61 slides from Alsea, S.a.b. De C.v's investor day presentation, March 2017
Slide 1: March 2017
March 2017
Slide 2: Forward-Looking Statements
Forward-Looking • Certain information contained in this presentation, particularly information regarding future Statements economic performance, finances, and expectations and objectives of management constitutes forward-looking statements. Forward-looking statements can be identified by the fact th
Slide 3: Speakers
Speakers Alberto Torrado Renzo Casillo Diego Gaxiola Executive CEO CFO Chairman Alsea Alsea
Slide 4: We are Alsea...
We are Alsea... Leading Quick Service Restaurant, Coffee Shop, Casual Dining and Family Restaurant operator in Latin America and Spain.
Slide 5: Strategic Definitions
Strategic Definitions PURPOSE Ignite people’s spirit We are a determined community committed to excellence and integrity, we maximize synergies to deliver VALUE a surprising offer to our GUESTS and to make sure that our Restaurants generate extraordinary results, PROPOSITION contributing with happin
Slide 6: Organizational Structure
Organizational Structure BOARD OF DIRECTORS Audit Committee Chairman Corporate Practices Committee Alberto Torrado Internal Audit Mario Sanchez CEO Renzo Casillo Alsea Mexico Alsea International CFO HR Federico Tejado Fabian Gosselin Diego Gaxiola Cory Guajardo Brang Managers Country Managers Casual
Slide 7: Diversified Market Brand Portfolio
Brand Portfolio Diversified Market Global Own
Slide 8: Units | FY16
Units | FY16 29% 3,195 restaurants 25% 21% 69% 8% 16% 7% 2% 6% 2% 4% 2% 4% 1% 0.1% 1% *Other includes: California Pizza Kitchen, Cañas y Tapas, LAVACA, The Cheescake Factory, Il Tempieto. 2% Other *
Slide 9: Store Growth
Store Growth 22% CAGR 3,195 2,954 2,784 1,858 1,422 FY12 FY13 FY14 FY15 FY16 Corporate Subfranchises
Slide 10: Employees | FY16
Employees | FY16 22% 67,340 18% 18% 16% 66% 5% 16% 4% 4% 10% 4% 4% 2% 2% 4% 2% 0% 1% *Other includes: Cañas y Tapas, LAVACA, The Cheescake Factory, Supply, Il Tempieto. 2% *Others
Slide 11: Our People FY16 KPI
Our People FY16 KPI 2015 2016 Turnover Rate 80% 81% Managerial Stability 61% 56% Managers Achieving Bonus 44% 54% Average Training Hours* 34 37 *Per employee
Slide 12: Sales | FY16
Sales | FY16 22% 21% 37,702 million pesos 17% 13% 58% 8% 4% Supply 20% 4% 22% 4% 2% 2% 1% 1% *Other includes: Cañas y Tapas, LAVACA, The Cheescake Factory, Il Tempieto. 1% Other *
Slide 13: Sales Growth
Sales Growth 29% CAGR 37,702 32,288 Guidance Alsea Day 2015 22,787 15,698 13,520 FY12 FY13 FY14 FY15 FY16 Figures in million pesos
Slide 14: Adjusted EBITDA | FY16
Adjusted EBITDA* | FY16 25% 16% 15% 65% 12% 19% 9% 8% Supply 16% 5% 5% 2% 2% *Adjusted EBITDA does not include administrative expenses, thus it represents the “Store EBITDA” 1% Other ** **Other includes: California Pizza Kitchen, Archie’s, Cañas y Tapas, LAVACA, The Cheescake Factory, Il Tempieto.
Slide 15: EBITDA Growth
EBITDA Growth 34% CAGR 13.7% EBITDA 13.3% EBITDA Margin Guidance Alsea Day 2015 12.3% 13.0% 11.9% 1,609 4,302 5,155 2,040 2,802 FY12 FY13 FY14 FY15 FY16 Figures in million pesos
Slide 16: ROE
ROE 480 bps 15.3% 14.5% 11.4% 10.5% Guidance Alsea Day 7.5% 2015 FY12 FY13 FY14 FY15* FY16* *Without considering any effects from the Put / Call Options.
