Retail Food Group Limited · ASX:RFG
Retail Food — FY2007 Earnings Presentation
30 slides from Retail Food's earnings presentation, Sep 17, 2007
Slide 1: Full Year Results Presentation for the Financial Year ended 30 June 2007
April 2006 September 2007 Retail Food Group Limited For personal use only Full Year Results Presentation for the Financial Year ended 30 June 2007
Slide 2: Highlights of FY07 & FY08 YTD
Highlights of FY07 & FY08 YTD For personal use only ¾ EBIT growth of 25.8% over pcp to $12.2m ¾ FY07 NPAT of $7.52 million representing a 26.7% growth from FY06, and exceeding Prospectus forecast of $7.4 million ¾ EPS increase of 22.1% over FY06 ¾ Full year final dividend of 3.125 cents per share (t
Slide 3: Introduction to RFG
Introduction to RFG Leading retail food brand ¾ RFG was established in 1989 and is now a leading Australian retail food brand manager and For personal use only franchising company with 681 franchised outlets in Australia and New Zealand manager and franchising ¾ RFG is an intellectual property owner
Slide 4: Donut King – Overview
Donut King – Overview For personal use only Business Overview • Established in 1981 • Targets the “impulse buy” and “treat” segments of the food retailing sector • Typically located in shopping centres food courts and other high traffic flow areas in front of shopping centre anchor tenants such
Slide 5: bb's café – Overview
bb’s café – Overview For personal use only Business Overview • ‘Relaxed’ café targeting the broader section of the community • Quality espresso and light meal offerings • Typically located in suburban shopping centres • Repositioned from a muffin and snack destination to a specialty coffee retailer
Slide 6: Business Overview – Executive Summary
FY07 Business Overview – Executive Summary FY07 % Inc v % Inc v Full Year Financial Results FY07 FY06 Prospectus Prospectus Prior Yr For personal use only Total Revenue excl Marketing (1) 23.6m 19.6m 20.2% 20.5m 15.1% Total Revenue incl Marketing 29.7m 24.7m 20.3% 26.8m 10.8% Corporate Expenses 6.9m
Slide 7: Financial Performance – Profit & Loss
FY07 Financial Performance – Profit & Loss FY07 Key Points $millions FY07 Prospectus FY06 For personal use only Total Revenue Excluding Strong FY07 result driven by record new Marketing 23.6 19.6 20.5 outlet commissionings (37 stores) & Total Revenue growth (up 15.1% on FY06) Marketing Fund Revenu
Slide 8: Financial Performance – Revenue
FY07 Financial Performance – Revenue Total Revenue of $29.72m up 10.8% on FY06 For personal use only Revenue (excluding Marketing) of $23.6m up 20% on prior year Other Revenue of $5.3m principally sales from interim non franchised outlet management ($3.3m) and from the pilot Central Manufactur
Slide 9: Financial Performance – Balance Sheet
FY07 Financial Performance – Balance Sheet $millions FY07 FY06 Balance Sheet Highlights For personal use only Current assets FY07 investment in Brumby’s recognised at Cash and cash equivalents 1.5 1.6 cost i.e. $19.5m in other non-current financial Trade and other receivables 5.8 4.2 assets with a
Slide 10: Financial Performance – Cash Flow
FY07 Financial Performance – Cash Flow Operating Cashflows For personal use only $millions FY07 FY06 Strong, consistent and recurrent Receipts from customers 30.6 27.7 cash inflows predominantly generated from the licensing of Payments to suppliers (19.7) (18.5) intellectual property Gross Operati
Slide 11: Business Overview – Donut King
FY07 Business Overview – Donut King FY07 % Inc v % Inc v Franchise System FY07 FY06 For personal use only Prospectus Prospectus Prior Yr Donut King Start of Year Outlets 265 265 250 Openings 30 21 42.9% 21 42.9% Closures 6 2 200.0% 6 0.0% Ending Outlets 289 284 1.8% 265 9.1% Growth in Outlets 24 19
Slide 12: Business Overview – bb's cafe
FY07 Business Overview – bb’s cafe FY07 % Inc v % Inc v FY07 FY06 For personal use only Prospectus Prospectus Prior Yr Franchise System bb’s café (incl. NZ) Start of Year Outlets 67 67 69 Openings 7 4 75.0% 6 16.7% Closures 3 2 50.0% 8 (62.5%) Ending Outlets 71 69 2.9% 67 6.0% Growth in Outlets 4 2
Slide 13: Business Overview – Combined Outlet Growth
FY07 Business Overview – Combined Outlet Growth FY07 % Inc v % Inc v FY07 FY06 For personal use only Prospectus Prospectus Prior Yr Franchise System Combined Start of Year Outlets 332 332 319 Openings 37 25 48.0% 27 37.0% Closures 9 4 125.0% 14 (35.7%) Ending Outlets 360 353 2.0% 332 8.4% Growth in
Slide 14: Business Overview – Average Weekly Sales & Average Transaction Value
FY07 Business Overview – Average Weekly Sales (AWS) & Average Transaction Value (ATV) For personal use only AWS FY07 FY07 Forecast FY06 Donut King 8,978 8,911 8,981 year on year growth 0.0% 4.1% 3.3% bb's café (Australian outlets only) 9,814 9,460 9,285 year on year growth 5.7% 3.5% 6.7% bb's café (
Slide 15: Central Manufacturing Facility & Coffee Roasting Facility
FY07 Business Overview – Central Manufacturing Facility (CMF) & Coffee Roasting Facility (CRF) For personal use only Improvement of franchise lifestyle to drive multi outlet ownership Acquisition and refurbishment works completed Commissioning of CMF and CRF equipment completed CMF currently d
Slide 16: Business Overview – Brumby's
FY07 Business Overview – Brumby’s Business Overview • Brumby’s is a specialty bread retailer, specialising in For personal use only the provision of staple food • Established in 1975 • Targets 4 sectors: Take-home, Eat now, Meal Solutions & Seasonal. • Typically located in high street locations, str
Slide 17: Business Overview – Brumby's (cont.)
