Retail Food Group Limited · ASX:RFG
Retail Food — FY2015 Earnings Presentation
31 slides from Retail Food's earnings presentation, Aug 27, 2015
Slide 1: FY15 Results Presentation
RETAILFOODGROUP STRENGTH IN BRANDS FY15 RESULTS | PRESENTATION
Slide 2: Retail Food Group (ASX:RFG)
Retail Food Group (ASX:RFG) RFG is Australia’s largest owner, developer & manager of retail food franchise systems • Network of c.2,450 outlets spanning 58 licensed global territories across 12 Brand Systems • Roaster and supplier of high quality coffee & affiliated products For personal use only •
Slide 3: Enviable Track Record
Enviable Track Record Sustained & sustainable outcomes demonstrate RFG continues to be a For personal use only company in growth Historical Performance(1) Strong Growth Story EBITDA CAGR since Listing: 27.6% • Continues to deliver positive outcomes whilst reinvesting in long term acquisitive & org
Slide 4: FY15 Results
For personal use only FY15 Results 4
Slide 5: Record Achievements
Record Achievements Business model delivering record performance & unique growth platform For personal use only FY15 Performance(1) Remarkable Outcomes FY14 FY15 Change Transformed into genuine global enterprise with significant international footprint Revenue(2) $128.8m $210.4m 63.4% Record EBI
Slide 6: Exemplary Performance & Shareholder Outcomes
Exemplary Performance & Shareholder Outcomes Rewarding shareholders with record earnings & dividends For personal use only 100 40 90% 90 35 80% 80 30 70% Cents per Share 70 60% 25 $ Millions 60 50% 50 20 40% 40 15 30% 30 10 20% 20 10 5 10% 0 0 0% FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY09 FY10 FY11 FY1
Slide 7: Diversifying Platforms
Diversifying Platforms Diversification nurtures business & drives growth For personal use only EBITDA Contributions FY15 9% EBITDA Contributions FY14 3% 1% 17% EBITDA Breakdown FY14 FY15 % Brand Systems (Domestic)(2) $56.6m $66.0m 16.6% Brand Systems (International)(2) $2.1m $15.1m 619% Co
Slide 8: Brand System Highlights
Brand System Highlights Healthy Franchise Network SSS Growth • Positive SSS/ATV growth(1) For personal use only 6 5.5 • Group SSS growth: 2.9% 5 • Group ATV growth: 3.4% 3.9 4 3.5 2.7 • Results driven by 3 2.2 1.9 1.9 • Ongoing Project EVO traction (27% penetration across 2 1.3 % 1.1 Traditional Bra
Slide 9: Brand System Results Summary - Financial
Brand System Results Summary - Financial Gross Franchise Revenue Network Franchise Revenue Net Coffee International EBITDA ($m) Division Sales ($m) Total ($m) For personal use only ($m) Contribution ($m) Contribution ($m) FY15 PCP FY15 PCP FY15 PCP FY15 PCP FY15 PCP FY15 PCP 160.5 (1.1)% 15.9 1.9% 3
Slide 10: Brand System Results Summary - Operational
Brand System Results Summary - Operational Closures EVO Traction Division SSS (%) ATV (%) New Outlets Legacy & Net Outlets Total Outlets (% of network) For personal use only Like for Like Consolidation(1) 3.9% 3.7% 20 18 8 (6) 341 34% Traditional 1.9% 2.8% 10 21 18 (29) 250 13% 1.1% 2.3% 16 20 18 (2
Slide 11: Acquisition Scorecard
Acquisition Scorecard A ‘glorious’ result For personal use only Full Synergy & FY15 EBITDA FY15 EBITDA Initial Integration Development Acquisition Leverage Return on Capital(3) Contribution(1) Guidance Achieved Completion Potential Priority Extraction $1.6m 100% 75% 15.1% $15.3m(2) +9.3% 75% 5
Slide 12: FY15 Acquisitions – Mobile & Specialty Coffee
FY15 Acquisitions – Mobile & Specialty Coffee Café2U Di Bella Coffee • Positions RFG as global mobile coffee leader • Australia’s pre-eminent specialty coffee brand For personal use only • Acquired September 2014 • Acquired February 2015 • $1.6m contribution to FY15 EBITDA • $2.9m contribution to FY
Slide 13: FY15 Acquisitions – Coffee Retail & Wholesale
FY15 Acquisitions – Coffee Retail & Wholesale Gloria Jean’s Coffees Group • Transformational acquisition of Gloria Jean’s Coffees Group For personal use only • $15.3m contribution to FY15 EBITDA(2) • Exceeded acquisition KPI by $1.3m (or 9.3%) • Or +$7m (50% increase) if China JV EBITDA included • F
Slide 14: Brand Systems & Coffee Wholesale: FY15 Achievements & FY16 Initiatives
Brand Systems & Coffee Wholesale: FY15 Achievements & FY16 Initiatives For personal use only 14
Slide 15: Traditional Brand Systems
Traditional Brand Systems FY15 Achievements FY15 Highlights Donut Michel’s Brumby’s King • Project EVO achieved 27% penetration across Traditional network For personal use only SSS Growth 3.9% 1.1% 1.9% • Donut King SSS growth continues to benefit from Project EVO • Project EVO traction in Michel’s
Slide 16: QSR Division
