(RBD) INVESTOR PRESENTATION

Transcription

1 RESTAURANT BRANDS NEW ZEALAND LIMITED (RBD) INVESTOR PRESENTATION MAY 2018 RUSSEL CREEDY GROUP CHIEF EXECUTIVE OFFICER GRANT ELLIS GROUP CHIEF FINANCIAL OFFICER 1

2 OUTLINE Restaurant Brands 101 FY18 Results New Zealand Operations Australia Operations Growth Opportunities Outlook Questions Summary Hawaii Operations 2

3 RESTAURANT BRANDS A CORPORATE FRANCHISEE, OPERATING ACROSS THE PACIFIC SAIPAN & GUAM HAWAII AUSTRALIA NEW ZEALAND 3

4 RBD INVESTMENT THESIS AN ATTRACTIVE INVESTMENT ON A NUMBER OF LEVELS PROVEN CAPABILITY IN MANAGING AND GROWING A HIGH PERFORMING STABLE OF ICONIC, BRANDED FOOD CHAINS Consistent track record of continued growth in revenues and earnings World-class corporate franchisee with recognised skills in marketing, facility and supply chain management SHARPLY FOCUSED GROWTH STRATEGY THAT HAS TRANSFORMED THE COMPANY INTO A MULTI-BRAND INTERNATIONAL BUSINESS Demonstrated execution capability with a track record of store transformation and operational excellence that can be replicated in new acquisitions and across additional brands Strong capital allocation capabilities that have consistently grown returns for shareholders INVESTMENT IN STRONG CASH GENERATING BUSINESSES Strong balance sheet and cash flows Consistent and growing dividend yields 4

5 GROUP FINANCIAL OVERVIEW TRACK RECORD OF DELIVERING CONTINUED GROWTH EVIDENCED BY FY18 NUMBERS FY14 FY15 FY16 FY17 FY18 TOTAL SALES (NZ$M) FY14 FY15 FY16 FY17 FY18 TOTAL EBITDA (NZ$M) FY14 FY15 FY16 FY17 FY18 TOTAL NPAT (excluding non-trading items) (NZ$M) FY14 FY15 FY16 FY17 FY18 DIVIDEND PER SHARE (NZ cents) 5

6 GROUP FINANCIAL OVERVIEW AUSTRALIA (QSR) AND HAWAII (PIR) ADDED STRONGLY TO FY18 STORE SALES AND MARGIN GROWTH, UNDERPINNED BY A STRONG NZ KFC PERFORMANCE HAWAII AUSTRALIA NEW ZEALAND FY16 FY17 FY18 SALES CONTRIBUTION (NZ$M) FY16 FY17 FY18 EBITDA CONTRIBUTION (NZ$M) 6

7 GROUP FINANCIAL OVERVIEW FY18 OPERATING CASH FLOWS UP 42% IN LINE WITH PROFITABILITY INVESTING CASH FLOWS REFLECT LARGER ASSET BASE OPERATING NET INFLOWS INVESTING NET OUTFLOWS* FY16 FY17 FY18 * Excluding acquisitions and divestments GROUP CASH FLOW (NZ$M) 7

8 CAPITAL MANAGEMENT FY18 SAW BANK DEBT UP ON AUSTRALIA AND HAWAII ACQUISITIONS BUT WELL WITHIN FACILITY LIMITS AND WITHOUT ANY PRESSURE ON THE BALANCE SHEET FACILITY: BTMU (A$50m) FIRST HAWAIIAN (US$51M) WESTPAC (NZ$60M & A$60M) FY14 FY15 FY16 FY17 FY18 ACTUAL* FACILITY BANK DEBT(NZ$M) BANK DEBT (NZ$M) Net Debt: EBITDA 1.7:1 Gearing (D:D+E) 44% 8

