Famous Brands Limited · JSE:FBR
Famous Brands — FY2017 Earnings Presentation
60 slides from Famous Brands's earnings presentation, Feb 28, 2017
Slide 1: Results Presentation for the year ended 28 February 2017
RESULTS PRESENTATION for the year ended 28 February 2017
Slide 2: Agenda
AGENDA Milestones Building capability Financial results Foundations for the future Questions Results presentation for the year ended 28 February 2017
Slide 3: Milestones
famous brands A. you're in good company > g ms MILESTONES i 7 vd ge
Slide 4: Strong revenue growth of 33%
Strong Revenue growth of 33% Results presentation for the year ended 28 February 2017
Slide 5: Operating profit before and after non-operational items
Operating profit before non-operational items 18% Operating profit after non-operational items 5% Results presentation for the year ended 28 February 2017
Slide 6: Seven acquisitions concluded to advance growth targets
Seven acquisitions concluded to advance growth targets; all successfully integrated Results presentation for the year ended 28 February 2017
Slide 7: Achieved strategic intent of building scale and capability
Achieved strategic intent of building scale and capability across operations Results presentation for the year ended 28 February 2017
Slide 8: Business model transformed with GBK acquisition
Business model transformed with GBK acquisition Results presentation for the year ended 28 February 2017
Slide 9: Successful leadership transition
Successful leadership transition Results presentation for the year ended 28 February 2017
Slide 10: Refined vision and strategy
Refined vision and strategy Results presentation for the year ended 28 February 2017
Slide 11: Building Brand Capability
famous | brands you're in good company BUILDING BRAND CAPABILITY
Slide 12: Building Brand Capability | System-wide Sales Growth
BUILDING BRAND CAPABILITY | SYSTEM-WIDE SALES GROWTH 11.5% 10.7% 5.0% DOMESTIC INTERNATIONAL TOTAL EXCL. GBK Results presentation for the year ended 28 February 2017
Slide 13: Building Brand Capability | Like-on-like Sales Growth
BUILDING BRAND CAPABILITY | LIKE-ON-LIKE SALES GROWTH 7.5% 6.4% -1.5% DOMESTIC INTERNATIONAL TOTAL EXCL. GBK Results presentation for the year ended 28 February 2017
Slide 14: Building Operational Brand Capability | Trading Footprint
BUILDING OPERATIONAL BRAND CAPABILITY | TRADING FOOTPRINT South Africa 2 270 Ireland 6 AME 339 UK 166 United Kingdom 166 Greece 1 Other 7 Egypt 5 Nigeria 125 Saudi Arabia 1 Ghana 1 UAE 8 2 782 Oman 1 Sudan 6 Ethiopia 1 Total Kenya 7 Restaurants Zambia 42 Angola 7 Malawi 11 Botswana 35 Zimbabwe 9 Nam
Slide 15: Building Brand Capability | New Restaurants Opened
BUILDING BRAND CAPABILITY | NEW RESTAURANTS OPENED 192 60 52 Total 29 24 19 8 STEERS ERS RS WIMPY MP MPY DEBONAIRS PIZZA FISHAWAYS MUGG & BEAN EMERGING BRANDS EMERGING BRANDS Results presentation for the year ended 28 February 2017
Slide 16: Building Brand Capability | Restaurant Numbers
BUILDING BRAND CAPABILITY | RESTAURANT NUMBERS 2 782 608 589 607 Total 309 240 219 113 97 STEERS ER RSS WIMPY MP PY DEBONAIRS PIZZA FISHAWAYS MUGG & BEAN MR MR BIGGS B GBK EMERGING EMERGING BRANDS BRANDS Results presentation for the year ended 28 February 2017
Slide 17: Building Brand Capability
BUILDING BRAND CAPABILITY Official launch of PAUL in SA with opening of Melrose Arch Profusion of consumer awards across brand portfolio Results presentation for the year ended 28 February 2017
Slide 18: Building Brand Capability | Goals
BUILDING BRAND CAPABILITY | GOALS Improve home Leverage delivery offering strategic alliance across all brands with Total and Shoprite in Africa Build capability in Expand tashas digital and social footprint in UAE media arenas Grow and streamline Signature brand portfolio Results presentation for t
