Collins Foods Limited · ASX:CKF
Collins Foods — FY2018 Earnings Presentation
31 slides from Collins Foods's earnings presentation, Jun 26, 2018
Slide 1: Collins Foods Limited
COLLINS For personal use only FOODS LIMITED ACN 151 420 781
Slide 2: Group's results reflect expansion through acquisitions
Group’s results reflect expansion through acquisitions For personal use only FY17 FY18 FY18 FY18 Change • Revenue up 21.7% to $770.9m Underlying (1) Statutory Significant Underlying items (2) • Underlying EBITDA up 16.4% to $94.5m $m • Underlying NPAT up 13.3% to $38.9m Revenue 633.6 770.9 770.9 21.
Slide 3: Significant items summary
Significant items summary For personal use only Acquisition costs EBITDA EBIT NPAT ($m) • Aggregated costs for the following acquisitions: Acquisition costs: - the acquisition of Yum! restaurants in Due diligence and legal advice 0.7 0.7 0.7 Australia Structuring and tax advice for acquisitions 0.5
Slide 4: Operational overview
Operational overview For personal use only Australia Europe • First restaurant in • Sizzler Australia SSS Annerley, Brisbane growth of (0.5%) • Top line revenue growth • Germany transformation continues to trade well of 13.6% plan progressing well ahead of expectations • Further Sizzler restaurant w
Slide 5: Expansion of KFC footprint
For personal use only Expansion of KFC footprint Page 4
Slide 6: Strategic acquisitions significantly expand our overall KFC footprint
Strategic acquisitions significantly expand our overall KFC footprint For personal use only Sales contribution ($m) 750 715 • Our growth platform has broadened and strengthened through the completion of 3 acquisitions over the past 88 650 18 months, in Australia, Germany and the Netherlands 564 76 5
Slide 7: KFC Australia
For personal use only Page 6 KFC Australia
Slide 8: Expanded footprint accounts for over 35% of Yum! KFC national presence
Expanded footprint accounts for over 35% of Yum! KFC national presence For personal use only 5 • Acquisition of 28* restaurants from Yum! now complete apart from 1 restaurant in SA NORTHERN TERRITORY • Completion has occurred as follows: - WA (4* restaurants) on 9 October 2017 WESTERN AUSTRALIA 137
Slide 9: KFC Australia approaches $100m of EBITDA
KFC Australia approaches $100m of EBITDA For personal use only • Revenue up 13.6% to $624.1m (of which $50.3m FY17 FY18 Change Underlying (1) Statutory or 9.2% contributed by acquisition) • Overall SSS growth of 1.0% using Collins Foods Restaurants methodology (1.4% using Yum! methodology) year end
Slide 10: KFC Australia continues to innovate and provide great value
KFC Australia continues to innovate and provide great value For personal use only CORE PRODUCT INNOVATION Providing the brand with a new variation on existing products GREAT VALUE Value offers continue to drive transaction growth and provide value Page 9
Slide 11: KFC Australia operations, digital and delivery
KFC Australia operations, digital and delivery For personal use only • Own delivery launched in KFC Indooroopilly in April – DELIVERY additional stores under OPERATIONS consideration • Foodora test continues with five stores – positive sales and profitability • Integration of acquired restaurants im
Slide 12: KFC Australia restaurant build update
KFC Australia restaurant build update For personal use only • FY18 capex of circa $22m for KFC Australia network development: – 2 new restaurant openings in WA, 1 in NT and a further 2 in QLD – 12 major remodels – 17 minor remodels • FY18 maintenance and other capital (i.e. digital menu boards) circ
Slide 13: KFC Europe
For personal use only Page 12 KFC Europe
Slide 14: KFC Europe footprint continuing to expand
KFC Europe footprint continuing to expand For personal use only NETHERLANDS • Total of 33 KFC restaurants at year end: - 15 KFC restaurants in Germany - 18 KFC restaurants in Netherlands 18 GERMANY • Netherlands transaction completed on 9 31 August 2017 Düsseldorf region • Built and opened 2 restaur
Slide 15: Netherlands in line with expectations while Germany has seen improvements
