Franchise Brands Plc · LSE:FRAN
Franchise Brands — FY2022 Earnings Presentation
37 slides from Franchise Brands's earnings presentation, 2023
Slide 1: Building an international business: Annual Results Presentation 2022
B FRANCHISE —z£ ~~ BRANDS Building an |» international business «§ =, Annual Results Presentation 2022 j oh
Slide 2: Contents
2022 Results Presentation 1 Contents When they g row, 03 Introduction to Franchise Brands 45 -B2C Division we grow 04 2022 results summary 416 Technology-enablement Our purpose is to build market 05 Franchise Brands: at a glance 47 Financials leading businesses primarily Mile Kehrirelnteln iS tinerc
Slide 3: Presenters
Presenters Stephen Hemsley Executive Chairman Stephen co-founded Franchise Brands in 2008 and has led the development of the business, including the IPO and external growth. A Chartered Accountant by training, he spent nearly ten years with 3i as Investment Director. He joined Domino’s Pizza as Fina
Slide 4: Overview
Overview moy Cc WHO WE ARE Multi-brand international franchisor, focused on B2B van-based, reactive and planned services. Defensive growth company. Operations in UK, North America and Europe. Q FOCUS Focused on building market- leading businesses primarily via a franchise model. If our franchisees g
Slide 5: Our Highlights
Our Highlights Another significant and highly successful year STATUTORY REVENUE £99.2m +72% 2021: £57.7m ADJUSTED EPS* 8.38p +51% 2021: 5.55p ADJUSTED EBITDA* £15.3m +80% 2021: £8.5m DIVIDEND PER SHARE 2.0p +33% 2021: 1.50p STATUTORY PBT £10.3m +78% 2021: £5.8m NET CASH*** £8.0m 2021: £6.5m ition of
Slide 6: Our Leading Brands
Our Leading Brands Franchise Brands: at a glance Oy B2B METRQ PLUMB WILLQW PUMPS Ze filta ADJUSTED EBITDA* £9.2m Commercial drainage experts providing a full range of services via 42 franchisees with over 50 depots nationwide. Specialist plumbing services, including those to water utilities. 13 stan
Slide 7: Our growing international footprint
Our growing international footprint NORTH AMERICA £67m 133 total sales* franchisees ev |? P METRS ROD ChipsAway J METRQ PLUMB . ovénclean r28) WILLQW PUMPS 4 filta Azura UNITED KINGDOM £116m 426 total sales* franchisees EUROPE £3m 27 total sales* franchisees * Filta North America and Europe is for t
Slide 8: The 2022 results at a glance
The 2022 results ne Ataglance (‘@ 18 £5.2m £0.2m 16 — £15.3m E14 £(0.1)m £(0.6)m <q Ee 2 £2.4m a g 8 Tv s+ 6 4 2 0 2021 B2B Filta International B2c Azura Group overheads 2022 D filta ChipsAway Aura METRO PLUME ovénilean WILLQW PUMPS filt =.
