Retail Food Group Limited · ASX:RFG
Retail Food — Merger or Acquisition (2014)
28 slides from Retail Food's merger presentation, 2014
Slide 1: Acquisition of Gloria Jean's Group
Acquisition of Gloria Jean’s Group
Slide 2: Contents
Acquisition of Gloria Jean’s Group = Executive Summary = The Transaction * Gloria Jean’s Business Overview = Strategic Rationale = Funding & Performance = Consolidated Pro-forma Performance Outcomes = The Gloria Jean’s Story = History = Enterprise Summary = Geographic Representation = Functional Div
Slide 3: Executive Summary – The Transaction
Executive Summary – The Transaction Gloria Jean’s Group acquisition provides Strong international and domestic footprint with c.800 outlets increasing RFG outlet population to over 2,400 Annualised coffee roasting and beverage throughput of c.2.9m kgs Increases RFG annualised throughput to c
Slide 4: Executive Summary – Gloria Jean's Business Overview
Executive Summary – Gloria Jean’s Business Overview The Gloria Jean’s Group comprises Global Gloria Jean’s Coffee Brand System and intellectual property Global It’s A Grind Brand System and intellectual property Franchisor and manager of the Australian and North American Brand System network
Slide 5: Executive Summary – Strategic Rationale
Executive Summary – Strategic Rationale Gloria Jean’s Group activities closely mirror and complement those of RFG The acquisition provides impetus for realignment of existing RFG Brand Systems and other operational pursuits anticipated to deliver synergy, integration and restructuring benefits e
Slide 6: Executive Summary – Funding & Performance
Executive Summary – Funding & Performance Transaction Funding Funding provided through debt and equity Debt via increase in NAB senior facility from $135m to $253m with c.90% of debt having extended maturity date to September 2017 Equity to raise a total of $65m via Vendor equity: $10m Pla
Slide 7: Executive Summary – Consolidated Pro-forma Performance Outcomes
Executive Summary – Consolidated Pro-forma Performance Outcomes Estimated FY15 underlying earnings uplift on PCP(1) (including c.$1.7m in initial synergy benefits) EBIT growth of c.39% NPAT growth of c.36% EPS growth of c.26% FY15 NPAT Guidance Original guidance 15% increase on PCP to c.
Slide 8: The Gloria Jean's Story
The Gloria Jean's Story -~ ESQUIRES 4 “Soon ca COFFEE
Slide 9: Gloria Jean's Group - History
Gloria Jean's Group - History From a single outlet in 1979, Gloria Jean's has transformed into an internationally recognised Brand System, and the largest Australian owned franchised specialty café and coffee business 1979 1986 1991 1993 1995 Network Gloria Jean’s Gloria Jean’s Network size growth 1
Slide 10: Gloria Jean's Group – Enterprise Summary
Gloria Jean's Group – Enterprise Summary Consolidated Gloria Jean’s Group $21.5m FY14 consolidated pro-forma normalised EBIT Functional Gloria Jean’s Coffees Gloria Jean’s Coffees Coffee Roasting, Warehousing Gloria Jean’s Coffees Australia International North America & Distribution Division (GJC Au
Slide 11: Gloria Jean's Group – Geographic Representation
Gloria Jean's Group – Geographic Representation Licenced Territories APAC EMEA New Zealand Saudi Arabia China South Africa Fiji Azerbaijan Indonesia Cyprus Singapore Ireland East Timor Kazakhstan Malaysia Romania Brunei Turkey Cambodia Ukraine Japan Bahrain Korea Egypt Macau Jordan Philippines Kuwai
Slide 12: Functional Divisions
Functional Divisions ESQUIRES 4 COFFEE
Slide 13: Gloria Jean's Group – GJC Australia
Gloria Jean's Group – GJC Australia Established footprint in the domestic specialist coffee shop market FY14 Outlet Population by Territory 358 stores $242.0m retail sales in FY14 Outlets franchised NT c.$8.6m contribution to pro-forma normalised FY14 Group EBIT 4 stores QLD 75 stores Di
Slide 14: Gloria Jean's Group - International
Gloria Jean's Group - International 358 outlets in 40 international markets Contributed FY14 revenue of $15.3m from 40 markets EMEA (174 stores) APAC (164 stores) Americas (20 stores) c.$6m contribution to pro-forma normalised FY14 Group EBIT Revenue principally comprises: Initial fran
