Tortilla Mexican Grill Ltd. · LSE:MEX
Tortilla Mexican Grill — FY2021 Earnings Presentation
29 slides from Tortilla Mexican Grill's earnings presentation, Apr 11, 2022
Slide 1: 2021 Annual Results Presentation
Slide 2: Presenting Team
TORTILLA PRESENTING TEAM ——= RICHARD MORRIS - ceo ANDY NAYLOR - CFO
Slide 3: Introduction & Highlights
01 INTRODUCTION & HIGHLIGHTS – Richard Morris, CEO 02 FINANCIAL REVIEW– Andy Naylor, CFO 03 STRATEGIC & OPERATIONAL REVIEW – Richard Morris, CEO 04 SUMMARY & OUTLOOK – Richard Morris, CEO 05 Q&A 3
Slide 4: Tortilla
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Slide 5: We are the UK's largest and most successful fast-casual Mexican restaurant business
We are the UK’s largest and most successful fast-casual Mexican restaurant business • Founded in 2007 • Leading fast-casual Mexican • Value-for-money proposition • By Brandon Stephens with a mission restaurant group in the UK • Freshly-prepared, customisable, tasty of bringing authentic burritos to
Slide 6: Strategic & Operational
STRATEGIC & OPERATIONAL • Seven new sites added to the estate during the Period, bringing the total number of sites at the period end to 64: • Three new company-run sites • Three new delivery kitchens supporting fast-growing delivery proposition • New partnership with Merlin Entertainments to open a
Slide 7: Financial Review
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Slide 8: Revenue increased 79.5% to £48.1m
Pre-IFRS 16 FY21 FY20 • Revenue increased 79.5% to £48.1m (FY20: £26.8m) driven by strong £m £m underlying growth, less trading weeks lost1 due to restrictions and new store Revenue 48.1 26.8 openings Cost of Sales (9.8) (6.0) Gross Profit 38.3 20.8 • LFL revenue increased 23.8% vs 2019, notably abo
Slide 9: Revenue
TORTILLA AVERAGE WEEKLY SALES (£000 REVENUE 1,200 • Sales channel mix evolved reflecting 1,000 regulations, overall big swing towards 449 422 387 376 369 362 800 delivery vs pre-pandemic levels 514 475 324 531 359 135 523 • Market-leading LFLs: 600 113 166 263 292 346 302 279 • +23.8% for the year 1
Slide 10: Increase in operating cash flow in line with the improvement in Adjusted EBITDA
• Increase in operating cash flow in line with the improvement in At 2 Jan At 3 Jan 2022 2021 Adjusted EBITDA, save for the settlement of a number of 2020 £m £m working capital-related cashflows that were deferred to early 2021 Non-current assets Right of use assets 24.9 25.3 • Increased expenditure
Slide 11: Well-placed to withstand industry headwinds
SECTOR CHALLENGE ACTION TAKEN • Increased wages in Nov 2021, ahead of the legal requirement in Apr 2022 • Fared well to date, not had to shut a store due to staffing issues and it’s not held us back with new store openings Labour • Operational and menu simplicity reduces training required, and reduc
Slide 12: Value for money proposition
With economists forecasting inflation to hit nearly 8% in April, our value for money proposition becomes increasingly important. The Group has pricing headroom to offset these increases and expects customers to down trade from higher cost peers as the cost of living squeeze increases. We know price
Slide 13: Strategic & Operational Review
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Slide 14: Q1 2022 LFL sales growth of 20.1%
• Q1 2022 LFL sales growth of 20.1% (CGA Peach Jan: +6.2%, Feb: +8.6%) • 2022 has started well, trading in line with expectations. Moved back into a post COVID world with trading patterns as anticipated, with delivery levelling off at circa 35% of sales • Strong start against, and confidence in, tar
Slide 15: Well-placed to navigate uncertainty
• Well-placed to navigate uncertainty - value-for-money, health and customisable proposition mitigating challenging consumer confidence • Favourable property market provides strong pipeline of new Track record of outperforming the wider hospitality industry sites – pipeline for 2023 looking strong (
Slide 16: Accelerated UK roll out, Franchising & Delivery Kitchen, Growth Opportunities
