Retail Food Group Limited · ASX:RFG
Retail Food — FY2014 Earnings Presentation
26 slides from Retail Food's earnings presentation, Aug 28, 2014
Slide 1: FY14 Results Presentation
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Slide 2: Company Overview
Company Overview For personal use only ASX Code RFG RFG is one of Australasia’s pre-eminent owners, developers and managers of retail food franchise systems. RFG was recently identified(1) Index ASX200 as equal market share leader within the Australian franchising industry, Share price (as at 19 Aug
Slide 3: FY14 Results Summary
FY14 Results Summary For personal use only Statutory Results FY10 FY11 FY12 FY13 FY14 PCP % Reported Revenue $134.0m $125.7m $116.4m $141.0m $168.4m 19.4% Underlying Revenue(1) $118.6m $110.0m $101.9m $117.0m $128.8m 10.1% EBITDA $44.9m $45.9m $48.4m $53.8m $59.1m 9.8% NPAT $26.0m $27.2m $28.5m $32.
Slide 4: FY14 Results Highlights
FY14 Results Highlights For personal use only Financial Highlights NPAT $36.9m (up 15.2% on PCP) Net Debt & Gearing 120 40% EPS 26.5 cps (up 1.9% on PCP) 100 Dividends 22.0 cps (up 11.4% on PCP) 30% Gross Debt $68.9m (headroom of $77.7m) 80 Millions Gearing 16.6% & interest coverage of 12.3x 60 20%
Slide 5: FY14 Financial Highlights
FY14 Financial Highlights For personal use only EBITDA Resilient business model, delivering strong results whilst investing in organic growth: 80 Gross Franchise 60 Millions 8.2% increase to $91.0m (PCP: $84.1m) Revenues (GFR) 40 Revenue 10.1% increase to $128.8m (PCP: $117.0m) 20 EBITDA 9.8% increa
Slide 6: FY14 Financial Highlights Cont.
FY14 Financial Highlights Cont. For personal use only August 2014 6
Slide 7: FY14 Brand System Review
For personal use only FY14 Brand System Review August 2014 7
Slide 8: FY14 Network Summary
FY14 Network Summary For personal use only Focus on Outlet Growth Project EVO Facilitates Enlarged Footprint • Net outlet growth of 60 in FY14 (FY13: -10 organic & 175 via • Project EVO facilitates Brand System entry into non- acquisition), resulting in closing network population of 1,434; tradition
Slide 9: FY14 Brand System Performance
FY14 Brand System Performance For personal use only Brand System Performance • All Brand Systems enjoyed improved EBITDA contribution on a per store metric; • EBITDA contribution from QSR was $13.5m (22.7% of EBITDA per outlet (Aus & NZ) Group), notwithstanding QSR400 start up costs & outlet $60,000
Slide 10: FY14 Brand System Performance Cont.
FY14 Brand System Performance Cont. For personal use only Diverse Revenue Streams • Decreasing reliance on any one Brand System evidenced by Group % EBITDA Contribution by Brand System EBITDA contributions – vindicates “Strength In Brands” philosophy and pursuit of multi-revenue and multi-Brand Syst
Slide 11: FY14 Brand System Performance Cont.
