Investment Thesis of MTY FOOD GROUP (MTY)

07/12/2021

1. SUMMARY

 

MTY FOOD GROUP. Ticker (MTY) current share price 57 Canadian dollars 

 

  • Fast food franchise company.

  • Recurring revenues due to its royalty-based business model.

  • Revenue CAGR 23% over the last 10 years.

  • Resilient model to financial crises.

  • Excellent track record in making acquisitions.

  • Aligned management team.

  • Fragmented market with growth potential.

1.1. History

MTY Food, founded in 1979 by Stanley Ma, is one of Canada's largest restaurant franchises and is becoming a major player in the United States through a strategy of mergers and acquisitions with an excellent track record, financed mainly by debt and FCF, and currently has 80 different brands including fast food, ice cream and similar brands. 

It is worth noting that MTY receives 90% of its revenues through royalties, as the company does not operate the restaurants, which makes its business model more attractive and with lower operating risk.

The following image summarises the most important milestones of the company:

2. BUSINESS ANALYSIS

This section will explain in detail MTY's business profile, its sources of revenue generation and the M&A strategy that the company has followed in recent years. 

2.1. Business profile

MTY's business consists of franchising and operating corporate-owned locations of quick service and casual dining restaurants, as well as the sale of retail products. The company also operates a food processing plant, and a distribution centre. 

The company has numerous restaurant concepts, allowing it to position itself in a wide range of demographic, geographic and economic sectors. 

The following image shows MTY's various brands, which protect the company from changes in consumer preferences:

The brands that have the largest weight in system sales (sales of all existing restaurants, including those that have closed or opened during the current financial year, as well as sales of new concepts acquired from the closing date of the transaction and onwards) are: Papa Murphy's and Cold Stone Creamery. These two brands currently account for over 45% of system sales, generating approximately 31% and 18% of sales respectively.

Taco Time, Thai Express and Baja Fresh Mexican Grill are the third, fourth and fifth largest concepts in terms of system sales, each generating less than 10% of network sales.

On the other hand, it is important to mention that the company has some seasonality in sales, this is due to the fact that sales of frozen treats and shakes are higher in Q2 and Q3, in addition, pizza sales have a higher demand on Halloween, the following image clearly shows this seasonality. 
 

With regard to the type of locations of the MTY group, these can be classified into: 

  1. Food courts, office towers and shopping centres.

  2. Street front.

  3. Non-traditional format within airports, hospitals, campuses, convenience stores, supermarkets, cinemas, amusement parks and other retail locations or shared sites. 

 

It should be noted that MTY has made a shift in its business model in recent years, where there has been an inclination towards a particular type of restaurant location and, therefore, in the percentage they represent in the system's sales.

 

The following table shows this evolution:

There is a tendency towards street-front shops, which is the most attractive of the three possible options, as demonstrated by the percentages of sales they are able to generate. Their weight in sales is higher than the percentage of shops, which means that they are more profitable for the franchise (remembering that their royalties depend proportionally on gross sales). 

Then, another important factor to take into account in MTY is the percentage of net closures in the year (excluding restaurants acquired by M&A operations), which has gone from being around 0% in 2010 to approximately 5.6% in 2020, although the pandemic played a fundamental role in the latter year.

The following table shows the net closure of premises in 2018 and 2019:

If we take into account the transition of the company's business model mentioned above, which is based on the reduction of the weight of restaurants in shopping centres (a model in decline in sales), it is consistent that in recent years there have been closures in the less profitable premises and it is to be expected that when the premises in shopping centres have less weight, the net closure of shops will decrease.

2.2. Sources of revenue generation: 

The operation of franchises

The franchise agreements that MTY usually enters into with franchisees may vary according to the type of shop location, being longer for those with traditional locations (between 10 and 15 years) or shorter for those without traditional locations (between 3 and 5 years). 

When an individual acquires a franchise from the group, they initially declare an income that can range between USD 25,000 and USD 50,000 for traditional locations and between USD 5,000 and USD 17,500 for non-traditional locations. In addition, and in accordance with the franchise agreement, the company will charge an ongoing royalty to each franchisee of approximately 3% to 7% of gross sales. 

