Collins Foods Limited · ASX:CKF
Collins Foods — FY2012 Earnings Presentation
32 slides from Collins Foods's earnings presentation, Jun 29, 2012
Slide 1: FY12 Full Year Results Presentation
For personal use only FY12 FULL YEAR RESULTS PRESENTATION 29 June 2012 ® COLLINS FOODS LIMITED 0
Slide 2: Today's agenda
Today’s agenda For personal use only SECTION 1 – FY12 OVERVIEW SECTION 2 – FINANCIAL PERFORMANCE SECTION 3 – DIVISIONAL PERFORMANCE SECTION 4 – STRATEGY & OUTLOOK SECTION 5 – QUESTIONS SECTION 6 – APPENDIX COLLINS FOODS LIMITED 1
Slide 3: FY12 Overview
For personal use only FY12 OVERVIEW COLLINS FOODS LIMITED 2
Slide 4: FY12 results snapshot
FY12 results snapshot For personal use only Statutory results • NPAT $11.4m vs $1.4m in prior period • Operating cashflow up 3.8% to $35.6m • Strong balance sheet – negligible change in debt; cash balance of $19.2m at 29 April 12 – remain comfortably within covenants with $40m of undrawn debt facili
Slide 5: FY12 in review
FY12 in review For personal use only • Extremely challenging trading conditions – some uplift over summer months, although lower than anticipated – mining regions trading well • New store rollout and refurbishment programme continues – 20 KFC and 3 Sizzler refurbishments – 3 new stores rolled out… 2
Slide 6: Financial Performance
For personal use only FINANCIAL PERFORMANCE COLLINS FOODS LIMITED 5
Slide 7: FY12 performance reflects extremely challenging trading conditions
FY12 performance reflects extremely challenging trading conditions For personal use only • Revenue down 1.0% yoy: Pro Forma (a) − resilient performance given FY12 intense competition FY12 FY11 Change Prospectus $million Actual Actual Expectation • EBITDA down 8.6% yoy Avg # restaurants(b) 145.9 143.
Slide 8: Pro forma revenues
Pro forma revenues For personal use only 35 15 Overall (LHS) 33 14 31 13 29 Sept / Oct period materially weaker as reported in 1H12. Early Summer inline. Sales weakened 12 27 as season progressed. Overall FY11 Actual Revenue ($m) Overall FY12 Actual KFC(LHS) 25 11 KFC FY11 Actual KFC FY12 Actual 23
Slide 9: Strong balance sheet
Strong balance sheet For personal use only • Balance sheet remains strong despite Balance Sheet $m 29 April 12 16 October 11 FY12 trading conditions Cash & Equivalents 19.2 4.9 • Cash of $19.2m (up $14.3m) Current assets 25.3 12.2 – capex spend wound back Non current assets 308.9 311.9 – tax losses
Slide 10: Strong operating cashflows
Strong operating cashflows For personal use only • Strong underlying operating cashflows FY12 FY11 demonstrate resilient business model $million Actual Actual – decrease on prior year reflects Net operating cash tough trading conditions flows before interest 51.2 57.0 and tax – interest paid flat wi
Slide 11: Divisional Performance
For personal use only DIVISIONAL PERFORMANCE COLLINS FOODS LIMITED 10
Slide 12: KFC performance reflects weaker trading environment
KFC performance reflects weaker trading environment For personal use only • Pro forma revenue down $2.5m on prior period Pro Forma (a) − average restaurant number FY12 FY11 increase as restaurant rollout Change $million Actual Actual continues Restaurants → SSSG down vs prior period but Average 119.
