Collins Foods Limited · ASX:CKF
Collins Foods — FY2022 Earnings Presentation
35 slides from Collins Foods's earnings presentation, Jun 28, 2022
Slide 1: Collins Foods Limited FY22 Results
Collins Foods Limited FY22 RESULTS 3 May 2021 to 1 May 2022 28 June 2022 Authorised for release by the Board ACN 151 420781
Slide 2: European performance sparks double-digit growth in sales and profitability
European performance sparks double-digit growth in sales and profitability • Revenue up 11.1% to $1,184.5m with growth across FY21 FY22 FY22 Underlying** Underlying # Change Underlying all business units ($m) POST AASB 16 POST AASB 16 PRE AASB 16 • Statutory NPAT of $54.8m (FY21: $37.3m) • Underlyin
Slide 3: All business units continue to drive top line sales and new store count
All business units continue to drive top line sales and new store count KFC KFC Taco Bell Australia Europe Australia • FY22 SSS growth of 1.4%, with +2.5% in • FY22 SSS growth of 16.8% with 11.2% SSS • FY22 SSS decline of 8.1%, with –5.5% in second half despite challenges of growth on pre-COVID FY19
Slide 4: Kentucky Fried Chicken Australia
Kentucky Fried Chicken Australia
Slide 5: KFC Australia successfully cycles record sales growth
KFC Australia SUCCESSFULLY cyclES record sales GROWTH FY21 FY22 FY22 • Revenue up 6.1% to $955.5m # Change Underlying Underlying Underlying • SSS growth of 1.4%, cycling +12.9% prior year ($m) POST AASB 16 POST AASB 16 PRE AASB 16 Restaurants ‒ second half SSS growth of 2.5% Year end (no.) 251 261 1
Slide 6: Brand strength and value positioning key to support navigating inflationary challenges
Brand strength and value positioning key to support navigating inflationary challenges • Brand metrics* at record levels ‒ purchase intent now in 7th straight year of increase ‒ brand consideration at highest level ever ‒ KFC now leads McDonald's on both Quality and Value perception scores ‒ market
Slide 7: Convenience and customer experience soars to new heights
Convenience and customer experience soars to new heights • Continued growth in digital and delivery, with e-commerce (delivery, web, app) accounting for 16.9% of sales, up from 13.3% prior year ‒ market share in delivery more than doubled in 2021 ‒ delivery via aggregator and Delivery-as-a-Service (
Slide 8: New restaurant development continues on track
new restaurant DEVELOPMENT CONTINUES ON TRACK • 10 new restaurants opened in FY22, with performance considerably above expectations • Acquired 1 store at Griffith in NSW from fellow franchisee in June 2022 at accretive multiple • Targeting build of 9 to 12 restaurants in FY23, ahead of LOGAN VILLAGE
Slide 9: Kentucky Fried Chicken Europe
Kentucky Fried Chicken Europe
Slide 10: KFC Europe marks impressive year of recovery
KFC Europe marks impressive year of recovery FY21 FY22 FY22 • Significant recovery in Europe with SSS growth of 16.8% (and 11.2% # Change growth on FY19) Underlying Underlying Underlying ($m) POST AASB 16 POST AASB 16 PRE AASB 16 ‒ Netherlands SSSG of 18.8% (7.1% on FY19) Restaurants ‒ Germany SSSG
Slide 11: Netherlands Corporate Franchise Agreement underpins Europe growth strategy