The franchisee's obligation to report gross sales generated is contractually stipulated, and may even be estimated by the point-of-sale ('POS') system installed in the shops. In the case of other items, royalties are integrated into the price of the products and are collected by the company through the distributors.

 

However, the Company's sources of revenue are not limited to those I have already discussed. In addition, MTY negotiates better prices with suppliers and shares a percentage of the margin it obtains with the franchisee, while the other part is an income from such negotiation. 

Finally, as a noteworthy aspect, the franchise agreement may also include employee training, technical assistance and other services that the company will provide to the franchisees for a slightly higher cost, which is usually attractive as it allows to "secure" the guidelines of the parent company. 

In summary, the company's revenue comes from the following sources:

1. Franchise revenues 

During 2019 and 2020, revenues from this category account for 50% and 52% of consolidated revenues respectively, representing more than 90% of the Company's EBITDA.

 

Franchise revenues are structured internally into several line items, all of which are derived from franchise operations, as described below:

1.1. Royalties: As recently mentioned, MTY charges an ongoing royalty to each franchisee. This fee typically ranges between 3 % and 7 % of gross sales, depending on the concepts, and is usually paid on a weekly or monthly basis.

 

1.2. Initial franchise fee: This income is a one-off payment and is not recurring as in the case of royalties. However, MTY charges an initial franchise fee that typically ranges from USD 25,000 to USD 50,000 (USD 5,000 to USD 17,500 for non-traditional locations) at the beginning of the term of the franchise agreement. 

Initial franchise fees are recognised on a straight-line basis over the term of the franchise agreement as the performance obligation associated with the franchise rights is fulfilled. Amortisation begins once the restaurant is opened.

1.3. Master licence fees: This type of income usually arises when there is an individual or entity interested in acquiring the territorial rights to a space in which the group is not yet located in order to expand the brand. MTY charges a master licence fee at the time it grants these rights. 

1.4. Renewal fees: At the time the contract agreed between franchisee and franchisee expires, the franchisee has the possibility to renew the terms or extend its status as a franchisee of MTY. In this case, the company charges a fee for the renewal of the expired franchise. Depending on the concept, the fee varies between USD 1,000 and USD 5,000 per renewed year. 

1.5. Revenue from the sale of franchised premises: In some cases, MTY manages the construction of a new restaurant, which is delivered 'turnkey' to the franchisee upon completion. 

Revenue from the construction and renovation of restaurants is recognised upon completion of the construction and renovation work.

1.6. Sales of goods and equipment: Indirectly, another source of income for the group is that franchisees are required to purchase certain goods and equipment, which will be used at their company locations. These items, which MTY provides to franchisees, are sold at a profit. 

Revenue is recognised when the goods are delivered. MTY also generates some management fees from the resale of services to its franchisees.

1.7. Rental income: In certain cases, the company may earn rental income on certain properties, leases it owns and firm rental income. This is because, as a large company, it is able to negotiate better terms on long-term leases than if the franchisee were to do so directly. A portion of the improved terms it obtains is collected by MTY. 

In other words, MTY can lease the premises in which the franchisee will carry out the activity and subsequently sublease them for a fee. 

1.8. Gift card revenue: MTY recognises breakage revenue on a pro rata recognition basis, which is based on the historical redemption pattern of gift cards. Such a non-redeem rate can be in the region of 10-15% of these gift cards. 

1.9. Supplier considerations: MTY receives supplier considerations. Supplier contributions are recognised in the month in which they are earned.

1.10. Transfer and other fees: MTY charges a fee for the transfer of a franchise, documenting changes to the franchise agreement and other documents, providing plans and specifications for shop design and for construction supervision.

1.11. Accounting fees: For some of the group's brands, MTY is able to do the accounting on behalf of the franchisees in return for the respective fees.

2. Food processing, distribution and retailing revenues: 

During 2019 and 2020, food processing and distribution revenue accounted for 21% and 17% of consolidated revenue, respectively.

2.1. The Company derives revenue from the production of a variety of food products: Revenues from food processing are recognised when the goods have been delivered to the end users.