Slide 9: Corporate activity and strategic review
Corporate activity and strategic review 4 \___ Xx é 2022 corporate activity Strategic review of the B2C division (16.7% of Group EBITDA in 2022) * Recommended all-share offer for Filta completed on 1 June 2022 * Factors that depressed franchise recruitment and retention in the B2C Division were tran
Slide 10: Business Performance
2022 Results Presentation 9 Business ; Performance . 9
Slide 11: Continued strong growth momentum
Continued strong growth momentum METR®@ ROD + System sales increased 19% to £60m. + Progress with broadening range of services: - 80% increase in pump sales; average order value approximately 5x drainage. - Tanker and pump sales now a record 22% of system sales * Strong franchisee growth across the
Slide 12: Willow Pumps & Filta UK integrated into B2B Division
Willow Pumps & Filta UK integrated into B2B Division WILLQW PUMPS * Increased contribution in 2022; total sales grew 14% to £18.2m * Filta UK businesses acquired in March 2022. * Delivers complementary services, primarily to commercial kitchens via direct labour and franchisees. * Strong recovery in
Slide 13: Cross selling opportunities
Cross selling opportunities GUTTER CLEANING SOIL PIPE REPAIR ‘& PIPEWORK & MAINTENANCE REPAIRS RADIATOR REPAIR & REPLACEMENT eo-— METR@ ROD METRQ PLUMB @ LEAK DETECTION TAP REPAIR & REPLACEMENT N. WILLQW PUMPS filta DRAIN MAPPING Stavices CCTV DRAIN SURVEYS bad ‘ Key BATH & SHOWER, REPAIRS —O TOILET
Slide 14: Filta North America performed strongly
Filta North America performed strongly * Franchise Brands only owned the business for ten months of 2022 Performed strongly, ahead of our expectations Full recovery of key customers post Covid and elevated price of cooking oil. Driven the value of used cooking oil collected from customers and sold f
Slide 15: Working responsibly: Filta's Environmental Impact Reports
Working responsibly Filta’s Environmental Impact Reports Increasing importance of ESG to Filta’s corporate customers filta fila Environmental Impact Report ECK)=AWARD Environmental Impact Reports, quantify the Fer onmanta xn aia environmental savings of: Filta Customer f§ *_ reusing (rather than dis
Slide 16: B2C division
B2C division ChipsAway ovenclean 2 LUKE TT NEVER HAPPENED Se omime, wo: Total of 39 recruits (2021: 57), markedly lower than the 5-year average of 55: * Satisfactory level of franchisee recruitment in the first six months of the year. * Recruitment in the second half was weak with 10 new recruits (H
Slide 17: Technology-enablement continues to deliver
Technology-enablement continues to deliver Azura acquisition helped increase the pace at which functionality can be added to our Vision platform: * new customer quotations system * additional self-service features for our “Connect” customer portal * and several invoicing features Continue to automat
Slide 18: Financial performance
2022 Results Presentation 17 Financial”. _ performances = om ee N
Slide 19: Summary of group results
Summary of group results Consolidated Group revenue increased by 72% to 2022 2021 £99.2m (2021: £577m). Continuing Discontinuing Continuing Discontinuing Operations ‘Operations: ‘Operations: ‘Operations: Change Overheads increased by 54%; initial cost savings from £000 £000 £000 £000 £000 £000 % the
Slide 20: Divisional trading results
Divisional trading results ES Inter- Inter- company company B2B Filta Int’ B2C = Azura_elimination* 2022 B2B Filta Int’! B2c Azura_ elimination* 2021 £'000 £'000 £000 =£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 System sales 90,223 69,560 25,773 797 186,353 69,919 23,593 59 93,571 Statutor
Slide 21: B2B division
B2B division 2022 2021 Metro Willow Filta Metro Willow Filta Rod Pumps UK 2022 Rod Pumps UK 2024 £000 £000 £000 £000 £000 £000 000 s'000 System Sales 62,917 18,175 9,132 90,223 54,001 15,918 69,919 Statutory 44,069 18,175 9,132 74376 «37,391 15,918 = 53,309 revenue Costofsales (81,247) (12,196) (6,6
Slide 22: Filta International
e Ean F I Ita ey FILTA INTERNATIONAL: ] n te r n a t i ro) n a | * MSF: monthly charge paid by franchisees for each MFU. + Equipment and supply: revenue from sale of new MFUs, replacement parts anon Europe 2022 and supplies sold to franchisees. £000 £000 £000 * These revenue streams bounced-back str
Slide 23: B2C division
