Collins Foods Limited · ASX:CKF
Collins Foods — HY14 Earnings Presentation
26 slides from Collins Foods's earnings presentation, Nov 28, 2013
Slide 1: 2014 Interim Results
For personal use only 2014 Interim Results 28 November 2013
Slide 2: HY14 financial overview
HY14 financial overview For personal use only • Overall revenue flat Change Significant HY14 versus • KFC SSSG: 1.3% HY13 HY14 items1 Underlying2 HY14 Underlying • Sizzler Aust SSSG: (9.4)% $m Revenue 197.9 198.0 - 198.0 0.0% • EBITDA flat due to timing differences in advertising spend – expect FY
Slide 3: HY14 operational overview
HY14 operational overview For personal use only • KFC continuing to show positive growth with an overall • Sizzler Australia continuing to be a challenge – 3.1% sales improvement focused effort on improving margins through labour productivity measures • New KFC restaurants on track – 6 to 7 restaura
Slide 4: Exciting growth opportunities
Exciting growth opportunities For personal use only • Competitive Foods – strategically attractive acquisition • Opportunity to invest in fast growing fast casual dining - 40 restaurants in WA and 4 in NT sector • Acquisition price of $55.6m fully debt funded • $1.85m investment for 50% equity stake
Slide 5: KFC continues to grow
For personal use only grow KFC continues to
Slide 6: KFC continues to grow
KFC continues to grow For personal use only HY13 HY14 Change • Revenue up 3.1% to $152.8m $m Restaurants • SSSG of 1.3% (FY13: 3.6%) – average 120.7 121.7 1.0 • new stores and remodeling performing well – period end 121.0 124.0 3.0 Revenue 148.2 152.8 3.1% • food court sales improving % SSSG 3
Slide 7: Strong product innovation behind sales growth
Strong product innovation behind sales growth For personal use only Zinger in a pie Boneless chicken Breakfast WOW dinners Very successful Strong uptake in recent Breakfast trial including 9 for $9.95 continuing promotion of the Zinger boneless chicken coffee – introduced in to drive growth on pie –
Slide 8: KFC brand build activity
KFC brand build activity For personal use only Continuing to strengthen the Brand’s positioning • Green & Gold Cricket campaign elevating the boldness of the brand • ‘Say it with Chicken’ campaign resonating with young adults • Family dinner time reinforcing brand aspirations • KFC Facebook fans: +7
Slide 9: Operational efficiencies driving improved margins
Operational efficiencies driving improved margins For personal use only • Service flow format has been refined and efficiency gains have increased as we have moved through the learning curve • Productivity gains from indirect labour initiatives flowing to bottom line • New maintenance system enablin
Slide 10: KFC capex focused on growth
KFC capex focused on growth For personal use only KFC Capex and Depreciation 25.0 7 6 20.0 New store openings 5 $ millions 15.0 4 3 10.0 2 5.0 1 0.0 0 FY 12 FY 13 FY14 Budget Depreciaton Maint / Systems Refurbishment / Rebuild / Relocate New Units New Unit Builds Page 9
Slide 11: New KFC restaurants
New KFC restaurants For personal use only North Lakes Wurtulla Chinchilla Opened 12 August 2013 Opened 11 September 2013 Opened 12 September 2013 Capital spend $1.3m Capital spend $1.2m Capital spend $1.2m Projected WSA $51.6k Projected WSA $46.8k Projected WSA $45.5k Actual WSA $55k Actual WSA $48k
Slide 12: Major reimage and rebuild
Major reimage and rebuild For personal use only Maryborough (reimage) Kallangur (reimage) Gympie (rebuild) Completed 21 June 2013 Re-opened 19 June 2013 Re-opened 24 July 2013 Capital spend $0.5m Capital spend $0.4m Capital spend $1.5m Projected WSA $55.6k Projected WSA $69.9k Projected WSA $73.4k A
Slide 13: Sizzler In transition
For personal use only Sizzler In transition
Slide 14: Sizzler performance reflects ongoing transition
Sizzler performance reflects ongoing transition For personal use only Significant HY14 • Revenue down 9.1% to $45.2m with Australian HY13 HY14 Change $m items Underlying SSSG down 9.4% Restaurants: • casual dining sector impacted more than QSR in - average 27.0 27.0 - - - current economic climate -
Slide 15: Comprehensive initiatives
Comprehensive initiatives For personal use only Designed to turn business around • New lunch menu launched in July has had a positive • Service and hospitality initiatives to drive a better impact in reversing decline at lunch dining experience • Revised dinner menu with food quality improvements •
Slide 16: Financial information
For personal use only Financial information
Slide 17: Strong balance sheet
Strong balance sheet For personal use only • Cash up $3m to $26.6m – strong cash flow generation 28 Apr 13 13 Oct 13 $m • Property, plant and equipment up $1.4m to $60.5m – Cash and equivalents 23.6 26.6 new restaurants and rebuilds partially offset by depreciation and impairment Total current asset
Slide 18: Strong, growing cashflows
Strong, growing cashflows For personal use only • Operating cashflow up 5% to $19.0m $m HY13 HY14 • Net investing cash outflows of $10.6m - restaurant Net operating cash flows before rollout and refurbishment program on plan 22.4 24.2 interest and tax • Cash outflow from financing down to $5.4m Net
Slide 19: Exciting growth opportunities
For personal use only Exciting growth opportunities
Slide 20: Competitive Foods (KFC franchisee)
Competitive Foods (KFC franchisee) For personal use only A very attractive acquisition of a business we know well • Acquiring an existing franchise Grows our KFC network • Expands our store base by 44 stores (35%) – 40 in WA and 4 in NT Meaningful new store rollout • WA/NT represent fast growing geo
Slide 21: Competitive Foods business overview
Competitive Foods For personal use only Business overview • Established by Jack Cowin in 1969 • Currently 44 restaurants – 40 in WA and 4 in NT • FY13 [July to June] sales of $107m • FY14 [July to June] forecast revenue of $110m • FY14 [July to June] forecast EBITDA of between $10.0m and $10.3m • KF
Slide 22: Competitive Foods acquisition overview
Competitive Foods For personal use only Acquisition overview • Purchase price of $55.6m Price • Yum! franchising fees • Transaction fees and stamp duty Completion • Expected February 2014 • Minimal impact on CKF earnings in FY14 • FY15 [May to April] forecast EBITDA (pre-synergies and margin improve
Slide 23: Snag Stand
Snag Stand For personal use only Investment in an innovative concept • Fast growing sector in restaurant industry both in Australia and Opportunity to invest the US in fast casual sector • Others in fast casual category include Grill’d Burgers and Guzman & Gomez • $1.85m investment for 50% equity st
Slide 24: Priorities and outlook for remainder of FY14
Priorities and outlook for remainder of FY14 For personal use only • KFC performance expected to continue • Continue to transition the Sizzler business • Group capital spend to remain inline with forecast • CKF confident it will deliver consensus FY14 earnings estimate of $17.3m normalised NPAT (6.5
Slide 25: Questions
For personal use only Questions
Slide 26: 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