Slide 19: Building Hospitality Capability
BUILDING HOSPITALITY CAPABILITY
Slide 20: Building Hospitality Capability
BUILDING HOSPITALITY CAPABILITY Acquisition of By Word of Mouth facilitates access to broader food services category Results presentation for the year ended 28 February 2017
Slide 21: Building Hospitality Capability | Goals
BUILDING HOSPITALITY CAPABILITY | GOALS Grow presence in premium corporate market Plan to enter home meal replacement space (stand-alone stores retailing bespoke products) Establish footprint in Cape Town and Durban Results presentation for the year ended 28 February 2017
Slide 22: Building Logistics Capability
BUILDING LOGISTICS CAPABILITY
Slide 23: Building Logistics Capability | Revenue Growth
BUILDING LOGISTICS CAPABILITY | REVENUE GROWTH 21% 19% 17% 16% 15% 15% 9% GAUTENG KZN WESTERN CAPE EASTERN CAPE FREE STATE MPUMALANGA Results presentation for the year ended 28 February 2017
Slide 24: Building Logistics Capability
BUILDING LOGISTICS CAPABILITY 25 500m2 of warehousing capacity; fleet of 117 trucks Commissioned Longmeadow primary distribution facility Owner drivers delivered 50% of total volumes – new milestone Results presentation for the year ended 28 February 2017
Slide 25: Building Manufacturing Capability
BUILDING MANUFACTURING CAPABILITY
Slide 26: Building Manufacturing Capability | Revenue Growth
BUILDING MANUFACTURING CAPABILITY | REVENUE GROWTH 76% 28% 20% 15% 18% 11% 9% 9% -7% FBMC-BB1 MPP WC FBSP BAK GAU BAK WC SSP FBJP FBICP Results presentation for the year ended 28 February 2017
Slide 27: Building Manufacturing Capability | Revenue Growth (cont.)
BUILDING MANUFACTURING CAPABILITY | REVENUE GROWTH (cont.) 52% 28% 37% 22% 17% -2% FBMC-BB2 FBMC-BB3 FBFCC FBGBC FBCC Results presentation for the year ended 28 February 2017
Slide 28: Building Manufacturing Capability
BUILDING MANUFACTURING CAPABILITY Take on of previously outsourced sliced cheese volumes at FB Cheese Company Muffin plant commissioned to take on Wimpy requirements Cater Chain emerging as a solid business, with final Competition Commission restrictions met LBF business fully integrated – supplies
Slide 29: Building Manufacturing Capability | Goals
BUILDING MANUFACTURING CAPABILITY | GOALS Leverage synergies in Manufacturing operations Secure sustainability of tomato supply Ramp up LBF production to meet rapidly growing demand Results presentation for the year ended 28 February 2017
Slide 30: Building Business Capability
BUILDING BUSINESS CAPABILITY
Slide 31: Building Business Capability
BUILDING BUSINESS CAPABILITY New Group-wide ERP system will be installed on time and within budget Continued investment in building depth at senior management and executive level Two year wage agreement in place Constant innovation, improvement and responsiveness to evolving trading landscape Result
Slide 32: Financial Results
®) famous | brands you're in good company FINANCIAL RESULTS
Slide 33: Salient Features
SALIENT FEATURES F 2017 F 2016 % Change Revenue (Rm) 5 720 4 308 33 Operating profit before non-operational items (Rm) 938 792 18 Operating profit after non-operational items (Rm) 817 780 5 Cash generated from operations (Rm) 795 718 11 EPS (cents) 414 529 (22) EPS before non-operational items and a
Slide 34: Income Statement
INCOME STATEMENT Rm F 2017 F 2016 % Change Revenue 5 720 4 308 33 Gross profit 2 772 1 838 51 Selling and administrative expenses (1 834) (1 046) 75 Operating profit before non-operational items 938 792 18 Non-operational items (refer note 1) (121) (12) Net finance costs (131) (7) Share of profit fr
