Retail Food Group Limited · ASX:RFG
Retail Food — H1 2023 Earnings Presentation
33 slides from Retail Food's earnings presentation, Feb 28, 2023
Slide 1: 1H23 Results Presentation
Retail Food Group Limited Level 4, 35 Robina Town Centre Drive Robina Qld 4226 28 February 2023 For personal use only 1H23 Results Presentation Please find enclosed for release to the market Retail Food Group Limited’s 1H23 Results Presentation. This announcement has been authorised for release by t
Slide 2: 1H23 Results Presentation
For personal use only 1H23 RESULTS PRESENTATION
Slide 3: Disclaimer
DISCLAIMER This Presentation contains summary information about the current activities of Retail Food Group Limited ACN 106 840 082 and its subsidiaries (RFG, the Company or Group) as at the date of this Presentation, unless otherwise stated. The information in this Presentation is of a general natu
Slide 4: 1H23 Highlights
TURNAROUND PLAN 1H23 HIGHLIGHTS HEADWAY For personal use only 47.4% (1) Underlying EBITDA 2019 Recapitalisation Same Store Sales (2) 17.9% Legacy regulatory actions finalized Positive Franchise First strategy (3) ACCC Proceedings resolved +13.3% SSS/+20.6 ATV vs 1H19 (5) FY23 Guidance expected
Slide 5: Key Highlights for 1H23
KEY HIGHLIGHTS FOR 1H23 Underlying EBITDA of $13.7m For personal use only Network Sales +14.0% vs 1H22 (up 47.4% vs 1H22) (1) Same Store Sales (SSS) +17.9% vs 1H22 Expect FY23 Underlying EBITDA be at the mid to upper end of the guidance range FY23 Underlying EBITDA guidance of $26.0m to $29.0m(2
Slide 6: Key Highlights for 1H23 (Cont'd)
KEY HIGHLIGHTS FOR 1H23 (CONT’D) Positive start to 2H23 with momentum For personal use only Network Sales +6.8% vs 2H22YTD continuing across key metrics1 Same Store Sales (SSS) +11.8% vs 2H22YTD Customer Count (CC) +12.0% vs 2H22YTD Positive ATV for all Brand Systems (vs 2H22YTD)(2) ACCC resolut
Slide 7: Snapshot
SNAPSHOT(1) POSITIVE CONTRIBUTIONS ACROSS ALL DIVISIONS IMPRESSIVE UNDERLYING RESULTS: > +17.9% 1H23 SSS growth across domestic franchise network: > Strong divisional outcomes contributed to 47.4% increase in 1H23 Group For personal use only • Underpinned by +17.3% CC & +0.5% ATV increases Underlyin
Slide 8: Snapshot: Turnaround Journey Further Advanced
SNAPSHOT MATERIAL LITIGIOUS ACTIVITY: TURNAROUND JOURNEY FURTHER ADVANCED > Dec 2022 resolution of ACCC proceedings(1): > Resolution of ACCC proceeding represents finalization of legacy regulatory For personal use only • Proceedings discontinued, without RFG: activity • Making any admission as to AC
Slide 9: Snapshot: Positive Start to 2H23
SNAPSHOT POSITIVE START TO 2H23(1): POSITIVE START TO 2H23 CONT’(1): > 2H23YTD domestic network performance remains strong despite challenging • Moderation of QSR Division performance following all time highs given For personal use only environment: return to more ‘normalised’ dine-in & eat out rout
Slide 10: Snapshot: Outlook
SNAPSHOT OUTLOOK For personal use only > Firm platform for much stronger FY23 established: • Resilient Brand Systems & broader business remain well positioned to respond to challenging trading environment • Relatively low sub $10 (ex QSR Division) ATV(1) provides scope & flexibility to better compet
Slide 11: Domestic Network Metrics
DOMESTIC NETWORK METRICS > Strong 2H22 momentum carried over into 1H23, despite impact of inflationary pressures & For personal use only Network Sales: staffing challenges: • Network sales grew +14.0% vs PCP to c.$258.8m 14.0% vs 1H22 • 1H23 SSS growth of +17.9% vs PCP reflects: • 1H23 maintenance o
Slide 12: Coffee Brand System Bounce Back
COFFEE BRAND SYSTEM BOUNCE BACK 1H23 KPIs vs PCP For personal use only 45.00% > Strong post COVID-19 recovery amongst coffee-based brand systems: Same Store Sales 40.7% • Donut King a ‘stand out’ performer 40.00% Customer Count • Strong marketing campaigns designed to build brand awareness & relevan
Slide 13: ATV Momentum Maintained
ATV MOMENTUM MAINTAINED For personal use only > Continuing investment in marketing, product innovation & consumer engagement: • >60 campaigns/product launches across all Brand Systems during 1H23, leveraging multiple tools including traditional, social & digital medias to: • Drive additional revenue
Slide 14: Continuing Focus on Engaging New Audiences/Customers
CONTINUING FOCUS ON ENGAGING NEW AUDIENCES/CUSTOMERS > Continuing focus on creating innovative new products, market activations & consumer engagement strategies to: For personal use only • Engage new customer audiences • Enhance brand relevance • Drive increased engagement via digital platforms • Ev
Slide 15: Introducing Rack 'Em Bones BBQ Ribs
INTRODUCING RACK ‘EM BONES BBQ RIBS > Launch of wholly new Brand System following successful FY23YTD trial: For personal use only • Complementary ‘virtual’ brand designed to leverage existing QSR outlet (Crust/Pizza Capers) fixed costs & assets to maximise profitability: • Simple low-cost business m
