Retail Food Group Limited · ASX:RFG
Retail Food — H1 2011 Earnings Presentation
26 slides from Retail Food's earnings presentation, Feb 17, 2011
Slide 1: Results Presentation – 31 December 2010 (1H11)
For personal use only Retail Food Group Limited Results Presentation ă 31 December 2010 (1H11)
Slide 2: Retail Food Group Limited (ASX: RFG)
Retail Food Group Limited (ASX: RFG) For personal use only RFG designs, develops and manages retail franchise systems and is the intellectual property owner and licensor of the following franchise systems: – Donut King – Michel’s Patisserie – Brumby’s Bakeries (including Big Dad’s Pies) – bb’s caf
Slide 3: 1H11 Strength In Brands
1H11 Strength In Brands For personal use only Continued growth notwithstanding challenging retail trading conditions: – Core NPAT: $14.1m ( 12.6% on pcp) – Core EPS: 13.2 cps ( 6.5% on pcp) – Dividends: 7.0 cps ( 33.3% on pcp) increasing Dividend payout ratio to 55.2% (1) – Continued strong net
Slide 4: Summary Information
Summary Information For personal use only Statutory Results Core Operations (1) 1H07 1H08 1H09 1H10 1H11 PCP % 1H10 1H11 PCP % Franchise Network Sales (2) $79.2m $306.3m $320.9m $321.2m $326.7m 1.7% Total Revenue (3) $12.4m $50.2m $69.7m $61.3m $60.3m (1.6%) Adjusted Revenue (4) $32.7m $38.6m 18.0%
Slide 5: Financial Highlights
Financial Highlights For personal use only Shareholder Wealth Positive shareholder outcome: 400 350 – Core EPS up 6.5% to 13.2 cps 300 250 – Interim dividend of 7.0cps fully franked (up 33.3% on pcp) (1) 200 150 – Dividend payout ratio exceeding 55% 100 50 – Sustained increase in market capitaliza
Slide 6: Financial Highlights
Financial Highlights For personal use only Decline in Revenue of 1.6% consistent with programmed model change:: – 1H11: $60.3m v 1H10: $61.3m Revenue Adj. Revenue – Ongoing transition of Michel’s Patisserie franchisees from 140 wholesale bakery model to traditional royalty model (234 as at 31 120
Slide 7: Operational Highlights
Operational Highlights For personal use only Resilient franchise systems: – Network sales up $5.5m to $326.7m – Weighted AWS up 2.3% underpinned by coffee growth – Weighted ATVs up 2.4% reflecting continuation of product bundling initiatives – Customer count down 0.7% indicates shopping centre foo
Slide 8: Debt Structure & Covenants
Debt Structure & Covenants For personal use only Senior debt facility of $85.0m refinanced with National Australia Bank (NAB) on 31 August 2010: – 3 year term – Structure allows for voluntary repayment of debt – Covenants consistent with those existing under prior facility and limited to interest
Slide 9: Franchise System Metrics - KPIs
Franchise System Metrics ‐ KPIs For personal use only Average Weekly Sales (AWS) Average Transaction Values (ATV) System 1H11 1H10 1H11 1H10 Donut King 9 853 9,853 9 716 9,716 5.25 5.08 Growth v prior period 1.4% 0.7% 3.4% 4.3% bb's café 11,715 11,408 7.59 7.37 Growth v prior period 2.7% 0.2% 3.0% 2
Slide 10: Franchise System Metrics - Outlets
Franchise System Metrics ‐ Outlets For personal use only System QLD NSW VIC TAS SA WA NT Aust China NZ Total Donut King 99 143 69 8 11 13 3 346 10 - 356 bb's café 20 1 9 - 7 - - 37 - 21 58 y Bakeries (1) Brumby's 158 33 67 1 19 50 9 337 - 17 354 56 180 60 - 23 11 - 330 - 4 334 Michel's Patisserie To
Slide 11: Acquisitions
Acquisitions For personal use only Purchase Cash Scrip Acquired Date Of Consideration Consideration Consideration Outlets Acquisition $’m $’m $’m Esquires Coffee Houses - New Zealand Master Franchise Business (‘MF Contract’) 46 7 Feb 2011 $7.4 $6.9 $0.5 - New Zealand & Australia Intellectual Propert
Slide 12: 2H11 Outlook
2H11 Outlook For personal use only 2H11 Initiatives – Development of new products and menu innovations – Expansion of successful online ordering sites Michel’s Patisserie online store sales have increased 57.1% since launching the national online ordering website (onlineorders.michels.com.au) in
Slide 13: FY11 Guidance
