Retail Food Group Limited · ASX:RFG
Retail Food — H1 FY2007 Earnings Presentation
21 slides from Retail Food's earnings presentation, February 2007
Slide 1: Retail Food Group Limited Half Year Results
April 2006 Retail Food Group Limited Half Year Results for the six months ended 31 December 2006 Colour copy of this document may be accessed via the Company’s website at www.rfg.com.au
Slide 2: Contents
Contents I. Business Overview II. Operational Performance III. Summary Financial Statements IV. Key Performance Indicators V. Additional H1 07 Commentary VI. Strategy & Growth Opportunities VII. Summary 2
Slide 3: Business Overview
Business Overview Established 1989, now considered leading Australian retail food brand manager & franchising Leading retail food company brand manager and Two franchise systems; Donut King and bb’s café: 349(1) franchised outlets in Australia and New Zealand franchising company RFG is intellectual
Slide 4: The Franchise Systems
I. Business Overview The Franchise Systems Donut King bb’s cafe (Aust Sales only) FY 06A Network Sales: A$122m FY 06A Network Sales: A$20m H1 07 Network Sales: A$68m H1 07 Network Sales: A$11m FY 07F Network Sales: A$135m FY 07F Network Sales: A$21m Outlets 30 June FY 06A: 265 Outlets 30 June FY 06A
Slide 5: FY07 Half Year Highlights
I. FY07 Half Year Highlights On target to meet FY 07 Prospectus Forecasts EBIT at H1 07 over 50% of full year forecast EBIT EBIT up 34% to $6.3m on previous corresponding period (PCP) EBIT up 22% to $6.3m on PCP continuing operations Total Revenue up 11.1% to $15,7m on PCP New outlet commissionings
Slide 6: Operational Performance – Donut King Outlet Growth
II. Operational Performance – Donut King Outlet Growth Donut King Outlets 18 new outlet openings and 4 outlet closures in H1 07 Represents 86% of Full Year new outlet commissionings An increase of 7 openings (or 64%) on PCP 4 closures - typical of openings / closings for system of Donut King size Ge
Slide 7: Operational Performance – bb's Café Outlet Growth
II. Operational Performance – bb’s Café Outlet Growth bb’s Café Outlets 6 new outlet openings in H1 07 Positive results of rationalisation and re-branding Outlet openings exceed FY 07 Full Year Prospectus forecast by 2 • Net outlets 70 as at 31 December 2006 Net of 3 closures • On track to meet Pros
Slide 8: Operational Performance – Combined Outlet Growth
II. Operational Performance – Combined Outlet Growth Combined Systems Outlet Growth • 24 new outlet commissionings for H1 07, an increase of 10 over the PCP • Net growth of 17 outlets for H1 07 Achieved solely by organic growth An increase of 11 stores (or 183%) on PCP On target to achieve Prospectu
Slide 9: Operational Performance – Net Outlet Growth
II. Operational Performance – Net Outlet Growth New Outlet Growth FY 07 – Full Year Forecast • Total outlets for both systems as at 30 June 07 were forecast to be 353, a net increase of 21 outlets (or +6.3%) over FY 06 • 21 new Donut King outlets were forecast to be open in FY 07 with a provision fo
Slide 10: Operational Performance – Network Sales
II. Operational Performance – Network Sales Network sales continue to grow H1 07 Network sales from Australian outlets totalled $79.2m 50.5% of Prospectus forecast of $156.7m Network sales traditionally stronger in H2 07 due to the impact of new store openings in H1 07 represents a 12.0% increase ov
Slide 11: Operational Performance – Average Weekly Sales
II. Operational Performance – Average Weekly Sales H1 07 Average weekly sales for Donut King ‘Combined’ and bb’s café exceed Prospectus forecasts Average weekly sales for Donut King ‘Full concept’ outlets are tracking below Prospectus forecast (- $66 per outlet per week) but offset by greater than f
Slide 12: Operational Performance – Revenue Composition & Growth
II. Operational Performance – Revenue Composition & Growth Revenue Total Revenue for H1 07 was $15.7m Exceeds the PCP H1 06 by 11.1% Exceeds the PCP H1 06 by 18.0% when discontinued operations are removed from H1 06 results 63.4% of full year Prospectus forecast for revenue Total Revenue (excluding
Slide 13: Summary Financial Statements – Income Statement (abridged)
III. Summary Financial Statements – Income Statement (abridged) EBIT (FY 06 & FY 07) • EBIT for H1 07 was $6.3m Exceed PCP by 34% 53.8% of FY 07 Prospectus forecast Confident of achieving FY 07 EBIT forecast • Corporate Expenses for H1 07 were $3.5m Increase of $200k or 6% on PCP Tracking with Full
Slide 14: Summary Financial Statements – Balance Sheet
III. Summary Financial Statements – Balance Sheet FY 06 1HY 07 +/(-) FY 06 +/(-) FY 06 $m $m $m % Cash and cash equivalents 1.6 4.4 2.8 172.5% Trade and other receivables 4.2 5.2 1.0 23.8% Inventories 0.4 0.1 (0.3) (69.8%) Highlights Other 1.1 0.2 (0.9) (81.2%) • Low requirement for cash Total curre
Slide 15: Summary Financial Statements – Cashflow Summary
III. Summary Financial Statements – Cashflow Summary H1 06 H1 07 $m $m • Service business model with minimal Cash flows from operating activities capital expenditure and working capital Receipts from customers 14.3 15.7 requirements and higher ROE Payments to suppliers and employees (10.2) (10.6) •
Slide 16: Key Performance Indicators
IV. Key Performance Indicators • H1 07 exceeding Prospectus growth forecasts: Franchise Revenue and Total Revenue growth of 21.5% and 18.0% respectively EBIT growth of 34% in H1 07 H1 07 Franchise Revenue growth exceeds FY 06 Full Year by 2.4 times EBIT & EBITDA growth exceeds growth achieved in FY
Slide 17: Additional Commentary
V. Additional Commentary Yatala Factory Premises • Refurbishment works nearing completion • Installation and commissioning of the CMF and the CRF equipment is being progressed Central Manufacturing Facility (CMF) • Commissioning of commercial CMF will realize the Company’s FY 07 primary growth initi
Slide 18: Additional Commentary – Brumby's Bakeries offer
V. Additional Commentary Brumby’s Bakeries Holdings Limited: • On 18 December 2006 the Company announced that it had made an offer to be implemented by Scheme of Arrangement to acquire all the issued shares in the BSX listed Brumby’s Bakeries Holdings Limited (Brumby’s Bakeries) . • Pursuant to the
Slide 19: Strategy & Growth Opportunities
VII. Strategy & Growth Opportunities • existing intellectual property in the Donut King and bb’s café systems; and its • brand management and franchising expertise New Store Rollout International Expansion ( Achieving) (investigating) Driving Average Weekly Sales Acquisitions ( Achieving) (targeting
Slide 20: Strategy & Growth Opportunities
VII. Strategy & Growth Opportunities Strategy and Growth Opportunities Going forward the number of RFG business drivers will increase from the present 2 to 6, summarised as follows: A. Underpinning Historical and FY 07 performance are; 1. New Store Rollout 2. Same Store Sales These two attributes ar
Slide 21: Summary – H1 07
VIII. Summary – H1 07 • H1 07 EBIT ($6.3m) is 34.0% up on H1 06 • H1 07 NPAT ($3.9m) is 39.3% up on PCP • Store rollout plans on track for FY 07 – forecast new outlet growth of 25 – performance YTD suggests this target will be comfortably achieved. • New store rollout of 24 achieved to 31st December