Results presentation. for the year ended 29 February 2012

Transcription

1 You re in good company Results presentation for the year ended 29 February 2012

2 Agenda Highlights Business model Operational performance Financial results Board changes Strategy and prospects 2

3 Highlights

4 Highlights 11 th successive year of record turnover and profits coming off an increasingly high base Milestone R2 billion revenue exceeded Milestone R400 million operating profit exceeded - 15% growth on prior year Operating margin maintained at record 19.1% - strong claw back in second half Net borrowing to equity improves to a 5 year low of 10% Total dividends to shareholders 200 cents per share - an increase of 29% Attained landmark share price of cents 4

5 Highlights Opened 146 new restaurants, surpassing goal of 2000 Traction gained in Africa: 21% growth in system-wide sales Successful integration of F2011 acquisitions Manufacturing and distribution capability continue to expand Awarded 10 th position in Sunday Times Top 100 Companies Survey Clean sweep of all relevant Leisure Options consumer awards 5

6 Business model

7 Business model Franchising Division Franchising Division Franchising Division Franchising Division The MAD Lab Food Services Division New Business Division Development Division Procurement Division Manufacturing Division Logistics Division Corporate International Domestic (Mainstream Brands) Domestic (Developing Brands) Domestic (Theatre of Foods) Marketing, Artistry and Design Retail and Wholesale!Wimpy UK!Steers!Wimpy!Debonairs Pizza!FishAways!Mugg & Bean!KEG!Milky Lane!Giramundo!Brazilian Café!House of Coffees!M c Ginty s!the Brewers Guild!O Hagan s!tashas!vovo Telo!Juicy Lucy!Group marketing and social media!group restaurant design!group product development!steers!wimpy!baltimore!trufruit!aqua Monte!Mugg & Bean!Site selection!franchisee selection!lease negotiation!strategic alliance management!drawings!costing!procurement!project management!supplier appointment and audits!price negotiations!new business integration!planning and forecasting!sauces and spices!meat and chicken products!bakery!ice-cream!fruit juice!mineral water!telesales!warehousing!distribution!human Resources!Finance!Information Technology!Legal 7

8 Operational performance

9 Franchising division Results presentation 9

10 System wide sales growth 25% 21,0% 20% 15% 10% 7,7% 8,5% 5% 0% Domestic Rest of Africa Total 10

11 Like-on-Like sales growth 8% 7% 7,0% 6% 5% 5,1% 5,2% 4% 3% 2% 1% 0% Domestic Rest of Africa Total 11

12 New restaurants opened 60 Total

13 Franchise network Total

14 Trading footprint UK 121 South Africa Rest of Africa 155 United Kingdom 121 Dubai 2 Ivory Coast 4 Nigeria 3 Sudan 5 Kenya 12 Tanzania 3 Zambia 19 Botswana 26 Namibia 25 South Africa Malawi 4 Mozambique 3 Zimbabwe 11 Swaziland 8 Lesotho 3 Mauritius 27 14

15 Highlights Domestic Mainstream Brands Launched new Steers image and positioning - REAL BURGERS Innovation around core products Increased focus on chicken 15

16 Highlights Domestic Mainstream Brands New design roll-out continues to gain momentum Maiden entry into Mauritius Re-focus on breakfast market 16

17 Highlights Domestic Mainstream Brands Remains at forefront of per capita consumption growth amongst Black consumers Accountable for 40% of Group s Africa turnover First to market with technology, innovation, trading format and value for money 17

18 Highlights Domestic Mainstream Brands On the Move model with Total continues to gain traction ten new sites this year Maiden entry into Zambia and Mauritius Metro trading format launched in Newcastle 18

19 Highlights Domestic Mainstream Brands Competitive climate fuels growth in the category Record 15% growth in system-wide sales 19

20 Highlights Domestic Mainstream Brands New corporate identity launched and roll-out commencing Successfully integrated into franchising and supply chain structures 20

21 Highlights Domestic Mainstream Brands Re-launch delayed due to Gauteng liquor license moratorium Rehabilitation of existing network well under way 21

22 Highlights Domestic Developing Brands Customer acceptance continues to grow Slow start but gaining momentum M c Ginty s OR Tambo 2 nd restaurant opened in Musina and push into mass market commencing 22

23 Highlights Domestic Theatre of Foods Brands Phenomenal organic growth continues Flagship le parc format launched at Hyde Park to extraordinary acclaim Export of concept under consideration 23

24 Highlights Domestic Theatre of Foods Brands First to market in pioneering artisan bakery category Ready to expand to Western Cape and KwaZulu Natal 24