2.2. Revenues from distributions: The Company earns revenue from the distribution of food and restaurant supplies to its Valentine and Casa Grecque locations. Revenue is recognised once the goods have been delivered to the franchise location.

2.3. Retail revenues: The Company earns revenues from the sale of products in retail shops. Retail revenue is recognised when the goods have been delivered.

3. Revenues from corporate-owned locations: 

MTY not only operates with franchisees, but in some cases the restaurants are owned and managed by the same group. 

 

Revenues from corporate-owned locations are recorded when services are rendered. Revenues from corporate-owned locations have accounted for 16% and 13% of total revenues in 2019 and 2020, respectively.

4. Promotional fund revenue: 

Promotional fund contributions are based on a percentage of gross sales as reported by franchisees. Occasionally, the company charges a fee for the administration of promotional funds. Depending on the franchise agreements, franchisees are required to pay a fee ranging from 1% to 4% of gross sales, depending on the concept, to the promotional fund. 

 

Promotional fund revenues have accounted for 16% and 17% of total revenues for 2019 and 2020 respectively.

 

2.3. M&A

MTY has a strong track record of deploying capital to execute cash flow enhancing M&A transactions. Many of the brands MTY acquires need significant work from an integration and process optimisation standpoint, which is where management has a long track record of successful transactions and ultimately reaping recurring cash flows from entitlements.

 

Acquisitions are the main growth strategy that the company will continue to pursue in the future, so this section explains the latest transactions and the multiples that the company has paid, and estimates the return that the company gets from these operations. 

In the following image we can see the more than 50 acquisitions the company has made, where we will focus on the latest large M&A deals such as Kahala Brands Ltd in 2016, Imvescor Restaurant Group in 2018, Papa Murphy's in 2019 and the most recent acquisition Kuto Comptoir de Tartares in 2021.

Kahala Brands Ltd: On 26 July 2016, MTY announced that it had completed the acquisition of Kahala Brands Ltd for a purchase price of USD 394.2 million, executed with the issuance of 2,253,930 MTY shares and the payment of USD 212 million in cash. At closing, Kahala franchised and operated approximately 2,879 shops worldwide with 18 brands in 27 countries and generated approximately $950 million in system sales. 

The objective of the transaction was to consolidate MTY's presence in the United States, as it would become an important growth platform for MTY's existing brands.

The shops acquired in the Kahala Brands Ltd. transaction have generated positive growth in MTY, driven primarily by the strong performance of Cold Stone Creamery (one of the 5 brands integrated with this acquisition), which accounts for about 10% of MTY's system sales.

 

The company paid pre-synergy EV/EBITDA multiples of 12.5x and post-synergy EV/EBITDA multiples of approximately 11.5x.

Imvescor Restaurant Group: On 1 March 2018, MTY, through the merger of a wholly-owned subsidiary with Imvescor Restaurant Group Inc. ("IRG"), acquired all of the outstanding shares of IRG. The total consideration for the transaction was USD 250.8 million, of which USD 53.1 million was settled in cash and the remainder in shares. 

At the closing of the transaction, IRG operated 5 brands in Canada and had 261 locations in operation, generating an EBITDA of USD 18.5 million. The brands integrated into the group were: Baton Rouge, Score's, Toujours Mike's, Pizza Delight and finally Ben & Florentine.  In this acquisition MTY paid EV/EBITDA multiples of 13x before synergies and 10x including synergies.

Papa Murphy's: MTY's last major acquisition, accounting for about 30% of sales. Conducted on 23 May 2019, the Company, through the merger of a wholly-owned US subsidiary with Papa Murphy's Holding Inc. ("PM"), acquired all outstanding shares. The total consideration for the transaction was $255.2 million. 

Papa Murphy's operated 1,301 franchise shops and 103 corporate-owned shops in the US, Canada and the United Arab Emirates. It generated $28.8 million in EBITDA and the deal closed at 8.5 times EV/EBITDA.

It is interesting to explain the concept of Papa Murphy's, as it can be considered unique. The company focuses on selling raw pizzas for consumers to bake at home, orders can be placed in-store or online and all the products the company uses are very fresh, which is demonstrated by the fact that they do not use refrigerators. 