Slide 35: Income Statement | Non-operational Items
INCOME STATEMENT | NON-OPERATIONAL ITEMS Note 1 F 2017 F 2016 Impairment loss 20 000 12 000 Derivative loss on call option utilised to hedge purchase price 33 253 - Foreign exchange loss on initial recognition of investment 23 295 - Professional fees 50 420 - Gain on bargain purchase (6 213) - 120 7
Slide 36: Revenue
REVENUE Rm 6000 5 720 5000 4 308 4000 3 283 3000 2 826 2 516 2 156 2000 1000 0 2012 2013 2014 2015 2016 2017 Results presentation for the year ended 28 February 2017
Slide 37: Operating Profit Before Non-operational Items
OPERATING PROFIT BEFORE NON-OPERATIONAL ITEMS 1000 Operating Profit (Rm) Margin % 900 938 800 700 792 20.5 600 20.0 19.1 672 500 566 18.5 400 18.4 413 300 466 200 16.4 100 0 2012 2013 2014 2015 2016 2017 Results presentation for the year ended 28 February 2017
Slide 38: Segmental Analysis | Revenue
SEGMENTAL ANALYSIS | REVENUE Rm F 2017 F 2016 % Change Franchising and Development 781 681 15 Supply Chain 3 983 3 364 18 Manufacturing 2 300 1 800 28 Logistics 3 416 2 911 17 Eliminations (1 733) (1 347) 29 Corporate 3 3 South Africa 4 767 4 048 18 International 953 260 266 UK 704 115 509 Rest of A
Slide 39: Segmental Analysis | Operating Profit
SEGMENTAL ANALYSIS | OPERATING PROFIT Rm % of Total F 2017 F 2016 % Change Franchising and Development 46 427 389 10 Supply Chain 49 455 348 31 Manufacturing 35 330 248 33 Logistics 13 125 100 24 Corporate (5) (48) (11) South Africa 89 833 726 15 International 11 105 66 58 UK 6 55 32 70 Rest of Afri
Slide 40: Segmental Analysis | Operating Margin
SEGMENTAL ANALYSIS | OPERATING MARGIN % F 2017 F 2016 Franchising and Development 54.7 57.1 Supply Chain 11.4 10.3 Manufacturing 14.3 13.7 Logistics 3.6 3.4 South Africa 17.5 17.9 International 11.0 25.5 UK 7.9 28.2 Rest of Africa and Middle East 19.9 23.3 Group 16.4 18.4 Results presentation for th
Slide 41: Productivity and Margin Ratios
PRODUCTIVITY AND MARGIN RATIOS % Operating profit margin % Expense to turnover % Gross profit magin % 60 48.5 50 42.8 43.4 44.2 42.7 41.8 40 32.0 30 24.0 23.0 23.0 24.0 24.0 20 19.1 20.0 20.5 18.5 18.4 16.4 10 0 2012 2013 2014 2015 2016 2017 Results presentation for the year ended 28 February 2017
Slide 42: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION Rm F 2017 F 2016 Move ASSETS Property, plant and equipment 1 398 286 1 112 Intangible assets 2 819 1 096 1 723 Investments in associates 83 53 30 Inventories 455 302 153 Trade and other receivables 649 463 186 Cash and cash equivalents 429 146 283 Other assets 53 62 (
Slide 43: Ratios | Net Debt/Equity
RATIOS | NET DEBT/EQUITY (%) 180 165 160 140 120 100 80 60 40 20 9.7 8.1 -0.4 -2.1 0 -8.9 -20 2012 2013 2014 2015 2016 2017 Results presentation for the year ended 28 February 2017
Slide 44: Cash Flow
CASH FLOW Rm 3500 3000 (215) (85) Tax 2500 Interest (227) Dividends 2 424 2000 Financing Activities (2 257) Capex & 1500 Acquisitions 1000 500 795 405 Cash from 6 Operations (36) 0 Forex effect Opening Cash Cash from Financing Tax Interest Dividend Capex & Forex Closing cash Operations Activities Ac
Slide 45: Foundations for the Future
8) famous | brands you're in good company FOUNDATIONS FOR THE FUTURE
Slide 46: Foundations for the Future
FOUNDATIONS FOR THE FUTURE New vision and strategic intent Review participation strategy in – but growth remains paramount Africa and the Middle East Expand existing company-owned Consolidate and elevate restaurant base in SA and UK UK business Results presentation for the year ended 28 February 201
Slide 47: Foundations for the Future
