Franchise Brands Plc · LSE:FRAN
Franchise Brands — H1 2021 Earnings Presentation
27 slides from Franchise Brands's earnings presentation, 2021
Slide 1: Interim Results Presentation 2021
5 FRANCHISE BRANDS BUILDING OUR BUSIN INTERIM RESULTS ESS PRESENTATION 2021
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 ple. This Presentation has not bee
Slide 3: Contents
CONTENTS 04 = Introduction to Franchise Brands 11. = B2C brands 05 2021 results summary 12 Financials 07 Franchise Brands: at a glance 21 Organic growth and acquisitions 08 Metro Rod 22 Summary and outlook 09 Metro Plumb 23 Appendix 10 Willow Pumps INTERIM RESULTS PRESENTATION 2021 2
Slide 4: Presenters
PRESENTERS Stephen Hemsley Chris Dent IE itive Chairman Chief Financ — Stephen co-founded Franchise Brands in 2008 — Chris was appointed as Chief Financial Officer and has led the development of the business, in 2017. He has substantial accounting and including the IPO and external growth financial
Slide 5: An Introduction to Franchise Brands plc
AN INTRODUCTION TO FRANCHISE BRANDS PLC Established in 2008 by Stephen Hemsley (Executive Chairman) and Nigel Wray (Non-executive Director) Focused on building market-leading businesses in selected customer segments, primarily via a franchise model. Over 425 franchisees across five principal franchi
Slide 6: Strong revenue recovery and record profit growth gives confidence
STRONG REVENUE RECOVERY AND RECORD PROFIT GROWTH GIVES CONFIDENCE IN A FULL YEAR PERFORMANCE AHEAD OF EXPECTATIONS FINANCIAL HIGHLIGHTS REVENUE ADJUSTED EBITDA® PROFIT BEFORE TAX +18% +50% +200% £28.6m £4.2m £2.6m H1 2021: £24.2m H1 2020: £2.8m H1 2020: £0.9m. ADJUSTED EARNINGS DIVIDEND NET CASH PER
Slide 7: The 2021 Interim Results: At a Glance
THE 2021 INTERIM RESULTS: AT A GLANCE 50 45 40 35 3.0 25 20 15 Adjusted EBITDA £m 10 os 0.0 £2.8m 2020 £0.8m 7 £0.1m £0.6m £(0.4)m METR@ ROD METRQ PLUMB. WILLQW PUMPS B2c ChipsAway ovénclean &: Barking Mad Group overheads £4.2m 2021 INTERIM RESULTS PRESENTATION 2021
Slide 8: Franchise Brands: Group at a Glance
FRANCHISE BRANDS: B2B METRO ROD Metro Plumb rvices. It h re operc ADJUSTED EBITDA* £2.3mM (+54%) INTERIM RESULTS PRESENTATION 2021 GROUP AT A GLANCE \y WILLOW PUMPS sition ha omplim ated the growth of pump- ADJUSTED EBITDA* £0.9m (413 Seretches and eff wont dnt your pocket & ovénclean sz" The B2C di
Slide 9: Strong overall performance by Metro Rod
B2B STRONG OVERALL PERFORMANCE BY METRO ROD METR® System sales increased 21%, accelerating through the period to a record £4.3m in June. This strong overall performance masks a quarterly performance impacted by lockdowns — Q12020 was a record quarter with 19% growth in system sales y-o-y, whereas Q1
Slide 10: Metro Plumb traded well. A clear growth opportunity for the Group
METRO PLUMB TRADED WELL. A CLEAR GROWTH OPPORTUNITY FOR THE GROUP METRQ Metro Plumb has continued to trade well throughout the period due to the resilient nature of its principal activity of emergency plumbing services Total plumbing revenue was up 39% to over £3m. We continue to focus on recruiting
Slide 11: A resilient overall performance. Facilitating growth of Metro Rod pump-related work
B2B A RESILIENT OVERALL PERFORMANCE. FACILITATING GROWTH OF METRO ROD PUMP-RELATED WORK WILLQW Willow Pumps core sales of service and emergency work and supply and installation work (“S&I”) increased 9% over the period: — Q\was significantly impacted by the Q1 2021 winter lockdown, with sales down 3
Slide 12: Strong recovery in B2C driven by buoyant franchise recruitment
STRONG RECOVERY IN B2C DRIVEN BY BUOYANT FRANCHISE RECRUITMENT ip ChipsAway _ovenclean o Scratches and scuffs won't dent your pocket — LESS Grime, mone Time — Barking Mad se, The division recovered strongly in H1 2021, despite the Q1 lockdown, as most of the franchisees continued to trade and, there
Slide 13: Summary of Group Results
SUMMARY OF GROUP RESULTS 2021 2020 Change Change Statutory consolidated revenue increased by 18% to Six months ended 30 June £000 £000 £000 % £28.6m (2020: £24.2m), following easing of COVID related Statutory revenue 28,631 24,209 4,422 18% lockdown restrictions. Cost of sales (16,921) (14,634) (2,2
Slide 14: Divisional Trading Results