On the negative side, this business model also competes with supermarkets, although the quality of the pizza is the differentiating factor of this business model.

Kuto Comptoir a Tartares: In terms of acquisitions, this is the most recent acquisition by MTY. It was announced on 1 December 2021, where MTY acquired Kuto Comptoir from Tartares, a high-growth company based in Quebec.

 

The other acquisitions MTY has made in recent years have paid multiples between 6x and 8x EV/EBITDA and 0.42x system sales, on average. The ROIC generated by these transactions can be estimated as follows:

 

If we consider the total investment in acquisitions that the company has made in a given period and how much they have contributed in cash flow, we can conclude that since 2009 acquisitions have had an average cash flow conversion of 12.61%.

Finally, acquisitions have contributed to an upward trend in the number of the company's outlets despite the fact that, as mentioned above, there has been a trend of net closures in recent years as a result of the change in business model. 

We should not forget that 2020 was deeply affected by the pandemic, which led to major closures across the restaurant sector. However, this crisis may provide opportunities for MTY in the medium term to acquire companies at reasonable multiples, as it already demonstrated after the 2008 financial crisis.

 

3. EVOLUTION OF REVENUES

 

In this section we will look at the evolution of MTY's revenues and the factors that have been decisive in achieving its current growth.

Firstly, we must bear in mind that we are dealing with a high quality company that is very resistant to crises, as demonstrated by its revenue evolution between 2006 and 2010, where, despite the global financial crisis, it was able to triple its revenue, increasing its sales from 22 million to 66.89 million.

This growth was generated mainly thanks to M&A operations where the company was able to take advantage of the financial weakness of many companies to acquire them.

However, not everything is positive in the evolution of the company's sales, as the company's historical organic growth is slightly negative over the last 10 years (-1%, -0.5%). Despite this, starting in 2018 with the appointment of Eric Lefebvre as CEO, MTY aims to focus much more on the organic side of the business. This factor was not the main priority in the past. 

Then, having understood that the company owes its growth to M&A operations, we can analyse that in the last 10 years the company has increased its sales with a CAGR of 23.1%, as shown in the following table:

In addition, the system's sales increased in the same period from 527 million to over 3500 million Canadian dollars, as shown in the graph below:

If we relate the sales of the system to the number of locations today, it can be concluded that the average revenue per restaurant has increased from $250,000 in 2011 to over $500,000 today. In the same period, the company spent approximately 1.2 billion on acquisitions, multiplying the number of locations by more than 3 times.

 

The geographic distribution of sales can be seen in the table below:

Despite the rapid growth in the United States resulting from the integration of Papa Murphy's Pizza and Cold Stone Creamery, the company's current market share in North America is still less than 1% of the market.

3. EVOLUTION OF EBITDA MARGIN

MTY's EBITDA margin is currently around 28%, as can be seen in the table below:

Although, it appears at first glance that margins have been declining since 2013, this is not entirely true. To understand this, we must bear in mind that MTY has several business segments, each with its own EBITDA margins. The following graph shows the weight of each business segment in the company's total revenues.

The food distribution and processing segment, which has lower margins, has considerably increased its weight in the company's overall revenues. As a result, overall margins decrease on paper and the company appears to be of lower quality, but in this case the opposite is true.

Franchise margins have not contracted; on the contrary, they are at their highest level in 10 years.

4. SHARE PRICE EVOLUTION

The evolution of MTY's share price has been incredible since its IPO in the 90s. It has managed to become a 100 bagger company, due to its excellent track record of generating recurring income through royalties and with a brilliant M&A strategy, where the management team has generated a lot of value for all shareholders.

   

5. SHAREHOLDERS AND MANAGEMENT TEAM

 

Stanley Ma, Chairman and Director: Stanley Ma founded the company and stepped down as CEO in November 2018. He is currently chairman of MTY. Although he is still active in pursuing, developing and negotiating mergers and acquisitions, he is no longer involved in day-to-day operations. Stanley is the company's largest shareholder, owning 16.2% of the shares, equivalent to 4,005,643 shares.