B2C division 2022 2021 £000 £000 System Sales 25,773 23,593 Revenue 6,423 6,427 Cost of sales (1,252) (1,368) Gross profit 5,171 5,060 GM% 81% 79% Admin expenses (2,618) (2,422) Adjusted EBITDA 2,554 2,638 Revenue was flat in the period: * MSF income was flat in the period, due to the reduced recrui
Slide 24: Adjusted and statutory profit
Adjusted and statutory profit Adjusted profit after tax increased by 93%. 2022 2021 Increase in amortisation of acquired intangibles a £000 £000 result of the Filta acquisition. Adjusted EBITDA 15,281 8.474 Increase in share-based payment expense Depreciation & amortisation of software (2,281) (1.71
Slide 25: Cash flow
Cash flow 30,000 25,000 20,000 0003 15,000 10,000 3 | o 5,000 7207 saquiarea le 19 ys0p sluaWanow yu s38y10 plod SpUuapIAIg 4193 01 panddns spun siuauifiod asa] piodas sub9) yuDg UsD2 Jo ju Jo uonisinbow BIDMYOS yo aspyaung Add JO esvyitig pod saxD_ sjuawianows ypydoo BUDLOM $3803 uonps|udbi034 pup
Slide 26: Balance sheet
Balance sheet Increase in intangible assets from £35m to £87m 2022 2021 reflects the additional intangible assets acquired as At 31 December £000 £000 a result of the Filta acquisition. Property, plant and equipment 6,149 5,331 ; . erty P ae Strong period-end cash position with net cash Intangible a
Slide 27: Summary and outlook
2022 Results Presentation Excellent momentum in the B2B businesses has continued in 2023 without noticeable impact from slowing economic growth or the rising cost of living. Capturing the defensive growth opportunities afforded by the Group’s mostly essential services, strong leadership positions in
Slide 28: Appendix
2022 Results Presentation 27 Appendix = _
Slide 29: Analysis of gross profit on sources of revenue
Analysis of gross profit on sources of revenue Year ended 31 December 2022 System sales* Statutory revenue Gross margin og systons tales of statutogy revenue Explanation MSF on B2C business 25,773 2,831 2,831 11.0% 100.0% B2C: fixed monthly fees MSF on B28 franchise business 59814 40,102 11196 18.7%
Slide 30: Reconciliation of system sales to EBITDA
Reconciliation of system sales to EBITDA B2B B2c Filta Int Azura Group Total Metro Rod DLO coveeads & ‘System sales* 59,814 30,409 25,773 69,560 797 186,353 Statutory sales MSF-generating 40,102 0 2,831 3,492 0 46,424 Direct labour operations turnover 18 30,409 194 0 0 30,620 Used oil sales ie} ie}
Slide 31: The Group's franchise systems
The Group’s franchise systems* as at 31 December 2022 ___ fae Network size New franchisees Franchisees leaving Net new Network size 31 December, recruited/added the system franchisees 30 June 2021 in 1H 2022 in H1 2022 in 1H 2022 2022 Metro Rod 42 2 +] 2 =] C) 42 Metro Plumb** 7 6 (+) : (=) 6 8 B2c
Slide 32: Working responsibly
Slide 33: Working responsibly: Our approach to ESG
Working responsibly Introduction Our approach to ESG In 2022, we made good progress on our ESG journey. We refined our framework around 3 pillars: environment, social and governance to help Good health and wellbeing goal: How we principally contribute: Mental Health First Aiders training Employee as
Slide 34: A great work environment
Working responsibly A great work environment GS Total number % of male % of female of employees* employees employees Metro Rod Support Centre 97 40% 60% B2BDLOand 242 79% 21% corporate franchises B2C Division Support Centre 8 38% 62% Filta International 30 76% 24% Azura 7 85% 15% Franchise Brands pl
Slide 35: Helping our customers meet their environmental obligations
Helping our customers meet th environmental obligations Metro Plumb ‘Specialist plumbing services Specialist plumbing services Metro Plumb Contributes by installing units which increase water pressure to sinks and reduce water usage. Tankless water heaters and the insulation of hot water pipes can i
Slide 36: Disclaimer
Disclaimer The information contained in this document (“Presentation”) and the presentation made to you verbally has been prepared by Franchise Brands ple (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 37: Franchise Brands contact details
FRANCHISE BRANDS www.franchisebrands.co.uk Franchise Brands plc Ashwood Court Tytherington Business Park Macclesfield SK10 2XF mail@franchisebrands.co.uk 01562 826705 2022 Results Presentation 36 @—___— METR® ROD www.metrorod.co.uk ChipsAway LUKE IT NEVER HAPPENED www.chipsaway.co.uk ovénclean www.o