Tortilla Mexican Grill Ltd. · LSE:MEX
Tortilla Mexican Grill — H1 2022 Earnings Presentation
29 slides from Tortilla Mexican Grill's earnings presentation, Oct 3, 2022
Slide 1: 2022 Interim Results October 2022
Slide 2: Presenting Team
[ TORTILLA | PRESENTING TEAM —— RICHARD Morris - CEO ANDY NAYLOR - CFO
Slide 3: Introduction & Highlights / Financial Review / Strategic & Operational Review / Q&A
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
TORTILLA L___—_} Tiel Gatti eros Te INTRODUCTION & HIGHLIGHTS RICHARD Morris, CEO
Slide 5: Strategic & Operational and Financial Highlights
Strategic & operational • Acquired Chilango in May, strengthening presence in Central London • Great progress achieved on new site roll-out, adding five sites and one delivery kitchen – all outside of London bar the delivery kitchen • Commenced franchise partnership with Compass Group and added Bris
Slide 6: Financial Review
TORTILLA L___—___} Teal Gaon Barron Ta FINANCIAL REVIEW ANDY NAYLOR, CFO
Slide 7: Revenue Increased by 30%
• Revenue increased by 30% to £26.9m (H1 H1 FY22 H1 FY21 FY21: £20.8m), driven by less lost trading £m £m Revenue 26.9 20.8 weeks due to the COVID-19 pandemic, the Cost of sales (6.2) (4.1) addition of 6 new stores and continued sales growth of the estate Gross profit 20.7 16.7 % of revenue 77.0% 80
Slide 8: Revenue: H1 FY22 vs H1 FY21
Revenue: H1 FY22 vs H1 FY21 Revenue: LFL analysis H1 FY22 LFL vs 2019* % % Actual Adj. VAT ** All sites Sales LFL 18.7 15.3 Volume LFL (3.9) (3.9) All sites ex. Zone 1 Central London Sales LFL 25.9 21.9 Volume LFL 1.6 1.6 CGA Peach benchmark Sales LFL 5.9 4.9*** *Compared to FY19, excluding Chilango
Slide 9: Great to See Consumers Returning
100% Delivery LFL vs FY19 Commenced partnership 80% with Uber Eats 52% 59% 63% 64% 69% 68% 71% 69% 71% 60% 83% 40% 20% 48% 41% 37% 36% 31% 32% 29% 31% 29% 17% 0% FY19 FY21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Delivery In-store • Great to see consumers returning to our stores, same
Slide 10: Gross Margin Utility Costs
Profitability has been impacted by unprecedented pressure on input costs, most acutely on proteins and utility costs Gross margin Utility costs • Utility costs heavily impacted by price increases • Chose not to hedge in Nov 2021 due to the market which has remained elevated • Utility cost increases
Slide 11: Fantastic Performance of Recent Store Openings
Fantastic performance of recent store openings, already at 110% of UK property market still favourable, with lower rents and improved sales hurdle required to hit 30% ROCE investment case landlord contributions FY21, FY22 openings Weekly sales Date opened Cohort2 Avg rent % of sales3 Avg landlord co
Slide 12: Acquisition of Chilango and Net Cash
• Acquisition of Chilango in May generated goodwill of £2.6m At 3 Jul At 4 Jul 2022 2021 • Net cash of £3.2m, with debt of £3m drawn from a total available facility of £m £m £10m (at 3 July 2022) Non-current assets • Strong liquidity provides platform for future growth – highly cash generative Intan
Slide 13: Strategic & Operational Review
TORTILLA L___—_} Tiel Gatti eros Te ; io © STRATEGIC & OPERATIONAL REVIEW > RICHARD Morris, CEO 13
Slide 14: Strategic Acquisition Provides Several Opportunities
Strategic acquisition provides several opportunities • Acquired eight bricks and mortar locations and retained one of the delivery-only kitchens • Five of the locations converted to Tortilla, the remaining three locations will be retained as Chilango due to proximity to existing Tortilla units. Inte
Slide 15: Very Healthy Spread of Profits Across the UK
Very healthy spread of profits across all parts of the UK with comparable profits both within London and across the rest of the UK London Rest of UK H1 FY22 Store EBITDA by site, within London vs Rest of UK (excluding Bankside which has remainded Across 8 Zone 1 central London Tortilla units, % of p
Slide 16: Property plan and new store openings
FY22 • On track to deliver 11 new stores for Tortilla this year (6 in H1, 5 in H2) – one of these openings is a delivery kitchen in Maida Vale and has since been closed along with a site in Brent Cross which opened last year. This was a condition of our non-exclusive trading relationship on delivery
Slide 17: Value for Money Proposition
With CPI inflation already above 10%, Tortilla’s value for money proposition becomes increasingly important. The Group has pricing headroom to offset these increases and expects customers to down trade from higher cost peers as the cost of living squeeze increases. So far this year, the Group has pr
Slide 18: New Site Opening Outperforming Expectations
New site opening outperforming expectations Sales momentum well ahead of sector • After Period end, as of 30 September: • Summer sales more challenging than expected o Opened new sites in Lincoln and Leicester • Despite one-off factors, LFL (vs. FY19) sales growth strong & above CGA o Converted five
Slide 19: Remain Encouraged by Continued Sales Performance
• Remain encouraged by continued excellent sales performance with industry leading LFLs • New openings performed above expectations with a buoyant pipeline of sites for the rest of 2022 and beyond • Importance of value-for-money proposition particularly in a recession • Remain cash generative and in
Slide 20: Q&A
TORTILLA L___—_} Tiel Gatti eros Te Q&A 20
Slide 21: Appendix
TORTILLA APPENDIX 21
Slide 22: We Are the UK's Largest Fast-Casual Mexican Business
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 • 84 sites worldwide1 customisab
Slide 23: Board and Management
EMMA WOODS RICHARD MORRIS ANDY NAYLOR BRANDON STEPHENS Non-Executive Chair Chief Executive Officer Chief Financial Officer Founder, Non-Executive Director New Board Appointment Francesca brings a wealth of business development, franchise, finance and M&A experience and has been involved in the succe
Slide 24: Award Winning
Freshness: Our toppings and guacamole are Award Winning: Numerous awards for food, freshly made in-house every day value, and profitability including: Innovation: Menu regularly reviewed and refreshed • Third most loved fast-casual chain to add trending fillings (e.g. chili no carne), popular in the
Slide 25: Site Selection Criteria
Site Selection Criteria • Uncompromising in site selection • Size: 60 sqM – 200 sqM • CAPEX: circa £350k - £425k depending on size, site condition and store front requirements • ROCE: 30% minimum investment hurdle • Use Class: ‘E’ • Locations: High street, shopping centres / leisure schemes, transpo
Slide 26: Centralised Production Unit
Centralised Production Unit (CPU) Head Office Structure Tortilla has an established and experienced senior management team to support a business of scale • Tortilla’s 5,500 sq ft Central Production Unit (CPU) in Tottenham Hale provides the production infrastructure to double the size of the estate.
Slide 27: People, Values and Culture
• Tortilla's people, values and culture are the foundation of our success • An inclusive culture with important values such as kindness and integrity • Continue to embrace and encourage diversity: • Workforce is now 42% non-British national • More than half of management are women • Under 25-year-ol
Slide 28: ESG Commitment and Targets
As part of Tortilla ongoing commitment to ESG, the Group appointed external consultants Sustainable Advantage to assess its performance across four areas (environmental, social, governance, ESG integration) and set targets for improvements over the next 2 years, outlined below: Assessment highlights
Slide 29: Real California Burritos & Tacos
TORTILLA Real California Burritos & Tacos
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