Slide 16: Network Development
NETWORK DEVELOPMENT > Continued focus on domestic network development: > Further development of corporate store portfolio: For personal use only • 13 new outlets across 4 Brand Systems established 1H23 (excludes • Demonstrating Brand System benchmarks & fostering retail mindsets trial outlets, total
Slide 17: 1H23 Performance Summary
For personal use only 1H23 PERFORMANCE SUMMARY
Slide 18: Group Performance
GROUP PERFORMANCE(1) 1H23 1H22 % Change 1H23 PERFORMANCE SUMMARY(1) For personal use only Revenue(2) $63.0m $54.7m 15.3% > 47.4% increase in 1H23 Underlying EBITDA to $13.7m (1H22: $9.3m): EBITDA (underlying) $13.7m $9.3m 47.4% • 52.3% increase when 1H22 COVID-19 related Government assistance exclud
Slide 19: Reconciliation of Underlying to Statutory Results
1H23 UNDERLYING STATUTORY RECONCILIATION OF UNDERLYING TO STATUTORY RESULTS EBITDA $13.7m $5.5m For personal use only > $6.8m non-core expenditure in continuing operations from restructuring activities & NPAT $12.3m ($1.1m) provisioning, comprising: • Advisory costs in connection with restructuring
Slide 20: Underlying EBITDA Performance by Division
UNDERLYING EBITDA(1) 1H23 1H22 % Change EBITDA PERFORMANCE BY DIVISION TO PCP For personal use only Bakery / Café Division(2) $5.6m $2.6m 114.0% > 1H23 Underlying EBITDA divisional results attributable to: (3) Coffee Retail Division $2.1m $1.5m 38.4% • Franchise Operations: • Strong domestic network
Slide 21: Cash Flows
CASH FLOWS CASH FLOW STATEMENT 1H23 ($m) 1H22 ($m) Receipts from Customers 64.9 53.8 > Increase in cash receipts from customers & payments to suppliers & employees Payments to Suppliers & Employees (50.5) (41.7) For personal use only consistent with: • Growth of underlying revenues in Franchise vs.
Slide 22: Balance Sheet
BALANCE SHEET AT 30 Dec 2022 1H23 ($m) FY22 ($m) BALANCE SHEET Assets Cash Reserves 24.2 29.2 > Increased net assets arising from 1H23 Statutory NPAT result For personal use only Trade Receivables 8.9 7.7 > 1H23 movements in lease receivables & lease liabilities reflect: Finance Lease Receivables 51
Slide 23: Debt Structure
DEBT STRUCTURE Gross debt $35.9 million For personal use only > Fully compliant with all covenants as of 30 December 2022 Net debt at 30 December 2022 (1) $17.6 million > Borrowings decreased by $5.0m during period, following 1H23 Covenant compliance Fully compliant with all lending covenants progra
Slide 24: 1H23 Divisional Performance
For personal use only 1H23 DIVISIONAL PERFORMANCE
Slide 25: Domestic Bakery / Café Division
DOMESTIC BAKERY / CAFÉ DIVISION 1H23 1H22 % Change > 1H23 performance influenced by: New Outlets 9 4 • Strong performances across Donut King & Michel’s Patisserie Brand Systems vs PCP: Closures (13) (32) For personal use only • Donut King(4): SSS +40.7%, CC +32.5%, ATV +6.2% • Represents +20.2% SSS
Slide 26: Domestic Coffee Retail Division
DOMESTIC COFFEE RETAIL DIVISION 1H23 1H22 % Change New Outlets 2 - > 38.4% increase in Underlying EBITDA vs PCP attributable to strong performance amongst Gloria Jean’s network driven by: Closures (11) (34) For personal use only • Post COVID-19 increases in customer count Outlets at Half-Year (1) 18
Slide 27: Domestic QSR Division
DOMESTIC QSR DIVISION(1) 1H23 1H22 % Change > 5.7% growth in Underlying EBITDA vs PCP influenced by: New Outlets 2 - • Continued growth in Divisional SSS (+3.1% vs PCP) despite moderation in Customer Closures (5) (3) For personal use only Count (-1.0% vs PCP) attributable to post-COVID-19 customer p
Slide 28: International Franchising Division
1H23 1H22 % Change INTERNATIONAL FRANCHISING DIVISION(1) New Master Franchise Agreements - 1 > 39.1% increase in Underlying EBTIDA vs PCP influenced by: New Outlets 44 36 For personal use only • Improved trading conditions across majority of international territories Outlets at Half-Year (2) 592 570
Slide 29: Di Bella Coffee (DBC)
DI BELLA COFFEE (DBC) 1H23 1H22 % Change External Revenue $2.3m $3.6m (36.2%) > 1H23 divisional performance influenced by: For personal use only • Reduced revenues attributable to: EBITDA Underlying(1)(2) $0.6m $0.5m 16.9% • FY22 exit from certain low-market supermarket supply contracts (1) Underlyi
Slide 30: Outlook
For personal use only OUTLOOK
Slide 31: Outlook
OUTLOOK > 1H23 domestic network momentum maintained in 2H23YTD(1): > Optimism maintained regarding potential future contribution of international • +6.8% increase in network sales network: • Strong CY23 new outlet pipeline(4) For personal use only • +11.8% SSS growth / +12.0% CC growth • Positive AT
Slide 32: Appendix
For personal use only APPENDIX
Slide 33: Definitions
Definitions 3PA Third party aggregator For personal use only ATV Average Transaction Value AWS Average Weekly Sale BCD Bakery/Café Division: Donut King; Michel’s Patisserie; Brumby’s Bakery CC Customer Count COGS Cost of Goods Sold CRD Coffee Retail Division: Gloria Jean’s; Cafe2U; The Coffee Guy; I