Retail Food Group Limited · ASX:RFG
Retail Food — H1 2016 Earnings Presentation
28 slides from Retail Food's earnings presentation, Feb 25, 2016
Slide 1: 1H16 Results Presentation
10 Ee YEARS CELEBRATING “S33 wee SINCE LISTING RETAILFOODGROUP STRENGTH IN BRANDS <= (©) @) 2 1H16 RESULTS PRESENTATION @ <= +P
Slide 2: Retail Food Group (ASX:RFG)
Retail Food Group (ASX:RFG) RFG is Australia’s largest multi-brand retail food franchise owner, developer & manager, with a network of 2,500+ outlets across 12 Brand Systems spanning 63 licensed global territories. The Company is also a roaster and supplier of high quality coffee & affiliated produc
Slide 3: 1H16 Results Highlights
For personal use only 1H16 Results Highlights 3
Slide 4: Record Achievements
Record Achievements Global revenue streams driving record business performance For personal use only 1H16 Performance Remarkable Outcomes 1H15 1H16 Change • Leveraging multiple opportunities to drive growth, synergies & overall business performance Revenue(1) $78.0m $148.3m 90.2% • Record results(
Slide 5: Results Highlights
Results Highlights Proven business model delivering positive shareholder returns For personal use only 60 25 90% 80% 50 20 70% 60% Cents per Share 40 15 $ Millions 50% 30 40% 10 20 30% 5 20% 10 10% 0 0 0% 1H11 1H12 1H13 1H14 1H15 1H16 1H11 1H12 1H13 1H14 1H15 1H16 EBITDA NPAT Interim Dividend EPS Di
Slide 6: Record Network Growth
Record Network Growth New Outlet Commissionings Record Outlet Commissionings 100 82 • Commissioned 2,500th outlet in December 2015 For personal use only • High demand for RFG’s innovative retail concepts 22 • Recruitment initiatives: ‘Manage to Own’ & finance incentives 16 16 14 11 12 11 • Record 14
Slide 7: Group Achievements & Initiatives
For personal use only Group Achievements & Initiatives 7
Slide 8: Diverse Global Business Model
Diverse Global Business Model Multi-brand & multi-revenue business model driving rapid growth For personal use only Continued Diversification of EBITDA Composition(1) • Revenue streams demonstrating significant earnings growth • 1H16 EBITDA contribution from ‘International’ (16.8%) & ‘Commercial’ (3
Slide 9: EBITDA Summary
EBITDA Summary Diverse operations safeguard investment & provide multiple levers for growth For personal use only Division EBITDA Contribution(1) 1H15 1H16 % Change Divisional EBITDA Breakdown 1H15 1H16 % Change Domestic Franchise Operations $23.6m $25.4m 7.6% Brand Systems (Domestic) $30.5m $
Slide 10: Acquired Asset Integration
Acquired Asset Integration FY15 acquired assets continue to outperform For personal use only Integration KPIs Exceeded • Acquired assets & resultant synergies driving positive outcomes across entire business platform • 1H16 EBITDA contribution from FY15 acquired assets exceeding budget • Combined EB
Slide 11: Accelerated Growth Platform
Accelerated Growth Platform Organisational Enhancement & Resource Prioritisation International Territories • Board expansion • New Zealand Brand System networks (Brumby’s, Esquires, bb’s For personal use only • Kerry Ryan appointed Non-Executive Director Café, The Coffee Guy and Cafe2U) transferred
Slide 12: Divisional Performance
Divisional Performance For personal use only 12
Slide 13: Brand System Summary
Brand System Summary Global Domestic New Outlet EBITDA ($m)(1) EBITDA CPO(2) ($’000) For personal use only Division Total Outlets SSS (%) ATV (%) Commissionings 1H16 PCP 1H16 PCP 9 341 7.8 5.4% 2.8% 2.0% 23.0 7.6% Traditional 10 256 5.3 (7.0%) 2.2% 2.4% 21.1 1.4% 11 281 8.6 2.4% 2.3% 4.7% 29.9 12.0%
Slide 14: Traditional Brand Systems
Traditional Brand Systems 1H16 Achievements Network Sales 1H15 1H16 PCP(1) • Division Network Sales decrease of 7.4% a result of 2H15 network Donut King $85.8m $82.3m (4.1%) For personal use only consolidation activity & rationalisation initiatives offset by SSS increase Michel’s Patisserie $81.9m $
Slide 15: Coffee Retail Division
