The One Group Hospitality, Inc. · NASDAQ:STKS
The One Group Hospitality — Investor Presentation (November 2022)
35 slides from The One Group Hospitality's investor presentation, November 2022
Slide 1: Investor Presentation November 2022
Investor Presentation November 2022
Slide 2: Cautionary Statements
Cautionary Statements Forward-Looking Statements This presentation contains statements relating to the Company’s future business and financial performance and future events or developments that constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United Sta
Slide 3: About the Company
About the Company We are an international restaurant company that develops and operates upscale and polished casual, high-energy VIBE dining restaurants and turn-key food & beverage services for hospitality venues including hotels, casinos and other high-end locations. 3
Slide 4: The Core
The Core Vision: The Undisputed Global Leader In VIBE Dining. Mission: STRATEGIC PILLARS Operations Marketing Culinary Execution: Best at Four Wall Execution - Holidays: Craveable: Flavorful and Memorable - Best in Class at Guest Celebrate and Convert To be the BEST Experience Have to Have it Again
Slide 5: Proven & Scalable International Platform
Proven & Scalable International Platform 63 Total Venues Across 22 States and 8 Countries Generating Approximately $420mm in System-Wide Revenue The United States and Canada United Kingdom Italy F&B F&B F&B F&B F&B F&B F&B Puerto Rico UAE Qatar Mexico Spain F&B ~$310mm ~$42mm ~20% TTM Q3 2022 Total
Slide 6: Third Quarter 2022 Highlights
Third Quarter 2022 Highlights TTM Q3 2022 Company-owned Revenue TTM Q3 2022 Management, License and Record-Setting Topline Momentum ($M) Incentive Fee Revenue ($M) +0.5% +45.6% +30% +70% YoY Improvement YoY Improvement Consolidated 1-Yr Consolidated 3-Yr Comparable Sales Comparable Sales (Q3 22 vs.
Slide 7: Full Year 2021 Highlights
Full Year 2021 Highlights Record-Setting Topline Momentum Adj. EBITDA ($M) & Margin Adj. Earnings Per Share +34.2% +870 +$0.78 BPS Improvement YoY Improvement Consolidated 2-Yr Comparable Sales (FY 21 vs. FY 19) $42.7 $0.59 15.4% +45.1% STK 2-Yr Comparable Sales (FY 21 vs. FY 19) $9.6 6.7% +23.2% $(
Slide 8: A Portfolio of Experiential Vibe Dining Restaurant Brands
Business Overview A Portfolio of Experiential Vibe Dining Restaurant Brands Bar-centric grill concept featuring American Artfully blends the modern steakhouse and a Turn-key food and beverage services scaled, favorites, award-winning sushi and specialty chic lounge, offering a high-energy, fine dini
Slide 9: STK Steakhouse Overview
STK Steakhouse Overview International Footprint Recent Performance Q3 2022 vs. 2019 Same Store Sales Comparison The United States & Canada United Kingdom Italy $318K $16.5mm TTM Q3 2022 TTM Q3 2022 Florence F&B Average Weekly Sales Annualized AUV Puerto Rico UAE Qatar Mexico Spain 25 Venues | 11 Sta
Slide 10: Kona Grill Overview
Kona Grill Overview Domestic Footprint Recent Performance Q3 2022 vs 2019 Same Store Sales Comparison $103K $5.4M TTM Q3 2022 TTM Q3 2022 Average Weekly Sales Annualized AUV 24 Venues | 17 States Approximately $130mm of System-Wide Food & Beverage Revenue 10 Source: SEC Filings
Slide 11: Hospitality Services Overview
Hospitality Services Overview Global Footprint A Leading Hospitality Company Comprehensive Portfolio of Growing List of Recognized The United States & Canada United Kingdom Italy Internationally Recognized Hotel Partners Brands Rivershore F&B F&B ME Hotel Florence F&B F&B Milan The W Hotel Los Angel
Slide 12: Strong Track Record of Growth