DIVISIONAL TRADING RESULTS Metro Rod Willow Pumps B2c H1 2021 Metro Rod Willow Pumps B2c 12020 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Statutory revenue 17,459 7,805 3,367 28,631 14,636 7,031 2,542 24,209 Cost of sales (12,394) (3,756) (771) (16,921) (10,496) (3,571) (567) (14,634) Gross pro
Slide 15: Metro Rod
METRO ROD H1 2021 H12020 Change Change £'000 £'000 £'000 % Revenue 17,459 14,636 2,823 19% Cost of sales (12,394) (10,496) (1,898) (18)% Gross profit 5,065 4,141 924 22% GM% 29% 28% 1% Administrative expenses (2,717) (2,620) (97) (4)% Adjusted EBITDA 2,347 1,520 827 54% H12021 12020 Change Change £'
Slide 16: Willow Pumps
WILLOW PUMPS H1 2021 12020 Change Change £000 £000 £000 % Revenue 7,805 7,031 775 1% Cost of sales (3,756) (3,571) (185) (5)% Gross profit 4,049 3,460 589 17% GM% 52% 49% 3% 5% Administrative expenses (3,120) (2,640) (481) (18)% Adjusted EBITDA 929 820 109 13% Revenue in the Willow Pumps core busine
Slide 17: B2C Division
B2C DIVISION H1 2021 H12020 Change Change £000 £000 £000 % Revenue 3,367 2,542 824 32% Cost of sales (771) (567) (204) (36)% Gross profit 2,596 1,975 620 31% GM% 77% 78% (N% Administrative expenses (1,140) (1,082) (58) (5)% Adjusted EBITDA 1,456 893 563 63% B2C division was most impacted by Spring 2
Slide 18: Adjusted and Statutory Profit
ADJUSTED AND STATUTORY PROFIT Adjusted EBITDA increased by 50% to £4.2m. Adjusted profit before tax increase of 72% to £3.1m, lower finance costs due to lower average gross debt. Prior period non-recurring items included: — Provision of £0.5m on the expectation of higher bad debt following the crisi
Slide 19: Adjusted EPS and Dividend
ADJUSTED EPS AND DIVIDEND GROWTH IN EPS AND DIVIDEND (P) Adjusted EPS increased 46% to 2.70p from 1.84p: Earnings growth of 65%. Weighted average number of Ordinary Shares has increased 12.5% from 85.1m to 95.8m as a result of the April 2020 placing. At the end of the period the total number of Ordi
Slide 20: Balance Sheet
BALANCE SHEET 30 June 2021 31Dec 2020 Change Change £'000 £'000 £'000 % Property, plant and equipment 5,388 4,651 737 16% Intangible assets 34,549 34,754 Deferred tax liability (2,309) (1,752) Accounting assets 32,240 33,002 (762) (2)% Inventories 879 712 Trade and other receivables 16,040 15,227 Tr
Slide 21: Cash Flow
CASH FLOW 10.0 Net cash of £5.2m at 30 June 2021. (31 December 2020: £4.9m). 4.2 -0.7 9.0 Y | -0.4 Cash from operating activities of £3.5m (H1 2020: £1.1m): 20 14 — EBITDA of £4.2m, less £0.7m of working capital investment. — 84% cash conversion, up significantly from prior year (H1 70 2020: 38%). -
Slide 22: Organic Growth and Acquisitions
ORGANIC GROWTH AND ACQUISITIONS INTERIM RESULTS PRESENTATION 2021 As we emerge from COVID-related disruption, the Group is well placed to continue investing in organic growth and earnings-enhancing acquisitions. We continue to benefit from the investment we are making in technology The digitisation
Slide 23: Summary and Outlook
SUMMARY AND OUTLOOK A period of strong recovery from the COVID-impacted performance in 2020, despite the Q1 2021 lockdown and delayed recovery of the hospitality sector. The second half of the year has started encouragingly with continuing growth in Metro Rod and Willow Pumps and buoyant B2C franchi
Slide 24: Appendix
, APPENDIX 3 FRANCHISE BRANDS INTERIM RESULTS PRESENTATION 2021
Slide 25: The Group's Franchise Systems as at June 2021
THE GROUP’S FRANCHISE SYSTEMS* AS AT 30 JUNE 2021 New franchisees Franchisees leaving Network size recruited the system Net new Network size 31 December, 2020 in H1 2021 in H12021 franchisees in 2020 30 June, 2021 B2C 386 40 + (33) 393 Metro Rod 42 ie) + ie) 42 Metro Plumb 5 0 + 0 5 Total 433 40 + (
Slide 26: Working Responsibly
WORKING RESPONSIBLY Our sustainability commitments and ESG ambitions underpin our actions across the Group. We are committed to adopting responsible business practices, delivering sustainable growth, positively supporting employees and empowering our franchisees. ENVIRONMENTAL We are committed to re
Slide 27: Franchise Brands contact details
FRANCHISE BRANDS www.franchisebrands.co.uk @FB_PLC Franchise Brands plc Ashwood Court Tytherington Business Park Macclesfield SK10 2XF mail@franchisebrands.co.uk 01562 826705 METR@ ROD www.metrorod.co.uk @MetroRodUK METRQ PLUMB www.metrorod.co.uk @MetroPlumbUK WILLQW PUMPS www.willowpumps.co.uk @Wil