9 NEW ZEALAND OPERATIONS 9

10 STRONG REVENUES THE NEW ZEALAND BUSINESS CONTINUED SOLID GROWTH WITH FY18 SALES IN EXCESS OF $420M, LED BY KFC CARL'S JR STARBUCKS PIZZA HUT KFC FY16 FY17 FY18 SALES (NZ$M) 10

11 EARNINGS MOMENTUM KFC DRIVES NEW ZEALAND EARNINGS GROWTH CARL'S JR. STARBUCKS PIZZA HUT KFC KFC EBITDA % SALES FY16 FY17 FY18 EBITDA (NZ$M) 20.2% 20.7% 20.6% 11

12 STRATEGIC AGENDA NEW ZEALAND Resolve Starbucks position Formalise master franchise for Pizza Hut Enhance Carl s Jr. profitability with a view to further development Build Pizza Hut network in NZ through independent franchisee ownership (120+ stores) Maintain KFC margins and sales growth over long term New KFC store builds (2+ pa) with wider store design options Introduce a further brand to NZ 12

13 AUSTRALIA OPERATIONS 13

14 KFC AUSTRALIA OPPORTUNITIES THE KFC BUSINESS IN NSW CONTINUES TO EXPAND WITH NEWLY ACQUIRED STORES AND ORGANIC SALES GROWTH Northern Territory c.5 restaurants There are over 600 KFC restaurants across Australia, mostly held by franchisees NT Queensland c.130 restaurants QLD WA Western Australia c.40 restaurants South Australia c.50 restaurants SA VIC NSW New South Wales c.200 restaurants ACT c.15 restaurants RBD 61 Yum! 50 Other Franchisees 90 Victoria c.150 restaurants TAS Tasmania c.15 restaurants 14

15 FY18 SOLID SALES AND EARNINGS GROWTH TOTAL SALES UP 56% WITH ORGANIC GROWTH, FULL YEAR TRADING (VS FY17) AND ACQUISITIONS EBITDA UP 47% WITH SOME SOFTENING OF MARGIN BUT 15% OF SALES SUSTAINABLE SSS +4.9% FY17 FY18 FY17 FY18 SALES (NZ$M) EBITDA (NZ$M) 15

16 EXPANSION OF THE BEACHHEAD STORE GROWTH BY ACQUISITION SAW STORE NUMBERS UP 45% BY YEAR END 42 STORES 8 STORES PURCHASES FROM SMALLER FRANCHISEES 10 STORES 1 STORE 61 STORES AQUIRED FROM YUM! NEW STORE BUILDS ORIGINAL ACQUISITION APRIL 2016 STORES AS AT FEB

17 STRATEGIC AGENDA AUSTRALIA Consolidate recent acquisitions and above-store structure Continue to acquire smaller independent KFC franchisees (primarily NSW) New store builds in growth corridors and CBD locations Acquire large parcels of KFC stores as and when opportunities arise Introduce a further brand to Australia 17

18 HAWAII OPERATIONS 18

19 SALES - FY18 DELIVERED ON BUSINESS CASE PIZZA HUT TACO BELL YR 1 BUSINESS CASE FY18 ACTUAL SALES (US$M) 19

20 EBITDA OVERALL ON TARGET TACO BELL MARGINS STRENGTHENED WHILE PIZZA HUT WAS IMPACTED BY US NATIONAL VALUE CAMPAIGNS AND LABOUR COST PRESSURES PIZZA HUT TACO BELL YR 1 BUSINESS CASE FY18 ACTUAL EBITDA (US$M) 20

21 THE STORE TRANSFORMATION PROCESS IS UNDERWAY FY18 FY NEW STORES MINOR REFURBISHMENTS MAJOR REFURBISHMENTS RELOCATES - - Kailua Taco Bell SSS +60% - 1 TRANSFORMATIONS

22 STRATEGIC AGENDA HAWAII Return Pizza Hut to positive SSS growth and margins above current levels Drive new store builds and transformations of Taco Bell brand Accelerate move out of large Pizza Hut red roof stores into smaller delcos Build new delcos KFC business in Hawaii (by acquisition or new store builds) 22