Slide 13: KFC capex
KFC capex For personal use only New restaurants Rebuilding $0.4m • Focus on growth capex with best returns from $1.8m new restaurants – $10.3m spent on 20 refurbishments and 2 Maintenance $4.3m new restaurants opened in FY12 Refurbishment $8.1m • One of new restaurants performing above expectations,
Slide 14: Sizzler performance reflects weaker trading conditions
Sizzler performance reflects weaker trading conditions For personal use only • Pro forma revenue down $1.7m on prior Pro Forma (a) period FY12 FY11 Change − increase in restaurant numbers due $million Actual Actual to opening of Sizzler Mackay Restaurants Average 26.4 25.9 0.5 − SSSG down vs prior
Slide 15: Sizzler capital expenditure
Sizzler capital expenditure For personal use only • 3 refurbishments completed New Refurbishment $1.5m − refurbishments performing below restaurant $2.5m expectations → more seating capacity Maintenance $1.6m needed • New restaurant commenced well but slowed FY12 Total $5.6m Growth CAPEX = $4.0m • R
Slide 16: Strategy & Outlook
For personal use only STRATEGY & OUTLOOK COLLINS FOODS LIMITED 15
Slide 17: Macro-economic factors
Macro-economic factors For personal use only • Australian economic fundamentals are strong • Consumer sentiment is down → cautious, paying down debt, saving more • Retail is doing it tough in a multi-speed economy • Heavy reliance on discounting to drive sales, which erodes profitability • QSR traff
Slide 18: Strong fundamentals, but consumers are still cautious
Strong fundamentals, but consumers are still cautious Q1 2012 Economic Indicators For personal use only GDP GDP Real Disposable Consumer Population Unemployment Consumer Yr End Qtr EndMar Dec Income Price Index Mar Rate Confidence Mar Mar Qtr End Dec (CPI) Qtr End Mar 104.1 96.1 7.7% 5.9 5.2 4.3 = Y
Slide 19: Consumers have made adjustments to their spending patterns
Consumers have made adjustments to their spending patterns given economic uncertainty For personal use only Australia has highest Australians are now saving more Historic household debt level, but… and spending less HH Debt Household savings % of GDP as % of income 120% 112% 100% 95% 88% 80% 70% 63%
Slide 20: QSR traffic is flat – need to rely on market share steal for growth
QSR traffic is flat – need to rely on market share steal for growth For personal use only Total Restaurants Traffic % Change vs Year Ago Quarter End QSR 1% 0% 0% 0% (71%) -1% 0% FSR (19%) -1% -1% -2% -3% Retail (10%) -1% -1% -4% -5% -7% Mar ’11 Jun ’11 Sep ’11 Dec ‘11 Mar ‘12 (Share of Traffic Qtr E
Slide 21: Refocused rollout and refurbishment programme
Refocused rollout and refurbishment programme For personal use only • Focus on new store rollouts as opposed to refurbishments → higher margins and better returns on investment • Reviewing food court portfolio → higher rent and lower customer numbers in FY12 • Continue reviewing capex on refurbishme
Slide 22: New Store – 2012 Upper Coomera Service Centre
New Store – 2012 Upper Coomera Service Centre For personal use only Financial Snapshot Capital Spend $ 954,081 PSA $ 60,000 Cash on cash 58.2% return COLLINS FOODS LIMITED 21
Slide 23: Product development combined with new marketing campaigns
Product development combined with new marketing campaigns For personal use only • Rebuilding and growing core KFC business through product development and marketing — reducing reliance on Limited Time Offerings — continuing to refresh product range — ongoing development of non-fried products & ‘in-b
Slide 24: Sales trends have improved – early signs of green shoots
Sales trends have improved – early signs of green shoots For personal use only 35 15 FY13 sales trend Overall (LHS) improving 33 14 31 13 29 Overall FY11 Actual Sept / Oct period materially weaker as reported in 1H12. Early Summer inline. Sales weakened Overall FY12 Actual 12 27 as season progressed
Slide 25: Improving operating efficiencies & trialing KFC AM
Improving operating efficiencies & trialing KFC AM – (By Yum!) For personal use only • Introduction of new service methods in 1H13 — soft trial of online ordering... look to replicate success of others in food service industry — roll-out of new ordering system — EFTPOS Touch & Go facilities — custom
Slide 26: Key priorities for FY13
Key priorities for FY13 For personal use only • Price increases — 2.0% price increase already implemented in 1H13 — further price increases planned for Sizzler to be implemented in stages during FY13 — willing to adjust prices across selected restaurants where appropriate • Positioning the business
Slide 27: FY13 outlook
FY13 outlook For personal use only • Return to same store sales growth – SSSG expected of 2.6% KFC – SSSG expected of 2.4% Sizzler • Possible upside if consumer confidence increases • Impact of Carbon Tax has been estimated at $2.5m pre-tax – significant cost increases to power and electricity – cur
Slide 28: In summary…
In summary… For personal use only • FY12 financial performance reflected extremely challenging trading conditions • Strong balance sheet • Dividend policy initiated, with maiden fully franked final dividend declared • Right strategy being pursued to return CKF to growth – refocused rollout and refur
Slide 29: Questions
For personal use only QUESTIONS COLLINS FOODS LIMITED 28
Slide 30: Appendix
For personal use only APPENDIX COLLINS FOODS LIMITED 29
Slide 31: Group income statement – NPAT bridge from statutory to pro forma
GROUP INCOME STATEMENT For personal use only FY12 ACTUAL NPAT BRIDGE FROM STATUTORY TO PRO FORMA Please refer to section 3.3.2 of the prospectus for a description of the nature of the above adjustments (a) Net interest expense relating to the capital structure prior to the IPO was higher than antici
Slide 32: 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. Circum