Retail Food Group Limited · ASX:RFG
Retail Food — H1 2020 Earnings Presentation
23 slides from Retail Food's earnings presentation, Feb 27, 2020
Slide 1: 1H20 Results Presentation
RETAIL 1H20 | 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: 1H20 Snapshot
1H20 SNAPSHOT > 1H20 Underlying EBITDA(1) of $31.7 million ($21.5 million excluding contribution from discontinuing operations and effect of AASB 15 & 16, on track with FY20 Underlying EBITDA guidance(2)) > 1H20 Underlying NPAT(1) of $9.3 million > Statutory net profit after tax of $14.3 million (1H
Slide 4: 1H20 Performance Review
RETAIL 00DGROUP 1H20 | PERFORMANCE REVIEW (fa ~~ a de
Slide 5: 1H20 Group Performance
1H20 GROUP PERFORMANCE(1) 1H20 1H19 % Change 1H20 PERFORMANCE SUMMARY Revenue (2) $179.5m $192.0m (6.5%) > 1H20 Underlying EBITDA(1) of $31.7 million ($21.5 million excluding contribution from discontinuing operations and effect of AASB 15 & 16, on track with FY20 EBITDA (underlying) $31.7m $23.9m 3
Slide 6: Reconciliation of Underlying to Statutory Results
RECONCILIATION OF UNDERLYING TO STATUTORY RESULTS 1H20 Underlying Statutory > An adjustment to statutory EBITDA of the $71.8 million gain on debt forgiven by lenders as part of corporate debt recapitalisation EBITDA $m 31.7 50.1 NPAT $m 9.3 14.3 > Adjustments to statutory EBITDA also reflect $20.3 m
Slide 7: EBITDA Performance by Division to PCP
EBITDA PERFORMANCE BY DIVISION TO PCP UNDERLYING EBITDA(1) 1H20 1H19 % Change > 1H20 Underlying EBITDA includes $7.2 million contribution from adoption of AASB 16 Leases, including discontinued operations, and $3.0 million Bakery / Café Division(2) $12.2m $11.6m 4.9% from AASB 15 adoption (1H19: $3.
Slide 8: Cash Flows
CASH FLOWS CASH FLOWS 1H20 1H19 ($m) ($m) > Decrease in cash receipts from customers consistent with: Receipts from Customers 175.7 246.6 • Reduced underlying revenues in Franchise and Di Bella Coffee operations; and Payments to Suppliers & Employees (150.8) (217.9) • Dairy Country transition to net
Slide 9: Balance Sheet
1H20 FY19 Balance Sheet at 31 Dec 2019 ($m) ($m) BALANCE SHEET Assets Cash Reserves 44.2 12.3 > Net assets increased to $184.9 million as a result of the Company’s Trade Receivables 32.1 15.4 recapitalisation and debt restructure, completed December 2019 Finance Lease Receivables 89.1 - > Reclassifi
Slide 10: 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’ $22.2 million placement Gross senior debt – post Recapitalisation $53.3 milli
Slide 11: 1H20 Divisional Performance
1H20 | DIVISIONAL PERFORMANCE
Slide 12: Initiatives to Drive Domestic Franchise Performance
Initiatives to Drive Domestic Franchise Performance > Ongoing focus on driving domestic franchise performance and achieving target of additional $30 million gross margin generation at franchisee level from current initiatives: • Consolidation of all franchise facing functions under dedicated Retail
Slide 13: Domestic Bakery / Café Division
DOMESTIC BAKERY / CAFÉ DIVISION 1H20 1H19 % Change > 1H20 performance influenced by: - New Outlets - - - Closures (49) (41) • Stabilisation of Same Store Sales (SSS), due to franchise turnaround initiatives. Excluding Michel’s Patisserie, SSS is Outlets at 31 December 535 597 (10.4%) +0.6% Same Stor
Slide 14: Domestic Coffee Retail Division
DOMESTIC COFFEE RETAIL DIVISION 1H20 1H19 % Change - New Outlets - - > 1H20 performance influenced by: - Closures (23) (35) • Positive impact of restructuring activity, resulting in reduced Coffee Outlets at 31 December 244 262 (6.9%) operating and overhead costs; offset by • Cumulative impact on tr
Slide 15: Domestic QSR Division
DOMESTIC QSR DIVISION 1H20 1H19 % Change - New Outlets - 1 > 1H20 performance influenced by: - Closures (11) (17) • Cumulative impact on trading revenues attributable to non-profitable outlet closures in FY19 and 1H20, particularly in Pizza Capers Outlets at 31 December 205 222 (7.7%) • Reduced supp
Slide 16: International Franchising Division
INTERNATIONAL FRANCHISING DIVISION 1H20 1H19 % Change New Master Franchise Agreements 1 2 > 1H20 performance influenced by: New Outlets 40 11 • Decrease in Transactional Revenues, primarily attributable to the sale of 1 less new territory in 1H20 Outlets at 31 December(1) 667 738 (9.6%) • Net reduct
Slide 17: Di Bella Coffee
DI BELLA COFFEE > Divisional 1H20 performance includes: 1H20 1H19 % Change • Cumulative impact on sales revenues of customers lost in FY19/1H20 in the highly competitive independent food services Revenue $14.2m $22.2m (35.9%) • $6.8 million of revenue decrease on PCP attributable to 1H19 exit from u
Slide 18: Manufacturing & Distribution
MANUFACTURING & DISTRIBUTION 1H20 1H19 % Change Revenue Dairy Country $72.2m $50.4m 43.2% > Divisional performance for 1H20 attributable to Dairy Country business: Foodservice(2) - - - • Dairy Country revenue increased by $21.8 million on PCP, Bakery Fresh(2)(4) - - - attributable to a 19.9% increas
Slide 19: 1H20 Strategy & Outlook
1H20 | STRATEGY & OUTLOOK
Slide 20: Turnaround Plan remains on track
Turnaround Plan remains on track > Initiatives to ‘right size’ Group operations: c.$10.7 million per annum payroll reduction achieved in FY19 Complete • Reduction of c.80 FTEs, removal of unnecessary functions • Increased brand P&L accountability c.$8.0 - $9.0 million per annum cost savings, with po
Slide 21: Outlook
OUTLOOK > 1H20 recapitalisation provides financial stability and platform for further implementation of turnaround initiatives > Disposal of non-core operations enables enhanced focus on continuing business > Restructuring activities significantly advanced, with further traction to occur 2H20 > Whil
Slide 22: Appendices
RETAIL = GROUP APPENDICES
Slide 23: Definitions
DEFINITIONS BCD Bakery/Café Division: Donut King, Michel’s Patisserie, Brumby’s Bakery CRD Coffee Retail Division: Gloria Jean’s, Café2U, The Coffee Guy, It’s A Grind, bb’s Café, Esquires Coffee Hudson Pacific Foodservice, Associated Foodservice, Bakery Fresh, Dairy Country MANUFACTURING & DISTRIBUT