Strong Track Record of Growth Historical EBITDA ($ in 000s) STK SSS Performance 72% 45% 9% 8% 1% 2017 2018 2019 2021 YTD 2022 SSS vs. 2019 Adjusted G&A % of GAAP Revenue Kona Grill SSS History (Same 24 Units) First Quarter of The ONE Group Ownership *See Appendix for reconciliation of Adjusted EBITD
Slide 13: Standout SSS Performance Post-COVID
Standout SSS Performance Post-COVID STK Same Store Sales Growth vs. 2019 Kona Grill Same Store Sales Growth vs. 2019 *Casual dining index represents a simple average of same store sales growth of BJ’s Restaurants, *Fine dining steak index represents a simple average of same store sales growth of Rut
Slide 14: Company-Owned Restaurant Level Margin Expansion
Company-Owned Restaurant Level Margin Expansion Company-Owned Restaurant Operating Profit Expansion +550 bps Achieved sales leverage relative to 2019 Eliminated non-essential costs (applied zero-based budgeting) Implemented cross-training for FOH/BOH staff Optimized menu and labor model Op
Slide 15: Successful Pivot Towards Special Occasions
Successful Pivot Towards Special Occasions STK Company-owned Comparable Sales by Dining Type Á la Carte Business had Rebounded with Increased Capacity Group / Events Business Beginning to Recover à la Carte dining was +81% for FY 2021 vs 2019 Successfully diversified sales mix away from Group / Even
Slide 16: Exciting Brand Activation Strategies
Exciting Brand Activation Strategies 16
Slide 17: Kona Grill – Improving Sales and Margins
Kona Grill – Improving Sales and Margins High Impact Sales Drivers AUV ($mm) Focused menu reengineering +28% $5.4 Menu innovation around craveable food offerings $4.2 Revived bar and patio program featuring live music Aggressive and sustained marketing activities FY 2019 TTM FYQ3 2022 2021 S
Slide 18: Target New Unit Economics by Ownership Type
Target New Unit Economics by Ownership Type Owned Restaurants Capital-Light Businesses STK STK Kona Grill STK Managed F&B Hospitality Licensed Revenue $8.0mm $5.0mm $6.0 - $10.0mm $6.0 - $10.0mm $5.0 - $20.0mm EBITDA $1.9mm $1.0mm -- -- -- Cash Investment $3.8mm(1) $2.5mm(1) -- <$500,000 <$500,000 R
Slide 19: STK GAAP Revenue and EBITDA Contribution by Ownership Type
STK GAAP Revenue and EBITDA Contribution by Ownership Type (Example - Illustrative Purposes Only) Company Management License Owned Agreement Agreement System-wide Revenue $8.0MM $8.0MM $8.0MM COGS 25% 25% 25% Other Operating 51% 51% 51% Restaurant EBITDA (Before License & Management Fees) $1.9MM $1.
Slide 20: Levers for Expected Future Organic Growth
Levers for Expected Future Organic Growth STK & Kona Grill Expansion Hospitality Growth Operational Initiatives Opportunity for ~200 STKs globally, Opportunity for at least 50 hospitality Drive same store sales through traffic across large and mid-sized markets management agreements globally,
Slide 21: STK Premier Venues Globally
STK Premier Venues Globally STK – Las Vegas STK – Chicago STK – New York Downtown STK – NY Rooftop* STK – Miami Beach STK – San Diego Rooftop STK – Los Angeles STK – Scottsdale STK – Orlando STK – Denver STK – Bellevue STK – San Juan STK – London STK – New York Midtown STK – Los Cabos STK –Nashville
Slide 22: Kona Grill Premier Domestic Suburban Venues
Kona Grill Premier Domestic Suburban Venues Kona Grill – Alpharetta Kona Grill – Baltimore Kona Grill – Boise Kona Grill – Carmel Kona Grill – Cincinnati Kona Grill – Dallas Kona Grill – Denver Kona Grill – Eden Prairie Kona Grill – El Paso Kona Grill – Gilbert Kona Grill – Huntsville Kona Grill – K
Slide 23: Exceptional Portfolio of Premier Hospitality Venues
