The One Group Hospitality, Inc. · NASDAQ:STKS
The One Group Hospitality — ONE Group Hospitality — Investor Presentation (September 2014)
38 slides from The One Group Hospitality's investor presentation, Sep 29, 2014
Slide 1: The ONE Group Investor Presentation September 2014
THEONEGROUP lifestyle hospitality INVESTOR PRESENTATION SEPTEMBER 2014
Slide 2: Cautionary Statements
Cautionary 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 t
Slide 3: The ONE Group
The ONE Group si) y 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
Slide 4: The ONE Group Investment Highlights
The ONE Group Investment Highlights Category Leading Restaurant Brand with Global Reach Premier and Differentiated High-Energy Restaurant and Hospitality Concepts Strong Performance and Industry-Leading Growth Metrics Capital Efficient Model Drives Positive Returns Attractive Food & Beverage Offerin
Slide 5: Our Company
Our Company = The ONE Group was formed in 2001 = STK: = Launched STK - Meatpacking in NYC in September 2006 = 11 STKs currently open and under construction = F&B Hospitality Program: = Launched our hospitality program in 2010 = Currently contracted in 6 hospitality venues = STK Rebel — projected to
Slide 6: Venues Open at end of 2014
22 Venues Open at end of 2014 STK - Restaurants STK - Atlanta STK - Los Angeles STK - Las Vegas STK - Miami STK — Downtown NY STK — Midtown NY STK —London STK —-DC F&B Restaurants Asellina— NY Cucina Asellina - Atlanta Cucina Asellina - London Bagatelle — New York Bagatelle — Los Angeles Heliot Stea
Slide 7: Venues Expected to be Opened by end of 2015
31 Venues Expected to be Opened by end of 2015 STK - Restaurants STK - Atlanta STK — Los Angeles STK —Las Vegas STK - Miami STK — Downtown NY STK — Midtown NY STK -London STK -DC STK - Disney STK - Chicago STK - Milan STK Rebel — Miami A 41% increase in venues F&B Restaurants Asellina— NY Cucina Ase
Slide 8: The ONE Group Globally — End of 2015
The ONE Group Globally — End of 2015 HELIOT eee HIPPODROM SIK ASELLINAT HOUSE. GRINGO. U1 £9 Marcon, R»p@ glk alk Bagatelle [SAN alk ME ‘i ae OTK ane SK aTK wo Ske ME THEONEGROUP
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Slide 10: STK Overview — A Steakhouse with High Energy and a Great Vibe
STK Overview — A Steakhouse with High Energy and a Great Vibe STK is a reinvention of the traditional steakhouse High-energy dining experience Greater emphasis on social dining by redefining the visitor profile Restaurants built around the bar, featuring DJ played music Targeted demographics High fe
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Slide 12: STK Rebel Overview
STK Rebel Overview = Rebel is a more accessible STK = Maintains the unique features, vibe and energy that have proven so successful for STK = Broader menu priced to appeal to a wider market = Smaller footprint and lower build-out cost = Initially targeting primary cities and then focusing on seconda
Slide 13: STK Rebel
STK Rebel
Slide 14: STK Rebel
STK Rebel
Slide 15: Hospitality Food & Beverage Services Business
HOSPITALITY FOOD & BEVERAGE SERVICES BUSINESS
Slide 16: A Leading Hospitality Company — ONE Hospitality
A Leading Hospitality Company — ONE Hospitality RESTAURANTS CLIENTS ¢ THE COSMOPOLITAN Me starwood Resorts satu HOTEL TRUST
Slide 17: F & B Hospitality Overview
F & B Hospitality Overview = Unique opportunity to leverage restaurant and hospitality expertise = Manage F&B for hotels, casinos and hospitality venues = Utilize company-branded restaurants or tailored concepts = Generate high margin fee income with minimal capital expenditure = Build long-term rel
Slide 18: Turn-Key F & B Solutions for Hospitality Clients
Turn-Key F & B Solutions for Hospitality Clients ME HIPPODROM! London Milan sik ok Hospitality Services Hospitality Locations Open For a Full Year‘) Total Food & Beverage Sales at Managed Units?) 4 ! $90.0 $84.4 mil 3 $60.0 2 4 $30.0 1 . $19.6 mil o+ $0.0 - 2010 2013 2010 2013 (1) Hosptatiyleatons o
Slide 19: Growth Opportunities
Growth Opportunities = STK: * Opportunity to open up to 50 STK restaurants globally = Targeting 2-3 STK restaurants per year, short-term = STK Rebel: = Opportunity to open at least 100 STK Rebel restaurants globally "Targeting 1-2 STK Rebel restaurants per year, short-term = Hospitality Management A
Slide 20: A Clear Market Leader
A Clear Market Leader soe = OpenTable” Open Table Diners Choice Awards 2014 - STK Washingon DC “ Best American Restaurant” QQ iets SQ tate Night Fine @Q rant Bar Scene [ARDS 2013, Best in Cat Condé Nast aon san rave er “A saucy spin on the steakhouse formula” - Zagat “The Best New VAN ITY IR Restaur
Slide 21: Seasoned Management Team with Proven Track Record
Seasoned Management Team with Proven Track Record Name Michael Serruya Position Non-Executive Chairman Previo\ experience Co-founder, past Chairman, President, Chief Executive Officer and Director of CoolBrands Former President, Chief Executive Officer and Chairman of Yogen Fraz World-Wide Director
