The One Group Hospitality, Inc. · NASDAQ:STKS
The One Group Hospitality — ONE Group Hospitality — Investor Presentation (December 2017)
62 slides from The One Group Hospitality's investor presentation, Dec 5, 2017
Slide 1: Investor Presentation December 2017
INVESTOR PRESENTATION DECEMBER 2017
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Slide 3: Forward-Looking Statements
Forward - Looking Statements In addition to historical information, this presentation contains statements relating to the Company’s future business and financial performance and future events or developments that may constitute “forward - looking statements” within the meaning of the “safe harbor” p
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Slide 5: Global hospitality company developing upscale, high-energy restaurants
We are a global hospitality company that develops and operates upscale, high - energy restaurants and turn - key food & beverage services for hospitality venues including hotels , casinos and other high end locations Our clients and partners are leading entertainment and hospitality companies, inclu
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Slide 7: Company Overview
Company Overview 7 STK & STK Rooftop Restaurants Upscale, high - energy steakhouse concept Launched in NYC in 2006 Portfolio of owned, managed and licensed restaurants 26 locations in operation or under lease / construction in North America, Europe and the Middle East Includes both large a
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Slide 9: Venues Expected to be Opened by the End of 2017
31 Venues Expected to be Opened by the End of 2017 Restaurants Hospitality Services Heliot Steak Asellina The Hideout Lola’s Bar & Casino Plunge Hospitality Services Hospitality Services Hospitality Services Atlanta Chicago Denver Dubai – UAE Ibiza – Spain Las Vegas London – UK Los Angeles Milan – I
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Slide 11: 2017 Focus and Results
2017 Focus and Results NOTE: See Appendix for a reconciliation of Adjusted EBITDA to GAAP Net Income.
Slide 12: STK Restaurants
..not your daddy's steakhouse STK RESTAURANTS
Slide 13: STK: Differentiated Steakhouse with High-Energy & Great Atmosphere
Reinvention of the traditional steakhouse High - energy dining experience Restaurants built around the bar, featuring DJ played music High female to male customer mix Destination locations Superior quality with innovative menu STK: Differentiated Steakhouse with High - Energy & Great Atm
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Slide 15: Irreplaceable Portfolio of Premier Locations
Irreplaceable Portfolio of Premier Locations 15 STK – Los Angeles STK – London STK – Milan STK – New York Downtown STK – Orlando STK – Atlanta STK – Miami Beach STK – Chicago STK – NY Rooftop STK – New York Midtown STK – Ibiza STK – Denver STK – San Diego Rooftop STK – Toronto STK – Las Vegas STK –
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Slide 17: STK vs. The Competition
Atmosphere STK vs. The Competition 17 Food Aesthetic Decor Bar Service High - energy, personable service Teamwork - focused and engaging Diverse, innovative menu Multiple portion sizes Dynamic, centralized bar scene Lounge fuels restaurants’ energy level Blend of edgy, modern, chic des
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Slide 19: A Clear Market Leader – Highly Differentiated
A Clear Market Leader – Highly Differentiated 19 “ “Best Steakhouse on the Strip” – Las Vegas Review - Journal “Best Places to Party this Summer” ” “A saucy spin on the steakhouse formula” – Zagat Top 5 Steakhouse in NYC – STK New York “…You’re only young once, people, so STK while you still can” –
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Slide 21: Superior Four Wall Economics
Superior Four Wall Economics 21 Full Service Average (1) Advantage Average Unit Volume $ 11.0mm $5.9mm $5.1mm Higher Sales/Sq. Ft. $889 $683 30% Higher Food & Beverage Costs 26.2% 28.8% 260bps Lower Labor Costs (2) 24.4% 26.5% 210bps Lower Restaurant Contribution Margin $2.1mm $1.2mm 75% Higher Cash
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Slide 23: Large and Mid-Sized Market Formats
Large and Mid - Sized Market Formats 23 Large Market Mid - Sized Market Markets: Large domestic and international markets Mid - sized to large domestic and international markets Sq. Ft.: 9,500+ 6,000 - 7,500 Seating Capacity: ~250 ~175 Primary Occasion: Happy hour , dinner and late night Lunch, happ
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Slide 25: ONE Hospitality
ONE HOSPITALITY™
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Slide 27: Exceptional Portfolio of Premier Hospitality Venues
Exceptional Portfolio of Premier Hospitality Venues 27 ME London STK, Radio, Marconi, Hospitality Services ME Milan STK, Radio, Hospitality Services Hippodrome Casino London Heliot Steak, Lola’s Bar & Casino, Hospitality Services Gansevoort New York Asellina, Rooftop, Hospitality Services W Hotel Lo
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Slide 29: Demonstrated Need for Experienced Hospitality F&B Partners
Demonstrated Need for Experienced Hospitality F&B Partners x Outsourcing F&B services becoming more prevalent within the hospitality industry x Historically hotels have not been successful with F&B operations and would prefer to focus on core competencies x Developers incentivized to split hotel man
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Slide 31: A Leading Hospitality Company – ONE Hospitality