Exceptional Portfolio of Premier Hospitality Venues ME Strand London ME Milan Hotel Calimala Florence STK, Radio, Marconi, Hospitality Services STK, Radio, Hospitality Services Roof & Dining The Curio Westminster London Hippodrome Casino London W Hotel Los Angeles STK, Bao Yum, Hospitality Services
Slide 24: Compelling Whitespace Opportunity
Compelling Whitespace Opportunity Significantly Underpenetrated Footprint… …With Significant Runway For Growth Total Venues Count Potential Current Remaining Whitespace 200+ 200+ 50+ 450+ 35+ 170+ 72% 88% 88% 170+ 63 14 25 24 Long-Term Current Potential The One Group historically achieved +19% annua
Slide 25: Most Recent New US Venues Delivering Superior Returns
Most Recent New US Venues Delivering Superior Returns Average Net Build Costs = $2.3MM Average Annualized Revenue = $10.0MM STK San Diego – 2018 STK Nashville – 2019 Average Annualized Restaurant EBITDA = $2.4MM Average Annual Cash on Cash returns = 104% STK Scottsdale – 2021 STK Bellevue – 2021 *Ba
Slide 26: Expected Near Term Venue Growth
Expected Near Term Venue Growth 2021 - 2023 Historical Venue Growth (1) 138% Growth in 4+ Years 26
Slide 27: Significant Remaining Upside
Significant Remaining Upside Existing Business Levers Digital Assets Massive Whitespace potential Friends With STK Steakhouse Private dining returns big impact to STKS in Benefits 1.2M 2022 271K Weekend brunch and happy hour programs Continued momentum with take-out and 337K delivery business
Slide 28: Strong Historical Performance
Strong Historical Performance GAAP Revenue ($M) Total Adjusted EBITDA ($M)* 28 *See Appendix for reconciliation of Adjusted EBITDA to GAAP Net Income.
Slide 29: Delivering Long-term Value for Shareholders
Delivering Long-term Value for Shareholders Consistent 1-2% New Unit Growth Same Store Sales Capital-light growth Economies of Scale 20%+ Consistent Adj. (7-13 per year) Growth EBITDA Growth 29
Slide 30: The ONE Group Highlights
The ONE Group Highlights Well Positioned for Fast Growing Hospitality Significant Growth in a Company Transforming Hospitality Sector Acquisitions can Further Strong Management Team Enhance our Brand Portfolio and Infrastructure to Support and Unit Pipeline Growth Strong Portfolio of High Multiple L
Slide 31: Appendix
APPENDIX
Slide 32: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures $ 000s ADJUSTED EBITDA RECONCILIATION Fiscal Year Ended December 2016 2017 2018 2019 2020 2021 Net income attributable to The ONE Group Hospitality, Inc. ($16,688) ($4,216) $3,274 $20,831 ($12,825) $31,348 Net income (loss) attributable to noncontrolling interest
Slide 33: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures $ 000s ADJUSTED EBITDA RECONCILIATION – Q3 2022 TTM Less: YTD Q3 Add: YTD Q3 FY 2021 2021 2022 TTM Q3 2022 Net income (loss) attributable to The ONE Group Hospitality, Inc. 31,348 25,577 8,455 14,226 Net income (loss) attributable to noncontrolling interest 600 5
Slide 34: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures $ 000s RESTAURANT OPERATING PROFIT FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Operating income (loss) as reported (2,658) 5,813 12,791 (13,694) 19,385 Management, license and incentive fee revenue (10,779) (11,568) (11,906) (5,325) (12,774) General and administrativ
Slide 35: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures $ millions TOTAL F&B SALES at OWNED and MANAGED UNITS 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A 2020A 2021A Total Owned Revenues $43.7 $56.4 $36.6 $40.5 $52.5 $63.9 $68.9 $74.0 $108.8 $136.6 $264.4 Management and 2.4 3.7 7.3 8.8 7.9 8.5 10.8 11.6 11.9
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