FY07 Business Overview – Brumby’s (cont.) Acquisition For personal use only RFG share ownership and offer acceptances 44.82% at 30 June 2007. RFG share ownership and offer acceptances 99.87% at close of offer 18 July 2007. Balance compulsorily acquired on 3 September 2007. Total acquisition co
Slide 18: FY08 Outlook – Operational Targets
FY08 Outlook – Operational Targets Continuing Outlet Expansion in Australia & NZ For personal use only Combined Donut King, bb’s café and Brumby’s FY08 forecast net outlet growth = 52 stores Restructuring of national FSO teams to take advantage of Brumby’s experienced team Programs to assist m
Slide 19: FY08 Outlook – Operational Targets (cont.)
FY08 Outlook – Operational Targets (cont.) AWS & ATV Growth For personal use only Targeted marketing campaigns to sustain growth in AWS via marketing initiatives and quality new site selection AWS currently exceeds FY08 Forecast ATV growth at FY08YTD exceeds 4.5% in all systems CMF / CRF Nat
Slide 20: FY08 Outlook – Financial Targets
FY08 Outlook – Financial Targets Revenue & Profit Drivers For personal use only Following Brumby’s acquisition: ¾ FY08 EBIT forecast to grow by 55% to $19 million ¾ FY08 NPAT forecast to be approximately $9.8 million representing a 30% increase over FY2007 Underlying business drivers – ie increa
Slide 21: The Michel's Acquisition
The Michel’s Acquisition For personal use only Business Overview • Established in 1988 with 2 company stores - Franchising commenced in 1990 • Demographic – female, middle to lower income with family, aged 25 – 50 • Site selection fresh food areas, predominately in front of supermarket entrances a
Slide 22: The Michel's Acquisition (cont.)
The Michel’s Acquisition (cont.) For personal use only Background to Agreement On 7 September 2007 RFG announced it had entered into a conditional Scrip & Cash Terms Agreement (SCTA) to acquire all the issued shares in The Michel’s Group Australia Pty Ltd (TMGA) TMGA is the intellectual property
Slide 23: The Michel's Acquisition (cont.) – Consideration
The Michel’s Acquisition (cont.) Scrip & Cash Terms Agreement Consideration For personal use only Pursuant to the SCTA, RFG will be entitled to the whole of TMGA’s FY08 earnings (after deduction of interest on TMGA’s existing debt) from 1 July 2007 Consideration payable to TMGA shareholders is $
Slide 24: The Michel's Acquisition (cont.) – FY08 Forecast P&L
The Michel’s Acquisition (cont.) FY08 Forecast P&L $ million Michel’s FY08 P&L Forecast For personal use only FY08 Revenue principally derived from wholesale Wholesale & Manufacturing Revenue 76.72 and manufacturing margin, as opposed to franchise service fees, i.e. royalties. Less: Cost of Goods
Slide 25: Capital Management
Capital Management With the completion of the Brumby’s acquisition RFG’s debt to equity ratio stood at 60% [ND/(ND+E)]. For personal use only This sits at the upper end of RFG’s preferred debt to equity range of 40% to 60%. Following the completion of the Michel’s acquisition (and assuming all d
Slide 26: FY07 Appendix
For personal use only FY07 Appendix 26
Slide 27: Appendix – Additional Information
FY07 Appendix – Additional Information Total Network Sales For personal use only Total Network Sales increase of $15.1 million FY07 % Inc v % Inc v Full Year Financial Results FY07 FY06 Prospectus Prospectus Prior Yr Total Network Sales (1) 158.2m 156.7m 1.0% 143.1m 10.6% (1) Inclusion of 25 NZ bb’s
Slide 28: For personal use only
For personal use only ? 290 Outlets + 69 Outlets + 322 Outlets + 346 Outlets = 339 = 681 = 1,027 28
Slide 29: Outlets by System by Territory
Outlets by System by Territory Franchise System QLD NSW VIC TAS SA WA NT Aust NZ Total For personal use only Donut King 87 108 60 7 13 12 3 290 0 290 bb's café 24 4 8 0 8 0 1 45 24 69 Brumby's 126 33 69 0 15 49 8 299 23 323 Michel's 56 195 55 0 24 10 0 340 6 346 Total (1) 293 340 191 7 60 71 12 974
Slide 30: Disclaimer
Disclaimer No responsibility for contents of Investor 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, express or implied, as to th