Retail Food Group Limited · ASX:RFG
Retail Food — H1 2008 Earnings Presentation
25 slides from Retail Food's earnings presentation, Feb 28, 2008
Slide 1: Half Year Results Presentation for the Six Months ended 31 December 2007 (1H08)
April 2006 For personal use only 28 February 2008 Retail Food Group Limited Half Year Results Presentation for the Six Months ended 31 December 2007 (1H08)
Slide 2: Highlights of 1H08
Highlights of 1H08 For personal use only EBIT growth of 154% over pcp to $16.0m 1H08 NPAT of $8.1m representing a 107% growth on 1H07 Basic EPS increase of 85% over pcp to 10.2 cents Central Manufacturing Facility fully operational and servicing 90 Donut King outlets Coffee Roasting Facilities commi
Slide 3: 1H08 Financial Performance – Summary
1H08 Financial Performance – Summary For personal use only %Inc v Key Points $millions 1H07 1H08 Prior Yr Overall performance significantly Network Sales (i) 79.2 306.3 287% impacted by positive contribution of Total Revenue Brumby’s and Michel’s (Brumby’s 6 (Excluding Marketing) 12.4 50.3 306% mont
Slide 4: Financial Performance – Revenue
1H08 Financial Performance – Revenue For personal use only T o t al R evenue C o mp o sit io n Michel’s is not a traditional royalty based franchise system – it Franchise Ot her Ot her and Wholesale & Manuf act uring derives income principally from a wholesale & manufacturing margin. 60 Significant
Slide 5: Financial Performance – EBIT, NPAT and EPS
1H08 Financial Performance – Revenue For personal use only N PA T EBIT 10 20 8 15 6 4 8.1 10 7.5 16.0 5.9 12.2 Retail Food Group HFY08 Results Presentation 2 3.9 5 8.9 9.7 3.4 2.8 6.3 4.7 0 0 FY05 1H06 FY06 1H07 FY07 1H08 FY05 1H06 FY06 1H07 FY07 1H08 1H08 EBIT 154% increase on 1H07 and 31% increase
Slide 6: Financial Performance – Balance Sheet
1H08 Financial Performance – Balance Sheet For personal use only $millions FY07 1H08 Balance Sheet Highlights Current assets Cash and cash equivalents 1.5 4.1 Historical business (Donut King and bb’s café) receivables continue to remain low Trade and other receivables 5.8 22.4 Other financial assets
Slide 7: Debt Structure
Debt Structure For personal use only RFG’s debt to equity ratio stands at 55.6% [ND/(ND+E)]. This sits comfortably within RFG’s preferred debt to equity range of 40% to 60% Net Debt = RFG core debt less (cash and CMF debt ($3.9m)) CMF debt secured against CMF Yatala premises Current RFG core debt of
Slide 8: Financial Performance – Cash Flow
1H08 Financial Performance – Cash Flow For personal use only $millions 1H07 1H08 Operating Cashflows Receipts from customers 15.7 57.7 Strong, consistent and recurrent Payments to suppliers (10.6) (50.3) cash inflows predominantly generated from the licensing of Gross Operating Cashflows 5.1 7.4 int
Slide 9: Business Overview – Michel's
1H08 Business Overview – Michel’s For personal use only Settlement of acquisition completed 14 December 2007 Manufacturing and wholesale product supply based revenue model Integration of all operational functions proceeding as planned Operational performance achieved by strategic marketing Retail Fo
Slide 10: Business Overview – Brumby's
1H08 Business Overview – Brumby’s For personal use only System under RFG stewardship for full 6 months New outlet growth driven by franchisee migration to multi- outlet ownership 2H07 growth pipeline fortified by existing franchisee interest Significant traditional shopping centre growth opportunity
Slide 11: Business Overview – Donut King
1H08 Business Overview – Donut King For personal use only 300th outlet opened in Western Australia Strong new outlet growth supported by franchisee progression to multi-outlet ownership (7 of 17 outlets) New outlet opening in all states – significant growth (8) in Victoria Growth presently aligned t
Slide 12: Business Overview – bb's cafe
1H08 Business Overview – bb’s cafe For personal use only Growth modest and inline with expectations Conservative organic growth model maintained due to highly competitive “coffee” sector Focus on community and local area to differentiate market positioning and customer appeal 2 new bb’s cafe outlets
Slide 13: Business Overview – Combined Outlet Growth
