20 November 2013
Russel Creedy CEO
Grant Ellis CFO
•
RBD 101
•
Trading Update
•
Challenges & Strategies
- KFC
- Pizza Hut
- Starbucks Coffee
- Carl’s Jr.
•
Outlook
• Corporate franchisee. Floated in 1997
• Operates four brands in New Zealand, of which KFC dominates
• Supports 31 Pizza Hut, 7 KFC and 1 Carl’s Jr. – independent franchisees
continued
• Strong cash flows and consistent dividend.
continued
• Simple structure, brand focused with functional support at Head Office
STORES
STAFF
KFC
90
KFC
2443
HEAD OFFICE STAFF - 88
Pizza Hut
52
Pizza Hut
637
27
Starbucks
Starbucks
319
Carl's Jr.
7
Carl's Jr.
342
Commentary
•
Group Revenues up +5.3%
•
NPAT (excluding non-trading) flat
•
Reported NPAT up 41.4% on nontrading gains
•
Brand EBITDA up +$0.2m with strong performance by Pizza Hut
•
Fully imputed dividend declared at
6.5 cents per share
•
Carl’s Jr. brand building momentum with 5 stores open
1H2012
$166.8m
$8.6m
$7.5m
$25.9m
6.5cps
-
1H2013
$167.2m
$8.8m
$6.9m
$27.0m
6.5cps
-
1H2014
$176.0m
$8.8m
$9.7m
$27.2m
6.5cps
5 Stores
$m
Sales
EBITDA
EBIT*
Assets Employed
*Excluding non-trading
1H2014
129.3
22.8
15.5
64.5
$ Δ % Δ
2013/14 2013/14
1.8
(1.1)
(1.3)
(5.8)
1.4
(4.4)
(7.7)
(8.2)
Transformation – a historical perspective
260
240
220
200
180
160
140
1996 1997 1998 1999 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Sales Revenue ($m's) (Left Axis)
Transformation Spend ($m's) (Right Axis)
EBITDA - Brand ($m's) (Right Axis)
0
20
10
60
50
40
30
Objective and Strategy
• Maintain positive SSS growth ( through
NPD, operational excellence)
• Return EBITDA margin to >20% through sales leverage, supply chain opportunities, loss prevention, marketing initiatives and continued operations improvements
• Roll out next phase of new stores
• Complete standard transformations over next 2 years
Comment
SSS flat for 1H in competitive market, value still rules
Value strategy has meant margin pressure but continued operations improvement
Auckland Airport to has opened and further site secured in Auckland
On target for 90% by 2015/16
$m
Sales
EBITDA
EBIT*
Assets Employed
*Excluding non-trading
1H2014
26.6
3.1
1.7
16.5
$ Δ % Δ
2013/14 2013/14
0.7
1.5
1.8
(1.9)
2.7
88.3
N/A
(10.5)
Pizza Hut challenge is to acquire new customers
Objective and Strategy
• Maintain positive SSS growth (albeit at more modest levels) through continued attractive pricing and quality offering
• Build margin through disposal of lower performing stores and continued efficiencies (plus supply chain initiatives)
• Continue web capability development
• Continue store sales to independent franchisees
Commentary
19+% 1H12 and 1H13
Double digit balance of year FY14
EBITDA 11.8% of sales 1H14
Will remain 10+%
Some enhancements , more work to come, mobile ordering
Five stores sold in 1H14. 1-2 more 2Y14
$m
Sales
EBITDA
EBIT*
Assets Employed
*Excluding non-trading
1H2014
13.0
1.4
0.6
4.4
$ Δ % Δ
2013/14 2013/14
(0.4)
-
0.2
(1.3)
(2.9)
75.1%
(23.6%)
-
Starbucks Coffee challenge is to retain sales momentum
Objective and Strategy
• Maintain SSS growth through value strategy and continuing improvements in customer experience
• Close poorer performing stores (3-4) as leases permit
• Complete some store refurbishment (2-3)
• Develop digital opportunities
Commentary
1H14 SSS +4%, momentum continuing.
Better customer experience scores
One store (Mt Maunganui) closed during
1H14. One further closure targeted
St Lukes saw extensive upgrade in 1H14
Some website development
$m
Sales
EBITDA
EBIT*
Assets Employed
*Excluding non-trading
1H2014
6.6
(0.2)
(0.8)
13.4
$ Δ % Δ
2013/14 2013/14
-
-
-
-
-
-
-
-
Carl’s Jr. challenge is to rapidly build the brand
Objective and Strategy
• Roll out 6-7 stores in new year
• Hold post-opening WPRA sales at not less than KFC levels
• Ensure stores contribute positive margin post 5-6 month establishment period
• Increase staff productivity and reduce input costs
Commentary
On target for six stores in current year with
Otahuhu open this week (RBD now 8 stores)
Current WPRA $55k
All stores showing positive EBITDA (some after 3 months). Brand will see positive contribution for the year
Labour scheduling much more effective but limited by sales volatility. Local sourcing beginning to show benefits but delays
Outlook for 2013/14 remains muted in current economic environment
•
KFC – limited store sales growth, some margin gain. One new store.
•
Pizza Hut – continue positive same store sales with profitable residual stores. Margin leverage to continue. 6-7 stores sold this year.
•
Starbucks Coffee – positive SSS continue with margins at similar levels.
•
Carl’s Jr. – established stores margin positive after 4-5 months. Adverse effect of establishment costs will continue. Positive brand profit for 2H of the year. Three new stores – total eight at year end.
Net Profit After Tax (excluding non-trading) is expected to be in the vicinity of $18-19 million for the year.