Eric Lefebvre, CEO and Director: Eric has been with MTY since 2009. He started as Vice President Finance, then became Chief Financial Officer between June 2012 and November 2018, and has since served as Chief Executive Officer of the Company. Prior to joining MTY, Mr. Lefebvre held leadership positions at Bell Aliant and Gaz Metro. He is a chartered professional accountant and holds an MBA. 

Notably, when Eric was appointed CEO of the company, he was granted a package of stock options to keep him aligned with the company's objectives and growth. So now he not only owns 9,137 shares, but also a package of options on 240,000 shares.

Ren e St-Onge, CFO: She joined MTY in 2012 and replaced Mr Lefebvre as CFO of the company in November 2018. Like Eric, she holds a package of options on 40,000 shares. This aligns his interests with those of the shareholders.

 

On the other hand, based on the salaries and compensation received by key executives, it is noted that there is target-based remuneration.

Para 2021, los incentivos de efectivo a corto plazo se basan en lograr ciertos niveles de crecimiento orgánico en EBITDA, en unidades de negocio o marcas, objetivos de EBITDA y crecimiento orgánico de los flujos de caja libres, así como en la apertura de nuevas tiendas. 

 

En cuanto a el nivel de salarios, Eric posee el mayor salario base bruto, siendo este de 500.000 dólares canadienses, el resto de directivos se encuentran en una franja de 250.000 a 300.000. 

 

Si comparamos lo que finalmente ganan los directivos, podemos concluir que existe un mayor interés por que la evolución de la empresa vaya bien ya que cerca del 20% de las acciones en circulación se encuentran entre los directivos.

 

Por otro lado mencionar que existen instituciones con un gran número de acciones como es el caso de Fidelity Management & Research and Company LLC y Fidelity Investments Canada, las cuales poseen el 13,29% y 10,29% de las acciones respectivamente.

6. ANÁLISIS DEL MERCADO

 

La industria de la comida rápida y la restauración, está creciendo a más del 3% anual y se espera que así continúe en los próximos años.

Además podemos observar que el mercado de Estados Unidos donde la empresa tiene menos del 1% de cuota de mercado es 10 veces más grande que el mercado en Canadá, lo que aporta muchas posibilidades a la empresa de aumentar su participación. 

 

En la siguiente gráfica se observa la principal contribución a este crecimiento reflejada en el porcentaje de gasto de estadounidenses y canadienses en restaurantes:

Por otro lado, respecto al COVID 19, todo el sector ha sufrido grandes caídas en sus ventas a causa de los cierres obligatorios, incluso algunos estudios afirman que entre el 20 y 25% de los restaurantes en Norteamérica quebraron a causa de la pandemia.

 

Esta reducción en la oferta de restaurantes se está haciendo notar en las ventas y beneficios de las empresas de restauración, como es el caso de MTY que, con menos restaurantes que en 2019, está generando mayor beneficio.

 

En lo que respecta a las restricciones durante la pandemia, Estados Unidos ha tomado medidas mucho menos restrictivas que Canadá, lo que se ha notado en la evolución de las ventas durante el año. Es de esperarse que las restricciones en Canadá disminuyan en el transcurso de los próximos trimestres, donde existe aun una mayor cantidad porcentual de restaurantes cerrados.

 

Sin embargo, se puede concluir que el entorno de mercado continúa siendo difícil, con mucha incertidumbre acerca de nuevas cepas de coronavirus que puedan causar nuevos cierres obligatorios. A pesar de ello, los restaurantes que mejor se adapten pueden salir favorecidos e incluso aprovechar el momento para hacer operaciones de M&A.

7. VENTAJAS COMPETITIVAS

 

Diversidad de marcas: La gran diversidad de conceptos le permite a MTY posicionarse en una amplia gama de sectores y segmentos de la población, además de tener la posibilidad de recaudar información para instalar nuevos conceptos en ubicaciones ya presentes.

