$ In 000' 27-Dec-09 26-Dec-10 REVENUE Revenue from Operation 1,074,446 Other Sales 51,951 Total Sale 1,126,397 EXPENSES Cost of Sale ( Company-owned restaurant) 111,010 Cost of Sale ( commissary) 382,150 Total Cost of Sale 493,160 Cost of Sale% of Revenue from Operation 45.9% Salaries and benefits ( Company-owned restaurant) 137,840 Salaries and benefits ( commissary) 34,063 Total Salaries and Benefits 171,903 Salary% of Revenue from Operation 16.0% Occupancy costs 32,343 International Operating Expenses 29,429 COGS 726,835 Gross Profit 347,611 Gross Profit Margin 32.4% Other operating expenses ( Company-owned Resturant) 72,997 Other operating expenses ( Commissary) 46,890 Total Other Operating Expenses 119,887 EBITDA 227,724 EBITDA Margin 21.2% Advertising and related costs 47,174 General and administrative expenses 109,954 Other general expenses 9,030 Total SG&A 166,158 Depreciation and amortization 32,407 Operating Income 29,159 Operating Profit Margin 2.7% Investment Income 875 EBIT 81,985 EBIT% 7.3% Interest expense 4,309 Interest expense% of EBIT 5.3% EBT 77,676 EBT% 7.2% Income tax expense 27,247 Net Profit 50,429 Net Profit Margin% 4.7% Less: Minority Interest 3,485 Net Profit After Minority Interest 46,944 EPS 2 Out Standing Share
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$ In 000' 27-Dec-09 26-Dec-10 25-Dec-11REVENUERevenue from Operation 1,074,446 1,166,970Other Sales 51,951 50,912Total Sale 1,126,397 1,217,882 EXPENSESCost of Sale ( Company-owned restaurant) 111,010 126,887Cost of Sale ( commissary) 382,150 426,955Total Cost of Sale 493,160 553,842Cost of Sale% of Revenue from Operation 45.9% 47.5%Salaries and benefits ( Company-owned restaurant) 137,840 142,093Salaries and benefits ( commissary) 34,063 35,141Total Salaries and Benefits 171,903 177,234Salary% of Revenue from Operation 16.0% 15.2%Occupancy costs 32,343 32,278International Operating Expenses 29,429 35,674COGS 726,835 799,028Gross Profit 347,611 367,942Gross Profit Margin 32.4% 31.5%Other operating expenses ( Company-owned Resturant) 72,997 75,558Other operating expenses ( Commissary) 46,890 53,188Total Other Operating Expenses 119,887 128,746EBITDA 227,724 239,196EBITDA Margin 21.2% 20.5%Advertising and related costs 47,174 49,035General and administrative expenses 109,954 111,608Other general expenses 9,030 9,767Total SG&A 166,158 170,410Depreciation and amortization 32,407 32,681Operating Income 29,159 36,105 Operating Profit Margin 2.7% 3.1%Investment Income 875 755EBIT 81,985 87,772 EBIT% 7.3% 7.2%Interest expense 4,309 2,981Interest expense% of EBIT 5.3% 3.4%EBT 77,676 84,791 EBT% 7.2% 7.3%Income tax expense 27,247 26,324Net Profit 50,429 58,467 Net Profit Margin% 4.7% 5.0%Less: Minority Interest 3,485 3,732Net Profit After Minority Interest 46,944 54,735
Girija:Assumed no new acquisition and no impairment loss
F43
Girija: Not enough information available. Also projecting this will not have any effect on DCF valuation as accrued expense will increase net profit and decrease operating CF by same amount.
