Franchise Brands Plc · LSE:FRAN
Franchise Brands — Stifel and LSEG 7th Annual Best of British Discovery Conference (2024)
28 slides from Franchise Brands's conference presentation, 2024
Slide 1: Growing our franchise businesses
Growing our franchise businesses =
Slide 2: Disclaimer
Disclaimer The information contained in this document (“Presentation”) and the presentation made to you verbally has been prepared by Franchise Brands plc (the “Company). Franchise Brands plc is a UK company quoted on AIM, a market operated by London Stock Exchange plc. This Presentation has not bee
Slide 3: Executive Chairman, Franchise Brands plc
Executive Chairman, Franchise Brands plc Chairman, Filta International
Slide 4: Our purpose: As they grow, we grow
&LSE Our purpose: “As they grow, we grow” We are focused on building, developing and growing market-leading franchise businesses. Build We build market-leading franchise businesses primarily via a franchise model. Develop We support our franchisees to successfully develop their businesses and achiev
Slide 5: Overview of Franchise Brands plc
Overview of Franchise Brands plc Founded in 2008. Origins in B2C. 2016 IPO. + 2017-2023: built portfolio of franchise businesses through acquisition and organic growth. + 7 franchise brands across 10 countries in UK, US and Europe. System sales of £425m. , Over 625 franchisees. + Aclear focus: B2B v
Slide 6: Overview of Franchise Brands plc
Overview of Franchise Brands plc Pirtek, Metro Rod and Metro Plumb provide essential services on a mostly reactive basis. Filta provides a planned service to hospitality sector. B2C brands, ChipsAway, Ovenclean and Barking Mad mostly single van operations. Demand for our mostly essential services is
Slide 7: Key milestones on the journey
Key milestones on the journey Founding IPO and Acquisition of of business acquisition of with the acquisition of ChipsAway METR@ ROD ovénclean roe Consideration £29m Consideration £1m Consideration £6m Acquisition of WILLQW PUMPS Consideration £7m Acquisition of Acquisition of Acquisition of Azura E
Slide 8: At a glance: 2024
At a glance: 20241 Our leading brands Pirtek Leading European provider of on-site hydraulic hose replacement services. £20.3m Adjusted EBITDA? 72 Total franchisees Water & Waste Services Drainage, plumbing, pumps maintenance and repair services and FOG services to commercial kitchens in the UK. £11.
Slide 9: A strong track record of delivery
Stifel & LSEG 7th A\ A strong track record of delivery System sales’ (£m) CAGR £425m 54% £350m £186m £76m £94m 2020 2021 2022 2023 2024E Adjusted earnings per share? (p) CAGR 8.4p 18% - ‘il 2020 2021 2022 2023 2024E Notes: 1 2024E system sales are unaudited Company estimates. Adjusted EBITDA2 (£m) C
Slide 10: Introducing the Maximum Potential Model
Introducing the Maximum Potential Model ‘B Methodology The Maximum Potential Model in action Originally introduced by Bain Capital at Domino’s Pizza. Map potential by franchise Methodology based on “best of the best” metrics being achieved by the territory. franchisees currently in each territory: a
Slide 11: Significant growth opportunities for the Group
Significant growth opportunities for the Group o Maximum potential model system sales Metro Rod Metro Rod £293m Filta International Filta International £752m Pirtek Pirtek £746m Rest of the Group Total Total £1.8bn £1.8bn Maximum potential system sales
Slide 12: Strategy in action: Filta International
Strategy in action: Filta International System sales - a strong track record of growth mmm System sales $140m 145 —e—#Franchisees $1201 um 4140 ™ 140 CAGR System $100m Sales 2018 134 135 to 2024 Gea m 9 19% 180 $60m 125 $40m $20m le a 120 115 2018 2019 2020 2021 2022 2023 2024E Note: 2024E system sa
Slide 13: The Maximum Potential Model: Filta North America
The Maximum Potential Model Filta North America customer base Total potential sites % of market System sales fils ae pe Max model Existing franchisees with more than 50 customers Highest average revenue per site $21,973 Highest market penetration 3.9% Addressable market in territories unsold /3 gq 9
Slide 14: Case study: Prudential Centre Stadium, New Jersey
Case study: Prudential Centre Stadium, New Jersey Prudential Center Stadium Levy Restaurants (Compass) Newark, NJ Home of NJ Devils (NHL) fryers of oil concession & kitchen stands
Slide 15: Waste Oil: H1 2023 & H1 2024
Waste Oil: H1 2023 & H1 2024 $26m $0.60 Volume, up 14% $25m $0.48 25m Ibs $0.50 $24m $0.40 2 $23m $0.35 g g Average price $0.30 & $22m achieved, $ 22m Ibs clommleens $0.20 21m $20m $0.10 $19m - H1 2023 H1 2024 —> Volume (lbs) —> Average Price achieved $ per Lb
Slide 16: Current consensus forecasts: 2024 and 2025
Current consensus forecasts: 2024 and 2025 2023A 2024E Change 2025E Change % % djusted EBITDA (£m) 30.1 357 19% 39.8 1% Adjusted EPS (p) 84 84 2 106 26% DPS (p) 2.2 24 9% 28 18% Adjusted net debt (£m) 747 65.0 49.9 Adjusted net debt to Adjusted EBITDA (x) 2.48x 1.82x 1.25x Consensus forecasts of Sti
Slide 17: F3 Working Smartly
F3 Working << a smartly BRANDS One works management system One common platform to be rolled out to the Pirtek businesses - Vision. One finance system One common finance platform across the whole group - Netsuite. One reporting One common reporting platform across the group. One sales One common sale
Slide 18: Capital allocation
Capital allocation capital allocation priorities Following recent acquisitions, strategic focus is on integrating and repaying the acquisition debt facilities. Board does not expect to make any further significant acquisitions until the outstanding debt is substantially repaid, anticipated in 2027.