Slide 17: Achievements
Achievements • Delivering results & meeting goals • Acquisition and integration of relevant brands • Well defined business strategy • Technology development • 2016: •Record year in openings (158 corporate units) •Record high EBITDA Margin in the last 9 years
Slide 18: Opportunities
Opportunities • People Development • Room to grow: SSS, development plan, acqusitions • Franchising strategy • Synergy and Critical Mass • Technological tools development • Sustainability
Slide 19: Renzo Casillo CEO
RENZO CASILLO CEO
Slide 20: Focus on GUESTS
Way to win Focus on GUESTS Focused on deep knowledge and an exceptional GUEST experience
Slide 21: Focus on GUESTS
Way to win 1 Brand Portfolio 7 2 Sustainability Best Talent Focus on 6 GUESTS 3 Synergy and Best Critical Mass Operator 5 4 Technology and Innovation Marketing
Slide 22: Brand Portfolio
1 Brand Portfolio Ensure our Growth Model, with the appropriate portfolio. Accelerate the Market Holding Capacity via corporate and franchisees stores. Identify countries, segments and brands that complement our portfolio.
Slide 23: Growth Strategy
1 Brand Portfolio Growth Strategy Organic Growth Inorganic Growth + SSS + Store + Acquisitions GROWTH Openings + Current + Current + New + New Brands Markets Brands Markets Operating Business Mix Operating Leverage Efficiencies MARGIN Corporate, Franchised, Cost of Sales EXPANSION Pricing Strategy S
Slide 24: Franchising Strategy
1 Brand Portfolio Franchising Strategy • Brands: Objectives • Markets: • Royalties • Technology Revenue • Opening Fee • Financing Streams • Distribution • Production • Marketing Fund • Profitable business model • Market presence Benefits • Brand top of mind • Synergy and critical mass
Slide 25: Markets Diversified Portfolio
Markets Diversified Portfolio Popular A/B C+ C C-/D+ D/E Segments Actual Market +415 Population GDP USD 3,195 Million Clients served as of 482 5,136 units Dec 16 LTM million billion Potencial Per-Capita spending expansion (Figures in usd) Served by the informal sector 325 328 500 515 750 1,980 1,580
Slide 26: Market Holding Capacity - Mexico
1 Brand Portfolio Market Holding Capacity Mexico Corporate Franchises
Slide 27: Market Holding Capacity - International
1 Brand Portfolio Market Holding Capacity International Corporate Franchises Col. Arg. Chl. Col. Arg. Chl. Col. Arg. Chl. Col. Bra Col. Spain
Slide 28: Best Talent
2 Best Talent Continue to strengthen Alsea Culture. Create new compensation models to attract and retain the best talent. Launch academies to institutionalize knowledge in: operations, marketing, procurement and real estate.
Slide 29: Manager Owner
2 Best Talent Manager Owner What it means to be a “Manager Owner”? Take care of your Take care of your Take care of your store as if it were team as if it were client as the your home your family Guest he is Winning results are compensated appropriately
Slide 30: Focus on our people
2 Best Talent Best Talent Focus on our people Store Managers • Higher Productivity • Training academies • Growth in SSS • Better compensation scheme • Attract, retain, motivate and • EBITDA Margin Expansion engage the best talent • Gain Market Share • Employee career plan • Variable compensation pla
Slide 31: Best Operator
3 Best Operator Drive traffic by constantly redefining and improving our GUEST’s experience. Benchmark and optimize productivity and GUEST statisfaction metrics. Optimize and expand the supervision process and tracking system of restaurants.
Slide 32: How to be the best operator
3 Best Operator How to be the best operator 67,340 Employees Best People Maintenance = Approx. 20% of Best Store Total CAPEX Guest experience tracking / accountability Best Service Best Experience Be an extension of our Guests’ home
Slide 33: Enlace
3 Best Operator Enlace Cloud Reports Direct Boss Formats Activity Regional Evidence upload Director District Manager GPS KPI Support Areas Feedback + Interaction = continuous improvement Help our brands reach its full potential
Slide 34: Marketing
4 Marketing To be the company with the best Guest, market and competition knowledge. Build the best loyalty programs and analytical skills. Have a center of expertise that adds value to our brands.
