Burger Fuel Worldwide Annual Meeting Scripted addresses

Chairman's Address, 10th Annual Meeting of Burger Fuel Worldwide Ltd, Thursday 24th August 2017 at 2.00 pm On behalf of the board, I welcome you all to the 10th BurgerFuel Worldwide AGM. This year we're also celebrating our 10th year as a publicly listed company and we thank you all for your support over this time. For those of you who haven't visited here before, this is the third AGM we have been able to hold here at BurgerFuel HQ. This is a world class research and development facility and the heart of the deeply unique BurgerFuel brand and culture. We recently hosted key BurgerFuel USA staff here for their training program. To be able to utilise this facility to induct these new staff proved to be invaluable in transferring the tapestry of our culture back to the business in the USA. As a board, it is our pleasure to be able to host you here today. The company will continue to operate as normal in the background so please excuse any residual noise from the day-to-day workings of BurgerFuel Worldwide. I would now like to review the main events of the past financial year for the BurgerFuel Group of companies. Despite the investment required to enter the USA, we are pleased to report an after tax net profit of $888,948. This represents an increase of 178% on last year. Group Operating Revenue increased by 9.9% to $22.3M. The 9.9% increase in Group Operating Revenue over the same period last year was largely comprised of sales revenue & long-term recurring royalties from existing and newly opened BurgerFuel restaurants. BurgerFuel Total (unaudited) System Sales are up 4% to $100.3M for the 12 month period, a key milestone for the Group. In total, 9 new restaurants were opened between 1 April 2016 and 31 March 2017. The total number of BurgerFuel restaurants operating globally as at 31 March 2017 was 86. Most notably, in May this year, despite withdrawing from the collaboration agreement with Franchise Brands, we opened our first BurgerFuel store in the United States. Located in Broad Ripple, Indianapolis, this is a 100% company owned and operated store. Although it is early days, the store is operating well, and the initial public reaction has been extremely positive. The focus is now on ensuring the continued growth of this store, monitoring performance closely and preparing for further expansion in the American market. In New Zealand, we have seen another strong year of results and have continued to expand our regional footprint, further strengthening our name as a household brand. While this expansion will continue in the foreseeable future, it is important to note that we view New Zealand as a mature market and are planning for the number of store openings in NZ to slow in the next few years, with a finite amount of opportunity available for more BurgerFuel stores in our current format. With this in mind, our focus is now on the development and footprint expansion of our current stores, as well as the identification and development of new opportunities and revenue streams. We now have three company-owned stores in the New Zealand market and these have proved to be valuable assets in terms of both operational development and revenue contribution. We see further potential to expand on this portfolio in the future. FY17 was another challenging year for us in Australia. Our concerns remain centred around the high operating costs and length of time needed to establish the brand to a profitable level in this market. As of the 31st March 2017, we now have a total of 27 BurgerFuel stores across the Middle East. Despite facing the ongoing effects of economic and political unrest in this region, this market has continued to perform quite well for us and remains a solid contributor to the Company. It should be noted, however, that expansion has slowed as predicted, and focus is now on more strategic openings. In the year to 31 March 2017, overseas markets contributed 30.1% to the Group's total system sales. The Company's Strategic Plan calls for continued investment into the business to facilitate global expansion. This means all available resource will go into the business, as opposed to paying dividends. On behalf of the Board, I wish to thank all employees, franchisees, and other business partners for their efforts. I would also like to thank my Board colleagues for their support and the work that they have performed during the year. Finally, the Directors would like to thank all shareholders for their ongoing support. We look forward to continuing our work to support management and direct the business for the year ahead so that the Company can continue to grow. Thank You Chief Executive's Address, Good afternoon ladies and gentlemen and welcome once again to our 10th AGM. It's certainly been a full-on 10 years that I must say have flown by! At the AGM last year, we announced our plans to part ways with Franchise Brands to allow us to move forward with our US expansion. I'm proud so say that we were able to overcome the significant setbacks we encountered, forging ahead in true BurgerFuel style to open a store on our own. The USA store is performing very well, initial market reaction has been overwhelmingly positive and I can confidently call this a successful market entry in these early stages. We were able to combine years of learnings across the globe to execute a best practice market launch that has set a new standard within the world of BurgerFuel. From the store and kitchen design, to the menu and instore processes, to staff training and customer service right through to the launch activation, the BFW team rolled out a world-class store opening, both operationally and through marketing, that has put us in good stead in this market. Alongside keeping this new store pumping, our attention is now fully focused on strategic expansion within the American market, which includes the possibility of both company owned and franchised stores. We chose Indianapolis for many reasons - the large catchment area that this state creates within the Mid-West acted as a key driver. Whilst a city like LA is flooded with new concepts every day, opening in Indianapolis has allowed us to profile the BurgerFuel brand, stand out and attract huge amounts of attention - both in Indianapolis and throughout the surrounding states. We are under no illusion that the biggest challenges lay ahead of us and the foot certainly has not come off the gas. Chris Mason and the BurgerFuel USA team are working day and night to ensure our next move in this market is the right one, and that we maintain this momentum in the USA. Expansion of this nature and ensuring we entered the USA the right way has required significant investment, however in keeping with our exploration strategy we have been able to do this without