 

Estructura de costes: A diferencia de un restaurante que tiene costes fijos muy altos como es el caso del alquiler del local o número de personal fijo, MTY no tiene que alquilar estos locales, ya que, como se explicó anteriormente se subarriendan al franquiciado. El coste variable de la comida en caso de inflación, puede llegar a beneficiar a la empresa porque cobran un royalty sobre los ingresos pero sin asumir el aumento del coste de la comida. 

 

Equipo gestor: El equipo gestor ha demostrado ser de gran valor para todos los accionistas, logrando escalar el negocio a través de operaciones de M&A con un track record exitoso.

 

Modelo de negocio resiliente a las crisis: En los años 2008 y 2009, durante la crisis financiera las ventas comparables de la empresa, solo cayeron 1,9% mientras que las ventas totales aumentaron un 55%, esto se genero por la oportunidad de adquirir empresas a muy buenos precios. 

 

8. Riesgos

 

Ventas comparables negativas: Como se ha explicado a lo largo de la tesis de inversión, MTY tiene ventas comparables negativas en los últimos años, sin embargo esto no ha impedido que el precio de la acción se haya multiplicado por varias veces debido a su fortaleza de generar crecimiento inorgánico por operaciones de M&A. No obstante, considero un riesgo que las ventas comprables lleguen a un nivel superior al -3%.

 

Cierre netos de locales: Excluyendo las adquisiciones de restaurantes que la empresa ha realizado, los franquiciados han tenido cierres netos durante los últimos años, lo que significa que no todos los franquiciados están teniendo éxito en sus restaurantes. Aunque hay que destacar que las franquicias que se han cerrado son menos rentables que las nuevas que se abren.

 

Covid 19: Nuevas cepas de coronavirus pueden causar nuevos cierres obligatorios de restaurantes como fue el caso en 2020, esta situación puede deteriorar aún más el sector y provocar la quiebra de muchos franquiciados de MTY.  

 

Riesgo M&A: MTY como se ha explicado, centra su crecimiento en realizar operaciones de M&A, por lo que, a pesar de tener un equipo gestor con un gran track record, con más de 50 adquisiciones exitosas, siempre existe un riesgo ligado con este tipo de operaciones. 

 

9. BUSINESS PLAN

 

En este apartado, estableceré mis estimaciones para el periodo 2022-2026 con la finalidad de proyectar los estados financieros de la compañía y obtener el valor intrínseco de la misma, por medio de Valoración por múltiplos comparables.

9.1. Estimaciones 2022 - 2026

 

Las hipótesis de valoración las estableceré en dos escenarios, el primero de ellos lo llamaré “escenario normal”, al cual le asignó una mayor probabilidad de ocurrencia y, en segundo lugar, un “escenario desfavorable” en el que se pondrá a prueba el crecimiento de la empresa. 

 

Antes de comenzar con los escenarios, quiero explicar diversos detalles que tiene MTY, los cuales son importantes conocer para poder realizar una valoración de forma correcta.

El CAPEX de la empresa es prácticamente nulo o negativo, esto se debe a que, cuando un franquiciado deja de pagar o cierra su restaurante, MTY mantiene el restaurante gratis, pudiendo vender a otro franquiciado y beneficiarse del traspaso del local a coste cero o como segunda opción puede vender sus activos y llegar a un acuerdo con el arrendador principal, ya que MTY ha realizado muchas mejoras al local.

En la siguiente imagen extraída del informe anual de 2020, se puede apreciar este caso de CAPEX cero o negativo:

Observamos, que en ambos años (2020 y 2019) la partida “Proceeds on disposal of property, plant and equipment, assets held for sale and intangible assets” es mayor que las adiciones en planta y equipo y activos intangibles. Esto se debe a la explicación que he dado anteriormente.

Por otro lado, hay que tener en cuenta la política de adquisiciones de la empresa y la conversión en flujo de efectivo de estas operaciones, tal y como se analizó en el apartado “2.3 estrategias de M&A de la empresa”.

Escenario Normal:

 

A continuación, mencionaré los factores claves de este escenario:

 

Ingresos: MTY es una empresa que ha aumentando sus ventas a un CAGR del 20% en los últimos 10 años, por lo que en este escenario normal, voy a proyectar las ventas a un 15% anual, teniendo en cuenta que el COVID ha dejado muchas empresas deterioradas y MTY puede aprovecharse para realizar adquisiciones.

