Retail Food Group Limited · ASX:RFG
Retail Food — H1 2015 Earnings Presentation
29 slides from Retail Food's earnings presentation, Feb 25, 2015
Slide 1: 1H15 Results Presentation
RETAILFOODGROUP STRENGTH IN BRANDS 1H15 RESULTS PRESENTATION ESQUIRES Y COFFEE bbs
Slide 2: Retail Food Group Limited (ASX:RFG)
Retail Food Group Limited (ASX:RFG) RFG is Australia’s largest owner, developer and manager of retail food franchise systems, with a network of c.2450 outlets spanning 46 global territories across 11 Brand Systems. RFG is also a roaster and supplier of high quality coffee and affiliated products, op
Slide 3: Group Achievements
Group Achievements For personal use only RFG International Footprint Global Transformation • RFG transformed into global franchisor and coffee wholesaler • Surpassed $1bn Enterprise Value • Record 1H15 outcomes(1): • EBITDA of $39.3m (39.7% increase on PCP) • NPAT of $25.3m (46.4% increase on PCP) •
Slide 4: 1H15 Results Summary
1H15 Results Summary For personal use only Underlying Results(1) 1H11 1H12 1H13 1H14 1H15 PCP% Revenue(2) $60.3m $49.5m $60.0m $64.6m $78.0m 20.7% EBITDA(1) $23.3m $25.1m $28.4m $28.1m $39.3m 39.7% NPAT(1) $14.1m $15.0m $16.5m $17.3m $25.3m 46.4% Basic EPS(1) 13.2 cps 13.8 cps 14.2 cps 12.9 cps 17.0
Slide 5: Results Highlights
Results Highlights EBITDA & NPAT For personal use only 50 • EBITDA up 39.7% on PCP to $39.3m(1) 40 • NPAT up 46.4% on PCP to $25.3m(1) Millions 30 • NPAT CAGR 13.8% (1H13 – 1H15) • c.20% EBITDA from international operations 20 • 84% EBITDA contribution from Brand Systems 10 • Coffee & Allied Beverag
Slide 6: RFG Global Brand Portfolio
RFG Global Brand Portfolio Increased Portfolio For personal use only • Delivers multiple channels of revenue and earnings • Penetrates retail and wholesale market segments and day parts Franchise Brand Systems Commercial & Wholesale QSR Retail Mobile Specialty Beverage Manufacturing Existing (FY14)
Slide 7: Global Summary
Global Summary For personal use only Rapid International Growth Global Position Aus Intl Total • 1H15 acquisitions deliver international platform and long term Outlet Population 1,823 653 2,476 sustainable growth path Net growth 1H15 524 518 1,042 • Enhanced portfolio positions RFG as a leading mult
Slide 8: Brand System & Divisional Results Summary
Brand System & Divisional Results Summary For personal use only Solid Results EBITDA EBITDA CPO(1) • Brand System EBITDA c.20% growth to $33.1m (PCP: $27.6m) $m PCP $k PCP • Exceptional EBITDA growth in Donut King (23.3%) and Michel’s Patisserie (15.1%) principally driven by increased EBITDA CPO(1)
Slide 9: Brand System Performance
Brand System Performance EBITDA per outlet For personal use only Strong Contributions Across Group $30,000 • Brand System EBITDA ($33.1m) represents 84% of Group EBITDA $25,000 • Longest Brand System under RFG stewardship (Donut King) delivers highest increase in EBITDA of 23.3% $20,000 • 15.1% incr
Slide 10: QSR: Crust Gourmet Pizza Bar & Pizza Capers
QSR: Crust Gourmet Pizza Bar & Pizza Capers Significant Growth Driver QSR 1H15 1H14 PCP For personal use only • QSR EBITDA contribution ($7.5m) up 7.1% on PCP and reduces Outlet Population acquisition EV/EBITDA multiple from 7x to sub 5x • Gourmet premium positioning resilient to pizza and industry
Slide 11: Donut King
Donut King Consistent Performer Donut King 1H15 1H14 PCP For personal use only • Exemplary EBITDA growth ($7.4m) up 23.3% on PCP Outlet Population • Consistent SSS and net outlet population growth Australia 339 332 2.1% • Robust new franchisee enquiry due to moderate entry cost model coupled with re
Slide 12: Michel's Patisserie
Michel’s Patisserie National Bakery Solution (NBS) Delivering Benefits Michel’s Patisserie 1H15 1H14 PCP For personal use only • Michel’s Patisserie remains key profit generator: Outlet Population • EBITDA contribution ($8.4m) up 15.1% on PCP Australia 313 311 0.6% • Largest single Brand System cont
Slide 13: Brumby's Bakery
Brumby’s Bakery Trusted Specialty Bakery Brumby’s Bakery 1H15 1H14 PCP For personal use only • EBITDA contribution of $5.7m represents 17.2% of Brand System Outlet Population EBITDA and 14.5% of Group EBITDA • New outlet commissioning and backfill delayed due to continued Project Australia 268 275 (
Slide 14: Coffee Retail
Coffee Retail Consolidated Profit Centre For personal use only • Coffee Retail comprises Gloria Jean’s Coffees (GJC), It’s A Grind (IAG), Esquires and bb’s Café Outlet Population Aus Intl Total • 1H15 EBITDA contribution $3.1m, anticipated to grow significantly following full 2H15 contributions from
Slide 15: Mobile
