Slide 1: Results presentation for the year ended 29 February 2012
You’re in good company Results presentation for the year ended 29 February 2012
Slide 2: Agenda
Agenda Highlights Business model Operational performance Financial results Board changes Strategy and prospects Results presentation 2012 2
Slide 3: Highlights
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Slide 4: Highlights
Highlights 11th successive year of record turnover and profits – coming off an increasingly high base Milestone R2 billion revenue exceeded Milestone R400 million operating profit exceeded - 15% growth on prior year Operating margin maintained at record 19.1% - strong “claw back” in second half Net
Slide 5: Highlights
Highlights Opened 146 new restaurants, surpassing goal of 2000 Traction gained in Africa: 21% growth in system-wide sales Successful integration of F2011 acquisitions Manufacturing and distribution capability continue to expand Awarded 10th position in Sunday Times Top 100 Companies Survey Clean swe
Slide 6: Business model
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Slide 7: Business model
Business model Food New Franchising Franchising Franchising Franchising Development Procurement Manufacturing Logistics Corporate The MAD Lab Services Business Division Division Division Division Division Division Division Division Division Division International Domestic Domestic Domestic Marketing
Slide 8: Operational performance
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Slide 9: Franchising division
Franchising division Results presentation 9
Slide 10: System-wide sales growth
System–wide sales growth 25% 21,0% 20% 15% 10% 8,5% 7,7% 5% 0% Domestic Rest of Africa Total Results presentation 2012 10
Slide 11: Like-on-Like sales growth
Like-on-Like sales growth 8% 7,0% 7% 6% 5,1% 5,2% 5% 4% 3% 2% 1% 0% Domestic Rest of Africa Total Results presentation 2012 11
Slide 12: New restaurants opened
New restaurants opened 60 Total 146 50 48 40 30 21 19 20 17 12 9 10 5 6 2 1 1 1 2 2 0 Results presentation 2012 12
Slide 13: Franchise network
Franchise network 600 Total 2 043 533 521 500 400 371 300 200 121 123 128 100 81 48 24 14 19 13 4 4 12 2 9 8 8 0 Results presentation 2012 13
Slide 14: Trading footprint
Trading footprint South Africa 1 767 Rest of Africa 155 United Kingdom 121 UK 121 Dubai 2 Sudan 5 Ivory Coast 4 Kenya 12 Nigeria 3 Tanzania 3 Malawi 4 Zambia 19 Mozambique 3 Botswana 26 Zimbabwe 11 Mauritius 27 Namibia 25 Swaziland 8 South Africa 1 767 Lesotho 3 Results presentation 2012 14
Slide 15: Highlights – Domestic – Mainstream Brands
Highlights – Domestic – Mainstream Brands Launched new Steers image and positioning - REAL BURGERS Innovation around core products Increased focus on chicken Results presentation 2012 15
Slide 16: Highlights – Domestic – Mainstream Brands
Highlights – Domestic – Mainstream Brands New design roll-out continues to gain momentum Maiden entry into Mauritius Re-focus on breakfast market Results presentation 2012 16
Slide 17: Highlights – Domestic – Mainstream Brands
Highlights – Domestic – Mainstream Brands Remains at forefront of per capita consumption growth amongst Black consumers Accountable for 40% of Group’s Africa turnover First to market with technology, innovation, trading format and value for money Results presentation 2012 17
Slide 18: Highlights – Domestic – Mainstream Brands
Highlights – Domestic – Mainstream Brands “On the Move” model with Total continues to gain traction – ten new sites this year Maiden entry into Zambia and Mauritius “Metro” trading format launched in Newcastle Results presentation 2012 18
Slide 19: Highlights – Domestic – Mainstream Brands
