Retail Food Group Limited · ASX:RFG
Retail Food — H1 2013 Earnings Presentation
31 slides from Retail Food's earnings presentation, Feb 21, 2013
Slide 1: 1H13 Results Presentation
For personal use only 1H13 Results Presentation 1
Slide 2: 1H13 Summary
1H13 Summary For personal use only Statutory Results Core Operations (1) 1H11 1H12 1H13 PCP % 1H11 1H12 1H13 PCP % Adjusted Revenue (2) $38.6m $48.8m $59.4m 21.6% Total Revenue (2) $60.3m $49.5m $60.0m 21.2% EBIT $22.2m $24.0m $25.2m 4.9% $22.9m $24.7m $27.9m 13.3% NPAT $13.6m $14.5m $14.6m 0.7% $14
Slide 3: 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 ‐ Crust Gourmet Pizza – Michel’s Patisserie ‐ The Coffee Guy – Brumby’s Bakery
Slide 4: Financial Highlights (1 of 2)
Financial Highlights (1 of 2) For personal use only Core EBIT of $27.9 million represents 13.3% increase on pcp ($24.7m) comprising: – Positive EBIT contributions from 2H12 & 1H13 acquisitions – Resilient franchise systems & coffee roasting activities – Notwithstanding significant expense due to o
Slide 5: Financial Highlights (2 of 2)
Financial Highlights (2 of 2) For personal use only Adjusted Revenue increase of 21.6% to $59.4m, attributable to: – 10% increase in franchise revenues – 12.5% increase in coffee revenues – $3.2m revenue increase from corporate outlets Franchise Revenue increased 10% to $34.7m, attributable to:
Slide 6: 1H13 Franchise System Metrics – KPIs
1H13 Franchise System Metrics – KPIs For personal use only System growth v prior period Average Weekly Sales (AWS) Growth Average Transaction Value (ATV) Growth (Australian stores only) 1H13 1H12 1H13 1H12 Donut King 4.8% 1.2% 5.9% 2.2% bb's café/Esquires (0.6%) 2.3% 2.6% 1.5% Brumby's Bakery (1.1%)
Slide 7: 1H13 Outlet Population
1H13 Outlet Population For personal use only Franchise System Total Outlets Australia NZ Other Donut King 351 337 3 11 bb’s cafe / Esquires 97 37 60 - Brumby’s 310 295 14 1 Michel’s 325 322 2 1 Pizza Capers 124 123 - 1 Crust 128 122 3 3 The Coffee Guy 56 - 56 - Total 1,391 1,236 138 17 Net growth
Slide 8: 1H13 Operational Excellence
For personal use only 1H13 Operational Excellence 8
Slide 9: Brand System Highlights
Brand System Highlights For personal use only RFG’s brands now serve more than 105 million customers a year Store opening milestones – First Esquires drive thru outlets opened in Australia and New Zealand – Donut King opened first ‘Evo’ concept store of the future at Marsden (Qld) showcasing new
Slide 10: Michel's Patisserie – National Bakery Solution
Michel’s Patisserie – National Bakery Solution For personal use only Commissioning of National Supply solution continues Establishment of new Michel’s bakery facility in Melbourne ― Includes new RFG Victorian state office Michel’s supply chain has been stabilised in Queensland with new finishi
Slide 11: QSR Pizza Division
QSR Pizza Division For personal use only Division comprises Crust and Pizza Capers RFG now the leader in the gourmet pizza category with 250+ outlets Market research confirms appetite for gourmet pizza category Founder and former Crust CEO Michael Logos appointed QSR Divisional Director – dr
Slide 12: Digital Enhancement
Digital Enhancement For personal use only Comissioning of a dedicated in‐house Digital Team maximising e‐commerce channels and elevating RFG as a leader in the digital space Enhanced digital engagement and consumer experience to deliver positive franchisee outcomes Dedicated ‘social media comm
Slide 13: Product Innovation
Product Innovation For personal use only Successful launch of Crust Seasonal Range including Heirloom Tomato Upper Crust pizza and Caramelised Fennel Salad Reinvigoration of Michel’s product lines to showcase improved quality Donut King: – Introduced extensive hot and cold savoury menu includi
Slide 14: Project Evo
Project Evo For personal use only Central platform for Brand System growth Includes store enhancement, menu extension, modernity and relevance to customers within all Brand Systems Dedicated Project Evo team within each Brand System Donut King, Michel’s and Esquires have commenced Project Ev
Slide 15: Donut King Evo
Donut King Evo For personal use only First Donut King full format Project Evo store opened in December 2012 (Marsden Qld) AWS is 24% and circa 85% increase above the respective AWS system and comparable site category averages Project Evo confirms opportunity to proliferate in non‐traditional s
Slide 16: Coffee Excellence
Coffee Excellence For personal use only Acquisition of The Coffee Guy Brand System in New Zealand successfully completed Donut King achieved +6% compound growth in coffee sales over 3 years supported by Royal Bean Blend, Barista certification and innovative marketing initiatives Coffee excelle
