Retail Food Group Limited · ASX:RFG
Retail Food — FY2009 Earnings Presentation
27 slides from Retail Food's earnings presentation, Sep 7, 2009
Slide 1: Results Presentation for the Financial Year Ended 30 June 2009
April 2006 For personal use only Retail Food Group Limited Results Presentation for the Financial Year Ended 30 June 2009
Slide 2: Retail Food Group Limited
Retail Food Group Limited For personal use only • Owner, Developer, Manager and Licensor of Franchise Systems in Australia, New Zealand and China • Intellectual property owner (not licensee) of four full format retail franchise systems with in excess of 1060 outlets Donut King Retail Food Group FY09
Slide 3: Growth strategies
Retail Food Group Limited For personal use only • Growth strategies are directed toward leveraging: existing proprietary rights in its franchise systems; brand management and franchising expertise; and positioning for acquisitive growth Increasing multi-outlet Ownership Driving International Expansi
Slide 4: 1063 Outlets in Australia, NZ and China
1063 Outlets in Australia, NZ and China For personal use only Retail Food Group FY09 Results Presentation (1) As at 30 June 2009 4
Slide 5: Financial Highlights
Financial Highlights For personal use only Year Ended 30 June ($A millions) 2009 2008 % ↑↓ Total Revenue (1) $130.5m $114.1m 14.4% ↑ EBIT $40.3m $34.4m 17.2% ↑ NPAT $23.5m $17.6m 33.4% ↑ Retail Food Group FY09 Results Presentation EPS (basic) 23.7 cps 19.9 cps 19.1% ↑ EPS from “Core Operations”(2) (
Slide 6: Financial Highlights (Commentary)
Financial Highlights (Commentary) For personal use only • Enhanced performance in challenging economic conditions Revenue up $16.4 million to $130.5 million EBIT up $5.9 million to $40.3 million NPAT up $5.9 million to $23.5 million Core EPS up 6.2cps to 23.6cps • Continuing strong cashflows Retail
Slide 7: Operational Highlights
Operational Highlights For personal use only • Acquired Systems Further integration of Brumby’s Bakeries and Michel’s Patisserie acquisitions Significant enhancement to acquired systems – benefiting both RFG and franchisee community • Significant growth in total franchise systems Network sales up $4
Slide 8: Performance and Earnings
Performance and Earnings For personal use only • NPAT up $5.9 million (or 33.4%) compared to FY08 driven by Franchising revenue growth of 19.7% Wholesale / Retail revenue growth of 12.1% • FY06 to FY09 Cumulative Average Growth Rates: EPS 40.2% NPAT 58.5% Retail Food Group FY09 Results Presentation
Slide 9: Gross Margin Analysis
Gross Margin Analysis For personal use only • 61.3% adjusted gross margin (FY08: 60.1%) based on: Combined wholesale / retail and franchising / other revenue Adjustment made to comparative FY08 cost of sales to include Michel’s Patisserie distribution costs ($4.0m)(1) • Combining revenue segments re
Slide 10: Contributions to Revenue & EBIT by Franchise System
Contributions to Revenue & EBIT by Franchise System • Contribution to the Company’s EBIT • Largely For personal use only attributable to successful Michel’s Patisserie up 28.5% to $15.2 million consolidation and cost synergies as opposed Donut King up 27.6% to $13.5 million to increasing revenue fro
Slide 11: Balance Sheet
Balance Sheet For personal use only • Key balance sheet impacts: Cash increase from improved collections Reduction in current assets via CMF sale (1) Core debt reduced to $96.0 million (FY09) from $113.7 million (FY08) Other debt reduced from $4.1 million (FY08) to nil (FY09) • Cashflow model comfor
Slide 12: Cashflow
Cashflow For personal use only • 98% conversion of gross operating cashflow into EBITDA • Continuing strong consistent cashflows from business operations Focus on management of working capital Supported dividend payout increase of 8.8% Excess free cashflow applied voluntarily to reduce core debt Ret
Slide 13: Debt Structure & Covenants
Debt Structure & Covenants For personal use only Year Ended 30 June 2009 2008 Status Net Debt ($A millions) (1) 90.6 113.7 Improved Interest Expense ($A millions) 8.4 10.0 Improved Interest Cover (times) (2) 4.93 3.36 Improved Operating Cashflow ($A millions) 23.2 13.2 Improved Leverage Ratio (Total
Slide 14: FY09 Franchise System KPIs
FY09 Franchise System KPIs For personal use only • Strong Performance of franchise systems Average Weekly Sales (AWS) Average Transaction Value (ATV) Year Ended 30 June ($A thousands) 2009 2008 2009 2008 Donut King 9,256 9,183 4.93 4.59 PCP growth 0.8% 2.3% 7.4% 4.8% Retail Food Group FY09 Results P
