Retail Food Group Limited · ASX:RFG
Retail Food — FY2020 Earnings Presentation
33 slides from Retail Food's earnings presentation, Aug 28, 2020
Slide 1: FY20 Results Presentation
RETAIL FOOD | GROUP FY20 RESULTS PRESENTATION
Slide 2: Disclaimer
DISCLAIMER This Presentation contains summary information about the current activities of Retail Food Group Limited ACN 106 840 082 (RFG) and its subsidiaries as at the date of this Presentation, unless otherwise stated. The information in this Presentation is of a general nature and does not purpor
Slide 3: FY20 Snapshot
FY20 SNAPSHOT RECAPITALISED: • 1H20 recapitalisation afforded financial stability & capacity to execute on operational imperatives/respond to 2H20 COVID-19 impact • $193.5 million gross equity proceeds raised(1) • New $75.5 million three-year debt facility (maturing November 2022), reduced to $53.3
Slide 4: FY20 Snapshot Continued
FY20 SNAPSHOT CONTINUED COVID-19: • Significant uncertainty arising from COVID-19 • Necessitated reassessment of likely FY20 performance & withdrawal of original FY20 guidance(1) • Influenced performance in all aspects of Group operations: • Particularly evident in Brand Systems with high shopping c
Slide 5: FY20 Performance Summary
RETAIL FOOD | GROUP FY20 PERFORMANCE SUMMARY
Slide 6: FY20 Group Performance Summary
FY20 GROUP FY20 PERFORMANCE SUMMARY FY20 FY19(6) % CHANGE PERFORMANCE Revenue(1) $264.0m $349.0m (24.4%) > FY20 Underlying EBITDA(2) of $35.5 million (excluding contribution from EBITDA (underlying)(2) $35.5m $44.0m (19.3%) discontinuing operations and effect of AASB 15/AASB 16), exceeding FY20 Unde
Slide 7: Reconciliation of Underlying to Statutory Results
RECONCILIATION OF UNDERLYING TO STATUTORY RESULTS FY20 UNDERLYING STATUTORY EBITDA $35.5m $32.3m > Adjustment to statutory EBITDA of $71.8 million gain on debt forgiven by lenders as part of NPAT $14.1m ($4.0m) debt recapitalisation > Adjustments to statutory EBITDA also reflect $92.5 million non-co
Slide 8: EBITDA Performance by Division to PCP
% EBITDA PERFORMANCE BY DIVISION TO PCP Underlying EBITDA(1) FY20 FY19 CHANGE Bakery / Café Division(2) $12.8m $19.4m (34.2%) > FY20 Underlying EBITDA divisional results attributable to: Coffee Retail Division (3) $5.7m $6.7m (14.5%) • Franchise Operations: QSR (4) $7.2m $9.8m (26.3%) • Stabilisatio
Slide 9: Cash Flows
CASH FLOWS FY20 ($m) FY19 ($m) Receipts from Customers 319.6 468.0 > Decrease in cash receipts from customers consistent with: Payments to Suppliers & Employees (280.6) (430.7) • Reduced underlying revenues in Franchise & Di Bella Coffee • Dairy Country transition to net tolling fee invoicing & paym
Slide 10: Balance Sheet
BALANCE SHEET AT 30 JUNE FY20 ($m) FY19 ($m) Assets Cash Reserves 40.2 12.3 Trade Receivables 20.1 15.4 BALANCE SHEET Finance lease Receivables 80.4 - Financial Assets 4.1 4.7 > Net assets increased to $176.1 million as a result of 1H20 recapitalisation & debt restructure (completed December 2019) I
Slide 11: Debt Structure
DEBT STRUCTURE Gross senior debt – Pre Recapitalisation $265.8 million Debt write-off $71.8 million Payment from Placement proceeds: $118.5 million New term facility $75.5 million Additional debt repaid from SPP & ‘top-up’ placement $22.2 million Gross senior debt – Post Recapitalisation $53.3 milli
Slide 12: FY20 Divisional Performance
FY20 DIVISIONAL PERFORMANCE
Slide 13: Domestic Bakery / Café Division
DOMESTIC BAKERY / CAFÉ DIVISION FY20 FY19 % CHANGE New Outlets - - > Divisional Same Store Sales (SSS) stabilisation underpinned by franchise turnaround initiatives: Closures (72) (76) • +0.8% on PCP during Q1-Q3FY20 (excluding Michel’s Patisserie(2)) Outlets at 30 June 490 562 (12.8%) • Brumby’s Ba
Slide 14: Domestic Coffee Retail Division
% DOMESTIC COFFEE RETAIL DIVISION FY20 FY19 CHANGE New Outlets - 7 > Gloria Jean’s focus on menu extension & fulfillment of Flavour Famous® messaging Closures (56) (80) gaining traction: Outlets at 30 June 220 251 (12.4%) • ‘Toastini’ campaign delivered c.$3.5 million annualised network revenue • Ki
Slide 15: Domestic QSR Division
DOMESTIC QSR DIVISION FY20 FY19 % CHANGE New Outlets - 1 > Benefited from consumer preference for meal delivery options during COVID-19 Closures (27) (17) restriction periods: Outlets at 30 June 195 222 (12.2%) • Drove strong post COVID-19 AWS growth amongst both Brand Systems Same Store Sales (SSS)
Slide 16: International Franchising Division
INTERNATIONAL FRANCHISING DIVISION FY20 FY19 % CHANGE New Master Franchise Agreements 2 6 > Two new Master Franchises granted during FY20: Gloria Jean’s Hungary and Gloria New Outlets 55 42 Jean’s Vietnam Outlets at 30 June(1) 631 699 (9.7%) > FY20 performance influenced by: Transaction Revenues $0.