F49
Girija: Long-Term Debt + Other Long Term Liabilities
- - -
112,026 125,503 143,824110,632 125,811 146,447
4/17/2023DFC Valuation$ in 000' 12/29/2013 12/26/2014 12/27/2015CFO 104,697 133,111 159,317 Interest(1-Tax) 2,371 2,371 2,371 Less:Capex 36,786 43,064 51,629 FCFF 70,282 92,419 110,059 FCFF growth 31% 19%PV of Explicit CFs 137,454 168,275 186,419 Number of Days left -3,396 -3,034 -2,668 Year Left -9.30 -8.31 -7.31
Terminal Growth Rate 2.0%Terminal Year Cash Flow 192,114 Terminal Year Value 3,578,662 PV of Explicit CFs 1,939,547 PV of Terminal Value 3,655,100 Cash Balances 16,396 Total Equity Value 5,611,043.39 Number of shares 21,790 Per Share Value 257.51
4/17/2023$ in 000' FY12 12/29/2013 12/26/2014CFONet Profit 72,406 90,851 Add: Non Cash Charges 35,035 40,558 Less: Increase in CA (Excluding Cash) 9,796 13,476 Add: Increase in CL 7,051 15,179 Total CFO 104,697 133,111 CFICapex 36,786 43,064 Total CFI 36,786 43,064 CFFDeferred revenue 0.00 0.00Long-term debt 0.00 0.00Deferred income taxes 0.00 0.00Total CFF 0.00 0.00Total Cash Flow 67,911 90,047 Beginning Cash Flow 16,396 84,307 Ending Cash Flow 84,307 174,354
12/27/2015
113,070 43,932 18,321 20,636 159,317
51,629 51,629
0.000.000.000.00
107,688 174,354 282,042
$ In 000' 2009 2010 2011REVENUE ASSUMPTIONSOperation Store DataEnd of period North America Company-owned: 588 591 598YoY% Growth in NA Company-Owned 0.5% 1.2%End of period International Company-owned: 26 21 30YoY% Growth in International Company-Owned -19% 43%Total Company Owned 614 612 628YoY% Growth in Total Company Owned -0.3% 2.6%End of period North America franchised: 2,193 2,346 2,463YoY% Growth in North America franchised 7.0% 5.0%End of period International franchised: 662 688 792YoY% Growth in International franchised 3.9% 15.1%Total Franchised 2,855 3,034 3,255Total Owned & Franchised 3,469 3,646 3,883Revenue #VALUE! 0.02134815 0.08611322Total Company Owned Sale 977,213 990,940 1,076,227Total Franchised Sale 74,775 83,506 90,743 Total Sales ( Company Owned & Franchised) 1,051,988 1,074,446 1,166,970 Other Sales 54,045 51,951 50,912% Other sales/ Total Sales 4.8% 4.4%Reported Sales 1,106,033 1,126,397 1,217,882 Average Revenue per Units & FranchiesAverage Revenue: Company OwnedNorth America 1,614 1,621 1,729 Average % grwoth in North America 0.4% 6.7%International 1,086 1,579 1,408 Average % grwoth in International 45.5% -10.9%Total Average Revenue Company Owned 1,592 1,619 1,714 Average % growth Total 1.7% 5.8%
Average Revenue: FranchisedNorth America 28 30 30 % grwoth in North America 6.7% 0.9%International 20 19 21 % grwoth in International -3.6% 6.9%Total Average Revenue Franchised 26 28 28 % growth Total 5.1% 1.3%COST ASSUMPTIONS
Cost of Sale ( Company-owned restaurant) 111,010 126,887% of Sale 10.3% 10.9%Cost of Sale ( commissary) 382,150 426,955% of Sale 36% 37%
Salaries and benefits ( Company-owned restaurant) 137,840 142,093
Cost of employee / store 225 226% growth in employee cost/store 0.5%Salaries and benefits ( commissary) 34,063 35,141% of Sale 3.2% 3.0%Occupancy costs 32,343 32,278Ocuupancy cost/ store 53 51% increase in occupancy cost/ store -2.7%International Operating Expenses 29,429 35,674% of Sale 2.7% 3.1%Other operating expenses ( Company-owned Resturant) 72,997 75,558% of Sale 6.8% 6.5%Other operating expenses ( Commissary) 46,890 53,188% of Sale 4.4% 4.6%Advertising and related costs 47,174 49,035% of Sale 4.4% 4.2%General and administrative expenses 109,954 111,608% of Sale 10.2% 9.6%Other general expenses 9,030 9,767% of Sale 0.8% 0.8%Income tax expense 27,247 26,324Tax % of EBT 35.1% 31.0%Deferred Tax 4,944 9,818Actual Tax Paid 22,303 16,506Actual Tax % of EBT 28.7% 19.5%
DEPRECIATION SCHEDULEGross property and equipment 426,140 445,715accumulated depreciation and amortization 239,546 263,805Net property and equipment 186,594 181,910CAPEX 42,268 29,319CAPEX/ Company Owned 69 47Increase in CAPEX / Company Owned store added -32%Average life of the asset 13.15 13.64
Girija: As we can observe from past 3 years company is trying to open its own instade of going for franchaise, and its being a principal sources of revenue it is more trying to have its own setups. So appx we can expect a sustainable grwoth rate of additions, own units for next two year as ~4.5%
F21
Girija: To reduce the lease or rental cost, operating cost company is setting its own units in International as well, as per the past growth rate we can assume that company is strategically strong and trying to capture global market with its own unit, it is more focusing on populated countries where it can have many consumer like China and India, therefore an optimistic assumption can be made that It will continuously increase the own setup and reduce to franchise, It can be expected that an approx. of ~4% keeping in mind about barrier to trade, local law, traditions etc.