1H08 Business Overview – Combined Outlet Growth For personal use only FY08 % of FY08F Franchise System FY06 1H07 FY07 1H08 Forecast Achieved Combined Start of Year Outlets 319 332 332 360 360 Acquisitions of Systems 663 663 Retail Food Group HFY08 Results Presentation Openings 27 24 37 41 75 55% Clo
Slide 14: Business Overview – Average Weekly Sales & Average Transaction Value
1H08 Business Overview – Average Weekly Sales (AWS) & Average Transaction Value (ATV) For personal use only AWS FY06 FY07 1H07 1H08 Donut King growth improvement 1H08 (circa 4%) maintained Donut King 8,981 8,978 9,334 9,684 and driven by strategic marketing focus pcp 3.3% 0.0% 1.2% 3.8% bb's café (A
Slide 15: Central Manufacturing Facility & Coffee Roasting Facility
1H08 Business Overview – Central Manufacturing Facility (CMF) & Coffee Roasting Facility (CRF) For personal use only Improvement of franchise lifestyle to drive multi outlet ownership CMF continues to deliver consistent high quality “dressed” product to 50 South East Qld Donut King franchisees CMF a
Slide 16: Business Overview - Summary
1H08 Business Overview - Summary For personal use only Strong financial performance sustained despite well documented adverse economic impacts, such as interest rates, global economic issues and consumer confidence System-wide retail sales continue to be impervious to softening discretionary spendin
Slide 17: Strategy & Growth Opportunities
Strategy & Growth Opportunities For personal use only RFG’s growth strategies are directed toward leveraging: • existing intellectual property in its franchise systems; and • brand management and franchising expertise New Store Rollout Driving Achieving International Expansion Earnings Growth Retail
Slide 18: FY08 Outlook – Operational Targets
FY08 Outlook – Operational Targets For personal use only Continuing Outlet Expansion in Australia & NZ Combined Donut King, bb’s café, Brumby’s and Michel’s FY08 forecast net outlet growth = 55 stores Programs to assist multi-outlet ownership by Franchisees Opportunity for group multi-system ownersh
Slide 19: FY08 Outlook – Financial Targets
FY08 Outlook – Financial Targets For personal use only Revenue & Profit Drivers Pro forma FY08 EBIT forecast of $32 million on track to be achieved Underlying business drivers will again underpin RFG performance in FY08: Strong pipeline for new outlet growth for 2H08 with 25 confirmed AWS continues
Slide 20: Appendix
1H08 Appendix For personal use only 1. RFG Overview 21 2. RFG – The Franchise Systems 22 Retail Food Group HFY08 Results Presentation 3. RFG - Investment Credentials 23 4. Outlets by System by Territory 24 20
Slide 21: RFG - Overview
RFG - Overview For personal use only Retail Food Group Limited (RFG) is an Australian company listed on the ASX since 22nd June 2006, whose principal franchise systems were also developed in Australia Founded in 1989 RFG is the Intellectual Property owner of four full format franchise systems being
Slide 22: RFG – The Franchise Systems
RFG – The Franchise Systems For personal use only Donut King bb’s cafe FY2006 Network Sales: $123m FY2006 Network Sales: $20m FY2007 Network Sales: $133m FY2007 Network Sales: $26m 1H08 Network Sales: $76m 1H08 Network Sales: $19m Outlets 30 June 2006: 265 Outlets 30 June 2006 : 67 Outlets 30 June 2
Slide 23: RFG – Investment Credentials
RFG – Investment Credentials For personal use only Leading retail food brand RFG was established in 1989 and is a leading Australian retail food brand manager and franchising company with 1051 franchised outlets in Australia and New Zealand manager and franchising RFG is an intellectual property own
Slide 24: Outlets by System by Territory
Outlets by System by Territory For personal use only Franchise System QLD NSW VIC TAS SA WA NT Aust NZ Total Donut King 91 110 65 8 13 13 3 303 0 303 bb's café 25 5 7 0 8 0 1 46 24 70 Brumby's 129 35 69 0 15 49 8 305 23 328 Retail Food Group HFY08 Results Presentation Michel's 57 197 55 0 24 11 0 34
Slide 25: Disclaimer
Disclaimer For personal use only No responsibility for contents of Investor Presentation 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, express or implied, as to th