Boston Pizza Royalties Income Fund · TSX:BPF.UN
Boston Pizza Royalties Income Fund — Shareholder Meeting (June 2003)
20 slides from Boston Pizza Royalties Income Fund's shareholder meeting presentation, Jun 18, 2003
Slide 1: Annual General Meeting
Annual General Meeting June 18, 2003 John L. Cowperthwaite Trustee 1
Slide 2: Annual General Meeting
Annual General Meeting June 18, 2003 Mike Cordoba President and C.O.O. 2
Slide 3: Presentation Agenda
Presentation Agenda • Fund characteristics • Business concept • Operating and growth strategies • Financial review • Outlook 3
Slide 4: Key Features of the Fund
Key Features of the Fund • “Top Line” revenue royalty income fund • Fund owns Boston Pizza trademarks • Receives 4% of “top line” franchise sales • Investors protected from changes in operating costs and capital expenditures 162 Locations Coast-to-Coast Initial July 2002 Royalty Pool - 154 restauran
Slide 5: Same Store Sales Growth; Business Concept
Same Store Sales Growth % 10 Average 6.3% Annually 8.8 8 7.6 7.7 7.8 7.4 6 5.7 5.3 5.1 4.6 4 3.5 2 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 As of December 31st, based on stores open minimum 24 months Business Concept Two Experiences Under One Roof Casual Dining Restaurant Sports Bar 5
Slide 6: Business Concept
Business Concept Two Large and Attractive Target Markets Families Young Adults Business Concept Appealing, High-margin Core Menu Food Costs - Target 25% vs. Industry Average 35%* Pizza Pasta * source: C.R.F.A. 6
Slide 7: Business Concept
Business Concept Lower Average Cheque Advantage • Affordability brings in customers in good times and bad • Wins traffic from higher -end restaurants in tough economy Business Concept Four Eating Occasions % of overall sales Lunch Dinner 29% 36% 12% 23% Take out and delivery Late night 7
Slide 8: Business Concept; Operating Strategy
Business Concept Broad National Appeal • Succeeds in markets of all sizes and in all geographic regions • Particularly strong appeal in small markets with population 10,000 or less • Now enjoys strong geographic diversification Operating Strategy “Three Pillars” of Success 1. Franchisee profitabilit
Slide 9: Franchisee Profitability; Building the Brand
1. Franchisee Profitability • Successful franchisees drive value • When they succeed, we succeed • Select franchisees carefully • Choose the right locations • Provide comprehensive training and support 2. Building the Brand • Leverage 40 years of brand equity • Support with high profile national adv
Slide 10: Improving the Customer Experience; Growth Strategy
3. Improving the Customer Experience • Continuously refresh menu selection • Keep restaurants up to date • Complete renovation every 7 years at franchisee expense • Proven sales builder: 10%-15% lift post renovation Growth Strategy Grown from 89 to 168 Restaurants in 10 years – Only 2 locations clos
Slide 11: Growth Strategy - Western and Eastern Canada
Growth Strategy - Western Canada Plan to develop 20- 25 new outlets in next 5 years – Franchise commitments signed for 21 Yukon/NWT 2 British Columbia Alberta 49 73 Saskatchewan 10 Manitoba 10 Ontario Maritimes 22 2 as at May 31, 2002 Growth Strategy – Eastern Canada Plan to develop 50- 55 new outle
Slide 12: Mark Powell, Chief Financial Officer
Mark Powell Chief Financial Officer 12
Slide 13: Financial Review; Same Store Sales Growth
Financial Review • Same store sales growth • Cash distributions • Financial performance • Outlook • Expansion of royalty pool Same Store Sales Growth % 10 Average 6.3% Annually 8.8 8 7.6 7.7 7.8 7.4 6 5.7 5.3 5.1 4.6 4 3.5 2 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 As of December 31st, ba
Slide 14: Q1 Same Store Sales Growth; Cash Distributions Declared
Q1 Same Store Sales Growth % Three months to March 31st 3.0 +2.8% 2.5 +2.4% 2.0 1.5 1.0 0.5 0 2002 2003 Based on all stores that have been open a minimum of 24 months Cash Distributions Declared $ 2002 .10 .08 .06 = $0.4585 .04 .02 0 Jul* Aug Sep Oct Nov Dec * Partial period 2002 14
Slide 15: Cash Distributions Declared; 2002 Financial Performance
Cash Distributions Declared $ Since Inception .10 +2% .08 .06 = $0.877 .04 .02 0 Jul* Aug Sep Oct Nov Dec Jan Feb Mar Apr May * Partial period 2002 2003 2002 Financial Performance Period from July 17 to December 31, 2002 Total Franchise sales $ 124.20 million Royalty income $ 5.00 million Interest i
Slide 16: Q1 Financial Performance; Outlook
Q1 Financial Performance Period from January 1 to March 31, 2003 Total Franchise sales $ 65.70 million Royalty income $ 2.60 million Interest income $ 0.50 million 3.10 million Non-controlling interest $ 1.10 million Expenses $ 0.22 million Cash generated $ 1.80 million or $0.23/unit Cash distribute
Slide 17: Expansion of Royalty Pool
Expansion of Royalty Pool • New stores added to Royalty Pool annually • 8 new restaurants rolled in January 1, 2003 for the period of May 1- November 1, 2002 • Formula designed to be accretive to Fund on a per unit basis • New royalties purchased at 92.5% of market value • Boston Pizza International
Slide 18: Growing Value
Growing Value • Distribution level increased 2% as of May 2003 • Brings current yield to 11%* • Only restaurant royalty fund to increase distributions • Commitment to creating value for unitholders *Based on June 17, 2003 closing price Growing Value New Employee Incentive Program • Closely aligns ma
Slide 19: Growing Value; Key Strengths
Growing Value Proactive Investor Relations Program • Dedicated IRO and investor website • Investor Roadshows twice a year • Attendance at all sector conferences Key Strengths Delivered promised stability and growth • Achieved industry-leading same store sales growth • Increased cash distributions •
Slide 20: Annual General Meeting
Annual General Meeting June 18, 2003 20
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