Netherlands Corporate Franchise Agreement underpins Europe growth strategy • Commencement of Netherlands Corporate Franchise Agreement (CFA) on 31 December 2021 • CFA ensures Collins Foods has primary operational control over this market ‒ refined marketing strategy with a return to KFC’s core value
Slide 12: Marketing strategy aims to maintain sales momentum while mitigating margin headwinds
Marketing strategy aims to maintain sales momentum while mitigating significant margin headwinds • Renewed focus on Core and shift from "Disruptive Value" to “Everyday Value” supporting positive sales momentum in both Netherlands and Germany • Recent advertising campaigns have leveraged the Colonel
Slide 13: Significant expansion opportunities in Europe despite current market dynamics
significant expansion opportunities in europe despite CURRENT market dynamics • Collins Foods' footprint increased to 45 out of 82 total KFC restaurants in Netherlands (55% market share), following Netherlands restaurant count ‒ acquisition of 15 restaurants from 3 separate franchisees (in addition
Slide 14: Taco Bell Australia
Taco bell Australia
Slide 15: Taco Bell's return to same store sales growth in Q4 provides positive momentum into FY23
TACO Bell's Return to same store sales growth in Q4 provides positive momentum into FY23 • Revenue up 27.5% to $35.8m FY21 FY22 FY22 # Change Underlying Underlying Underlying • SSS decline of 8.1%, though improvement noted from first half ($m) POST AASB 16 POST AASB 16 PRE AASB 16 result of –11.2% R
Slide 16: Marketing efforts centred on establishing brand's taste and value credentials
Marketing efforts centred on establishing brand's taste and value credentials • Focus on improving value and quality of offering is starting to generate positive results ‒ menu changes made to increase portion size and value perception ‒ leveraging KFC expertise to improve operational efficiency and
Slide 17: Store rollout to accelerate in FY23
Store rollout to accelerate in FY23 • Successful opening of 4 restaurants in FY22, all drive-thru, despite COVID-related building delays in Melbourne ‒ Midland, VIC opened on 29 September 2021 ‒ Eatons Hill, QLD opened on 2 November 2021 ‒ Berwick South, VIC opened on 12 April 2022 ‒ Dandenong South
Slide 18: Sizzler Asia
Sizzler Asia
Slide 19: Post COVID recovery underway in Sizzler Asia
Post COVID recovery underway in Sizzler Asia FY21 FY22 # # Change Statutory Statutory Revenue ($m) 2.5 2.8 10.8% EBITDA ($m) 1.6 1.7 4.3% JAPAN % margin 64.0% 59.8% (4.2)% 10 EBIT ($m) 0.8 1.1 48.1% % margin 32.0% 38.6% 6.6% # There is no impact from AASB 16 THAILAND • Royalty revenue up 1
Slide 20: Financial Performance
Financial Performance
Slide 21: Cash flow continues to be reinvested for growth
Cash flow continues to be reinvested for growth FY21 FY22 FY22 • Net operating cash flow (post AASB 16) of $156.3m, up $28.1m on prior year due to ($m) POST AASB 16 POST AASB 16 PRE AASB 16 stronger underlying EBITDA Net operating cash flows before interest and tax 183.1 212.3 153.3 Net interest pai
Slide 22: Balance sheet remains in healthy shape
Balance sheet remains in healthy shape • Cash balance of $97.2m, slightly up on 2 MAY 2021 1 MAY 2022 1 MAY 2022 prior year despite some repayment of ($m) POST AASB 16 POST AASB 16 PRE AASB 16 borrowings Cash and equivalents 95.7 97.2 97.2 • Property, plant and equipment of Total current assets 111.