FOUNDATIONS FOR THE FUTURE Manage cash within the new Board skills and expertise balance sheet constraints reinforced over the past year Experienced management team in place to execute future strategies Results presentation for the year ended 28 February 2017
Slide 48: Our Growth Agenda
OUR GROWTH AGENDA We are intent on building capability, capacity and scale across manufacturing, branded franchised and food services spaces We are obsessed with being close to our trading partners and consumers across premium and mainstream markets We are passionate about unique consumer experience
Slide 49: Our Strategic Intent and Vision
OUR STRATEGIC INTENT AND VISION Our business is focused on building To be the leading innovative capability and capacity to position branded franchised and food ourselves to deliver unique consumer services business in South Africa experiences in the branded franchised and selected international and
Slide 50: Prospects
8) famous | brands you're in good company PROSPECTS
Slide 51: Prospects
PROSPECTS Higher capex will be Local and global incurred to build trading conditions company-owned remain challenging restaurant base Bed down acquisitions and unlock opportunities to build scale across the business Enthusiastic about Growth focus remains and appropriate opportunities acquisitions w
Slide 52: Supplementary Information
Hi sii ——— 8) famous ae brands you're in good company SUPPLEMENTARY INFORMATION
Slide 53: Board of Directors
BOARD OFBOARD DIRECTORS OF DIRECTORS Santie Botha Darren Hele Lebo Ntlha Chairman Chief Executive Officer Group Financial Director Panagiotis Halamandaris Bheki Sibiya Periklis Halamandaris John Halamandres Thembisa Skweyiya Theofanis Halamandaris Kevin Hedderwick Norman Adami Moses Kgosana Christop
Slide 54: Shareholder Analysis
SHAREHOLDER ANALYSIS As at 28 February 2017 PIC/GEPF 11.3% Panagiotis Halamandaris 7.9% Coronation Fund Managers 6.1% Other 59.1% Theofanis Halamandaris 7.2% Periklis Halamandaris 5.0% John Halamandres 3.4% Results presentation for the year ended 28 February 2017
Slide 55: Consumer Trends
CONSUMER TRENDS In light of constrained discretionary income consumers continue to prize value and convenience offerings Focus on food ecology and mindful dining as consumers become more concerned about the components of the farm-to-table chain Allied to this focus is the intensifying trend to healt
Slide 56: Consumer Trends
CONSUMER TRENDS YOY % change in food and beverage income at current prices (%) Restaurants and coffee shops Takeaway and fast-food outlets 16.0 15.0 14.7 12.9 12.9 11.4 11.7 10.8 10.1 9.6 9.0 8.8 8.5 9.3 9.7 6.9 8.7 8.1 8.5 7.6 7.9 5.9 5.5 5.5 4.8 1.7 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16
Slide 57: Ratios | NAV per Share
RATIOS | NAV PER SHARE (R) 18 15.5 16 14.9 14.2 14 12.4 12 10.2 10 8.7 8 6 4 2 0 2012 2013 2014 2015 2016 2017 Results presentation for the year ended 28 February 2017
Slide 58: Ratios | RONA and ROE
RATIOS | RONA AND ROE % RONA % ROE % 55 50 50.0 49.0 45 46.1 44.5 43.6 40 35.9 36.0 36.4 40.3 34.5 35.1 35 30 29.1 25 20 2012 2013 2014 2015 2016 2017 Results presentation for the year ended 28 February 2017
Slide 59: Operating Margins by Division
OPERATING MARGINS BY DIVISION % Manufacturing Logistics Domestic Franchising Group 70 60.2 60.1 60.4 59.4 60 57.1 54.7 50 40 30 19.1 18.5 20.0 20.5 18.4 16.4 20 10 15.3 13.6 13.7 13.7 14.3 12.5 0 3.5 3.5 4.0 4.0 3.6 3.4 2012 2013 2014 2015 2016 2017 Results presentation for the year ended 28 Februar
Slide 60: Contact Information
CONTACT INFORMATION Darren Hele Chief Executive Officer +27 11 651 5812 Lebo Ntlha Group Financial Director +27 11 847 6491 Instinctif Partners Investor Relations +27 11 447 3030 Results presentation for the year ended 28 February 2017