Slide 15: FY09 Franchise System KPI Commentary
FY09 Franchise System KPI Commentary For personal use only • Donut King AWS improved by +1.1% during 2H09 Continues to be impacted by commissioning of lower turnover Victorian outlets ATV reflects promotions and product bundling (also key driver for Brumby’s Bakeries and bb’s café ATVs) Retail Food
Slide 16: FY09 Franchise Outlet Metrics
FY09 Franchise Outlet Metrics For personal use only Donut King bb’s café Brumby’s Michel’s Total RFG System Outlets Bakeries Patisserie Opening Balance 307 68 329 348 1052 Openings 24 3 19 13 59 Closures (6) (9) (17) (16) (48) Net 18 (6) 2 (3) 11 Closing Balance 325 62 331 345 1,063 Retail Food Grou
Slide 17: FY09 Summary
FY09 Summary For personal use only • Exceptional performance continues 1,063(1) outlets with network sales of $632 million Positive franchisee growth metrics maintained Proven acquisitions and sustainable organic growth Retail Food Group FY09 Results Presentation • Revenue and profit exceeds consens
Slide 18: FY10 Initiatives
FY10 Initiatives For personal use only • Business model continuing to show resilience in volatile economic and unpredictable retail environment • Further growth anticipated Development of new products and menu innovations Product bundling continues Expansion of coffee domestically and internationall
Slide 19: Appendix I - Franchise Systems: Donut King
Appendix I - Franchise Systems For personal use only Donut King Target Market: Treat, Impulse Buy, Reward Significant net outlet growth of 18 (from 24 commissionings) supported by Retail Food Group FY09 Results Presentation active multi-outlet ownership market Outlet closures of 1.8% of System is 67
Slide 20: Appendix I - Franchise Systems: Michel's Patisserie
Appendix I - Franchise Systems (continued…) For personal use only Michel’s Patisserie Target Market: Treat, Take a Break, Special Occasions Positive franchisee support for royalty model – no withdrawals Retail Food Group FY09 Results Presentation System conversion to traditional royalty model accele
Slide 21: Appendix I - Franchise Systems: Brumby's Bakeries
Appendix I - Franchise Systems (continued…) For personal use only Brumby’s Bakeries Target Market: Baked Fresh, Convenient, Wholesome New site development focus on shopping centres, non traditional Retail Food Group FY09 Results Presentation locations, and Go! concept stores (9 operating) Further gr
Slide 22: Appendix I - Franchise Systems: bb's café
Appendix I - Franchise Systems (continued…) For personal use only bb’s café Target Market: Relaxation, Time Out Strength in AWS (9.4%) and ATV (7.9%) superior to all RFG franchise systems Retail Food Group FY09 Results Presentation Evaluation of long term bb’s café strategy continues Pilot conversio
Slide 23: Appendix II - Core Operations Reconciliation
Appendix II - Core Operations Reconciliation For personal use only • Results from ‘Core Operations’ excludes amounts recognised in the income statement relating to the impact of: interest rate swaps disposal of CMF gain on acquisition of Brumby’s Bakeries Retail Food Group FY09 Results Presentation
Slide 24: Appendix III – Outlets by Territory
Appendix III – Outlets by Territory For personal use only Franchise System QLD NSW VIC TAS SA WA NT Aust China NZ Total Donut King 99 117 70 8 12 12 3 321 4 0 325 bb’s Café 21 2 9 0 8 0 0 40 0 22 62 Brumby’s Bakeries 130 34 72 0 17 50 8 311 0 20 331 Retail Food Group FY09 Results Presentation Michel
Slide 25: Appendix IV - RFG v. All Ords since IPO
Appendix IV - RFG v. All Ords since IPO For personal use only Retail Food Group FY09 Results Presentation Year Ended 30 June 2006 2007 2008 2009 Share Price $0.85 $1.49 $1.27 $1.60 Market Cap $60.9 mil $108.3 mil $124.9 mil $160.4 mil Debt $17.6 mil $26.6 mil $116.8 mil $95.5 mil(1) Enterprise Value
Slide 26: RFG Investment Credentials
RFG Investment Credentials For personal use only RFG was established in 1989 and is a leading Australian retail food brand manager and franchising company with 1063 Leading retail food brand manager and franchised outlets in Australia, New Zealand and China (as at 30 June 2009) franchisor RFG is an
Slide 27: 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, express or implied, as to the adequac