creating financial strain on the company. We continue to carry no debt and have healthy capital available for further development and exploration. BFW is a company that excels in both systemisation and marketing. It's now time for us to draw on these skills and apply them to other opportunities. We are well placed in terms of having the resource to do so. We are actively exploring further development opportunities, both inside and outside of the BurgerFuel brand. As previously alluded to, this could include either the acquisition or development of other food concepts or revenue streams. I know many of you are curious about this area and would like to know more. We will update shareholders if and when we have more information available. Across all markets, we continue to face the ever-increasing proliferation of competitor concepts. We remain focused on being great at what we do and on strengthening the parts of the business that other brands cannot emulate. Brand pillars like Radio BurgerFuel, our arts program, Creative, Sweet, and our involvement in the muscle car scene are strategic endeavours that enable us to offer our customers so much more than just a burger and a place to eat it in. It is this depth of brand, alongside our high-quality food experience, that gives us our competitive edge and keeps our customers coming back. Additionally, as you will all be well aware, technology is playing an increasingly important role in businesses like ours, every day. We are constantly working to innovate, develop and strengthen our technological capabilities across all areas of the business to ensure operational efficiency and an ability to meet an ever growing suite of customer demands. Chief Operating Officer to present his address to shareholders. Thanks Josef. I'd also like to welcome our shareholders to BurgerFuel HQ today, and thank you all for your ongoing support. On the operations side of the business, FY17 has seen the launch of many new BurgerFuel innovations. This includes big steps forward in our staff training program, system upgrades, increased operational efficiencies, menu updates and advancements in digital marketing. Increased focus on Operations: Over the last year, we have continued to set the industry standard in operational excellence and focus remains on scalability, and creating economic and operational efficiency. We've undertaken many projects to improve our current systems, as well as upgraded our operational model to increase profitability. We see people as the biggest asset of our business, and as such, have continued to invest in the recruitment, development and engagement of staff right across the globe. Increased focus on training and development: In order to effectively deliver our brand, our food, and the BurgerFuel experience, we need well trained, engaged staff leading the charge at the coal face of the business. In FY17 we have made huge headway in refining our online learning system. We are now delivering a completely digital, totally interactive training model to our franchisees and store staff. This technology is world-class and tailored to the learning needs of the millennials who work in our stores. Allowing them to learn within the digital space is so native to them that it not only produces better training results, but also attracts great talent. The global visibility into staff development that this online system gives us is invaluable to our business. The BurgerFuel online learning system was recently placed 2nd in some key industry awards, beating offerings by many other companies that are larger and far more established than us. I'd now like to play a quick video that I hope will demonstrate just how advanced we are in this area. Menu Improvements: In all markets, we have continued with our ongoing quest to source the very best ingredients we can get our hands on, as well as improve, innovate and fine tune our gourmet food offering. This allows us to retain our competitive edge in this fast moving industry. Our specials program has also gone from strength to strength in the last 12 months and we have continued to drive transactions by giving our customers the chance to experience even more unique new ingredients, flavours and cuisines. Customer service and experience: Without happy, content, satisfied customers, we don't have a business so we're always focused on maximising the BurgerFuel customer experience and looking for new ways to connect with our customers. We have made improvements to our service model, increased customer service training for all staff and increased resource for our customer service channels here at HQ. We've also put a major focus on stimulating, and responding to customer reviews. We now know that 72% of consumers globally, use review sites to make decisions on what to buy and where to eat. This means that across every area of the business, we're fully focused on doing what is required to achieve great customer reviews Over the last 12 months, we have seen improvements to our online review score (as you can see on the slide behind me). This shows that this focus is paying off. Marketing: Our global marketing programme was ramped up yet again, with an ever increasing focus on innovative, highly targeted and measurable digital campaigns. Alongside this, we've utilised our partnerships with Facebook, Instagram, You Tube and Google to gain access to new tools. These tools allow us to use highly specific data to drive transactions with existing and potential customers. Local Store Marketing has been a core part of our marketing program since day one. This grass roots activity allows us to authentically and credibly amplify the brand. This creates a connection between our stores and the community, producing sustainable sales results. At a store level, our Local Store Promotions efforts have also been scaled up. We have continued to increase the number of on-the-ground promotions staff in many of our markets. This is supported with regular training sessions to arm these staff with the tools they need to increase brand awareness and transactions within their local communities. Summary: Major global exploration and growth drives everything we do. In order to execute this successfully and sustainably, the only way forward is through innovation, quality product, great customer experiences, effective training, leveraging technology, and world-class marketing. This is what drives us forward, every day in our quest to build the ultimate brand, experience and lifestyle. I'll now move on to our regional updates. Australasia System sales across Australia and New Zealand have increased by 15%. We have continued to strengthen our growth position in New Zealand, remaining the largest gourmet burger chain in this market, and the third largest burger concept overall. FY17 saw us