Slide 1: Final Results Presentation 2019
FINAL RESULTS PRESENTATION 2019
Slide 2: Agenda
01 11 Introduction to Maximum potential Franchise Brands model 02 12 At a glance The B2C brands 06 13 Our strategy and Financials business model 19 07 Acquisitions update Metro Rod 20 08 Summary and outlook Willow Pumps 21 09 Appendix Metro Plumb 10 Water in. Waste out. FRANCHISE BRANDS PLC: 2019 FI
Slide 3: An Introduction to Franchise Brands Plc
AN INTRODUCTION TO FRANCHISE BRANDS PLC • Established in 2008 by Stephen Hemsley (Executive Chairman) and Nigel Wray (Non-executive Director). • Focused on building market-leading businesses in selected customer segments using primarily a franchise model. • The Group currently has a combined network
Slide 4: Franchise Brands: At a Glance
FRANCHISE BRANDS: AT A GLANCE B2B B2C Founded in 1983, commercial drainage specialist Founded in 1997, Willow Pumps is a leading ChipsAway, Ovenclean and Barking Mad Metro Rod provides a range of drain clearance, pump supply, installation and servicing business, each provide a high level of service
Slide 5: A Strong Performance Driven by Metro Rod System Sales and Willow Pumps
A STRONG PERFORMANCE DRIVEN BY ACCELERATING METRO ROD SYSTEM SALES AND ACQUISITION OF WILLOW PUMPS 2019 FINANCIAL HIGHLIGHTS OPERATIONAL HIGHLIGHTS • Metro Rod’s Vision 2023 strategy REVENUE ADJUSTED EBITDA* PROFIT BEFORE TAX continues to drive our organic growth. +24% +29% +14% • Metro Rod’s system
Slide 6: The 2019 Results: At a Glance
ADJUSTED THE 2019 RESULTS: AT A GLANCE EBITDA* +29% 6.0 Thousands 5.5 +£0.2m £5.2m +£0.5m 5.0 +£0.5m Adjusted EBITDA £m 4.5 £4.0m 4.0 3.5 3.0 2.5 2018 Metro Rod Willow Pumps B2C 2019 FRANCHISE BRANDS PLC: 2019 FINAL RESULTS PRESENTATION 5
Slide 7: Our Strategy and Business Model: Generating Growth
OUR STRATEGY AND BUSINESS MODEL: GENERATING GROWTH • Franchise Brands is focused on building market-leading businesses in selected customer segments, using primarily a franchise model. • We currently have a combined network of almost 450 UK franchisees across five franchise brands. • Our focus is on
Slide 8: Metro Rod's Rate of Growth Continues to Accelerate Through Vision 2023
METRO ROD’S RATE OF GROWTH CONTINUES TO ACCELERATE THROUGH VISION 2023 STRATEGY Vision 2023: returns the franchisee to front and centre of their businesses. • 2019 growth metrics: – System sales growth of 14% (2018: 8%). – 45% of franchisees achieved annual sales above £1m (2019: 34%). – Continued i
Slide 9: Willow Pumps Acquisition Expands Range of Services
WILLOW PUMPS ACQUISITION ALLOWS FOR EXPANSION OF METRO ROD AND METRO PLUMB’S RANGE OF SERVICES Acquisition of Willow Pumps in October 2019 helps further Metro Rod’s ambition of expanding its range of services to the commercial market: • Leading pump supply, installation and servicing business with a
Slide 10: Significant Opportunity to Create a National Plumbing Business
SIGNIFICANT OPPORTUNITY TO CREATE A NATIONAL PLUMBING BUSINESS Metro Plumb’s sales continued to grow in 2019, however, our current structure has limitations: • Metro Plumb is dependent on one principal customer. • Metro Plumb franchised territories are predominantly operated by Metro Rod franchisees
Slide 11: Our Ambition: A "Water In. Waste Out." Service
OUR AMBITION IS TO OFFER A “WATER IN. WASTE OUT.” SERVICE TO THE COMMERCIAL SECTOR COMMERCIAL ADDRESSES IN THE UK 2.2m FRANCHISE BRANDS PLC: 2019 FINAL RESULTS PRESENTATION 10
Slide 12: The Maximum Potential Model
THE MAXIMUM POTENTIAL MODEL MAXIMUM POTENTIAL MAXIMUM POTENTIAL MAXIMUM POTENTIAL £110m £161m £189m MAXIMUM PENETRATION MAXIMUM PENETRATION MAXIMUM PENETRATION 4.6% 6.2% 7.4% MAXIMUM YIELD PER ADDRESS MAXIMUM YIELD PER ADDRESS MAXIMUM YIELD PER ADDRESS £1,105 £1,194 £1,155 FRANCHISE BRANDS PLC: 2019
Slide 13: The B2C Brands
THE B2C BRANDS FRANCHISEES FRANCHISEES FRANCHISEES RECRUITED IN 2019 RECRUITED IN 2019 RECRUITED IN 2019 35 14 16 FRANCHISEES FRANCHISEES FRANCHISEES 205 112 87 GROSS PROFIT GROSS PROFIT GROSS PROFIT £4.07m £0.69m £0.73m DIVISIONAL GROSS PROFIT DIVISIONAL OVERHEAD DIVISIONAL EBITDA* £5.49m £2.96m £2
Slide 14: Summary of Group Results