Slide 15: Gloria Jean's Group – GJC North America
Gloria Jean’s Group – GJC North America US$38m of retail sales in FY14 Outlet population of 87 62 Gloria Jean's Brand System outlets 25 It’s A Grind Brand System outlets Worldwide franchising and IP rights to It’s A Grind Strong e-commerce platform Vertically integrated roasting, packa
Slide 16: Gloria Jean's Group – Maranatha
Gloria Jean’s Group – Maranatha Established in 1982 Largest supplier of whole bean, ground, freeze dried coffee and capsules to Woolworths in Australia Drinking cocoas, teas and snack based products Roasts for GJC Domestic & International Coffee roasting facilities in Sydney and Los Angele
Slide 17: Continued Evolution of RFG
Continued Evolution of RFG oe = ESQuiRES 4/ Se OOFFEE cat oe 6uYy’ COFFEE
Slide 18: RFG – Growth by Acquisition & Scale Leverage
RFG – Growth by Acquisition & Scale Leverage Acquisition of Acquisition of Brumby’s master Pizza Capers, franchise rights for Crust Gourmet NZ, NT, WA and Pizza Bar and RFG founded FNQ The Coffee Guy with Donut Acquisition of King and bb’s Brumby’s and Café c.50 outlets Michel’s Patisserie Acquisiti
Slide 19: Expanded Global Footprint
Expanded Global Footprint KEY GJC RFG 5 Roasting Plants RFG’s outlet population in excess of 2,400 outlets across 40 countries, now a truly global franchising business with a fully integrated coffee supply chain 19
Slide 20: Brand System Evolution
Brand System Evolution RFG: THE NEW GLOBAL FRANCHISE FORCE QSR Retail Mobile Specialty Manufacturing Beverage & Supply Chain NZ Existing RFG AU Acquired Maranatha LLC US Strengthening RFG’s portfolio to become one of the world’s leading multi-brand coffee & food franchising groups 20
Slide 21: Long-term Benefits
Long-term Benefits Substantial long-term benefits arising from the acquisition Optimise Brand Systems - facilitates opportunity to consolidate and strengthen RFG business and maximise revenue outputs Management Strength - enhances management depth at all levels and introduces expertise in new ar
Slide 22: Acquisition Terms & Funding
Acquisition Terms & Funding La ak me. COFFEE ca 6uY*
Slide 23: Acquisition Terms & Funding
Acquisition Terms & Funding $179.9m initial payment $163.5m comprising Purchase Price $153.5m cash $10.0m RFG Scrip(1) $16.4m – subject to milestone achievements and earn out(2) Timing Anticipated settlement December 2014 The acquisition is being funded from a combination of new debt facilit
Slide 24: Disclaimer
Disclaimer No responsibility for contents of Presentation To the maximum extent permitted by law, Retail Food Group Limited (ABN 31 106 840 082), its officers, advisers and representatives: • make no representation, warranty or undertaking, and accept no responsibility or liability, express or impli
Slide 25: Risks
Risks Commentary There are a number of risk factors in respect to investing in Retail Food Group Limited (RFG). Various of these risk areas may be heightened due to the proposed acquisition of Gloria Jean's Group. RFG has taken all caution in identifying and hereinafter advising what some of those r
Slide 26: Risks
Risks Operational Risks (cont’d) RFG Growth Risks As RFG’s business model grows and evolves there is a risk that management of the business does not evolve and grow with the business. Lack of effective controls could pose a material adverse risk in respect to future growth and efficiency. Reputation
Slide 27: Risks
Risks Acquisition Risks (cont’d) Integration Risks The acquisition of Gloria Jean's Group contemplates the successful integration of a number of business units. Namely, retail franchised outlets, Maranatha roasting facility, North American franchise outlet performance, North American roasting busine
Slide 28: Risks
Risks Acquisition Risks (cont’d) Asset Impairment As a consequence of the global financial crisis, ASIC has specifically identified impairment of assets as an issue for Australian companies. The RFG Board regularly monitors impairment risk, and consistent with accounting standards, RFG is periodical