Coffee Retail Division 1H16 Achievements • EBITDA CPO increased $6.2k or 50.2% over PCP across domestic For personal use only network driven by integration synergies Highlights 1H15(1) 1H16 PCP • Gloria Jean’s Coffees SSS & ATV growth (2.2% & 2.8%) driven by Network Sales $35.1m $124.8m 255.6% bever
Slide 16: Mobile Division
Mobile Division 1H16 Achievements For personal use only • Mobile EBITDA CPO increased to $3.5k (PCP: $1.0k) for international Highlights 1H15(1) 1H16 PCP network, whilst domestic EBITDA CPO sustained at $6.4k Gross Franchise Revenue $1.8m $3.5m 94.4% • Strong network population growth reflective of
Slide 17: QSR Division
QSR Division 1H16 Achievements • Successful premium product launches for Pizza Capers & Crust Highlights 1H15 1H16 PCP For personal use only Gourmet Pizza (Summer Flavours & La Dolce) driving Division ATV Network Sales $107.8m(1) $102.9m (4.5%) increase of 6.6% on PCP • EBITDA CPO increased 7.0% ove
Slide 18: Coffee & Allied Beverage
Coffee & Allied Beverage 1H16 Achievements • Performance & prospects support continued investment in coffee For personal use only • Coffee Wholesale EBITDA increased to $8.2m (PCP: $1.2m) • Significant untapped opportunity exists with global coffee market Highlights 1H15 1H16 PCP forecast to grow c.
Slide 19: Outlook
For personal use only Outlook 19
Slide 20: FY16 Outlook
FY16 Outlook New Outlet Commissiongs For personal use only Domestic International 300 Outlook 250 • Positive outlook maintained for FY16 & beyond 200 150 • Increasingly diverse global operations & opportunity 100 • Low risk expansion framework in place (Master 50 Franchise/Joint Venture Agreements)
Slide 21: Appendices
For personal use only Appendices 21
Slide 22: Appendix – Earnings & Performance Reconciliation
Appendix 1 – Earnings & Performance Reconciliation 1H15 1H16 For personal use only Underlying LFL Reported Underlying Reported EBITDA $39.3m $36.4m $34.5m $53.5m $49.2m PCP% 36.4% 42.7% NPAT $25.3m $23.3m $21.5m $32.1m $28.9m PCP% 27.1% 34.4% EPS 17.0cps 15.7cps 14.5cps 19.6cps 17.6cps PCP% 15.3% 21
Slide 23: Appendix - Definitions
Appendix 2 - Definitions For personal use only Acronym Description GFR Franchise Revenue (inc. FSF) + net coffee contribution FSF Franchise Service Fee SSS Same Store Sales ATV Average Transaction Value LFL Like for Like CPO Contribution per Outlet (EBITDA) EVO Project Evolution QSR Pizza Capers & C
Slide 24: Appendix – Cash Flow Performance
Appendix 3 – Cash Flow Performance 1H15 ($m) 1H16 ($m) For personal use only Receipts from customers 92.4 179.3 • 71.1% increase in gross operating cash flow to Payments to suppliers and employees (66.4) (134.8) $44.5m (PCP: $26.0m) Gross operating cash flows 26.0 44.5 • Continuing strong cash flows
Slide 25: Appendix – Financial Position
Appendix 4 – Financial Position FY15 ($m) 1H16 ($m) For personal use only Assets: Cash reserves 17.1 14.9 • Reduction in trade receivables of $1.4m due to improved cash Trade receivables 43.9 42.5 collections and reflected in improved cash flow conversion to EBITDA ratio (90.4%) Financial assets 29.
Slide 26: Appendix – Debt Structure
Appendix 5 – Debt Structure Senior Debt Facility 1H16 For personal use only Net debt(1) $197.2m • New bi-lateral facility secured with NAB and Westpac with combined facility of $304.0m Interest expense(1) $9.9m Interest cover (times) (1) 10.0x • Facility headroom (including cash) at 31 December 2015
Slide 27: Appendix – Capital Management
Appendix 6 – Capital Management Shares Price ($) Proceeds/Value ($m) For personal use only Shares on issue 1 July 2015 162,937,484 Dividend Reinvestment Plan (Final FY15 Dividend) 1,405,763 4.17 5.86 Shares on issue 31 December 2015 164,343,247 Share Value 5.86 27
Slide 28: Disclaimer
Disclaimer No responsibility for contents of Presentation To the maximum extent permitted by law, Retail Food Group Limited (ABN 31 106 840 082), its officers, advisers and representatives: For personal use only • make no representation, warranty or undertaking, and accept no responsibility or liabi