Presentation to NZX - 20 November 2013

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NZX Emerging And Mid Cap Companies

Conference

20 November 2013

Russel Creedy CEO

Grant Ellis CFO

Presentation Outline

RBD 101

Trading Update

Challenges & Strategies

- KFC

- Pizza Hut

- Starbucks Coffee

- Carl’s Jr.

Outlook

RBD 101

• 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

RBD 101 -

continued

• Strong cash flows and consistent dividend.

RBD 101 -

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

Results 1H 2014

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

KFC Operations

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

KFC challenge is sales

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

Pizza Hut Operations

$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

Starbucks Coffee Operations

$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

Carl’s Jr. Operations

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.

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