Slide 17: Di Bella Coffee (DBC)
DI BELLA COFFEE (DBC) > DBC’s reputation for high quality coffee products recognised: FY20 FY19 % CHANGE • 22 medals across wholesale/franchise blends at November 2019 Golden Bean External Revenue $23.0m $35.8m (35.8%) industry awards EBITDA Underlying(1)(2) $2.1m $3.4m (38.1%) > 2H20 completion of
Slide 18: Manufacturing & Distribution
MANUFACTURING & DISTRIBUTION FY20 FY19 % CHANGE Dairy Country $102.9m $99.5m 3.4% > FY20 divisional performance attributable to Dairy Country only: Hudson Pacific(3) - $53.6m - • Revenue increased $3.4 million on PCP on the back of increased processing volumes in grocery channel External Revenue $10
Slide 19: Responding to COVID-19
RESPONDING TO COVID-19 > Safety & wellbeing of our people & community the priority at all times > Initiatives implemented under turnaround plan provided strong foundation for decisive action > Broad range of operational & financial measures to support franchise network: • Operational modifications/a
Slide 20: Redefining RFG's Approach to Network Management
REDEFING RFG’S APPROACH TO NETWORK MANAGEMENT
Slide 21: Driving Strategic Change in Our Franchise Network
DRIVING STRATEGIC CHANGE IN OUR FRANCHISE NETWORK > Whole-of-organization realignment focused on improving franchisee outcomes & driving growth > All franchise facing functions & brand management consolidated into single Retail Division under new leadership > Retail Division recently relaunched as ‘
Slide 22: An Accomplished Leadership Team
AN ACCOMPLISHED LEADERSHIP TEAM > New leadership team with significant retail & franchising expertise appointed: Head of Retail: Jessica Buchanan • Multi-site franchisee with her family during early career • Established herself as head strategist at large multi-national advertising agencies to build
Slide 23: Driving World-Class Systemisation & Tools
DRIVING WORLD-CLASS SYSTEMISATION & TOOLS > 12 months program to develop world class systemization across all aspects of Iconic Co’s operations • Audit, break-down & rebuild of systems & processes • Informed by new expertise recruited to the business • Focus on driving efficiency, simplicity & posit
Slide 24: Building Enhanced Franchisee Relationships
BUILDING ENHANCED FRANCHISEE RELATIONSHIPS > Driving positive network sentiment via: • ‘Franchisee first’ mindset & culture • Focus on ensuring franchisees have best opportunity to succeed • Enhanced systemisation & business tools (eg launch of new Local Area Marketing (LAM) portal) • Partnership wi
Slide 25: New Field Team Structure
NEW FIELD TEAM STRUCTURE: > Evolution of franchisee field support team structure for implementation 1H21 > New structure tasked with four key objectives: • Driving more revenue into stores • Training franchise partners to become better retailers & generate more profits • Helping franchise partners t
Slide 26: FY21 Focus
RETAIL FOOD | GROUP IOONICCO FY21 FOCUS
Slide 27: FY21 Focus – Bakery/Café Division
FY21 FOCUS – BAKERY/CAFÉ DIVISION • Donut King: • Rollout & launch of new Donut King premium coffee blend & signage: • Major initiative – c.$2m investment • Targets increased coffee sales/appeals to non-traditional customers • Aggressive bundle/box offers & donut category innovation • Leverage multi
Slide 28: FY21 Focus – Coffee Retail Division
FY21 FOCUS – COFFEE RETAIL DIVISION • Aggressive focus on securing Drive-thru locations • Trial of new Gloria Jean’s concept in 1H21, including: • New freshly baked food range • ‘First to market’ brand proposition • Launch of ‘Best Coffee Ever’ to drive hot beverage category sales • Ongoing promotio
Slide 29: FY21 Focus – QSR Division
FY21 FOCUS – QSR DIVISION • Rollout & launch of successfully trialed new value model across all stores located in mid to low demographic populations (80% of the network) to: • Drive franchisee revenues & customer count • Facilitate new store growth opportunity • Increase market share • Shift brand p
Slide 30: Outlook
RETAIL FOOD | GROUP OUTLOOK
Slide 31: Outlook
Outlook • 1H20 recapitalization provided financial stability & platform for further implementation of turnaround initiatives: • Sustainable balance sheet with liquidity buffer • Disposal of non-core operations facilitates enhanced focus on continuing business & driving improved franchisee outcomes •
Slide 32: Appendix
RETAIL FOOD | GROUP APPENDIX
Slide 33: Definitions
Definitions BCD Bakery/Café Division: Donut King, Michel’s Patisserie, Brumby’s Bakery CRD Coffee Retail Division: Gloria Jean’s, Cafe2U, The Coffee Guy, It’s A Grind, bb’s Café, Esquires Coffee Manufacturing & Distribution (formerly referred to as Commercial Division) Hudson Pacific Foodservice, As