Franchise Brands Plc · LSE:FRAN
Franchise Brands — H1 2024 Earnings Presentation
33 slides from Franchise Brands's earnings presentation, 2024
Slide 1: Interim Results Presentation
B FRANCHISE BRANDS 0 4 Interim Results Presentation
Slide 2: 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 bee
Slide 3: Contents
“As they grow, we grow” @ We are focused on building, developing and growing market-leading franchise business Contents 03 Overview of 17 B2C division Franchise Brands O4 H1 2024: at a glance 18 Integration update Fi ial& O tional 05 Financiol & Operciona 19 Corporate update O7 Pirtek Europe ?1 Fina
Slide 4: Overview of Franchise Brands
Overview of Franchise Brands Multi-brand franchisor focused on B2B van-based service. Presence in 10 countries across UK, North America and Europe across 7 franchise brands. Pirtek, Metro Rod and Metro Plumb provide essential services on a mostly reactive basis. Filta provides a planned service to h
Slide 5: H1 2024: At a glance
H1 2024: At a glance Our leading brands Pirtek Leading European provider of on-site hydraulic hose replacement services. £10.4m Adjusted EBITDA* 72 Total franchisees Water & Waste Services Drainage, plumbing, pumps maintenance and repair services and FOG services to commercial kitchens in the UK. £5
Slide 6: H1 2023 includes adjustments set out in Note 1
H1 2023 includes a number of adjustments which were set out in Note 1 of the 2023 Annual Report & Accounts.
Slide 7: Divisional performance
Divisional pe rfo r m a n ce. } i as ' i Southampton 023 6088787
Slide 8: Pirtek Europe at a glance: H1 2024
Pirtek Europe at a glance: H1 2024 UK & Republic of Germany Belgium & Ireland & Austria _ Netherlands Sweden Germany _ Netherlands " 1998 1997 2021 & Established 1988 Aue Belgium TOD) 2017 2014 1998 System sales £m £41.3m £33.7m £12.3m £4.1m g14m £92.8m % of total 45% 36% 13% 4% 2% 100% EBITDA £m‘ £
Slide 9: Pirtek Europe
Pirtek Europe Pirtek generated total System sales of £92.8m (ten-weeks H1 2023: £37.2m). On a like-for-like basis, System sales grew by 2%, a resilient performance given more subdued market conditions: — UK & Rol maintained System sales at £41.3m despite softening demand from construction and plant
Slide 10: Pirtek Europe
Pirtek Europe H12024 H12023 2m in on a LFL basis, a resilient Central Central Franchised DLO Costs 12024 Costs 12023 £'000 £'000 £'000 £000 ¢ 000 '000 £000 g, 10% from DLO System sales 83,642 9,197 -| 92,838 33,847 3,321 -| 37,168 n and Fra Statutory _ - Revenue 22,277 9,196 (204) 31,269 9,132 3,321
Slide 11: Water & Waste Services division — at a glance
Water & Waste Services division — at a glance Established 1983 2016 Acquired 2017 2017 kc System sales £m 34.0 5.4 % of total 62% 1% Franchisees 44 21 Corporately operated 2 - territories Engineers 491 87 “Includes Kemac. 18 Metro Rod franchisees also operate a Metro Plumb franchise METRO METRQ PLUM
Slide 12: Business overview
Business overview METRQ PLUMB WILLQW PUIVIPS Metro Rod, Metro Plumb, and Kemac increased system sales by 5% to £39.3m (H1 2023: £37.4m). Growth spread across almost the entire network. Market continues to be challenging. Customers holding back spend on non-essential maintenance. Sales also held back
Slide 13: Water & Waste Services division overview
Water & Waste Services division overview seaes Statutory revenue st of sales Gross profit GP% Admin Adjusted EBITDA 3,705 Adjusted EBITDA/System sales H1 2024 H1 2023 Metro Willow Filta H1| Metro. Willow Filta 1 Rod Pumps UK] 2024 Rod Pumps UK] 2023 1000s £'000s £'000s| £'000s] 000s £'000s £'000s] £
Slide 14: Filta International at a glance: H1 2024
Filta International at a glance: H1 2024 North America filta System sales £m £43.3m £17m £45.0m | 9 operates in US, Can and Europ - Core franchise business 84% - Waste Oil 16% Number of Franchisees 125 32 157 On MSF 14% 53 Plann: Franchisees offering FiltaClean nee - - in North aw 1 FiltaGold (nev F
Slide 15: Filta International
Filta International System sales in North America increased by 7% in local currency in H1 2024 (5% in £). System sales for core franchise business increased 12% in local currency (11% in §). FiltaMax strategic growth initiatives based on Maximum Potential Model gaining traction: — Expansion of range
Slide 16: Waste Oil: H1 2023 & H1 2024
Waste Oil: H1 2023 & H1 2024 $30m $0.60 Volume $25m $0.48 25m Ibs $0.50 Average price 201 22m Ibs . on achieved SOKO $0.35 $15m $0.30 $10.4m $10m $8.7m $0.20 $5m $0.10 Oueir $1.4m $0m H1 2023 H1 2024 mmm Statutory revenue mmm Gross Profit ($m) —3 Volume (lbs) > Average Price achieved $ per lb
Slide 17: Filta International
Filta International North America £1000 System sales 43,261 Statutory "756 revenue Cost of sales (7,046) 4,708 40% Administrative ministrative (1763) expenses Adjusted EBITDA a Adjusted EBITDA/System sales [manana Europe £'000 1,695 283 (139) 144 51% (162) (18) (4.1%) H1 2024 £'000 44,956 12,037 (7,
Slide 18: B2C division
B2C division & Barking Mad ChipsAway ovenclean diet mcieeuicrns Less mime, mone Tine - Recruitment market for small consumerfacing franchise Revenue businesses remains challenging. Notwithstanding this, the underlying trading of individual franchisees remains robust, with average sales per franchise
Slide 19: Integration update
Integration update i Adjusted EBITDA/System Sales increased to 8.6% (H1 2023: 8.4%). Vision works management system roll out to Pirtek businesses. Group finance system: Netsuite. Water & Waste Services division integration. Opportunities to integrate shared central services: technology, finance, mar
Slide 20: Corporate update
Corporate updatey enfi 2024 Interim Results Presentation 19 Appointment of Stifel Nicolaus Europe Limited as nominated adviser to the Company, with effect from 1 October 2024. Allenby Capital, Dowgate Capital and Stifel will remain as joint brokers to the Company. Appointment of PKF Littlejohn LLP a
Slide 21: Capital allocation
Capital allocation capital allocation priorities Following recent acquisitions, strategic focus is on integrating and repaying the acquisition debt facilities. Board does not expect to make any further significant acquisitions until the outstanding debt is substantially repaid, anticipated in 2027.
