2018 pp p73 agm 4 - pizza pizza · •pizza pizza limited’s ownership 23.0% •market...
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PizzaPizza
– ROYALTY CORP. – Annual General Meeting
May 28, 2019
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JAY SWARTZ Pizza Pizza Royalty Corp. Board Chair
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FORWARD- LOOKING STATEMENTS
• This presentation will contain forward-looking statements.
• Investors should be aware that any forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those disclosed here today.
• Investors are directed to the Company’s Annual Information Form for a full discussion of risks.
• Management does not intend to discuss any undisclosed material information today.
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CURT FELTNER Chief Financial Officer
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PIZZA PIZZA ROYALTY CORP. Top Line Royalty Structure
Royalty Pool Retail Sales
Royalty Income
Dividends to Shareholders
Less: Expenses& Taxes
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Trademarks & brand names are the Company’s major assets
PIZZA PIZZA ROYALTY CORP. ASSETS
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• TSX exchange listing PZA
• Publicly-traded shares outstanding 24,618,392
• Fully Diluted shares 31,967,706
• Pizza Pizza Limited’s ownership 23.0%
• Market capitalization $320 million
• Current monthly dividend $0.0713
• Current dividend yield 8.5%
• Credit facility matures Apr 2020 $47M
SHAREHOLDER INFORMATION PPRC, A HIGH-YIELD DIVIDEND CORPORATION.
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$35.4 MILLION IN ROYALTY REVENUE ($546 MILLION SYSTEM SALES)
Licence and royalty agreements with Pizza Pizza Limited provide cash flow stability to investors,
without exposure to operational risks.
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2018 PERFORMANCE HIGHLIGHTS SSSG IS THE KEY DRIVER OF SHAREHOLDER YIELD.
• Royalty Pool System Sales $546 M
• Royalty Pool 758 restaurants (+6)
• SSS decreased 1.6%
• Royalty Revenue $35.4 M
• Dividends per share $0.8556
• $4.2 million working capital reserve
• Pay-out ratio 104%
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0
150
300
450
600
12 13 14 15 16 17 18
$546$551$545$534$505$491$482
($ millions)
Royalty revenues are based on top-line Royalty Pool System Sales.
ROYALTY POOL SYSTEM SALES
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-2%
-1%
0%
1%
2%
3%
4%
5%
2012 2013 2014 2015 2016 2017 2018
SSSG is the key driver of shareholder yield growth.
SAME STORE SALES GROWTH
2.7%
2.1%1.1%
4.5%
-0.1%
1.9%
-1.6%
AVERAGE 1.5%
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$0.000
$0.008
$0.016
$0.024
$0.032
$0.040
$0.048
$0.056
$0.064
$0.072
$0.080
Jan-11 May-12 Jan -13 Jun-13 Jan-14 Apr-15 Nov-15 Jun-16
$0.0713$0.0697$0.0680$0.0667$0.0650$0.0625
$0.0600$0.0584
PPRC increased dividends seven times in seven years.
MONTHLY DIVIDEND GROWTH
+2.7% +4.2% +4.0% +2.6% +1.9% +2.5% +2.3%
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SSSG and WORKING CAPITAL
PPRC’s healthy cash reserve available during sales variability
$0
$1,200
$2,400
$3,600
$4,800
$6,000
-7.0%
-5.0%
-3.0%
-1.0%
1.0%
3.0%
5.0%
7.0%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
SSSG Working Capital
Share buy backGlobal Recession
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• Royalty Pool System Sales $134 M
• Royalty Pool 772 restaurants (+14)
• SSS decreased 1.5%
• Dividend per share $0.214
• Pay-out ratio 107%
• $3.9 million working capital reserve
Q1 ’19 PERFORMANCE HIGHLIGHTS
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• Royalty Structure
• High-yield Dividend Corp
• Sales Growth History
• Stable Quick Service Industry
• Exceptional Brand Recognition
• Strong Cash Position
• PPL’s ownership 23%
ADVANTAGES OF PZA
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PAUL GODDARD Chief Executive Officer
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ORGANIZATIONAL CHART
Shareholders
Pizza Pizza Royalty Corp.
(77%)
Pizza Pizza Royalty Limited
Partnership
Pizza Pizza Limited (23%)
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FUNDAMENTALS
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AWARD WINNING FRANCHISE MODEL
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TM
Sponsorships Special Events
EXPANDING BRAND AWARENESS
Partnering with major sports arenas, entertainment venues and special community events provides marketing and business opportunities.
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RESTAURANT RE-IMAGING
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TECHNOLOGY INNOVATION PARTNERING INNOVATION WITHCONVENIENCE LEADS TO SALES GROWTH.
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TECHNOLOGY INNOVATION PARTNERING INNOVATION WITHCONVENIENCE LEADS TO SALES GROWTH.
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PRODUCT QUALITY & INNOVATION NEW PRODUCT LAUNCHES ARE KEY TO SALES BUILDING.
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�28
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POWERFUL BRANDS & MARKETING
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POWERFUL BRANDS & MARKETING
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MARKETING VALUE MESSAGE
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Our fundraising events have raised over $3,300,000 forvarious charities including the Children’s Miracle Network.
SOCIAL RESPONSIBILITY
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OUTLOOK
• Deliver extreme convenience
• Focus on food quality
• Improve brand relevance
• Drive baseline sales
• Enhance service excellence
• Maximize value for customers
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Thank You.