 

En lo que respecta al crecimiento orgánico, este lo considero en torno al 0%.

 

Deuda: Hay que destacar que en la deuda no he tenido en cuenta los arrendamientos ya que MTY los subarrienda a los franquiciados y respecto a su proyección, estará ligada a las operaciones de M&A de la empresa.

 

M&A: He tenido en consideración como he mencionado anteriormente un crecimiento inorgánico del 15%, por lo que la empresa seguirá desplegando capital hacia operaciones de M&A, en las que voy a estimar que MTY pagará por adquisición, una media de 7x EV/EBITDA pre-sinergias. Además se ha tenido en consideración el FCF que la empresa genera durante el año para hacer frente a estas adquisiciones y las limitaciones que existen según los pactos.

 

CAPEX: Como se ha explicado, el CAPEX es muy bajo cercano al 0, por lo que en este escenario he considerado una inversión equivalente al 1% de las ventas

 

Márgenes: En este escenario considero un margen EBITDA en línea con los últimos años en torno al 30%.

 

Escenario Desfavorable:

 

Los factores claves de este escenario son los siguientes:

 

Ingresos: En este escenario, contemplaré un entorno más difícil para la empresa, donde el crecimiento orgánico se sitúa de media en -0,5% y de forma inorgánica crezca solo al 7-8%.

 

Deuda: Hay que destacar que en la deuda no he tenido en cuenta los arrendamientos ya que MTY los subarrienda a los franquiciados y respecto a su proyección, al tener un menor crecimiento inorgánico podrá destinar gran parte del FCF a pagar deuda, por lo que es de esperarse en este escenario que la empresa termine el año 2026 con caja neta.

 

M&A: He tenido en consideración como he mencionado anteriormente un crecimiento inorgánico del 7-8%, por lo que la empresa seguirá desplegando capital hacia operaciones de M&A, en las que voy a estimar que MTY pagará por adquisición, una media de 7 veces EV/EBITDA pre-sinergias.

 

CAPEX (sin cambios al escenario anterior): Como se ha explicado el CAPEX es muy bajo cercano al 0, por lo que en este escenario he considerado una inversión equivalente al 1% de las ventas

 

Márgenes (sin cambios al escenario anterior): En este escenario considero un margen EBITDA en línea con los últimos años en torno al 30%.

9.1. Proyecciones 2022 - 2026

ESCENARIO NORMAL

Como se aprecia en las proyecciones de la cuenta de pérdidas y ganancias, el EBITDA se ha incrementado en 151 millones, producto de adquisiciones, donde si establecemos una media de 7 veces EBITDA por cada una de ellas, llegaríamos a una inversión aproximada de 1061 millones en operaciones de M&A. 

 

Luego, el FCF durante el periodo de proyección ha sido de 1009 millones, incrementándose en 118 millones desde el año 2022 al año 2026, donde se consideró la rentabilidad histórica de las adquisiciones. 

 

En la siguiente tabla resumen se muestra la proyección de los principales parámetros financieros:

La deuda, podemos estimarla estable durante este periodo, ya que las adquisiciones proyectadas son cubiertas prácticamente en su totalidad con el FCF generado.

ESCENARIO DESFAVORABLE 

En este escenario, la empresa tiene un crecimiento orgánico ligeramente negativo por lo que producto de adquisiciones el EBITDA se incrementó en 50,3 millones hasta el periodo finalizado en 2026. Contemplando el mismo múltiplo EV/EBITDA que en el escenario anterior llegamos a la conclusión que se necesita una inversión aproximada de 360 millones en operaciones de M&A.

 

Sin embargo, al contrario del escenario "normal", el FCF generado anualmente por MTY, le permite a la empresa realizar estas adquisiciones y destinar cerca de 70 millones anuales al pago de deuda.

La empresa terminará con una caja neta de 70 millones en 2026.