F31
Girija: NA Franchised are increaseing in decreaseing order, They are quite increaseing there own unit instead of Franchise, and through Franchise they are capturing local market as well as international, it can be assume a slow growth ~2% in Franchise and high growth in own units,
F40
Girija: I can see company is trying capture International Market in this stage to create a good customer awareness and branding, so they might increase the Franchies in International Market, and they are more focous in China where as they are trying to jump into emergin countries as well, so I can assume ~3% for next two years and 4% in 3rd Year.
F54
Girija: Assuming This sales which is software and online ordering fee will decline as a proportion of sales and stabilise at around 3% of other sales
F59
Girija: Considering average inflation with +1 to 2% and as per Q1 report revenue up by 1.6%, I expect management is strongly focusing on domestic sale in North America, because it generate principal revenue from its domestic sales, in-fact the ratio of addition and closing of store is comparatively low YoY therefore on an average ~2.3% growth in North American sale we can expect at the end of this fiscal year.
F61
Girija: As per Q1 releases, International revenue has been increased by 8.2% which reflects that organisation is slowly and steadily focusing on more franchise to open, more advertising, branding to remove the slowdown from international operation, I am optimistic towards it and assume it gives boost to international revenue in near future. Not suddenly but at a long run, therefore we can be little conservative on ~8.2% growth rate.
F67
Girija: Most of the revenue generates from domestic sales either its Company-owned or Franchise, it seems they are capturing the domestic market very well, and as per the past trend in Revenue grwoth in domestic franchise, they are more concern about logistic, cost advantage by getting into partnership, therefore we can expect an increment in revenue, although there is probability of price up of commodity in comming couple of month, but it doesnt have a great impact on Franchise revenue. so we can expect ballpark of 1.5% grwoth
F69
Girija: As per Q1 releases, Total International revenue has been increased by 8.2% which reflects that organisation is slowly and steadily focusing on more franchise to open, more advertising, branding to remove the slowdown from international operation, As per historical trend we can see in 2011 it was an increase in revenue and again it fall down by ~1% and internationally they have planned to add 1100 units which will work out by next 6yrs. I can expect for next 2 years they are going to more focus on Company-owned sales rather franchise in internationally, we can expect a steady growth after 2 years not before that,
F80
Girija: Girija: Cost of Sale has increased due to price hike in commodity in 2011 basically for Cheese, Wheat and Meat, and CoS is decrease due to price decrease in raw materials, as per survey again the price of commodity is going to increase, currently Cheese is selling at $1.72/ Pound, and expected it will go up by $1.95, and primary raw materials such as Wheat, Meat etc. are comparatively low. So we can expect keeping view on Cheese inflation rate in US as +1 to 2.8, there is a small increase in raw materials, on an average I am expecting a ~2% of increase in Cost of Sale for next year. And it will remain stable in 10.5% to 11%.
Girija: as no of stores increase economies of scale will kick in. so there could be decline in this ratio
F103
Girija: s no of stores increase economies of scale will kick in. so there could be decline in this ratio
F116
Girija: Keeping revenue growth and cost advantage it can be assumed that EBIT will increase for next few years compare to the past trend, so the average tax rate will be in control with corporate tax rate ( 35% ) from 30 to 35%, and it can be assumed the tax rate will be 32% for next 3 years.
F126
Girija: Property prices in US are again raising
F128
Girija: As per Accounting polcies equipments have 5-10 years life and buildings have 15-20 years life. As more buildings get added the number is moving towards 15, assuming average life will stabilze at around 16 years
G128
Girija: As per Accounting polcies equipments have 5-10 years life and buildings have 15-20 years life. As more buildings get added the number is moving towards 15, assuming average life will stabilze at around 16 years
H128
Girija: As per Accounting polcies equipments have 5-10 years life and buildings have 15-20 years life. As more buildings get added the number is moving towards 15, assuming average life will stabilze at around 16 years