FY11 Guidance For personal use only January trading performance – Impact of Qld weather events (SE Qld flooding and Cyclone Yasi) 152 outlets impacted, 6 remain closed Continuing to assess damage sustained and cost of reinstatement The long term financial, physical and emotional wellbeing of
Slide 14: Appendices
Appendices For personal use only Appendix 1 – 1H11 Performance Appendix 2 – Earnings Performance Appendix 3 – Cashflow Performance Appendix 4 – Financial Position Appendix 5 – Franchise Systems – Donut King – bb’s café – Brumby’s Bakeries, including - Brumby’s GO! Concept - Big Dad’s Pies Concept –
Slide 15: 1H11 Performance
Appendix 1 – 1H11 Performance For personal use only 15 Retail Food Group Limited - 1H11 Results Presentation
Slide 16: Earnings Performance
Appendix 2 ‐ Earnings Performance For personal use only Key earnings highlights: 1H11 1H10 $’m $’m Core NPAT of $14.1m $14 1m (12.6% (12 6% increase on 1H10) after Revenue from franchising operations 33.7 30.7 adjusting for impacts of derivative financial instruments ($0.5m unfavourable post-tax)
Slide 17: Cash Flow Performance
Appendix 3 ‐ Cash Flow Performance For personal use only Key cash flow highlights: 1H11 1H10 $’m $’m Continuing strong cash flows – a feature of RFG RFG’ss Receipts from customers 74.8 75.5 business model – supported by balanced investment and financing activities Payments to suppliers and employe
Slide 18: Financial Position
Appendix 4 ‐ Financial Position For personal use only 1H11 FY10 Key balance sheet highlights: $’000 $’000 Increase in net assets by $10.4m $10 4m reflects reducing Assets: working capital requirements and well managed debt and equity structures Cash reserves 9.6 13.1 Trade receivables 11.8 13.1
Slide 19: Franchise Systems: Donut King
Appendix 5 – Franchise Systems For personal use only Australia’s largest specialty donut and coffee chain – Serves 30 million donuts to Australians every year – Operates within the ‘impulse buy’, ‘reward’ and ‘treat’ segments of the food retailing sector 1H11 Performance: Network Sales: $83.9m
Slide 20: Franchise Systems: bb's café
Appendix 5 – Franchise Systems For personal use only Café franchise with 37 outlets in Australia and 21 outlets in New Zealand – Operates within the ‘time out’, ‘relaxation’ and ‘meeting place’ segment of the food retailing and q qualityy coffee sector – Successful launch of ‘My Local Café’ sub-br
Slide 21: Franchise Systems: Brumby's Bakeries
Appendix 5 – Franchise Systems For personal use only Australia’s second largest specialty bread and savoury retail franchise chain – Incorporates Big Dad’s Pies, Brumby’s Go and Brumby’s Express outlet configurations – Operates within the “baked fresh” and “convenient” baked fresh convenient baker
Slide 22: Franchise System Sub-brands
Appendix 5 – Franchise System sub brands sub‐brands For personal use only Brumby’s GO! offers quality fresh sandwiches, snacks and savouries – Operates within the “pre-made”, “snack "and “convenience” segments – Concept developed to meet market for fresh, fresh healthy and ready-made bakery produc
Slide 23: Franchise Systems: Michel's Patisserie
Appendix 5 – Franchise Systems For personal use only Australia’s largest specialty coffee and cake retailer – Rated the “Best Tasting Coffee Franchise“ by Choice Magazine (July 2010) – Operates within the “treat”, “take a break” and “special occasions” segment 1H11 Performance: Network Sales: $1
Slide 24: Franchise Systems: Esquires Coffee Houses
Appendix 5 – Franchise Systems For personal use only Founded in 1993 in Vancouver, Esquires Coffee Houses has grown internationally with outlets in New Zealand, Fiji, Ireland and North America. – First New Zealand store opened in 2002 – Fastest growing coffee house franchise in New Zealand Acqui
Slide 25: 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 Leading retail food brand with 1,148 franchised outlets in Australia, New Zealand and China (as at 17 February 2011) manager and franchisor R
Slide 26: 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: representation warranty or undertaking, make no representation, undertaking express or