Mobile Mobile(1) 1H15 For personal use only Acquisitive Growth Outlet Population • Acquisition of Café2U positions RFG as clear market leader within global mobile coffee market: Australia 179 • Addition of 236 mobile vans to network International 142 • Access to international markets in Great Britai
Slide 16: International
International For personal use only Platform for Global Expansion • International footprint enhanced by acquisitions: • Café2U (11 September 2014) International 1H15 1H14 PCP • Gloria Jean’s Coffees (3 December 2014) Outlet Population • It’s A Grind (3 December 2014) • Maranatha LLC (3 December 2014
Slide 17: Coffee & Allied Beverage
Coffee & Allied Beverage For personal use only Diversifying Coffee Revenues • Coffee EBITDA ($8.4m) represents c.21%(1) of Group EBITDA Coffee & Allied Beverage ($m) 1H15 1H14 PCP • 1H15 entry into burgeoning ‘in-home’ and commercial capsule Coffee Revenue market via alignment with patented Caffital
Slide 18: Coffee & Allied Beverage
Coffee & Allied Beverage For personal use only Key Group Business Driver Significant Growth Potential • Increased delivery into Brand Systems, Contract Roasting, • Positions RFG to capitalise on the growth phenomenon in Commercial and In-home Global Market Australia and internationally • Plethora of
Slide 19: Acquisitive Activity
Acquisitive Activity Café2U (completed September 2014) Di Bella Coffee (completed February 2015) For personal use only • 236 outlets in five markets • 800+ premium contract and wholesale customers • Positions RFG as clear market leader within global mobile • Reputable market leading brand within ind
Slide 20: Initiatives & Outlook
Initiatives & Outlook Enhancement of Business Operations Asset Rental Program For personal use only • Recent acquisitions provide impetus for realignment of existing • Significant opportunity identified to leverage existing Brand RFG Brand Systems and other beneficial operational pursuits: Systems v
Slide 21: Appendices
For personal use only Appendices 21 February 2015
Slide 22: Appendix 1: 1H15 Reported Results Summary
Appendix 1: 1H15 Reported Results Summary For personal use only Reported Results 1H11 1H12 1H13 1H14 1H15 PCP% Reported Revenue $67.4m $56.3m $70.8m $78.1m $97.4m 24.7% Underlying Revenue(1) $60.3m $49.5m $60.0m $64.6m $78.0m 20.7% EBITDA $22.6m $24.4m $25.6m $28.1m $34.5m 22.5% NPAT $13.6m $14.5m $
Slide 23: Appendix 2: Earnings and Performance Reconciliation
Appendix 2: Earnings and Performance Reconciliation For personal use only 1H14 1H15 Reported Underlying LFL Reported EBITDA Adjustments ($m) ($m) ($m) ($m) Reported EBITDA $34.5m EBITDA 28.1 39.3 36.4 34.5 Acquisition Costs(1) $4.8m PCP% 39.7% 29.5% 22.5% Underlying EBITDA $39.3m NPAT 17.3 25.3 23.3
Slide 24: Appendix 3: Definitions
Appendix 3: Definitions For personal use only Acronym Description GFR Franchise Revenue (inc. FSF) + net coffee contribution FSF Franchise Service Fee NWS Brand System Network Sales (Australia & NZ only) SSS Same Store Sales ATV Average Transaction Value QSR Pizza Capers and Crust Gourmet Pizza Coff
Slide 25: Appendix – Cash Flow Performance
Appendix 4 – Cash Flow Performance For personal use only 1H15 1H14 $’m $’m Receipts from customers 92.4 82.9 • Continuing strong cash flows – a feature of RFG’s business model – supported by balanced investment Payments to suppliers and employees (66.4) (58.0) and financing activities Gross operatin
Slide 26: Appendix – Financial Position
Appendix 5 – Financial Position For personal use only 1H15 FY14 $’m $’m Assets: • Working capital increases attributable to seasonal Cash reserves 30.8 11.6 increases in revenues and consolidation of newly Trade receivables 48.1 23.7 acquired businesses including: Financial assets 29.4 23.9 • c.$11m
Slide 27: Appendix – Debt Structure
Appendix 6 – Debt Structure For personal use only Senior Debt Facility 1H15 Net debt $178.2m • Senior debt facility increased to $253 million Interest expense $2.5m • $28 million current borrowings reflecting April 2015 maturity Interest cover (times) 12.8x • $225 million non-current borrowings refl
Slide 28: Appendix – Capital Management
Appendix 7 – Capital Management For personal use only Proceeds/Value Shares Price ($) ($m) Shares on issue 1 July 2014 144,868,508 Dividend Reinvestment Plan 1,168,051 4.66 5.44 Institutional/Sophisticated Investor Placement 8,333,334 4.80 40.00 Gloria Jean’s Coffees Acquisition 1,882,814 5.31 10.00
Slide 29: Disclaimer
Disclaimer No responsibility for contents of 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, and accept no responsibility or liabi