Slide 17: 2H13 Innovation & Growth
For personal use only 2H13 Innovation & Growth 17
Slide 18: Donut King
Donut King For personal use only 7 new Donut King outlets scheduled for 2H13 Rollout of Donut King next generation branding including livery Launch of a Customer Service Training Initiative to up skill more than 2,500 team members across Australia Project Evo First Donut King drive thru incl
Slide 19: Michel's Patisserie
Michel’s Patisserie For personal use only Partnered with Channel 7’s Sunrise as the official onset café from February 2013 Provides opportunity to showcase coffee excellence, enhanced menu and Project Evo initiatives Sunrise offers exceptional level of brand exposure to national audience drivi
Slide 20: Brumby's Bakery
Brumby’s Bakery For personal use only Bread product sales up 4.4% Further expansion of Pure Bake range Improved hot savoury product range introduced Continuation of partnership with Cadbury including superior quality Hot Cross Bun range Project Evo Project Evo ‘store of the future’ represe
Slide 21: Coffee / Esquires / bb's Café / The Coffee Guy
Coffee / Esquires / bb’s Café / The Coffee Guy For personal use only Creation of Coffee Maximisation Unit charged with expanding RFG’s coffee business (wholesale and retail) Coffee roasting facilities expanding with new wholesale customers and products 5 new Esquires outlets planned for 2H13
Slide 22: QSR Pizza Division
QSR Pizza Division For personal use only 18 new pizza outlets planned for 2H13 Outlet proliferation consistent with segmentation strategy QSR Division to introduce new initiatives to drive pizza delivery Pizza Capers Biggest menu reinvigoration in the brand’s history to be launched in 2H13
Slide 23: Outlook
Outlook For personal use only 1H13 performance provides a solid foundation for enhanced 2H outcomes notwithstanding: ‐ Subdued Christmas trading and c.30 outlets having been affected by January floods ‐ Anticipated continuation of challenged retail marketplace for the duration of CY13 Whereas FY
Slide 24: Appendices
Appendices For personal use only Appendix 1 – Summary Financial Performance Appendix 2 – Core Earnings Reconciliation Appendix 3 – Earnings Performance Appendix 4 – Cash flow Performance Appendix 5 – Financial Position Appendix 6 – Debt Structure Appendix 7 – Capital Management 24
Slide 25: Appendix – Summary Financial Performance
Appendix 1 – Summary Financial Performance For personal use only 25
Slide 26: Appendix – Core Earnings Reconciliation
Appendix 2 – Core Earnings Reconciliation For personal use only Reconciliation of Statutory result to ‘Core Earnings’ 1H13 1H12 $’m $’m Statutory EBIT 25.2 24.0 Administration of failed Michel’s supplier operations (including 2.4 - direct financial assistance provided to franchisees) Corporate res
Slide 27: Appendix - Earnings Performance
Appendix 3 ‐ Earnings Performance For personal use only 1H13 1H12 $’m $’m Franchise, licensing & other fees up 10% to $34.7m, Revenue from franchising operations 45.5 38.4 reflecting contributions from acquisitions in 2H12 (Pizza Capers) and 1H13 (Crust & The Coffee Guy), organic Revenue from whol
Slide 28: Appendix - Cash Flow Performance
Appendix 4 ‐ Cash Flow Performance For personal use only 1H13 1H12 $’m $’m Continuing strong cash flows – a feature of RFG’s business model – supported by Receipts from customers 71.8 59.8 balanced investment and financing activities Payments to suppliers and employees (49.9) (36.7) 85.5% conver
Slide 29: Appendix - Financial Position
Appendix 5 ‐ Financial Position For personal use only 1H13 FY12 $’m $’m Significant cash holdings, notwithstanding 1H13 voluntary debt reduction ($11m) and final FY12 Assets: dividend payout ($9.8m) Cash reserves 13.2 12.8 Trade receivables 19.3 16.5 Working capital increases in 1H13 attributabl
Slide 30: Appendix - Debt Structure
Appendix 6 ‐ Debt Structure For personal use only Facility headroom (including cash) at 31 December 2012 of $45m ‘NAB’ Facility 1H13 Gross debt of $100m at 31 December 2012 Net debt $86.7m – $50m of debt on fixed interest rate to June 2014 – $50m of debt subject to variable interest rates Intere
Slide 31: Appendix – Capital Management
Appendix 7 – Capital Management For personal use only Shares Price Proceeds/Value ($m) Shares on issue 1st July 2012 108,422,615 Institutional/Sophisticated Investor Placement 16,330,000 2.85 46,540 SPP 2,455,946 2.85 7.00 Crust acquisition – partial consideration 2,358,462 2.968 7.00 ESOP – exercis