Tortilla Mexican Grill Ltd. · LSE:MEX
Tortilla Mexican Grill — FY2022 Earnings Presentation
33 slides from Tortilla Mexican Grill's earnings presentation, March 2023
Slide 1: Tortilla Mexican Grill plc 2022 Annual Results Presentation
Tortilla Mexican Grill plc 2022 Annual Results Presentation March 2023
Slide 2: Presenting Team
PRESENTING TEAM Richard Morris – CEO Andy Naylor – CFO 2
Slide 3: Agenda
AGENDA 01 INTRODUCTION & HIGHLIGHTS – Richard Morris, CEO 02 FINANCIAL REVIEW – Andy Naylor, CFO 03 STRATEGIC & OPERATIONAL REVIEW – Richard Morris, CEO 04 Q&A 3
Slide 4: Introduction & Highlights
INTRODUCTION & HIGHLIGHTS Richard Morris, CEO 4 4
Slide 5: Highlights – FY22
HIGHLIGHTS – FY22 Strategic & operational • Year of record growth for the Group (net 18 sites added to the portfolio) • Strategic acquisition of Chilango in May 2022 • Bolstered the Board and Executive team with several key appointments • Launched new franchise partnership with Compass Group • Re-la
Slide 6: Growth
GROWTH FY22 was a record year of growth for the Group taking the total number of sites to 82 Record year of 90 growth for the Group 80 70 60 50 Total number of stores reconciliation FY21 vs FY22 40 Openings: 30 • 10 UK Tortilla sites • 3 delivery kitchens 20 • 6 franchise stores (5 Compass, 1 SSP) C
Slide 7: Franchising
FRANCHISING Excellent franchising proposition due to simplicity of operating model and flexible store formats Franchise stores delivered a very strong sales performance with overall franchise income growing by 112% in FY22. A great result considering the material impact that Covid-19 and multiple ra
Slide 8: Financial Review
FINANCIAL REVIEW Andy Naylor, CFO 8 8
Slide 9: Income Statement
INCOME STATEMENT FY22 FY21 £m £m • Revenue increased by 20.0% to £57.7m (FY21: £48.1m), driven by the Revenue 57.7 48.1 addition of ten new stores, the acquisition of Chilango and the Cost of sales (13.6) (9.8) absence of a COVID lockdown which impacted Q1 FY21 Gross profit 44.1 38.3 • Gross profit
Slide 10: Revenue: FY22 vs FY21
REVENUE: FY22 vs FY21 FY22 revenue was £9.6m (20%) higher than FY21: • FY22 benefitted from three months of reduced VAT (12.5%) whereas FY21 benefitted for the full 12 months (5% VAT rate until Sep FY21 then 12.5% VAT rate until end of FY22) resulting in £3.9m less revenue in FY22 • FY22 new store o
Slide 11: Revenue: LFL Growth and Channel Mix
REVENUE: LFL GROWTH AND CHANNEL MIX LFL growth Channel mix • LFL sales growth of +16.4% (vs FY19) achieved for the full year 100% • Fairly consistent through the year despite challenges around “cost-of- 90% living” crisis, strikes etc which built as the year developed, albeit H1 LFL 80% 52% 70% slig
Slide 12: New Stores – Opening Financials
NEW STORES – OPENING FINANCIALS FY21 openings CAPEX • All three openings in FY21 (Edinburgh, Exeter and Windsor), collectively • In anticipation of rising building costs, the Group recognised the returned a 56% ROCE based on FY22 EBITDA challenge and worked hard to obtain capital contributions to ke
Slide 13: FY23 New Store Openings (2 Openings to Date)
FY23 NEW STORE OPENINGS (2 OPENINGS TO DATE) Derby Greenwich • Opened in Feb 2023 • Opened in Mar 2023 • Average weekly sales since opening: £16.6k • Average weekly sales since opening: £16.3k • Investment case maturity sales1: £13.7k • Investment case1 maturity sales: £17.2k • CAPEX to build: £305k
Slide 14: Profitability
PROFITABILITY Profitability impacted by external factors; unprecedented pressure on input costs, most acutely on proteins and utility costs Cost inflation factors arising from Ukraine war ∑ = £2.6m Comparing FY22 actual vs expectation pre-conflict: £2.6m of the gap relates to cost pressures arising
Slide 15: Balance Sheet
BALANCE SHEET FY22 FY21 £m £m • Acquisition of Chilango in May 2022 generated goodwill of £2.6m Non-current assets • Closed FY22 with cash balances of £2.4m, with an unchanged debt position of £2.9m. Intangible assets 2.6 - Total debt facility available is £10m Right of use assets 31.0 24.9 Property
Slide 16: Strategic & Operational Review
STRATEGIC & OPERATIONAL REVIEW Richard Morris, CEO 16 16
Slide 17: Tortilla in Central London Is Booming
TORTILLA IN CENTRAL LONDON IS BOOMING Central London is booming following a desire for people to get back to the office. This theory underpinned the acquisition of Chilango and the Board is confident there is further room for growth • Great to see the London recovery continue into FY23: 23,000 avera
Slide 18: Chilango Acquisition
