Retail Food Group Limited · ASX:RFG
Retail Food — FY2008 Earnings Presentation
25 slides from Retail Food's earnings presentation, Sep 4, 2008
Slide 1: Full Year Results Presentation for Financial Year ended 30 June 2008
April 2006 For personal use only Retail Food Group Limited Full Year Results Presentation for the Financial Year ended 30 June 2008
Slide 2: Highlights of FY08
Highlights of FY08 Robust business model: For personal use only i. with 4 iconic branded Franchise Systems; ii. generating strong and reliable cashflows; iii. which delivered exceptional results for FY08; iv. exceeding guidance; v. Notwithstanding decreased consumer sentiment, reduced discretionar
Slide 3: FY08 Financial Performance - Summary
FY08 Financial Performance - Summary %Inc v Key Points For personal use only $millions FY07 FY08 Prior Yr Overall performance significantly Network Sales (i) 158 592 274 impacted by positive contribution of Brumby’s (12 months) and Michel’s (10 Total Revenue (iii) 23.6 114.9(v) 387 months) Franchi
Slide 4: Financial Performance – Revenue
FY08 Financial Performance – Revenue T o t al R evenue C o mp osit ion ( $m) ( i) For personal use only Franchise Ot her Wholesale/ Ret ail Michel’s is not a traditional royalty based franchise system – it derives income principally from a wholesale & manufacturing $18.3m $20.5m $23.6m $116.4m mar
Slide 5: Financial Performance – EBIT, NPAT, EPS
FY08 Financial Performance For personal use only EBIT Consistent EBIT accretion historically driven by 40 Up 11% Up26% Up 176% (i) franchise revenue increases 30 176% increase on FY07(i) $m 20 33.6 Despite upscale of operations EBIT continued to be 10 driven by organic growth in historical rev
Slide 6: Financial Performance – Balance Sheet
FY08 Financial Performance – Balance Sheet $millions FY07 FY08 Balance Sheet Highlights For personal use only Current assets 157% increase in net assets resulting from acquisition of two additional Franchise Systems (Brumby’s and Michel’s) funded Cash and cash equivalents 1.5 4.1 by equity issue a
Slide 7: Debt Structure
Debt Structure RFG’s debt to equity ratio stands at 53.7% [ND/(ND+E)] - within RFG’s preferred debt to equity range of 40% to 60% For personal use only Net Debt = RFG core debt less (cash ($4.1m) and CMF debt ($3.9m)) CMF debt secured against CMF Yatala premises Current RFG core debt of $113
Slide 8: Financial Performance – Cash Flow
FY08 Financial Performance – Cash Flow $millions FY07 FY08 Operating Cashflows For personal use only Receipts from customers 30.6 130.1 Historical strong, consistent and recurrent Payments to suppliers and employees (19.7) (102.7) cashflows further enhanced by Brumby’s and Michel’s acquisitions In
Slide 9: Business Overview – Michel's
FY08 Business Overview – Michel’s Settlement of acquisition completed 14 December 2007 For personal use only Manufacturing and wholesale product supply based revenue model Integration of operations functions completed, accounting and IT proceeding to schedule Strategic review of franchisor a
Slide 10: Business Overview – Brumby's
FY08 Business Overview – Brumby’s For personal use only Brumby’s integration complete and system performing beyond expectation Organic outlet growth anticipated to improve with greater reliance on multi-outlet owners Increased focus on securing and proliferating outlet growth in previously les
Slide 11: Business Overview – Donut King
FY08 Business Overview – Donut King For personal use only Continued consistent organic revenue and new outlet growth performance Strong new outlet growth supported by franchisee progression to multi-outlet ownership (10 of 25 outlets) New outlet opening in all states – significant growth (10)
Slide 12: Business Overview – bb's cafe
FY08 Business Overview – bb’s cafe For personal use only Modest new outlet growth continued in highly competitive coffee sector Closures recognise site competition and resultant demand driven Lessor rental expectations at lease renewal Organic growth will continue to be modest Implementation
Slide 13: Average Weekly Sales (AWS) & Average Transaction Value (ATV)
