Retail Food Group Limited · ASX:RFG
Retail Food — H1 2024 Earnings Presentation
32 slides from Retail Food's earnings presentation, Feb 20, 2024
Slide 1: 1H24 Results Presentation
Retail Food Group Limited Level 4, 35 Robina Town Centre Drive Robina Qld 4226 20 February 2024 1H24 Results Presentation Please find enclosed for release to the market Retail Food Group Limited’s 1H24 Results Presentation. This announcement has been authorised for release by the Board of Directors.
Slide 2: Half Year Results Presentation
20 RESULTS HALF YEAR 24 PRESENTATION
Slide 3: Interim results update
Interim results update Agenda Matt Marshall 1. Key highlights Chief Executive Officer 2. Business update 3. Half year financial performance 4. Q&A Results Webinar Tuesday 20 February 10:00am AEDT Rob Shore Conference call: Chief Financial Officer https://s1.c-conf.com/diamondpass/10037003-8shh3d.htm
Slide 4: About Retail Food Group
About Retail Food Group Retail Food Group is a global food and beverage company headquartered in Queensland, Australia. RFG is Australia’s largest multi-brand retail food and beverage franchise owner with a portfolio of quality franchise brands under its ownership. 33 >40m COUNTRIES CONSUMER TRANSAC
Slide 5: Our guiding principles
Our guiding principles FRANCHISEE CUSTOMER PEOPLE FUTURE FIRST OBSESSED MATTER FOCUSED We recognise that the We understand that our We are committed to fostering As we journey forward, we success of our franchise customers are the driving force a supportive and inclusive embrace innovation and partn
Slide 6: Group continues to gain momentum
Group continues to gain momentum Network Sales Same Store • Network Sales growth of 4.7% on 2H23. Immaterial decline on PCP due to FY23 outlet closures and price competition in the ($4.5m) Sales Growth QSR segment Immaterially down 1.7% 1.8% • 70 new outlets opened in 1H24, up from 13 in 1H23. Domes
Slide 7: Execute on growth opportunities
Execute on growth opportunities GROW THE MARKETING PRODUCT TECHNOLOGY DELIVER OMNI NETWORK FOCUS INNOVATION DEVELOPMENT CHANNEL EXPERIENCES Focus on core brands Customer led insights Strong product Technology to enhance Path to purchase journey mapping innovation pipeline customer experience and Str
Slide 8: 1H24 Trading Outlet Growth
1H24 Trading Outlet Growth • All core brands except Brumby’s were in net outlet growth. Brumby’s franchisee recruitment remains challenging due to a nationwide baker shortage Non-Core • Rack’em Bones BBQ Ribs continued to grow ahead of (17) expectations and offset 75% of pizza network sales decline
Slide 9: New and renewed stores
New and renewed stores 22 NEW PHYSICAL OUTLETS OPENED 32 REFURBISHMENTS COMPLETED IN 1H24 Donut King Fountain Gate Donut King Ocean Keys 9 BEEFY’S OUTLETS ACQUIRED 5 PREVIOUSLY CLOSED OUTLETS REOPENED Donut King Gloria Jean’s Donut King Marrickville Stanhope Gardens Pacific Fair 699 743 OUTLETS July
Slide 10: Company store portfolio grew quickly
Company store portfolio grew quickly 60 • YTD Four wall EBITDA of ($0.2m) inclusive of coffee synergies, excluding corporate management time. Pace of openings in late 1H24 creating short term profitability challenges 50 • Acquired Beefy’s including 9 retail outlets (none are franchised). Company sto
Slide 11: Network continues to grow and renew
Network continues to grow and renew 77 Franchise Partner renewals across all 51 Approved franchise applications. 3 Dark Brumby’s outlets settled in 1H23. brands. Successful roll out of Up from 66 renewals in Up from 34 approved Manage-to-own (MTO) Success. Made. Simple. previous comparable period. a
Slide 12: Multi-site Operator Focus
Multi-site Operator Focus Future Objectives High potential MSO forum scheduled for March Incentive program designed to unlock joint business plans that; Improved execution Incentivises our best operators to grow their outlet portfolio with RFG, standards and AWS Provides a benchmark of partnership a
Slide 13: Focus shifts to new eComm channels for growth
Focus shifts to new eComm channels for growth Rack ’em Bones BBQ Ribs is an online brand launched in late FY23 to leverage our existing QSR outlets and maximise profitability. GROWTH Annualised Rack ’em Bones is now available in 901 locations, ACCELERATING $9.1m up from 42 outlets at 30 June. Deploy
Slide 14: Customer Led Marketing
Customer Led Marketing Marketing and product initiatives are prioritised to drive new customer acquisition, frequency, loyalty and targeted value offers New Product Campaigns & ‘Value’ based Outlet Loyalty Development Partnerships offers Standards Trending ingredients Strong executions Tailored deal
Slide 15: Driving New Customers and Frequency - QSR
Driving New Customers and Frequency - QSR Protecting Franchisee Profitability Driving brand relevance Launch of the ‘Crustworthy’ • Franchise partner profitability is a key focus brand platform that speaks to the elevated during intensive competitor discounting standard and pizza experience • Gross
Slide 16: Technology deployment drives improved customer experience