ACCELERATED UK FRANCHISING & DELIVERY KITCHEN INTERNATIONAL ROLL OUT PARTNERSHIPS EXPANSION GROWTH GROWTH OPPORTUNITIES UNDERPINNED BY: FRESH, CUSTOMISABLE PRODUCT PROPOSITION WELL INVESTED INFRASTRUCTURE PEOPLE & CULTURE 16
Slide 17: 68 sites globally
TORTILLA SITE OPENINGS BY FORMAT 20 • Three Tortilla-operated sites opened during FY21: Edinburgh, 15 Windsor, Exeter 10 • Strong confidence over FY22 openings, with two new sites opened 5 YTD and seven more planned 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 •
Slide 18: Scalable business model with extensive spare capacity
• Scalable business model with extensive spare capacity in the central kitchen and well- invested operating infrastructure leverages ability to expand capital-light franchise model • Partnership launched with Merlin Entertainments to open at Chessington World of Adventures under the Tortilla Pronto
Slide 19: Delivery kitchens extend reach of the Group's delivery service
• Delivery kitchens extend reach of the Group’s delivery service, help to saturate high demand areas and help to protect the in-store sales and experience for customers • Low capex cost means low sales can achieve decent returns – as long as delivering circa £10k per week, sites are profitable • Thr
Slide 20: Significant international opportunity driven by growing global popularity of burritos
• Significant international opportunity driven by growing global popularity of burritos • Successfully trade from nine sites operated in the Middle East by franchise partner Eathos Ltd • The Middle East franchise has successfully pivoted to a delivery model resulting in record sales over the last tw
Slide 21: Record financial results and strong strategic progress
• Record financial results and strong strategic progress • Strong QSR brand, with a clear long-term growth strategy and significant growth opportunities over near, medium and long term • Well positioned to navigate uncertainty (e.g. energy and cost of goods inflation to labour shortages), further mi
Slide 22: Q&A
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Slide 23: Appendix
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Slide 24: Freshness, innovation, sustainability and provenance
Freshness: Our toppings and guacamole are freshly made in-house every day Innovation: Menu regularly reviewed and • Third most loved fast-casual chain in the UK refreshed to add trending fillings (e.g. chili no carne), popular add-ons (e.g. churros) • Best Mexican Restaurant in London and seasonal s
Slide 25: Uncompromising in site selection
• Uncompromising in site selection • Size: 60 sqM – 200 sqM • CAPEX: circa £350k - £425k depending on size, site condition and store front requirements • ROCE: 35% minimum investment hurdle • Use Class: ‘E’ • Locations: High street, shopping centres / leisure schemes, transport hubs, motorway servic
Slide 26: Tortilla's Central Production Unit
• Tortilla’s 5,500 sq ft Central Production Unit (CPU) in Tottenham Tortilla has an established and experienced senior management team to support a Hale provides the production infrastructure to double the size of business of scale the estate. • The CPU supplies all of the menu items sold in the res
Slide 27: Tortilla's people, values and culture
• Tortilla's people, values and culture are the foundation of our success • An inclusive culture with important values such as kindness and integrity • Continue to embrace and encourage diversity: • Workforce is now 48% non-British national • More than half of management are women • Under 25-year-ol
Slide 28: ESG commitment and targets
As part of Tortilla ongoing commitment to ESG, the Group appointed external consultants Sustainable Advantage to assess its performance across four areas (environmental, social, governance, ESG integration) and set targets for improvements over the next 2 years, outlined below: Assessment highlights
Slide 29: Real California Burritos & Tacos
TORTILLA Real California Burritos & Tacos
Tortilla Mexican Grill — FY2021 Earnings Presentation on 6ix