9.2. Múltiplos Comparables 

 

En este apartado, se analizarán las empresas comparables a MTY, tanto en Canadá como en Estados Unidos, con la finalidad de estimar los múltiplos medios a los que cotizan estas empresas. 

 

* Es importante destacar que, el estudio se ha llevado a cabo considerando la media de los múltiplos en los últimos 5 años (EV/EBITDA y P/FCF), ya que con las condiciones actuales de mercado y las grandes inyecciones de liquidez que se han producido desde el 2020, muchas de las empresas comparables a MTY han tenido una expansión sin precedentes de sus múltiplos. 

En este estudio, podemos observar cómo MTY siempre ha cotizado con descuento respecto a comparables, además de las empresas mencionadas en el estudio se pueden añadir otras empresas en Canadá, aunque de menor capitalización como:

  • Pizza Pizza Royalty: la cual a través de su subsidiaria, Pizza Pizza Royalty Limited Partnership, es propietaria y franquicia de restaurantes de servicio rápido bajo las marcas Pizza Pizza y Pizza 73 en Canadá. También venden alimentos y bebidas. Al 31 de diciembre de 2020, la compañía tenía 749 restaurantes en el grupo de regalías. Pizza Pizza Royalty Corp. Fue fundada en 1967 y tiene su sede en Toronto, Canadá.

 

Cotiza de media a 13x EV/EBITDA y 18x P/FCF.

 

  • Boston Pizza Royalties Income Fund, opera como franquiciador de pizzerías y restaurantes de pasta para cenas informales. A partir del 1 de enero de 2021, el sistema de franquicias de la compañía constaba de 387 restaurantes en Canadá. Boston Pizza Royalties Income Fund se fundó en 2002 y tiene su sede en Richmond, Canadá.

 

Cotiza de media a 13x EV/EBITDA y 17x P/FCF.

9.3. Valoración 

 

Escenario Normal:

 

Luego de haber analizado los comparables de MTY en Norteamérica, he decidido valorar a la empresa a 14x EV/EBITDA y 17x P/FCF, siendo esta su media histórica. 

 

A pesar de que las empresas comparables cotizan a múltiplos mayores, es mas sensato utilizar los múltiplos que acabo de mencionar, ya que hay que destacar que estas otras empresas cuentan con mayor capitalización de mercado y con un mayor seguimiento de los analistas.

VALORACION NORMAL MTY.PNG

Escenario desfavorable

 

En este escenario, debido a un menor crecimiento de la empresa, aplicaré múltiplos de 11x EV/EBITDA y 14x P/FCF.

valoracion des mty.PNG

10. CONCLUSION 

Luego de haber analizado MTY en profundidad, puedo concluir que estamos ante una empresa de gran calidad, con un modelo de negocio con ingresos recurrentes muy resistente ante las crisis, además el equipo directivo se encuentra alineado con los intereses de los accionistas y esta formado por excelentes profesionales que han sido capaces de llevar a cabo mas de 50 operaciones de M&A de forma exitosa.

La empresa opera en un mercado muy fragmentado por lo que aun queda mucho margen para asignar capital y crear valor, respecto a los factores de riesgo como las ventas comparables negativas, la entrada de Eric como nuevo CEO, tiene el objetivo de centrarse en el crecimiento orgánico y no solo el inorgánico como se venia haciendo hasta el 2018.

Por ultimo, la valoración por múltiplos comparables arroja rendimientos positivos em ambos escenarios "normal" y "desfavorable", con rendimientos anualizados a 5 años de doble digito.

*La Tesis de Inversión de MTY FOOD GROUP, fue publicada en esta pagina web el 07/12/2021, y en caso de necesitar una actualización por publicaciones de resultados de la empresa o hechos destacables del sector, se dejara un enlace directo al final de esta tesis. 

Disclaimer 

Las publicaciones de esta pagina web no son un consejo de inversión. Todos los contenidos de este sitio web y el boletín, y todas las demás comunicaciones y correspondencia de su autor, son solo para fines informativos y educativos y en ningún caso, ya sea expreso o implícito, se considerarán consejos de inversión, legales o de cualquier otra naturaleza. Haga su propia investigación y diligencia debida.