SUMMARY OF GROUP RESULTS 2019 2018 Change Change Year ended 31 December £’000 £’000 £’000 % Statutory revenue A 44,013 35,470 8,543 24% A • Statutory consolidated revenue increased 24% to £44.0m, with the additional revenue Franchise payments (19,612) (17,330) (2,282) 13% coming from Metro Rod and o
Slide 15: Fee & Direct Labour Income
FEE & DIRECT LABOUR INCOME 2019 % of 2018 % of Change Change Year ended 31 December £’000 Total £’000 Total £’000 % A • Strategically important MSF income increased by 11% to £11.2m, driven by a 15% increase in MSF at Metro Rod as a result of the 14% MSF income A 11,207 46% 10,107 56% 1,101 11% incr
Slide 16: Individual Business Results
INDIVIDUAL BUSINESS RESULTS A • Metro Rod delivered an EBITDA contribution EBITDA BY BUSINESS of £3.2m in the period, an increase of 19%: 2019 2018 Change Change − Accelerating system sales growth of £’000 £’000 £’000 % 14% (2018: 8%) from our engaged franchise network. B2B- Franchisor (Metro Rod) A
Slide 17: Adjusted EPS and Dividend
ADJUSTED EPS AND DIVIDEND • Adjusted EPS increased by 29% to 4.34p from 3.36p: GROWTH IN EPS AND DIVIDEND (P) − Earnings growth of 29%. − Weighted average number of shares has grown from 2019 0.95 4.34 77.7m to 77.9m as the result of movements in treasury shares and the issuance of Ordinary Shares t
Slide 18: Movement in Adjusted Net Debt
MOVEMENT IN ADJUSTED NET DEBT 10 • Adjusted net debt increased by Thousands £0.5m £9.2m £1.5m £4.2m to £9.2m (2018: £5.0m). 8 • Gross bank debt increased by £0.6m £1.6m to £9.4m, as payments of £0.4m £0.3m £2.4m were off-set by the £4.0m increase in term loan following 6 £0.4m the acquisition of Wil
Slide 19: Balance Sheet
BALANCE SHEET 2019 2018 Change Change A • Statutory net debt has increased from £5.9m Year ended 31 December £’000 £’000 £’000 % to £11.1m: Property, plant and equipment 4,781 1,286 3,495 73% − £4.0m of the £5.0m acquisition of Willow Pumps was funded with debt. Intangible assets 35,507 27,232 − Wil
Slide 20: Acquisitions Update
ACQUISITIONS UPDATE • We continue to selectively seek acquisitions that expand the range of services that Metro Rod, Metro Plumb and Willow Pumps can offer to the commercial market in pursuit of our ambition to offer a “Water in. Waste out” service. • The B2C division will focus on the acquisition o
Slide 21: Summary & Outlook
SUMMARY & OUTLOOK • 2019 has seen us successfully build the business both organically and by acquisition. • Acceleration in the rate of system sales growth at Metro Rod continues to drive organic growth. • Acquisition of Willow Pumps is an important step in servicing the “Water in. Waste out” requir
Slide 22: Appendix
FRANCHISE BRANDS PLC: 2019 FINAL RESULTS PRESENTATION 21
Slide 23: The Group's Franchise Systems
THE GROUP’S FRANCHISE SYSTEMS* AS AT 31 DECEMBER 2019 Network size New franchisees Franchisees leaving Net new Network size 31 December, 2018 recruited in 2019 the system in 2019 franchisees in 2019 31 December, 2019 B2C 387 65 + (48) = 17 404 Metro Rod 40 6 + (4) = 2 42 Metro Plumb** 1 2 + 0 = 2 3
Slide 24: Environment, Social and Governance
ENVIRONMENT, SOCIAL AND GOVERNANCE Julia Choudhury appointed as Board Director with overall responsibility for ESG ENVIRONMENT We are committed to reducing our environmental impact, continually improving our environmental performance and supporting our customers in reaching their environmental goals
Slide 25: Our Team
OUR Stephen Hemsley Chris Dent Peter Molloy TEAM Executive Chairman Chief Financial Officer Managing Director, Metro Rod Tim Harris Julia Choudhury Colin Ross Managing Director, B2C Division Corporate Development Director Chief Information Officer Nigel Wray David Poutney Rob Bellhouse Non-executive
Slide 26: Disclaimer
DISCLAIMER The information contained in this document (“Presentation”) and the presentation made to you verbally has been prepared by Franchise Brands plc (the “Company”). Franchise Brands plc is a UK company quoted on AIM, a market operated by London Stock Exchange plc. This Presentation has not be
Slide 27: www.franchisebrands.co.uk @FB_PLC www.metrorod.co.uk
www.franchisebrands.co.uk www.metrorod.co.uk www.metrorod.co.uk www.willowpumps.co.uk @FB_PLC @MetroRodUK @MetroPlumbUK @WillowPumps Franchise Brands plc Ashwood Court Tytherington Business Park Macclesfield SK10 2XF mail@franchisebrands.co.uk www.chipsaway.co.uk www.ovenclean.com www.barkingmad.uk.