Slide 22: Financial Performance
FINANCIAL PERFORMANCE
Slide 23: Strong Revenue Performance
Strong Revenue Performance (SMiilions) Total Food & Beverage Sales at Owned & Managed Units (2) $180.0 44.9% 149-43 CAGR: $126.2 $135.0 $107.2 00 $81.0 41.5 $45.0 u 2010 2011 2012 2013 _ (0.2%) 114% 10.8% (0.7%) H (SMillions) $8.0 $7.3 149 "13 CAGR: 5 $46.1 2012 2013
Slide 24: Adjusted EBITDA and Net Income
Adjusted EBITDA and Net Income TOG Adjusted EBITDA” $15.0 $12.0 149-13 CAGR: 34 5% $20 $75 $67 $60 $5.2 $3.3 soo + 2010 2011 2012 2013 TOG Adjusted Net Income") $10.0 $8.0 $6.1 _ $4.4 $4.0 $20 31.6 = | $0.0 —— 2010 2011 2012 2013
Slide 25: Annual Adjusted EBITDA — Owned STKs and F&B Hospitality
Annual Adjusted EBITDA — Owned STKs and F&B Hospitality (SMiiions) FY Ended December 31, 2013 Owned of FaB % of of STK's (1) Rev Hospitality Rev Others (2) Rev Revenues S$ 336 100.0% $ 73 100.0% $ 50 100% $ 460 Expenses: Food and beverage costs 88 26.1% 12 24.3% 10.0 Unit operating expenses (before
Slide 26: Significant Growth: Company-Owned Restaurants
Significant Growth: Company-Owned Restaurants 2-3 New Company-Owned Leases Per Year 2013 2014 ee) = = i i= |S 8 S la 9 ;= | Q ° = — == 1 —| = -<Sp eee — —— NY- % NY- MPD 3% nit nit ep) = I —e =| — =a wth wth = 4 iomnd gs a ap) —— i —— =| —| =a 5 CRC gs | care
Slide 27: Significant Growth: Hospitality
Significant Growth: Hospitality 1-2 New Hospitality Management Agreements Per Year 2014 2015 Me le = a ME ioe Milan co cecox [a] ME _ a Ne LOI secon Reotap Poe re. cod ua, t ; Liver eee El London Las Vegas HELIO’ HOUSE London ar
Slide 28: Targeted Unit Economics
Targeted Unit Economics Hospi TARGETED Rebel Revenue $9.0 mil $5.0 mil CURRENT ‘Comp Store Base EBITDA $2.0 mil |$1.0 mil = Average Cash ‘Same Store Sales Growth 2% to 3% Investment‘? $3.8 mil} $2.5:mill <$500,000 ROI 53% | 40% - Food & Beverage Costs 26.0% to 26.5% Bowe | Management Fees 7 = aon Un
Slide 29: Delivering Potential Value For Shareholders
Delivering Potential Value For Shareholders Attractive Business Model Strong STK Growth / Launch Rebel + Growth in Hospitality Food and Beverage Services Business ss Strong Top Line Growth Xe Significant Earnings Growth
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Slide 31: Appendix
WV wT g - : LS =e > =. APPENDIX
Slide 32: Historical GAAP Income Statement
Historical GAAP Income Statement (SMillions) Revenues (Owned unit net revenues Management and incentive fee revenue Total revenue Cost and expenses: (Owned operating expenses: Food and beverage costs Unit operating expenses General and administrative Depreciation and amortization Management and roya
Slide 33: Historical GAAP Balance Sheet
Historical GAAP Balance Sheet (SMillions) FYE December 31, 2011 20128 20130 Assets: ‘Cash and cash equivalents $17 $ 10 $§ 17 Accounts receivable, net 23 34 29 Inventory 12 14 1.0 Other current assets 4 03 08 Due from related parties 02 o4 0.2 Total Current Assets $55 $§ 62 § 167 Property, plant & e
Slide 34: Reconciliations of Non-GAAP Measures — Cautionary Statements
Reconciliations of Non-GAAP Measures — Cautionary Statements ADJUSTED EBITDA: We define adjusted EBITDA as net income before interest expense, provision for income taxes, depreciation and amortization, non-cash impairment loss, deferred rent, pre-opening expenses, non-recurring gains and losses and
Slide 35: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation (SMillions) Net (loss) income attributable to THE ONE GROUP Net (loss) attributable to noncontrolling interest Net (loss) income Interest expense, net of interest income Provision for income taxes Depreciation and amortization EBITDA Deferred rent Pre-opening expenses
Slide 36: Adj. EBITDA — Owned STK's and F&B Hospitality - Reconciliation
Adj. EBITDA — Owned STK’s and F&B Hospitality - Reconciliation (Millions) GAAP Adju Owned Total Adj. EBITDA (Owned 2013 Adj. Total ___STK’s (1) Other (2)_ STK and F&B Hosp. Level) Revenues’ Owned unit net revenues $ 386 $36 $$ 336 $ 50 Management and incentive fee revenue 73 7.3 73 Total revenue $ 4
Slide 37: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation (SMillions) FYE December 31 2011A__2012A__2013A Net (loss) income attributable to THE ONE GROUP $1.0 ($2.3) ($21.5) Net (loss) attributable to noncontrolling interest so9 ($0.4) ~— ($0.4) Net (loss) income $1.9 ($2.8) ($21.9) Non-recurring gain $0.0 ($5.0) - Non-re
Slide 38: Total F&B Sales at Owned and Managed Units Reconciliation
Total F&B Sales at Owned and Managed Units Reconciliation ($Millions) FYE December 3° 2011A__2012A ‘Owned Unit Net Revenue (a) $437 $56.4 «$387 Management and Incentive Fee Revenue 24 32 13 GAAP Revenue 46.4 60.4 Q Food & Beverage Sales at Managed Units (a) 373 49.8 84.4 Net Revenue from Discontinue
ONE Group Hospitality — Investor Presentation (September 2014) on 6ix