Technology deployment drives improved customer experience 1 2 Digital kiosks On Table Ordering Successful roll out of our first digital QR code technology to facilitate kiosk to Gloria Jean’s Melton, VIC. order at table now deployed to pilot We’ll evaluate outcomes & expect to sites with a focus on
Slide 17: Technology deployment drives improved customer experience
Technology deployment drives improved customer experience 3 4 Transition to TASK eComm site launches Transition of Crust to TASK tills Rack’em Bones will launch a has commenced full rollout dedicated eComm website in in February 2024 including 2H24 following the transition delivery tracking of Crust
Slide 18: Continued focus on growth opportunities
Continued focus on growth opportunities GROW THE PRODUCT DELIVER OMNI NETWORK INNOVATION CHANNEL EXPERIENCES MARKETING TECHNOLOGY FOCUS DEVELOPMENT 1H24 Half Year Presentation 17
Slide 19: Financial Results
FINANCIAL RES RETAIL FOOD
Slide 20: Café, Coffee, Bakery ('CCB') performed strongly
Café, Coffee, Bakery (‘CCB’) performed strongly $181m $169m • CCB contributes c.70% of group network sales with higher revenue conversion due to vertical integration of coffee DOMESTIC NETWORK SALES SAME STORE SALES DOWN 0.1% ON 1H23 UP 3.2% and pie manufacturing • Net trading outlets in core brands
Slide 21: Café, Coffee, Bakery ('CCB')
Café, Coffee, Bakery (‘CCB’) Network Sales : Cafe, Coffee, Bakery(1) • Customer count was impacted by FY23 outlet closures and lower foot traffic in malls in a tougher economic environment • Despite macro challenges, 1H24 Network sales were immaterially down 0.1% on 1H23 and up 7.4% on 2H23 • CCB pr
Slide 22: BEEFY's performing strongly post acquisition
BEEFY’s performing strongly post acquisition 19 days Christmas trading • Beefy’s acquisition completed on 11 December and was consolidated for 19 days from that date with strong trading during the peak tourism season. The trend continued through January, with $0.9m $34.5K a slowdown as expected as S
Slide 23: Quick Service Restaurants ('QSR') remains challenged
Quick Service Restaurants (‘QSR’) remains challenged $74m $71m • QSR contributed 30% of group network sales with no vertical integration of product sales into the network DOMESTIC NETWORK SALES SAME STORE SALES DOWN 5.5% ON 1H23 DOWN 1.3%1 • Competitors continued to use heavy discounting in their pr
Slide 24: Quick Service Restaurants ('QSR')
Quick Service Restaurants (‘QSR’) Network Sales: Quick Service Restaurants • Customer count impacted by competitor discounting and was particularly apparent during Christmas and New Year trading which fell below PCP by $0.5m, down (7.2%) • Same Store Sales down $3.9 million in pizza brands offset by
Slide 25: Income Statement
Income Statement UNDERLYING CONSOLIDATED INCOME STATEMENT Change Change 1H24 vs 1H24 vs • Underlying Revenue increased 2% on 1H23 and 8% on $millions 1H23 2H23 1H24 1H23 2H23 2H23 with a larger corporate store portfolio and offset NETWORK SALES 259.1 243.4 254.8 (2%) 5% REVENUE 52.2 49.5 53.4 2% 8%
Slide 26: Reported vs underlying results
Reported vs underlying results • Underlying Revenue excludes marketing fund movements and the USA operations whilst they undergo a transformation into growth. $2.6m • Underlying EBITDA excludes non-recurring costs of transformation, $1.2m Transformation, acquisition and acquisitions and legacy legal
Slide 27: Financial Position
Financial Position CONSOLIDATED BALANCE SHEET $millions FY23 1H24 CURRENT ASSETS • Cash reserves of $20.9m includes $18.0m of unrestricted cash Cash and cash equivalents 22.3 20.9 Trade receivables 11.1 10.2 (FY23: $17.9m) Inventories 3.7 5.6 Lease receivables 19.3 22.8 • Inventory levels increased
Slide 28: Cash Flow
Cash Flow UNDERLYING CASHFLOW STATEMENT $millions 1H23 1H24 UNDERLYING CASHFLOW FROM OPERATING ACTIVITIES 7.7 12.1 $12.1m 79% Operating cashflows not included in underlying 0.7 (2.0) Underlying Operating Underlying EBITDA to Cashflow Inflows, up 58% Underlying Operating CASHFLOW FROM OPERATING ACTIV
Slide 29: FY24 Guidance
FY24 Guidance • Same Store Sales growth of 1.8% in 1H24 • Corporate store roll out largely complete for Revenue from contracts despite impacts of weaker macro economic FY24 with focus now on outlet standards, conditions on the retail environment – trends revenue growth and improving margins to with
Slide 30: 1H24 Half Year Presentation
1H24 Half Year Presentation 29
Slide 31: Disclaimer
DISCLAIMER This Presentation contains summary information about the current activities of Retail Food Group Limited ACN 106 840 082 and its subsidiaries (RFG, the Company or Group) as at the date of this Presentation, unless otherwise stated. The information in this Presentation is of a general natu
Slide 32: Glossary
Glossary 3PA Third party aggregator GJDT Gloria Jeans Drive Thru Four In relation to company stores, EBITDA excluding overhead costs of the Mobile Mobile Van Wall corporate management time, inclusive of marketing levies payable to EBITDA marketing funds ATV Average Transaction Value MSO Multi-Site O