23 GROWTH OPPORTUNITIES 23

24 POTENTIAL FOR EXPANSION IN ALL MARKETS THERE ARE CONSIDERABLE NETWORK GROWTH POSSIBILITIES IN EXISTING MARKETS; HOWEVER THE US MAINLAND PRESENTS A STEP-CHANGE OPPORTUNITY New Zealand Australia Hawaii US Store builds Store build (corridors) Potential acquisition Potential acquisition Small franchisee acquisitions New store builds (beachhead) Large acquisition Store builds (network) N/A Relocations New store builds Potential entry Potential entry New store builds Transformations Potential acquisition (beachhead) 24

25 US EXPANSION THE OPPORTUNITY Market potential California 6th largest economy in the world Proven first tier global brands (KFC and Taco Bell) Relative under-penetration in the target market Tested beachhead model (critical mass, proven management) Established QSR market (still growing strongly) Proven brand operating experience in multiple markets Strong franchisor relationship 25

26 OUTLOOK FY19 Current strategies across all geographic markets are delivering positive results. The Taco Bell and Pizza Hut brands in Hawaii have delivered a solid contribution in the first period of ownership. The opportunity there is network enhancement through new store builds and transformations. Australian store acquisitions continue to add to growth in that market. KFC New Zealand continues to strongly underpin continuation of profit growth in that market. Absent any major changes to economic or market conditions, the Group will deliver a Net Profit after Tax (excluding non-trading items) for the FY19 year of at least 10% above current year s performance. 26

27 QUESTIONS? DISCLAIMER The information in this presentation: Is provided by Restaurant Brands New Zealand Limited ( RBD ) for general information purposes and does not constitute investment advice or an offer of or invitation to purchase RBD securities. Includes forward-looking statements. These statements are not guarantees or predictions of future performance. They involve known and unknown risks, uncertainties and other factors, many of which are beyond RBD s control, and which may cause actual results to differ materially from those contained in this presentation. Includes statements relating to past performance which should not be regarded as reliable indicators of future performance. Is current at the date of this presentation, unless otherwise stated. Except as required by law or the NZX Main Board and ASX listing rules, RBD is not under any obligation to update this presentation, whether as a result of new information, future events or otherwise. Should be read in conjunction with RBD s audited consolidated financial statements for the year to 26 February 2018 and NZX and ASX market releases. Includes non-gaap financial measures including "EBITDA. These measures do not have a standardised meaning prescribed by GAAP and therefore may not be comparable to similar financial information presented by other entities. However, they should not be used in substitution for, or isolation of, RBD s audited consolidated financial statements. We monitor EBITDA as a key performance indicator and we believe it assists investors in assessing the performance of the core operations of our business. Has been prepared with due care and attention. However, RBD and its directors and employees accept no liability for any errors or omissions. Contains information from third parties RBD believes reliable. However, no representations or warranties are made as to the accuracy or completeness of such information. 27

28 SUMMARY RBD a corporate franchisee, New Zealand-based but successfully diversified into Australia and Hawaii FY18 a record year with sales of $740.8 million (+49%) and NPAT (excluding non-trading) of $40.4 million (+32%) Hawaiian acquisition in nearly a full year s trading performed close to expectations Major expansion of Australia KFC beachhead with 18 stores acquired (increase of 42%) NZ business continues to provide a strong base to sales and earnings Final FY18 dividend of 18 cps (+33%) for a full year of 28 cps Potential growth opportunities in the US 28

29 RESTAURANT BRANDS NEW ZEALAND LIMITED (RBD) INVESTOR PRESENTATION MAY 2018 RUSSEL CREEDY GROUP CHIEF EXECUTIVE OFFICER GRANT ELLIS GROUP CHIEF FINANCIAL OFFICER 29