Highlights – Domestic – Mainstream Brands Competitive climate fuels growth in the category Record 15% growth in system-wide sales Results presentation 2012 19
Slide 20: Highlights – Domestic – Mainstream Brands
Highlights – Domestic – Mainstream Brands New corporate identity launched and roll-out commencing Successfully integrated into franchising and supply chain structures Results presentation 2012 20
Slide 21: Highlights – Domestic – Mainstream Brands
Highlights – Domestic – Mainstream Brands Re-launch delayed due to Gauteng liquor license moratorium “Rehabilitation” of existing network well under way Results presentation 2012 21
Slide 22: Highlights – Domestic – Developing Brands
Highlights – Domestic – Developing Brands Customer acceptance Slow start but gaining 2nd restaurant opened continues to grow momentum – in Musina and push McGinty’s OR Tambo into mass market commencing Results presentation 2012 22
Slide 23: Highlights – Domestic – Theatre of Foods Brands
Highlights – Domestic – Theatre of Foods Brands Phenomenal organic growth continues Flagship “le parc” format launched at Hyde Park to extraordinary acclaim Export of concept under consideration Results presentation 2012 23
Slide 24: Highlights – Domestic – Theatre of Foods Brands
Highlights – Domestic – Theatre of Foods Brands First to market in pioneering artisan bakery category Ready to expand to Western Cape and KwaZulu Natal Results presentation 2012 24
Slide 25: Highlights – Domestic – Theatre of Foods Brands
Highlights – Domestic – Theatre of Foods Brands Brand completely re-invented Re-launch of high street offering imminent Results presentation 2012 25
Slide 26: Average monthly sales of key line items
Food for thought Average monthly sales of key line items 1.5 million breakfasts 3.4 million burgers 4 million cups of coffee 2 million ice cream cones 1.8 million pizzas Results presentation 2012 26
Slide 27: Highlights – United Kingdom
Highlights – United Kingdom Severe economic conditions prevail - tough market to trade in Nominal contributor to Group revenue (only 3.8%) Right-sizing concluded, business is profitable, and no distraction to management “The business isn’t shabby, it’s the UK that’s shabby” Keith McLachlan, Thebe Se
Slide 28: Manufacturing division
Manufacturing division Results Results presentation presentation 2012 28
Slide 29: Gross Revenue % Growth - Manufacturing
Gross Revenue % Growth - Manufacturing 30% Growth 12.6% 27,3% 25% 20% 15,1% 15,4% 15% 11,0% 10% 7,7% 6,0% 5% -2,9% 0% Meat Plant Bakery Sauces & WCP Meat WCP Bakery Fruit Juice Ice-Cream -5% Spices Plant Results presentation 2012 29
Slide 30: Highlights - Manufacturing
Highlights - Manufacturing Contended with 30% average increase in beef price and 17% increase in paraffin price Operating margin unchanged at 11.7% Chicken fillet plant commissioned in November 2011 Successful take-on of Milky Lane soft serve volumes concluded in October Results presentation 2012 30
Slide 31: Logistics division
Logistics division Results Results presentation presentation 2012 31
Slide 32: Gross Revenue % Growth - Logistics
Gross Revenue % Growth - Logistics 60% Growth 20.1% 50% 48,9% 40% 30% 24,5% 20% 18,1% 17,4% 10% 8,0% 0% Midrand, Gauteng KwaZulu Natal Western Cape Eastern Cape Free State Results presentation 2012 32
Slide 33: Highlights - Logistics
Highlights - Logistics Contended with 16% increase in diesel price Operating margin improves to best ever at 3.5% Take-on of all newly acquired brands concluded: 43% increase in line items ex-warehouse Owner driver model continues to gain momentum: 49% and 41% of volume delivered from KZN and Wester
Slide 34: Financial results
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Slide 35: Salient features