Slide 35: Business Intelligence
4 Marketing Right equipment and tools Well-Timed and Reliable Information Improve Strategy Business Intelligence Spot New Decision-Making Opportunities Support
Slide 36: Loyalty Programs
4 Marketing Loyalty Programs +580,000 Almost 1,300 Users Restaurants on board Wow Approx. 30% Increase in average ticket Wow is in 6% of Alsea Mexico Sales
Slide 37: Marketing Shared Services
4 Marketing Marketing Media Market Strategic Research Alliances Marketing Customer Shared Services Experience & Public Call Center Relations CRM & Customer Digital Technology
Slide 38: Technology and innovation
5 Technology and innovation Provide our restaurants with technology, ensuring the best operation and GUEST’s experience. Be the leader in mobile and digital strategies. Develop systems that optimize and simplify the managment and support of our restaurants.
Slide 39: Technological Advantages
5 Technology Technological Advantages CRM Loyalty Mobile Social Focus on Guests Cloud and Stores POS Analytics
Slide 40: Mobile Apps & Web Platforms
5 Technology Mobile Apps & Web Platforms APPS WEB
Slide 41: Synergy and Critical Mass
6 Synergy and Critical Mass Consolidate Alsea’s synergies and infrastructure as a competitive advantage for the brands. Implement a global and consistent sharing of best practices. Build superior procurement skills to optimize purchases between brands and countries.
Slide 42: Powered by Alsea
6 Synergy and Critical Mass Powered by Alsea Marketing Real Estate Operations Commercial Talent Supply Technology Strategy Development Chain for Guests Synergy and Financial Critical Mass Capacity
Slide 43: Sustainability
7 Sustainability To reaffirm our commitment to provide food safety in the most vulnerable communities. Consolidate the four pillars of our strategy. To be recognized as the favorite neighbor of the communities where we participate.
Slide 44: Four Pillars
7 Sustainability Four Pillars Community Support Sustainability Responsible Quality Consumption of Life
Slide 45: Diego Gaxiola CFO
DIEGO GAXIOLA CFO
Slide 46: Goals Check 2016
Goals Check 2016 Initial 2016 guidance VS FY16 SALES Mid-teens 16.8% ✓
Slide 47: Goals Check 2016
Goals Check 2016 Initial 2016 guidance VS FY16 SALES Mid-teens 16.8% ✓ EBITDA High-teens 19.8% ✓ EBITDA margin expansion 40-50 bps 40bps ✓
Slide 48: Goals Check 2016
Goals Check 2016 Initial 2016 guidance VS FY16 SALES Mid-teens 16.8% ✓ EBITDA High-teens 19.8% ✓ EBITDA margin expansion 40-50 bps 40bps ✓ Dividends $ 0.5 pesos per share $ 0.77 ✓ Adjusted EPS* $ 1.50 $ 1.68 ✓ *Without considering any effects from the Put / Call Options.