FY08 Business Overview – Average Weekly Sales (AWS) & Average Transaction Value (ATV) AWS FY06 FY07 FY08 Donut King growth improvement FY08 of 2.3% was supported by a For personal use only Donut King 8,981 8,978 9,183 full pricing policy and strategic departure from discount vouchers pcp 3.3% 0.0%
Slide 14: Business Overview – Central Manufacturing Facility (CMF)
FY08 Business Overview – Central Manufacturing Facility (CMF) Improvement of franchise lifestyle to drive multi For personal use only outlet ownership Yatala (QLD) CMF has immediate capacity to service entire Donut King system (no requirement for regional CMF’s) Achieved guidance of delivering p
Slide 15: Business Overview - Summary
FY08 Business Overview - Summary Two strategic acquisitions in Brumby’s and Michel’s achieved For personal use only Brumby’s integration successfully completed, Michel’s ongoing Core Debt de-leveraging of $5.0m as a consequence of robust free cash flow Continued strong financial performance
Slide 16: Strategy & Growth Opportunities
Strategy & Growth Opportunities RFG’s growth strategies are directed toward leveraging: For personal use only • existing intellectual property in its franchise systems; and • brand management and franchising expertise New Store Rollout Driving International Expansion Achieved Earnings Growth Chin
Slide 17: FY09 Outlook – Franchise System Targets
FY09 Outlook – Franchise System Targets Continuing Outlet Expansion in Australia & NZ For personal use only Combined Donut King, bb’s café, Brumby’s and Michel’s FY09 forecast net outlet growth of 33 stores New outlet openings of 55 will be fortified by continued multi-ownership by Franchisees
Slide 18: FY09 Outlook – Operational Financial Targets
FY09 Outlook – Operational Financial Targets Consolidation For personal use only FY08 achieved two significant acquisitions and FY09 will be concerned with consolidation and structural enhancement Further capitalise and integrate synergies and enhancements including: overhead rationalisations
Slide 19: FY09 Outlook – Operational Financial Targets YTD
FY09 Outlook – Operational Financial Targets YTD For personal use only Business model possesses strong defensive revenue and earnings quality which has remained resilient to adverse economic conditions While discretionary spending and consumer sentiment has been impacted, RFG has not experienced
Slide 20: Appendix
1H08 Appendix For personal use only 1. RFG Overview 21 2. RFG – The Franchise Systems 22 Retail Food Group FY08 Results Presentation 3. RFG - Investment Credentials 23 4. Outlets by System by Territory 24 20
Slide 21: RFG - Overview
RFG - Overview Retail Food Group Limited (RFG) is an Australian company listed on the ASX since 22nd June 2006, whose franchise For personal use only systems were also developed in Australia Founded in 1989 RFG is the Intellectual Property owner of 4 full format franchise systems being Donut Kin
Slide 22: RFG – The Franchise Systems
RFG – The Franchise Systems For personal use only FY2006 Network Sales: $123m FY2006 Network Sales: $20m FY2007 Network Sales: $133m FY2007 Network Sales: $26m FY2008 Network Sales: $144m FY2008 Network Sales: $34m Outlets 30 June 2006: 265 Outlets 30 June 2006 : 67 Outlets 30 June 2007: 289 Outlets
Slide 23: RFG – Investment Credentials
RFG – Investment Credentials For personal use only Leading retail food brand RFG was established in 1989 and is a leading Australian retail food brand manager and franchising company with in excess of 1050 franchised outlets in Australia and New Zealand manager and franchising RFG is an intellec
Slide 24: Outlets by System by Territory
Outlets by System by Territory For personal use only Franchise System QLD NSW VIC TAS SA WA NT Aust NZ Total Donut King 94 108 67 8 13 14 3 307 0 307 bb's café 26 3 7 0 8 0 0 44 24 68 Brumby's 128 35 71 0 16 49 8 307 22 329 Retail Food Group FY08 Results Presentation Michel's 57 196 57 0 22 10 0 342
Slide 25: Disclaimer
Disclaimer No responsibility for contents of Investor Presentation For personal use only To the maximum extent permitted by law, Retail Food Group Limited (ABN 31 106 840 082), its officers, advisers and representatives: • make no representation, warranty or undertaking, express or implied, as to th