Salient features F 2012 % Change Revenue (Rm) 2 156 15 Operating profit (Rm) 413 15 Cash generated by operations before changes in working capital (Rm) 452 15 Earnings per share (cents) 278 15 Headline earnings per share (cents) 278 15 Total dividends per share (cents) 200 29 Net debt/equity (%) 10
Slide 36: Income statement
Income statement Rm F 2012 F 2011 % Revenue 2 156 1 878 15 Cost of sales (1 233) (1 065) Gross profit 923 813 14 Selling and administrative expenses (510) (455) Operating profit 413 358 15 Net interest paid (11) (15) Profit before tax 402 343 17 Taxation (134) (112) Profit for the year 268 231 16 Ad
Slide 37: Revenue (Rm)
Revenue (Rm) 2500 2 156 2000 1 878 1 685 1 549 1500 1 190 1000 872 500 0 2007 2008 2009 2010 2011 2012 Results presentation 2012 37
Slide 38: Operating profit (Rm)
Operating profit (Rm) 450 19,5% 19,1% 400 19,0% 19,1% 350 18,3% 18,3% 18,5% 300 18,0% 250 17,3% 17,5% 200 16,9% 413 358 17,0% 150 308 262 217 16,5% 100 151 50 16,0% 0 15,5% 2007 2008 2009 2010 2011 2012 Operating Profit Operating Margin Results presentation 2012 38
Slide 39: Statement of financial position (Rm)
Statement of financial position (Rm) F 2012 F 2011 Move Assets Property, plant and equipment 156 131 25 Intangible assets 695 660 35 Working capital 128 77 51 979 868 111 Funding Equity 840 709 131 Net borrowings 82 101 (19) Deferred liabilities and current tax balances 57 58 (1) 979 868 111 Results
Slide 40: Cash flow (Rm)
Cash flow (Rm) 500 11 Interest 450 400 132 Tax 350 300 399 Cash from 159 250 operations Dividends 200 !%&$ !"#$ 150 84 Capex (net) 100 58 Funding (net) 50 86 41 0 Opening cash Closing cash Results presentation 2012 40
Slide 41: Segmental analysis
Segmental analysis % of F 2012 F 2011 Change Total Rm Rm % Revenue Franchising – Local 20 440 386 14 Supply chain 76 1 614 1 383 17 United Kingdom 4 82 95 (13) Corporate 20 14 100 2 156 1 878 15 Operating Profit Franchising – Local 64 265 235 13 Supply chain 34 141 116 21 United Kingdom 2 7 11 (30)
Slide 42: Board changes
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Slide 43: Board changes
Board changes Panagiotis Halamandaris Periklis Halamandaris Theofanis Halamandaris John Lee Halamandres Stanley Aldridge Kevin Hedderwick Bheki Sibiya Hymie Levin Christopher Boulle Results presentation 2012 43
Slide 44: Strategy and prospects
Strategy and prospects famous! brands You're in good company
Slide 45: Strategy
Strategy Pursue acquisitive brand growth in new markets Build manufacturing capability, push for new business - existing plants and new opportunities Expand logistics capability - capacity and owner driver Build procurement capability and further develop “lowest cost producer” status Open 250 new re
Slide 46: Prospects
Prospects Consumer spending, especially middle income, expected to be muted Competitive climate and category fragmentation will persist Margins will continue to come under pressure, across the total business Speed, convenience, innovation and value for money will remain key drivers The Group will re
Slide 47: Questions
Questions Results presentation 2012 47
Slide 48: Results presentation for the year ended 29 February 2012
You’re in good company Results presentation for the year ended 29 February 2012
Slide 49: Group information
Group information famous! brands You're in good company
Slide 50: Strategic intent
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 Results presentation 2012 50
Slide 51: Famous Brands "Recipe"
Famous Brands “Recipe” Our primary orientation remains that of an integrated franchise system Building great and enduring brands will always be our obsession Our franchisees are our #1 customer and we must unshakeably offer them a business model that works We must be consumer driven – always afforda