A Leading Hospitality Company – ONE Hospitality™ Note: Bagatelle, Gansevoort Park Rooftop, Marconi, Radio M, Asellina, Cucina Asellina, and Heliot are jointly owned and / or licensed brands. and / or licensed brands . Comprehensive Portfolio of Internationally Recognized Brands Growing List of Globa
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Slide 33: Case Study – The ME Hotel, London
Case Study – The ME Hotel, London : $17 Million F&B Sales Room Service for 157 Keys 5,000 sq ft Banqueting Space 6 Small Banqueting / Event Rooms Marconi 75 Person Lobby Lounge Bar Radio Roof 220 person Restaurant / Bar STK Restaurant – 2 Meal 200 person Restaurant / Bar Breakfast & Event Room 90 pe
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Slide 35: Multiple Levers for Expected Future Growth
Multiple Levers for Expected Future Growth 35 STK Expansion Opportunity for ~150 STKs globally, across large and mid - sized markets Targeting 3 - 5 new STK restaurants per year, short - term Blend of managed and licensed units, which require lower capital investment and produce high margin ro
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Slide 37: Summary of Expected Development
STK Dubai – Downtown STK Doha STK Puerto Rico STK Beach Puerto Rico STK Abu Dhabi Summary of Expected Development 37 The ONE Group is Poised for Continued Growth Attractive Future Markets Worldwide Barcelona Berlin Hong Kong Macau Madrid Mexico City Moscow Munich Paris
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Slide 39: Expected Near-Term STK Development Pipeline
Expected Near - Term STK Development Pipeline 39 STK Dubai – Jumeirah Beach STK Dubai – Downtown Deal Structure: Opened: Sq. Ft: Target Sales (1) : License Fee %: License Term + Option (2) : Location: Licensed Q4 2017 ~9,000 sq. ft. $6.0mm 5.0% 10 Years + 1 X 5 Years The Rixos Hotel Dubai Jumeirah B
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Slide 41: Expected Near-Term STK Development Pipeline
Expected Near - Term STK Development Pipeline 41 STK San Diego Deal Structure: Opening: Sq. Ft: Target Sales (1) : Target 4 - Wall Margin (2) : Lease Expiration (3) : Base Rent/Mo: % Rent: Location: Owned Q2 2018 ~4,300 sq. ft. $4.6mm 15% January 2036 $27,300 6.0% The Andaz Hotel San Diego, CA (1) Y
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Slide 43: Expected Near-Term STK Development Pipeline
Expected Near - Term STK Development Pipeline 43 STK Puerto Rico STK Beach Puerto Rico Deal Structure: Opening: Sq. Ft: Target Sales (1) : License Fee %: License Term + Option (2) : Location: Licensed Q4 2018 ~7,750 sq. ft. $6.0mm 5.0% 10 Years + 1 X 5 Years The Condado Vanderbilt Hotel San Juan, Pu
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Slide 45: Expected Near-Term STK Development Pipeline
Expected Near - Term STK Development Pipeline 45 STK Austin Deal Structure: Opening: Sq. Ft: Target Sales (1) : Target 4 - Wall Margin (2) : Lease Expiration (3) : Base Rent/Mo: % Rent: Location: Owned Q4 2018 ~11,000 sq. ft. (Incl Rooftop) $6.7mm 15% February 2036 $29,400 6.0% E 3rd St. Austin, TX
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Slide 47: Financial Review
FINANCIAL REVIEW
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Slide 49: Strong Historical Revenue Performance – Improving Adjusted EBITDA
Strong Historical Revenue Performance – Improving Adjusted EBITDA $4.5 $6.1 $1.6 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 2016 2017 TTP Change + 36 %
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Slide 51: 2017 Focus and Results
2017 Focus and Results NOTE: See Appendix for a reconciliation of Adjusted EBITDA to GAAP Net Income.
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Slide 53: Expected New Unit Economics
Expected New Unit Economics 53 STK Large Market STK Mid - Sized Market STK Licensed F&B Hospitality (One Primary Restaurant) F&B Hospitality (Two or More Restaurants) Revenue $8.0mm $5.5mm $5.0 - $8.0mm $8.0 - $10.0mm $15.0 - $20.0 mm EBITDA $ 1.6mm $1.0mm -- -- -- Cash Investment $3.8mm (1) $ 2.8mm
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Slide 55: Goals (not projections)
* These are not projections; they are goals and are forward - looking, subject to significant business, economic, regulatory and competitive uncertainties and contingencies, many of which are beyond the control of the Company and its management, and are based upon assumptions with respect to future
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Slide 57: The ONE Group Investment Highlights
Fast Growing Hospitality Company Transformational Acquisition Further Enhances our Brand Portfolio and Unit Pipeline Strong Management Team and Infrastructure to Support Growth Multiple Levers to Drive Revenues and Profitability Strong Portfolio of High Volume, High Margin Brands with Industry Leadi
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Slide 59: Appendix
APPENDIX
Slide 60: Reconciliations of Non-GAAP Measures
Reconciliations of Non - GAAP Measures STATEMENT OF OPERATIONS SEPTEMBER 2017 TOTAL F&B SALES at OWNED and MANAGED UNITS Q4 2016 Nine Months ended Sept 2017 TTP Sept 2017 Revenues: Owned unit net revenues 18.0$ 50.6$ 68.5$ Management and incentive fee revenue 2.4 7.6 10.0 Total revenue 20.4$ 58.1$ 7
Slide 61: Reconciliations of Non-GAAP Measures
Reconciliations of Non - GAAP Measures YTD TTP December 2016 September 2017 - Net (loss) income attributable to The ONE Group Hospitality, Inc. (16.7)$ (20.0)$ Net income attributable to noncontrolling interest 0.2 0.1 Net (loss) income (16.5) (19.9) Interest expense, net of interest income 0.5 1.0
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ONE Group Hospitality — Investor Presentation (December 2017) on 6ix