25 Highlights Domestic Theatre of Foods Brands Brand completely re-invented nted Re-launch of high street offering imminent 25

26 Food for thought Average monthly sales of key line items 1.5 million breakfasts 3.4 million burgers 4 million cups of coffee 2 million ice cream cones 1.8 million pizzas 26

27 Highlights United Kingdom Severe economic conditions prevail - tough market to trade in Nominal contributor to Group revenue (only 3.8%) Right-sizing concluded, business is profitable, and no distraction to management The business isn t shabby, it s the UK that s shabby Keith McLachlan, Thebe Securities 27

28 Manufacturing division 28

29 Gross Revenue % Growth - Manufacturing 30% Growth 12.6% 27,3% 25% 20% 15% 15,1% 15,4% 11,0% 10% 5% 7,7% 6,0% 0% -2,9% -5% Meat Plant Bakery Sauces & Spices WCP Meat Plant WCP Bakery Fruit Juice Ice-Cream 29

30 Highlights - Manufacturing Contended with 30% average increase in beef price and 17% increase in paraffin price Operating margin unchanged at 11.7% Chicken fillet plant commissioned in November 2011 Successful take-on of Milky Lane soft serve volumes concluded in October 30

31 Logistics division 31

32 Gross Revenue % Growth - Logistics 60% Growth 20.1% 50% 48,9% 40% 30% 24,5% 20% 18,1% 17,4% 10% 8,0% 0% Midrand, Gauteng KwaZulu Natal Western Cape Eastern Cape Free State 32

33 Highlights - Logistics Contended with 16% increase in diesel price Operating margin improves to best ever at 3.5% Take-on of all newly acquired brands concluded: 43% increase in line items ex-warehouse Owner driver model continues to gain momentum: 49% and 41% of volume delivered from KZN and Western Cape respectively New Nelspruit depot commissioned 33

34 Financial results

35 Salient features F 2012 % Change Revenue (Rm) Operating profit (Rm) Cash generated by operations before changes in working capital (Rm) Earnings per share (cents) Headline earnings per share (cents) Total dividends per share (cents) Net debt/equity (%) (py) Dividend cover (times) (py) Return on equity (ROE) (%) (py) 35

36 Income statement Rm F 2012 F 2011 % Revenue Cost of sales (1 233) (1 065) Gross profit Selling and administrative expenses (510) (455) Operating profit Net interest paid (11) (15) Profit before tax Taxation (134) (112) Profit for the year Adjustments (1) - Headline earnings (Rm) Headline earnings per share (cents) Earnings per share (cents)

37 Revenue (Rm)

38 Operating profit (Rm) ,1% 19,1% 19,5% 19,0% ,3% 18,3% 18,5% ,0% ,3% ,9% ,5% 17,0% 16,5% 16,0% Operating Profit Operating Margin 15,5% 38

39 Statement of financial position (Rm) F 2012 F 2011 Move Assets Property, plant and equipment Intangible assets Working capital Funding Equity Net borrowings (19) Deferred liabilities and current tax balances (1)

40 Cash flow (Rm) Interest Tax Cash from operations 159 Dividends 200!%&$!"#$ Opening cash 84 Capex (net) 58 Funding (net) 41 Closing cash 40

41 Segmental analysis % of Total F 2012 R m F 2011 R m Change % Revenue Franchising Local Supply chain United Kingdom (13) Corporate Operating Profit Franchising Local Supply chain United Kingdom (30) Corporate - - (4) Operating Margin % % Franchising Local Supply chain United Kingdom Group

42 Board changes

43 Board changes Panagiotis Halamandaris Periklis Halamandaris Theofanis Halamandaris John Lee Halamandres Stanley Aldridge Kevin Hedderwick Bheki Sibiya Hymie Levin Christopher Boulle 43

44 Strategy and prospects

45 Strategy Pursue acquisitive brand growth in new markets Build manufacturing capability, push for new business - existing plants and new opportunities Expand logistics capability - capacity and owner driver Build procurement capability and further develop lowest cost producer status Open 250 new restaurants - 47 in rest of Africa Leverage our exclusive Netcare hospital service provider status Embark on a major step change surrounding innovation - leverage our investment in the Mad Lab Improve and expand our retail and wholesale market presence 45

46 Prospects Consumer spending, especially middle income, expected to be muted Competitive climate and category fragmentation will persist Margins will continue to come under pressure, across the total business Speed, convenience, innovation and value for money will remain key drivers The Group will remain a sound business / investment proposition 46

47 Questions 47

48 You re in good company Results presentation for the year ended 29 February 2012

49 Group information

50 Strategic intent Our business is focused on growth and development of best-in-class franchised leisure brands supported by a business model which maximises stakeholder value creation 50