FY14 Brand System Performance Cont. For personal use only FY14 Donut Brumby's Mi c hel 's QSR O ther Superior EBITDA contribution Item Summary Ki ng Bakery P ati s seri e of QSR is testament to RFG’s GFR($m) 91.0 18.7 17.8 26.9 20.5 7.1 resolve to enter the gourmet FSF ($m) 44.8 10.3 10.1 9.6 12.1 2
Slide 12: Project Evolution
Project Evolution For personal use only Continued EVO Traction • FY14 witnessed establishment of Michel’s Patisserie & Brumby’s EVO Outlet Commissionings (New & Refurbishments) Bakery EVO pilot outlets, together with the commissioning of the 160 inaugural full format Donut King Drive-Thru outlet; 14
Slide 13: QSR: Crust Gourmet Pizza Bar & Pizza Capers
QSR: Crust Gourmet Pizza Bar & Pizza Capers For personal use only Crust FY14 Highlights QSR FY14 FY13 PCP % • Network sales growth driven by: Outlet Population o Domestic network development (48 new outlets commissioned); and Australia & NZ 335 265 26.4% o ATV growth fortified by new menu developmen
Slide 14: Donut King
Donut King For personal use only Reliable Growth Generator Donut King FY14 FY13 PCP % • 22 new outlets commissioned in FY14: Outlet Population o Represents 16% increase on PCP (19) and 120% increase on FY12 (10); Australia & NZ 340 333 2.1% o Evidences sustainable new outlet growth traction and Othe
Slide 15: Michel's Patisserie
Michel’s Patisserie For personal use only Profit Generator Michel’s Patisserie FY14 FY13 PCP % • Michel’s remains a key RFG profit generator notwithstanding Outlet Population bakery transition: Australia & NZ 314 315 (0.3%) o FY14 EBITDA Contribution of $17.3m (PCP: $15.5m); o Highest Brand System c
Slide 16: Brumby's Bakery
Brumby’s Bakery For personal use only Brand System Highlights Brumby’s Bakery FY14 FY13 PCP % • EVO pilot store established December 2013: Outlet Population o Introduces significant coffee opportunity; Australia & NZ 278 295 (5.8%) o Outlet assessment advanced, with 18% reduction in build costs alre
Slide 17: Coffee Wholesale & Coffee Franchise
Coffee Wholesale & Coffee Franchise For personal use only Driving Wholesale Coffee Coffee Revenue – By Region • Second Australian roaster (Yatala) commissioned: o Significantly expands roasting capacity; and o Secures supply for growing coffee business; New Zealand • Dedicated wholesale coffee team
Slide 18: Initiatives & Outlook
For personal use only Initiatives & Outlook August 2014 18
Slide 19: Acquisitive Activity
Acquisitive Activity For personal use only Acquisitions Announced La Porchetta • Share Purchase Agreements (SPAs) entered into to acquire • Settlement anticipated early 2Q15; Cafe2U and La Porchetta Brand Systems; • SPA subject to ordinary and usual conditions, including RFG • Each acquisition is im
Slide 20: Initiatives & Outlook: Pathways to Success
Initiatives & Outlook For personal use only Platform Laid Pathways to Success Cont. • FY14 laid solid foundation for enhanced outcomes; and • Significant opportunity to leverage existing Brand Systems via • Multiple levers available for driving future earnings growth. Group finance & equipment leasi
Slide 21: Appendices
Appendices For personal use only Appendix 1 – Cash Flow Performance Appendix 2 – Financial Position Appendix 3 – Debt Structure Appendix 4 – Capital Management August 2014 21
Slide 22: Appendix – Cash Flow Performance
Appendix 1 – Cash Flow Performance For personal use only FY14 FY13 $’m $’m Receipts from customers 175.5 150.3 Payments to suppliers and employees (124.9) (98.4) Gross operating cash flows 50.6 51.9 Continuing strong cash flows – a feature of RFG’s EBITDA 59.1 53.8 business model – supported by bala
Slide 23: Appendix – Financial Position
Appendix 2 – Financial Position For personal use only FY14 FY13 $’m $’m Assets: Cash reserves 11.6 16.8 Working capital increases attributable to increased funding of marketing initiatives, seasonal increases in Trade receivables 23.7 19.0 revenues and payment terms offered to franchisees on new sto
Slide 24: Appendix – Debt Structure
Appendix 3 – Debt Structure For personal use only Facility headroom (including cash) at 30 June 2014 of $77.7m. ‘NAB’ Facility FY14 Gross debt of $69m at 30 June 2014: Net debt (1) $61.5m - $50m of debt on fixed interest rate to March 2016; Interest expense (1) $4.7m - $19m of debt subject to variab
Slide 25: Appendix – Capital Management
Appendix 4 – Capital Management For personal use only Proceeds/Value Shares Price ($m) Shares on issue 1st July 2013 130,277,856 Institutional/Sophisticated Investor Placement 12,325,582 4.30 53.0 SPP 1,238,210 4.30 5.32 FY13 Performance Shares issued to CEO 104,408 4.31 0.45 (shareholder approved)
Slide 26: Disclaimer
Disclaimer For personal use only No responsibility for contents of 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, and accept no responsibility or liabili