continue to increase our store numbers in a measured and precise way. More regional store openings has meant that even more New Zealanders have access to our gourmet burgers. In October, we added to our company-owned stores portfolio with the strategic purchase of the successful BurgerFuel Takapuna store. All three company-owned stores in NZ contribute well to corporate results. These company owned stores not only contribute to BFW financially, they assist us with training, research, product trials and allow us to get far closer to our customers and store operations on a daily basis. The Company owned stores portfolio is certainly an area we will look to expand in the future, if, and when, appropriate opportunities present themselves. Alongside the operational improvements, we've made significant advancements to the menu mix in New Zealand with a major menu update rolled out in December. This update saw the inclusion of more high quality, gourmet ingredients as well as new burger options to meet the needs of this hungry market. We also made significant improvements to the quality of our Thick shake offering and have seen the tangible benefits of this with significant growth in Thick shake sales over the last 12 months. Further developments in this area are underway in our R & D department, and will roll out in the near future. As Peter mentioned, Australia has remained a tough market for us. We continued our consolidation process in FY17 and moved to close two low-performing stores, as well as another in early FY18. These stores were franchised and therefore the closures have no material impact on the Group. It is a reality in Australia that making money is not easy. At this stage we will persevere, but will continue to monitor the viability of the Australia business closely. Middle East In the Middle Eastern market we have experienced positive results in some areas and made progress in others. Most notably, our business in Saudi Arabia has experienced significant growth in the last six months, and this can be largely attributed to the recent revitalisation of the Saudi economy as well as efforts to increase marketing activity in that country. In the next few months, a new tax structure on locals will be introduced in Saudi Arabia. We are preparing for this and will monitor any residual effects on our business closely. In the UAE, we are facing a densely populated competitor market, with over 55 burger concepts now competing. Despite these challenges, our business in the UAE continues to operate quite well and Dubai remains a strong focus for us in the Middle Eastern region. The largest problem facing all retail brands in Dubai is the continued increase in available retail space, alongside a major increase in retail rents. This creates an imbalance in the market and these out of proportion occupancy costs take the shine off trading results, removing incentives to develop further. This is a trend that is occurring in nearly all developed markets and something we are keeping a close eye on. Recently, our Dubai Mall store was closed for this very reason, however our partners in the UAE have plans to replace this store with another key site shortly. Further store relocations in this market may also occur. In Egypt, while we remain optimistic about this market, the reality is that due to the ongoing political turmoil, store turnover is very low. With this in mind, we have exercised the consolidation of 2 underperforming stores - these closures have no material effect on the Company. Our partners continue to look for expansion opportunities in Egypt and have our support in this endeavour. In Iraq, our partners celebrated the long awaited liberation of this country in July, which will open up new economic opportunities. We currently have one store in Baghdad where sales are strong, and our partners have a second under construction. They are also actively looking at expansion beyond these two stores. In summary, while revenue is down for the MENA region, it continues to be a good contributor for us. We do caution the market every year that our outlook in any of these countries can change quickly due to the ongoing potential for volatility in the Middle East. Summary: Overall, it has been a year of significant development for BurgerFuel and we have worked hard to position the company well for further expansion in the USA, as well as for the maximisation of both existing markets and new opportunities. As we continue our quest for global growth our mission, as always, is to build a scalable, efficient, highly profitable operational model that produces results for our franchisees and the Company. Chief Executive to close address to shareholders. While the opening of our first USA based store was an exciting milestone for us, it is important to note that we view this as only the beginning of the first step in our American expansion journey. We still have many opportunities and of course challenges ahead. As I said at last year's AGM, entrepreneurial spirit is a huge part of the BurgerFuel brand - we've always backed ourselves, even in the toughest of times and our opening in America is a great example of our ability to make the best out of an adverse situation. We continue to face a heavy proliferation of competitor concepts, economic instability in some markets and saturation in others. These factors only serve as further motivation to keep driving forward, keep innovating and keep thinking well outside the box. There is still big opportunity for the Group to grow, and the board and I will be considering all options for expansion, both here in NZ, and globally. The BurgerFuel team continue to work every day to hit the strategic, operational and financial goals that are required to achieve significant global expansion. We face new challenges every day. We play to our strengths and to our experience, using our skills in systemisation, operational excellency, innovative thinking and good old fashioned hard work to overcome the hurdles and make them work in our favour. Closing thanks: I want to take this opportunity to thank you all for your continued support over the last 10 years, no matter when you joined the BurgerFuel journey. Also, to our Board of Directors for their ongoing guidance and support. I also wish to thank our Franchisees, our staff at HQ and all of the BurgerFuel staff worldwide, because without their energy, passion and dedication to delivering the ultimate BurgerFuel experience to our customers day-in and day-out, we could not have achieved what we have to date. Thanks again for your support and I look forward to sharing our developments with you as we continue on our mission of taking our kiwi burger brand to the USA - and beyond! Josef Roberts CEO BurgerFuel Worldwide End CA:00306111 For:BFW Type:GENERAL Time:2017-08-24 16:10:56