51 Famous Brands Recipe Our primary orientation remains that of an integrated franchise system Building great and enduring brands will always be our obsession Our franchisees are our #1 customer and we must unshakeably offer them a business model that works We must be consumer driven always affordable, available and accessible Within our industry we will be the lowest cost producer We will stay out of anything that is not leisure, food and beverage Remain a family but never lose our high performance culture South Africa and rest of Africa are our #1 priority trading markets 51

52 Business model Franchising division International - Houses the Group s offshore intellectual property and brands This division is responsible for development of the existing Wimpy brand Domestic Mainstream Brands - Houses the Group s brands that are of a mainstream nature, namely those brands which have broad consumer appeal and are wholly-owned trademarks. Whilst contained within a single business unit, the model of brand stewardship, or competition between brands is firmly entrenched through standalone strategic structures Domestic Developing Brands - Houses brands that are in a development phase, or are being restructured to compete tactically within clearly defined trade channels Theatre of Food Brands - Houses the Group s niche brand trademarks which are held through joint venture partnerships in which the Group has a controlling interest 52

53 Business model MAD Lab MAD is the acronym for Marketing. Artistry. Design. This newly created business unit has been established to bring about a significant step change in the Group s marketing, new product development and restaurant design functions Food Services Responsible for extending the Group s trademarks into the FMCG retail and wholesale markets Procurement Custodian of the Group s centralised procurement function. Accountable for procurement of all product, capital equipment, services and the like. Also serves as the Group s sales forecasting and stock movement resource Development Provides a turnkey service to all of the Group s brands and their respective franchise partners, offering a comprehensive range of services surrounding all new restaurant openings, revamps and relocations 53

54 Business model New business Responsible for the centralised processing and approval of all new franchisee and landlord / developer enquiries. Accountable for all lease negotiations ensuring optimum rental agreements are negotiated on behalf of our franchise partners. Resourced also to manage the Group s strategic alliance partners Manufacturing Represents a key part of the Group s backward integration model, tasked with manufacturing a range of licensed products for use by the franchise network. Also accountable for quality assurance of all manufactured and outsourced products required by the various brands Logistics Represents the Group s route-to-market, delivering to the franchise network a complete basket of products required for brand-specific menus Corporate Houses the Group s back of house functions which provide a service to the various operating business units 54

55 Current shareholding Other Coronation Life Managers 29.7% 28.7% Enderle SA (Pty) Ltd 5.0% 6.3% 8.2% 10.4% 11.7% Peter Halamandaris John Halamandres Perikles Halamandaris Theofanis Halamandaris 55

56 Operating profit Local franchising Rm ,5% 62,0% 5 year compound growth 19% 60,9% 60,2% 64% 62% 60% 58% ,3% 54,8% Operating Profit Operating Margin % 54% 52% 50% 48% 56

57 Operating profit Supply chain Rm % ,6% 8,1% 5,7% 7,8% 8,4% 8,7% 9% 8% 7% 6% % 4% 3% 2% % Operating Profit Operating Margin 0% 57

58 Operating margin percentages by division ,8 62,0 62,5 60,9 60, , ,3 18,3 16,9 18,3 19,1 19,1 5,6 10,9 8,1 9,6 10,1 5,7 7,8 11,3 9,2 8,4 8, Local Franchising Group United Kingdom Supply chain 58

59 Operating margin percentages Supply chain ,7 11,7 10 9,5 9,7 8 7, ,1 2,4 3,0 3,0 3, Manufacturing Logistics 59

60 Ratios % Times 50 4,0 45, ,0 42,5 44, ,4 38,2 3, ,1 2,4 2,4 38,0 2,5 2,2 33,4 2,2 2,1 36,1 35,7 2,1 2,2 34,5 2,3 3,0 2,5 2, ,8 1,6 1,4 1, Rona (%) ROE (%) Net Asset Turn (times) Dividend Cover (times) 1,0 60

61 Ratios continued NAV Debt/Equity % ,8 8, , ,3 4,3 5,2 6,2 27, ,0 3,5 14,3 9, Net asset value per share (R) (NAV) Debt/Equity (%) 0 61

62 Consumer Recognition BEST burger for the 16th consecutive year BEST chips for the 14th consecutive year BEST pizza for the 12th time BEST coffee shop for the 12th consecutive year BEST Breakfast BEST New Restaurant Source: Leisure Options 62

63 Contact information Kevin Hedderwick Chief Executive Officer Stan Aldridge Group Financial Director Del-Maree English Investor Communications

64 You re in good company Results presentation for the year ended 29 February 2012