Slide 23: Funding capacity & covenants continue to be available to support growth initiatives
Funding capacity & covenants continue to be available to support growth initiatives Net debt ($m)/ net leverage ratio* • Net leverage ratio* (pre AASB 16) of 1.17 ‒ significant headroom to covenant maximum of 2.75 • Net debt of $174.9m(1) $203.2 ‒ significant headroom to current facility of circa $3
Slide 24: Outlook
OUTLOOK
Slide 25: Growth plans continue on track despite current margin headwinds
GROWTH PLANS CONTINUE ON TRACK DESPITE CURRENT MARGIN HEADWINDS KFC KFC Taco Bell Australia Europe Australia • First 7 weeks FY23 SSS of +4.1% • First 7 weeks FY23 SSS of +12.2% • First 7 weeks FY23 SSS of +1.6% (Netherlands), +19.4% (Germany) • Some margin compression expected • Moderate margin pre
Slide 26: FY23 & beyond: Collins Foods' long-term success recipe
Fy23 & beyond: COLLINS FOODS' LONG-TERM SUCCESS RECIPE Collins foods' strengths are well-suited to navigate a turbulent environment • A healthy balance sheet • World-class, scalable brands • Specialisation in the resilient, value-centric QSR sector • Operational excellence focus • Management team ca
Slide 27: Collins Foods Limited
COLLINS FOODS LIMITED
Slide 28: Appendix
COLLINS FOODS LIMITED APPENDIX q =
Slide 29: Executing against ESG strategy
Executing against ESG strategy Our people, our communities and our planet deserve our wholehearted commitment. We want our growth to be sustainable. Primary goals: People and communities Planet Governance Establish Collins Foods Reduce our carbon footprint by achieving a Commitment to Giving as a be
Slide 30: Group results summary
Group results summary Post AASB 16 Pre AASB 16 FY22 FY22 FY21 FY22 FY22 FY21 FY22 FY22 Non-trading Change Non-trading Change Underlying* Statutory Underlying Underlying* Statutory Underlying items items ($m) POST AASB 16 POST AASB 16 POST AASB 16 POST AASB 16 PRE AASB 16 PRE AASB 16 PRE AASB 16 PRE
Slide 31: KFC Australia results summary - pre AASB 16
KFC Australia results summary - pre AASB 16 FY22 FY21 Statutory & Change Underlying Underlying ($m) PRE AASB 16 PRE AASB 16 Restaurants year end (no.) 251 261 10 Revenue ($m) 900.4 955.5 6.1% % SSS 12.9% 1.4% EBITDA ($m) 161.4 166.5 3.1% % margin 17.9% 17.4% (0.5)% EBIT ($m) 132.0 134.5 1.9%
Slide 32: KFC Europe results summary
KFC Europe results summary Post aasb 16 Pre aasb 16 FY22 FY22 FY21 FY22 FY22 FY21 FY22 FY22 Non-trading Change Non-trading Change Underlying Statutory Underlying Underlying Statutory Underlying items items ($m) POST AASB 16 POST AASB 16 POST AASB 16 POST AASB 16 PRE AASB 16 PRE AASB 16 PRE AASB 16 P
Slide 33: Taco Bell results summary - pre AASB 16
Taco Bell results summary - pre AASB 16 FY21 FY22 Change Underlying Underlying ($m) PRE AASB 16 PRE AASB 16 Restaurants year end (no.) 16 20 4 Revenue ($m) 28.0 35.8 27.5% % SSS 3.9% (8.1)% EBITDA restaurant level ($m) 1.4 1.4 (-)% % Margin 5.1% 3.7% (1.4%) EBITDA ($m) (1.6) (3.0) (93.4)% % m
Slide 34: FY22 non trading items summary
FY22 non trading items summary Post aasb 16 Pre aasb 16 EBITDA EBIT NPAT EBITDA EBIT NPAT ($m) POST AASB 16 POST AASB 16 POST AASB 16 PRE AASB 16 PRE AASB 16 PRE AASB 16 Restaurant Impairments – Taco bell 0.0 3.2 2.2 0.0 1.6 1.1 Gain on disposal of land (1.2) (1.2) (0.9) (2.7) (2.7) (2.3) KFC Europe
Slide 35: For further information please contact
For further information please contact CORPORATE Drew O’Malley Managing Director & CEO P: +61-7 3352 0800 INVESTORS Ronn Bechler Market Eye P: +61-400 009 774 E: ronn.bechler@marketeye.com.au MEDIA Tristan Everett Market Eye P: +61-403 789 096 E: tristan.everett@marketeye.com.au Disclaimer This pres