Slide 19: Developed management and corporate governance
Developed management and corporate governance Continued development of our management and corporate governance Running the Company to reflect our current size and support our Responsible for the setting and oversight of the Group’s strategy, growth ambitions. business plans and budget; corporate dev
Slide 20: The investment case
The investment case Stifel & LSEG 7th A\ Provider of essential reactive services, with resilient underlying demand. Significant opportunities for growth, small share of large and fragmented markets demonstrated by the maximum potential model. ae 22 Experienced management team with strong track recor
Slide 21: Appendix
Appendix
Slide 22: Group financial results: H1 2024
Group financial results: H1 2024 H1 HI 2024 2023 Change Change 1H 2024 includes a full 6M from Pirtek compared restated" ‘ COO ©1000 COO 3 to 10-weeks in H1 2023. 206,035 145,475 60,560 42% System sales increased by 42% to £206m (H1 2023: £145.5m). Statutory revenue 69,800 51,875 17,925 35% Statutor
Slide 23: Adjusted and statutory profit: H1 2024
Adjusted and statutory profit: H1 2024 H1 o004 Depreciation and amortisation of software increased 63% to 2024 eee CSD Gi £3.0m (HI 2023: £1.8m), primarily due to the full 6M impact of the £000 £000 £000 % Pirtek acquisition. Finance expense reflects additional interest cost of the acquisition Adjus
Slide 24: Adjusted EPS and dividend (p): H1 2024
Adjusted EPS and dividend (p): H1 2024 maces J» ey H1 2024 Period ending 30 June 2024 Final dividend Interim dividend 1.10 1.10 31 December 2023 1.20 1.00 4.04 31 December 2022 1.10 0.90 2.00 31 December 2021 0.90 0.60 31 December 2020 0.80 0.30 110 Adjusted EPS decreased 7% to 4.04p (H1 2023: 4.34p
Slide 25: 17,761 12,272 30,101 (4,977) (5,291) (61) 12,784 6,981 30,040 72% 57% 100% (1,273) (1,011)
17,761 12,272 30,101 (4,977) (5,291) (61) 12,784 6,981 30,040 72% 57% 100% (1,273) (1,011) (2,858) (3,548) - (5,374) (1,007) (605) (4,498) - (1,433) (3,371) (5,828) (3,049) (16,101) - (200,602) (48,894) - - (136,747) - 214,263 194,118 (5,545) (1,002) (15,687) - (6,270) (6,159) (5,545) 6,389 (13,369)
Slide 26: Leverage: H1 2024
Stifel & LSEG 7th A\ 3 3 Leverage: H1 2024 30 Jun 2024 31 Dec 2023 Change The Group finished the period with cash of £13.7m £000 £000 £000 (81 Dec 2023: £12.3m) and Adjusted net debt of £69.9m. 13,674 12,278 1,396 Adjusted net debt, as used to test the bank covenants, represents 1.96x Adjusted EBITD
Slide 27: Filta Customer Environmental Impact Reports
h Annual Best of the British Dis Filta Customer Increasing importance Environmental Impact Reports, quantify the Help our customers demonstrate of ESG to Filta’s environmental savings of: their own ESG credentials to their corporate customers. Reusing (rather than discarding) the cooking oil own sta
Slide 28: Franchise Brands contact details
FRANCHISE BRANDS www.franchisebrands.co.uk Franchise Brands plc Ashwood Court Tytherington Business Park Macclesfield SK10 2XF mail@franchisebrands.co.uk 01625 507910 PIRTEK. www.pirtek.eu METRO R www.metrorod.co.uk METR®@ PLUMB www.metrorod.co.uk WILLQW www.willowpumps.co.uk Z filta www.filta.co.uk
Franchise Brands — Stifel and LSEG 7th Annual Best of British Discovery Conference (2024) on 6ix