Slide 52: Business model
Business model Franchising division International - Houses the Group’s offshore intellectual property and brands This division is responsible for development of the existing Wimpy brand Domestic Mainstream Brands - Houses the Group’s brands that are of a mainstream nature, namely those brands which
Slide 53: Business model
Business model MAD Lab MAD is the acronym for Marketing . Artistry . Design. This newly created business unit has been established to bring about a significant step change in the Group’s marketing, new product development and restaurant design functions Food Services Responsible for extending the Gr
Slide 54: Business model
Business model New business Responsible for the centralised processing and approval of all new franchisee and landlord / developer enquiries. Accountable for all lease negotiations ensuring optimum rental agreements are negotiated on behalf of our franchise partners. Resourced also to manage the Gro
Slide 55: Current shareholding
Current shareholding Other Coronation Life Managers 29.7% 28.7% 5.0% 11.7% Enderle SA (Pty) Peter 6.3% Ltd Halamandaris 8.2% 10.4% John Halamandres Perikles Theofanis Halamandaris Halamandaris Results presentation 2012 55
Slide 56: Operating profit – Local franchising
Operating profit – Local franchising Rm 300 64% 62,5% 62,0% 60,9% 62% 250 h19% 60,2% growt 60% nd pou 200 ar com 5 ye 58% 150 56% 265 235 54% 54,8% 100 204 186 142 52% 50 112 50% 49,3% 0 48% 2007 2008 2009 2010 2011 2012 Operating Profit Operating Margin Results presentation 2012 56
Slide 57: Operating profit – Supply chain
Operating profit – Supply chain Rm 160 10% 8,7% 9% 140 8,4% 8,1% 7,8% 8% 120 7% 5,7% 100 5,6% 6% 80 5% 141 4% 60 116 94 3% 40 61 61 2% 20 36 1% 0 0% 2007 2008 2009 2010 2011 2012 Operating Profit Operating Margin Results presentation 2012 57
Slide 58: Operating margin percentages – by division
Operating margin percentages – by division 70 62,0 62,5 60,9 60,2 60 54,8 49,3 50 40 30 18,3 16,9 18,3 19,1 19,1 20 17,3 10,9 10,1 11,3 9,6 9,2 10 8,1 7,8 8,4 8,7 5,6 5,7 0 2007 2008 2009 2010 2011 2012 Local Franchising Group United Kingdom Supply chain Results presentation 2012 58
Slide 59: Operating margin percentages – Supply chain
Operating margin percentages – Supply chain 14 11,7 11,7 12 9,5 9,7 10 8 7,3 6 4 3,5 3,0 3,0 2,4 2,1 2 0 2008 2009 2010 2011 2012 Manufacturing Logistics Results presentation 2012 59
Slide 60: Ratios
Ratios % Times 50 4,0 45,2 44,5 45 42,0 42,5 38,2 3,5 40 37,4 35 38,0 36,1 36,1 35,7 3,0 34,5 30 33,4 2,5 2,4 25 2,3 2,5 2,2 2,2 2,4 2,1 20 2,2 2,0 15 2,1 10 1,8 1,5 1,6 5 1,4 0 1,0 2007 2008 2009 2010 2011 2012 Rona (%) ROE (%) Net Asset Turn (times) Dividend Cover (times) Results presentation 2012
Slide 61: Ratios continued
Ratios continued NAV Debt/Equity % 10 50 45,8 8,7 9 45 8 7,4 40 7 35 6,2 30,3 6 30 5,2 27,5 5 4,3 25 4 3,5 20 14,3 3 15 9,7 2 10 7,0 1 5 0 0 2007 2008 2009 2010 2011 2012 Net asset value per share (R) (NAV) Debt/Equity (%) Results presentation 2012 61
Slide 62: Consumer Recognition
Consumer Recognition BEST burger for the 16th consecutive year BEST chips for the 14th consecutive year BEST pizza for the 12th time BEST coffee shop for the 12th consecutive year BEST Breakfast BEST New Restaurant Source: Leisure Options Results presentation 2012 62
Slide 63: Contact information
Contact information Kevin Hedderwick Chief Executive Officer +27 11 651 5812 Stan Aldridge Group Financial Director +27 11 651 5902 Del-Maree English Investor Communications +27 83 395 8608 Results presentation 2012 63
Slide 64: Results presentation
You’re in good company Results presentation for the year ended 29 February 2012