Slide 22: Financial performance
Slide 23: Group financial results
Group financial results H1 HI 2024 2023 Change Change 1H 2024 includes a full 6M from Pirtek compared restated" ‘ COO ©1000 COO 3 to 10-weeks in H1 2023. 206,035, 145,475 60,560 42% System sales increased by 42% to £206m (H1 2023: £145.5m). Statutory revenue 69,800 51,875 17,925 35% 7 Statutory reve
Slide 24: Adjusted and statutory profit
Adjusted and statutory profit H1 o004 Depreciation and amortisation of software increased 63% to 2024 eee CSD Gi £3.0m (HI 2023: £1.8m), primarily due to the full 6M impact of the £000 £000 £000 % Pirtek acquisition. Finance expense reflects additional interest cost of the acquisition Adjusted profi
Slide 25: Adjusted EPS and dividend (p)
Adjusted EPS and dividend (p) Adjusted EPS decreased 7% to 4.04p (H1 2023: 4.34p). This results from: H1 2023 |» Te — Increased interest cost of Pirtek acquisition debt — Overall effective tax rate of the Group has increased by 2.7% from 23.7% to 26.4% — 25% increase in average number of shares in i
Slide 26: Cash flow
17,761 12,272 30,101 (4,977) (5,291) (61) 12,784 6,981 30,040 72% 57% 100% – – (1,273) (1,011) (2,858) (3,548) - (5,374) – (1,007) (605) (4,498) – - (1,433) (3,371) (5,828) (3,049) (16,101) – - (200,602) (48,894) – - - (136,747) - 214,263 194,118 (5,545) (1,002) (15,687) – - (6,270) (6,159) (5,545)
Slide 27: Debt Jun 2024
Debt 30 Jun 2024 £’000 13,674 (45,000) (38,289) an fee 823 (1,103) Other lease debt (9,660) (Net Debt)/Net cash (79,555) 31 Dec 2023 £000 12,278 (50,000) (36,908) 749 (837) (74,749) (7,567) (82,286) Change £000 1396 5,000 (1381) 74 (266) 4,824 (2,093) 2,731 The Group finished the period with cash of
Slide 28: Summary and Outlook
Summary and Outlook The resilient underlying demand for the Group’s essential reactive services means that the business performed satisfactorily despite the macroeconomic headwinds. The highly cash-generative nature of our predominantly franchise business has allowed us to reduce Adjusted net debt t
Slide 29: Appendix
Slide 30: Divisional trading results
Divisional trading results System sales Statutory revenue Gross profit GP% dmin ve ivisional EBITDA Adjusted EBITDA H1 2024 H1 2023 Waste & Inter- Waste & Inter- Water Filta company, 1 Water Filta company, Ht Pirtek Services International B2c Azura_ elimination 2024) Pirtek Services International B2
Slide 31: Pirtek Europe — by country
Pirtek Europe — by country System sales Statutory Revenue Cost of sales Gross profit GP% Administrative expenses Adjusted EBITDA Adjusted EBITDA as % system sales “Before central costs UK& Republic of Ireland 12,294 (3,523) 8,771 1% (3,692) 5,079 12.3% Germany & Austria 7,827 (2,259) 5,568 71% (2,18
Slide 32: Waste Oil, 2018 to 2023
Waste Oil, 2018 to 2023 $50m $0.70 47m lbs $45m $0.60 $40m $35m $0.50 30 ci $0.40 $25m 0.30 $20m $i $15 ™ ene $0.22 $0.22 $11.9m $0.20 $10m 6.3m $0.10 gsm 846m $4.7m - eon care $0m 2018 2019 2020 2021 2022 2023 mam Statutory revenue mam Gross Profit ($m) —Volume (lbs) —Avg Price achieved $ per lb
Slide 33: Franchise Brands contact details
FRANCHISE BRANDS www.franchisebrands.co.uk Franchise Brands plc Ashwood Court Tytherington Business Park Macclesfield SK10 2XF ands.co.uk 01625 507910 www.pirtek.co.uk METR®@ ROD www.metrorod.co.uk METR®@ PLUMB www.metrorod.co.uk WILLQW P| www.willowpumps.co.uk filta www.filta.co.uk www.gofilta.com