Netherlands in line with expectations while Germany has seen improvements For personal use only FY17 FY18 FY18 FY18 Change • Europe SSS growth of 0.8% after adjusting for Underlying (1) Statutory Significant Underlying cannibalisation impact on 2 restaurants items (2) • Proforma SSS of 1.4% (factori
Slide 16: KFC Europe development summary and roadmap
KFC Europe development summary and roadmap For personal use only FY18 • Development during FY18: - 2 restaurants built in Germany (Kirchheim-Teck and Munster) Duisburg, - 2 major remodels in Germany GER - 2 restaurants built in Netherlands (Utrecht Haarrijn and Rijswijk id Bogaard) - 1 major remodel
Slide 17: Taco Bell
For personal use only Page 16 Taco Bell
Slide 18: Taco Bell has been embraced by Australian consumers
Taco Bell has been embraced by Australian consumers For personal use only • Annerley restaurant in Brisbane continues to trade strongly • Very positive customer engagement with the brand • Economic model delivering to expectations • Further restaurants to be opened prior to end of calendar year Anne
Slide 19: Taco Bell fresh and engaging
Taco Bell fresh and engaging For personal use only ENGAGEMENT Building strong customer following through ‘Sunday sessions’ of local live music PRODUCT OFFERING Prepared fresh daily and uniquely Taco Bell Page 18
Slide 20: Sizzler
For personal use only Page 19 Sizzler
Slide 21: Sizzler Australia and Asia delivers stable EBITDA
Sizzler Australia and Asia delivers stable EBITDA For personal use only FY17 FY18 Change • Overall revenue down 22% driven by 2 fewer Underlying (1) Statutory restaurants compared to prior year Restaurants • Same store sales growth in Australia of (0.5%) year end (no.) (2) 16 14 2↓ • 1 further resta
Slide 22: Continued growth in Sizzler Asia
Continued growth in Sizzler Asia For personal use only • Sizzler Asia continues to expand its footprint • During FY18 Thailand opened 5 new restaurants and China opened 1 with a closure of 1 restaurant • Royalty revenue up 9.7% vs last year due to new restaurants openings and strong value offering •
Slide 23: Financial overview
For personal use only Financial overview Page 22
Slide 24: Strong growth in operating cash flow
Strong growth in operating cash flow For personal use only • Net operating cash flow of $74.5m up $14.0m on prior year $m FY17 FY18 • Excluding the investment and financing activities Net operating cash flows before interest and tax 83.8 101.4 associated with the Netherlands and Australian acquisiti
Slide 25: Comfortable net leverage ratio of 2.1 after Netherlands and Australian acquisitions
Comfortable net leverage ratio of 2.1 after Netherlands and Australian acquisitions For personal use only Net Debt / Net Leverage Ratio (1) • Net leverage ratio at 2.14 250 2.75 227.2 • Net leverage ratio covenant maximum 2.50 of 2.75 200 2.25 • Net debt up $94.1m to $227.2m, driven by acquisition o
Slide 26: Strong balance sheet
Strong balance sheet For personal use only $m 30-Apr-17 (2) 29-Apr-18 • Cash balance down $44.3m to $60.5m following completion of Netherlands and Australian acquisition Cash and equivalents 104.8 60.5 • Property, plant and equipment up $61.9m mainly due Total current assets 114.1 72.9 to: Property,
Slide 27: Priorities for FY19
Priorities for FY19 For personal use only • Growing the core KFC Australian business through: - transaction led same store sales growth, maintaining focus on WA - continue to roll out delivery to more stores – through aggregator and own channel - building a further 8 restaurants - disciplined focus
Slide 28: Appendix
For personal use only Page 27 Appendix
Slide 29: FY17: significant items summary
FY17: significant items summary For personal use only $m EBITDA EBIT NPAT Acquisition costs Acquisition costs • Aggregated costs for the following acquisitions: Legal due diligence 0.8 0.8 0.8 – 13 restaurants in NSW/VIC (including stamp duty) Legal advice 1.2 1.2 1.2 – 12 restaurants in Germany Fin
Slide 30: Questions
For personal use only Page 29 Questions
Slide 31: Disclaimer
Disclaimer For personal use only This presentation contains forward looking statements which may be subject to significant uncertainties beyond CKF’s control. No representation is made as to the accuracy or reliability of forward looking statements or the assumptions on which they are based. Circums