CHILANGO ACQUISITION Strategic acquisition provides several opportunities • Acquired eight bricks and mortar locations • Five of the locations converted to Tortilla sites, with the remaining three locations retained as Chilango due to proximity to existing Tortilla units. Integrated into the Group’s
Slide 19: Operational and Technological Opportunity
OPERATIONAL AND TECHNOLOGICAL OPPORTUNITY OPERATIONAL TECHNOLOGICAL Opportunity to enhance operational and financial performance of Various brands have improved sales and customer experience using the business through several initiatives: technology. Opportunity to test kiosks within certain locatio
Slide 20: Value for Money
VALUE FOR MONEY With the current “cost of living crisis”, Tortilla’s value for money proposition becomes increasingly important. We remain less expensive than the competition and have introduced regional pricing to reflect the higher cost base in the London region At the same time, we maintained our
Slide 21: Value for Money
VALUE FOR MONEY Comparing Tortilla to its wider peer group, the Group is very well positioned with a competitively priced proposition: 18.00 16.00 14.00 12.00 Price £ 10.00 8.00 6.00 4.00 2.00 - Note that the above compares our planned price (April 2023) as it remains to be seen how much pricing wil
Slide 22: FY23 Current Trading
FY23 CURRENT TRADING Sales Costs • LFL sales growth (vs. FY22) for the 8 weeks to 26 Feb 2023: • Locked in utilities hedge (Apr-Sep 2023) which will deliver price protection beyond the end of the Government support period. LFL sales LFL sales (VAT adj.) Compared with the same period last year, this
Slide 23: Summary
SUMMARY • FY22 was a record year of new site openings and FY23 pipeline is strong. Tortilla remains an exciting growth business • Aside from the acquisition, all FY22 new stores were outside of London, in some smaller towns/cities, providing confidence in UK white space opportunity • Steps taken to
Slide 24: Q&A
Q&A TORTILLA L___—_} Tiel Gatti eros Te 24
Slide 25: Appendix
APPENDIX TORTILLA 25
Slide 26: About Us
ABOUT US We are the UK’s largest and most successful fast-casual Mexican restaurant business • Founded in 2007 • Leading fast-casual Mexican • Value-for-money proposition • By Brandon Stephens with a restaurant group in the UK • Freshly-prepared, mission of bringing authentic • 82 sites worldwide1 c
Slide 27: Strengthened Board of Directors
STRENGTHENED BOARD OF DIRECTORS EMMA WOODS RICHARD MORRIS ANDY NAYLOR BRANDON STEPHENS Non-Executive Chair Chief Executive Officer Chief Financial Officer Founder, Non-Executive Director Board Appointment Sep FY22 Francesca brings a wealth of business development, franchise, finance and M&A experien
Slide 28: Fresh, Customisable Product Proposition
FRESH, CUSTOMISABLE PRODUCT PROPOSITION Freshness: Our toppings and guacamole are freshly Award Winning: Numerous awards for food, made in-house every day value, and profitability including: Innovation: Menu regularly reviewed and refreshed to • Third most loved fast- add trending fillings (e.g. chi
Slide 29: Well-Defined, Proven Property Strategy
WELL-DEFINED, PROVEN PROPERTY STRATEGY WITH FLEXIBILITY ACROSS SITE LOCATIONS AND FORMATS Site Selection Criteria • Uncompromising in site selection • Size: 60 sqM – 200 sqM • CAPEX: circa £375k - £450k depending on size, site condition and store front requirements • ROCE: 30% minimum investment hur
Slide 30: Robust Scalability Through Centralised Production Infrastructure
ROBUST SCALABILITY THROUGH A CENTRALISED PRODUCTION INFRASTRUCTURE AND EXPERIENCED HEAD OFFICE TEAM Centralised Production Unit (CPU) Head Office Structure • Tortilla’s 5,500 sq ft Central Production Unit (CPU) in Tottenham Tortilla has an established and experienced senior management team to suppor
Slide 31: People & Culture
PEOPLE & CULTURE • Our mission is to provide high quality support that will allow us to recruit, retain and develop an exceptional team that will enable us to achieve all of our goals including our overarching aspiration of becoming the employer of choice within the fast casual sector • We are commi
Slide 32: Environment Social Governance (ESG)
ENVIRONMENT SOCIAL GOVERNANCE (ESG) The Group reports on it’s environmental, social and governance targets and achievements annually, available to view here. The Impact Report for 2022 highlights include; OUR PEOPLE People are the heart of our business and we’re proud to champion diversity, inclusio
Slide 33: Tortilla
TORTILLA Real California Burritos & Tacos
Tortilla Mexican Grill — FY2022 Earnings Presentation on 6ix