Retail Food Group Limited · ASX:RFG
Retail Food — FY2019 Earnings Presentation
23 slides from Retail Food's earnings presentation, September 2019
Slide 1: FY19 Results Presentation
FY19 RESULTS PRESENTATION
Slide 2: Disclaimer
DISCLAIMER This Presentation contains summary information about the current activities of Retail Food Group Limited ACN 106 840 082 (RFG) and its subsidiaries as at the date of this Presentation, unless otherwise stated. The information in this Presentation is of a general nature and does not purpor
Slide 3: FY19 Snapshot
FY19 SNAPSHOT > FY19 Underlying EBITDA(1) of $50.7m ($44.0m excluding effect of AASB 15, consistent with guidance). - Underpins FY19 Underlying NPAT(1) of $15.4m (FY18: $33.3m). > Statutory net loss after tax of $149.3m (FY18: ($306.7m)) recognises $185.2m in non-cash impairments, provisioning and r
Slide 4: FY19 Performance Review
FY19 PERFORMANCE REVIEW
Slide 5: FY19 Group Performance
FY19 GROUP FY19 PERFORMANCE PERFORMANCE(1) FY19 FY18 % Change SUMMARY Revenue (including disc ops) (2) $349.8m $374.0m (6.5%) > FY19 revenue includes $24.0m arising from adoption of new AASB 15 revenue standard, including consolidating Franchise Marketing Funds. EBITDA (underlying) $50.7m $71.4m (28
Slide 6: Reconciliation of Underlying to Statutory Results
RECONCILIATION OF UNDERLYING TO STATUTORY RESULTS FY19 Underlying Statutory > Impairment and provisioning assessments for FY19 considered RFG’s market capitalisation as at 30 June 2019 compared to the carrying value of assets, EBITDA $m 50.7 (134.5) RFG’s store closure assessment, expected FY19 sust
Slide 7: EBITDA Performance by Division to PCP
EBITDA PERFORMANCE BY DIVISION TO PCP > Domestic Franchise operations EBITDA declines due to: UNDERLYING EBITDA(1) FY19 FY18 % Change • Trading revenue impact of planned reduction in outlets, following 2018 strategic domestic store network reset; Bakery / Café Division(2) $21.9m $24.4m (9.9%) • Decl
Slide 8: Cash Flows
FY19 FY18 CASH FLOWS ($m) ($m) Receipts from Customers 468.3 584.7 > Decrease in cash receipts from customers consistent with Payments to Suppliers & Employees (466.2) (552.1) reduced underlying revenues in Franchise and Di Bella Coffee operations. Gross Operating Cash Flows 2.1 32.5 > The Group’s c
Slide 9: Balance Sheet
Balance Sheet at 30 June 2019 FY19 FY18 ($m) ($m) BALANCE SHEET Assets Cash Reserves 12.3 19.0 > Decreases in receivables, PP&E, intangible assets, and Trade Receivables 15.4 52.9 deferred tax balances, and increases in provisioning, primarily Financial Assets 4.7 23.8 attributable to non-cash impai
Slide 10: Debt Structure
DEBT STRUCTURE > Continued evaluation of a range of debt reduction options including: Senior Debt Facilities FY19 • Equity and debt funding; • Asset sales; Total Bank Borrowings $262.8m • Major restructuring and cost reduction initiatives. Tenor of Facilities 31 October 2019 > The Board and manageme
Slide 11: FY19 Divisional Performance
FY19 DIVISIONAL PERFORMANCE
Slide 12: FY19 Initiatives to Drive Domestic Franchisee Profitability
FY19 Initiatives to Drive Domestic Franchisee Profitability > Significant improvements to RFG’s domestic operations have been implemented in FY19, some of which include: - The total redevelopment of RFG’s approach to Brand System marketing, with the implementation of new processes and strategies. Th
Slide 13: Domestic Bakery / Café Division
DOMESTIC BAKERY / FY19 FY18 % Change CAFÉ DIVISION - New Outlets - 2 - Closures (76) (131) > FY19 performance influenced by: • Trading revenue decline primarily due to cumulative Outlets at 30 June 2019 562 638 (11.9%) impact of FY18 & FY19 outlet closures, and fee reductions; Same Store Sales (SSS)
Slide 14: Domestic Coffee Retail Division
DOMESTIC COFFEE FY19 FY18 % Change RETAIL DIVISION - New Outlets 7 5 - Closures (80) (47) > FY19 performance influenced by: • Trading revenue decline primarily due to Coffee Outlets at 30 June 251 287 (12.5%) cumulative impact of FY18 & FY19 outlet closures, and fee reductions; Mobile Vans at 30 Jun
Slide 15: Domestic QSR Division
DOMESTIC QSR DIVISION FY19 FY18 % Change > FY19 performance influenced by: - New Outlets 1 1 • Trading revenues increase attributable to vertically - Closures (17) (54) integrated product supply into QSR in FY19, and $7.7m impact of AASB 15 adoption, offset by FY18 Outlets at 30 June 2019 222 238 (6
Slide 16: International Franchising Division
INTERNATIONAL FY19 FY18 % Change FRANCHISING DIVISION New Master Franchise Agreements 6 9 > FY19 performance influenced by: New Outlets 42 93 • Reduction in Transactional Revenues (and EBITDA) primarily attributable Outlets at 30 June 2019(1) 699 866 (19.3%) to prevailing negative sentiment surround
Slide 17: Di Bella Coffee
DI BELLA COFFEE (Formerly Coffee & Allied Beverages Division) FY19 FY18 % Change > Divisional FY19 performance influenced by: Revenue $35.8m $53.7m (33.3%) • $3.7m margin reduction on loss of key customers in the independent contract roasting sector, particularly in Victoria; EBITDA(1) $3.5m $8.1m (
Slide 18: Manufacturing & Distribution Division
MANUFACTURING & DISTRIBUTION DIVISION FY19 FY18 % Change (formerly Commercial) Revenue > Divisional performance for FY19 attributable to: Foodservice $53.6m $82.7m (35.2%) • Foodservice: significant operational challenges arising Dairy Country $99.5m $68.3m 45.8% subsequent to 2H18 integration of AF
Slide 19: FY19 Strategy & Outlook
FY19 STRATEGY & OUTLOOK
Slide 20: Six Point Plan
SIX POINT PLAN Business improvement will be driven by the successful implementation of RFG’s Six Point Plan that focuses on business stabilisation, debt reduction and operational improvement amongst the Company’s business units: 1. Re-focusing the Group on its core retail food franchise and coffee s
Slide 21: Outlook
OUTLOOK > While the retail industry continues to provide its challenges, RFG is beginning to observe the positive impacts of the vast business improvement measures being implemented throughout the Group as part of its turnaround strategy. > Management remains focused on the execution of RFG’s Six Po
Slide 22: Appendices
APPENDICES
Slide 23: Definitions
DEFINITIONS BCD Bakery/Café Division: Donut King, Michel’s Patisserie, Brumby’s Bakery CRD Coffee Retail Division: Gloria Jean’s, Café2U, The Coffee Guy, It’s A Grind, bb’s Café, Esquires Coffee Hudson Pacific Foodservice, Associated Foodservice, Bakery Fresh, Dairy Country MANUFACTURING & DISTRIBUT