31, 2011 A 2012 A 2013 A Owned Unit Net Revenue (a) $ 43.7 $ 56.4 $ 38.7 Management and Incentive Fee Revenue 2.4 3.7 7.3 GAAP Revenue 46.1 60.1 46.0 Food & Beverage Sales at Managed Units (a) 37.3 49.8
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