Slide 49: Goals Check 2016
Goals Check 2016 Initial 2016 guidance VS FY16 SALES Mid-teens 16.8% ✓ EBITDA High-teens 19.8% ✓ EBITDA margin expansion 40-50 bps 40bps ✓ Dividends $ 0.5 pesos per share $ 0.77 ✓ Adjusted EPS* $ 1.50 $ 1.68 ✓ ROIC ROIC > WACC >100bps ✓ ROE* > 12% 15% ✓ *Without considering any effects from the Put
Slide 50: Consolidated Results
Consolidated Results Sales 17% 10,500 17% EBITDA 15% 1,569 20% 37,702 5,155 8,958 32,288 1,367 4,302 CAGR 29% CAGR 34% (12 - 16) (12 - 16) 4Q15 4Q16 FY15 FY16 4Q15 4Q16 FY15 FY16 Net Ordinary Income * Net Debt / EBITDA 2.6 x 31% 672 35% 2.4 x 1,534 CAGR 48% 512 1,137 (12 - 16) 4Q15 4Q16 FY15 FY16 FY
Slide 51: EBITDA Bridge
13% 5,155 EBITDA Bridge 5% 4,302 (4)% 4% (2)% 2% 2% FY15 FX Other Supply Vips Grupo Openings SSS FY16 COGS Zena & Run Rate QSR 9% Mexico 65% Coffee shops 27% South America Casual Dining 15% Adjusted Spain Adjusted Family Dining EBITDA 19% EBITDA by category by segment Supply 24% 25% 16% Figures in m
Slide 52: EBITDA to Net Income | FY16
EBITDA to Net Income | FY16 5,155 (2,388) (771) (408) (529) 68 1,126 EBITDA D&A All-in Cost PUT option Taxes Associates Net Income of Financing* Free Cash Flow | FY16 1,589 5,444 (5,039) 5,155 (771) (529) 405 (645) (239) EBITDA Financial Income Net WC FFO Capex FCF Dividends NET FCF Expenses Paid Ta
Slide 53: Debt profile
Debt maturity 7% 11% 19% 34% 19% 1% 1% 1% 7% Debt profile 4,979 Capital structure 4Q16 4Q15 Avarage cost Net Debt / EBITDA 2.4x 2.6x peso: 6.8% 2,774 2,769 EBITDA / Interest Paid 5.8x 6.1x euro: 2.0% 1,690 Debt structure 4Q16 Main banks 1,107 1,000 Bond Debt 27% Bank of America 20% Bank Debt 73% Sco
Slide 54: Guidance 2017
Guidance 2017 Between 170 - 190 50 - 60 TOP LINE 220 - 250 corporate sub-franchisees GROWTH Total openings Low to Mid Mid Single Double Digit Digit Growth SSS Revenues Flat Low to Mid EBITDA Double Digit margin Growth EBITDA vs. 2016 GROWTH EBITDA 4 - 4.5BN 2.2x - 2.4x CAPEX* Net debt / EBITDA *Excl
Slide 55: Five year goals
Five year goals 2017e 2021e VS 2020e SALES Low to mid double digit CAGR* > 15% = *5 - year Compound Annual Growth Rate
Slide 56: Five year goals
Five year goals 2017e 2021e VS 2020e SALES Low to mid double digit CAGR* > 15% = EBITDA Low to mid double digit CAGR* = High-teens = EBITDA margin expansion Flat vs. 2016 >15% = *5 - year Compound Annual Growth Rate
Slide 57: Five year goals
Five year goals 2017e 2021e VS 2020e SALES Low to mid double digit CAGR** > 15% = EBITDA Low to mid double digit CAGR** = High-teens = EBITDA margin expansion Flat vs. 2016 >15% = >$0.70 pesos Acum >$ 5.50 pesos Dividends per share per share g Adjusted EPS* $1.70 CAGR** >25% = *Without considering a
Slide 58: Five year goals
Five year goals 2017e 2021e VS 2020e SALES Low to mid double digit CAGR** > 15% = EBITDA Low to mid double digit CAGR** = High-teens = EBITDA margin expansion Flat vs. 2016 >15% = >$0.70 pesos Acum >$ 5.50 pesos Dividends per share per share g Adjusted EPS* $1.70 CAGR** >25% = ROIC 11% >20% = ROE* 1
Slide 59: Grupo Axo | Performance
Grupo Axo | Performance 937 Sales 6,144 EBITDA CAGR 40% CAGR 38% 640 (13 - 16) 4,505 (13 - 16) 355 394 2,234 2,532 15.9% 15.6% 14.2% 15.2% FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 229 Net Income CAGR 28% 178 (13 - 16) 131 108 5.2% 4.8% 3.9% 3.7% FY13 FY14 FY15 FY16 Figures in million pesos
Slide 60: Winning with Alsea
Winning with Alsea Strong, Relevant, High Growth Experienced Leading Brands Industry Executive Team Leading Strategic Partner Solid Financial Restaurant for Global Position Operator Brands Shared Services Proven Track Institutional Business Model Record Corporate Governance
Slide 61: We are Alsea...
We are Alsea... Leading Quick Service Restaurant, Coffee Shop, Casual Dining and Family Restaurant operator in Latin America and Spain.