QSR Division FY15 Achievements FY15 Highlights • Avoidance of destructive price discounting practices adopted within For personal use only competitive set SSS Growth 1.3% • ATV initiatives utilised to support SSS ATV Growth 5.4% • Increased digital marketing & enhanced EDM targeting strategies led t
Slide 17: Coffee Retail Division
Coffee Retail Division FY15 Achievements FY15 Highlights For personal use only • Exceptional outcomes SSS Growth 5.5% • SSS & ATV growth (5.5% & 3.1% respectively) ATV Growth 3.1% • EBITDA Contribution per Outlet increase of 41.3% on PCP driven by leverage & scale(1) Network Population 810 • 4Q15 co
Slide 18: Mobile Division
Mobile Division FY15 Achievements • Exceptional performance For personal use only • Organic growth of 42 outlets • EBITDA Contribution per Outlet 6.6% up on PCP(1) FY15 Highlights • Consolidation of Café2U & The Coffee Guy into Mobile Division Network Population 341 • Enhanced franchisee profitabili
Slide 19: Coffee & Allied Beverage
Coffee & Allied Beverage FY15 Achievements For personal use only • Annualised throughput of 5.92m kgs consistent with guidance • Integration of Roasting Australia & Di Bella Coffee • Access to best in class equipment & facilities • Enhanced management team & expertise • Streamlined processes & proce
Slide 20: Accelerated Growth Plan: FY16 & Beyond
For personal use only Accelerated Growth Plan: FY16 & Beyond 20
Slide 21: Framework for Continued Success
Framework for Continued Success Ongoing organisational, efficiency & productivity initiatives embellishing platforms for long term success & realisation of enhanced earnings For personal use only Realising EBITDA Opportunity Network Consolidation • On track to realise c.$16m additional EBITDA over 3
Slide 22: Revenue Drivers
Revenue Drivers Franchise Initiatives Strong International Opportunities For personal use only • Transitioning one off revenue streams into recurring weekly • RFG engaging with multiple parties regarding new revenue, including ‘Inspire’ franchisee training program licensing/master franchise opportun
Slide 23: FY16 Outlook
FY16 Outlook Outlook FY16 Guidance • RFG enthusiastic regarding short & long term performance • NPAT growth c.20% on PCP (underlying) For personal use only • Proven business model • +250 new outlet commissionings, including • Solid platform laid for enhanced performance, including • c.130 internatio
Slide 24: Appendices
For personal use only Appendices 24
Slide 25: Appendix – Earnings & Performance Reconciliation
Appendix 1 – Earnings & Performance Reconciliation For personal use only FY14 FY15 EBITDA Adjustments Reported Underlying LFL Reported ($m) Reported EBITDA $59.4m EBITDA $59.1m $88.8m $86.5m $59.4m Acquisition, Integration & $29.4m Restructuring Costs(1) PCP% 50.2% 46.4% 0.5% Underlying EBITDA $88.8
Slide 26: Appendix - Definitions
Appendix 2 - Definitions For personal use only Acronym Description GFR Franchise Revenue (inc. FSF) + net coffee contribution FSF Franchise Service Fee NWS Brand System Network Sales (Australia & NZ only) SSS Same Store Sales ATV Average Transaction Value LFL Like for Like QSR Pizza Capers & Crust G
Slide 27: Appendix – Cash Flow Performance
Appendix 3 – Cash Flow Performance • 28.6% increase in gross operating cash flow to FY14 FY15 $65.1m (PCP: $50.6m) For personal use only $’m $’m Receipts from customers 175.5 263.6 • Continuing strong cash flows – a feature of RFG’s Payments to suppliers & employees (124.9) (198.5) business model –
Slide 28: Appendix – Financial Position
Appendix 4 – Financial Position • Working capital increases attributable to seasonal increases in FY14 FY15 revenues & consolidation of newly acquired businesses including $’m $’m • c.$15m in Trade Receivables For personal use only Assets: Cash reserves 11.6 17.1 • c.$13.5m in Inventories Trade rece
Slide 29: Appendix – Debt Structure
Appendix 5 – Debt Structure • Facility headroom (including cash) at 30 June 2015 of Senior Debt Facility FY15 $77.4m For personal use only Net debt(1) $200.3m • Gross debt of $206m at 30 June 2015 Interest expense(1) $7.3m • $50m current borrowings reflecting October 2015 Interest cover (times) (1)
Slide 30: Appendix – Capital Management
Appendix 6 – Capital Management Proceeds/Value Shares Price ($) ($m) For personal use only Shares on issue 1 July 2014 144,868,508 Dividend Reinvestment Plan (Final FY14 Dividend) 1,168,051 4.66 5.44 Institutional/Sophisticated Investor Placement 8,333,334 4.80 40.00 Gloria Jean’s Coffees Group Acqu
Slide 31: Disclaimer
Disclaimer 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: For personal use only • make no representation, warranty or undertaking, and accept no responsibility or liabi