Collins Foods Limited · ASX:CKF
Collins Foods — FY2019 Earnings Presentation
31 slides from Collins Foods's earnings presentation, Jun 25, 2019
Slide 1: FY19 Full Year Results
COLLINS For personal use only FOODS LIMITED FY19 FULL YEAR RESULTS 25 JUNE 2019 ACN 151 420 781
Slide 2: Collins Foods Group delivers strong earnings growth
Collins Foods Group delivers strong earnings growth For personal use only FY18 (1) FY19 FY19 FY19 Change • Revenue up 16.9% to $901.2m Underlying Statutory Significant Underlying (2) items ($m) • Underlying EBITDA up 20.3% to $113.7m Revenue 770.9 901.2 901.2 16.9% ↑ • Underlying NPAT up 15.7% to $4
Slide 3: FY19 significant items summary
FY19 significant items summary For personal use only Impairment costs EBITDA EBIT NPAT ($m) • Impairment of restaurant property, plant and equipment on 1 KFC Impairment costs: Australia, 4 KFC Europe and 2 Sizzler Australia restaurants KFC Australia restaurants - 0.1 0.0 KFC Europe restaurants - 4.6
Slide 4: FY19 results overview
FY19 results overview For personal use only Australia Europe Australia Australia • Top line revenue growth of 15.8% • Same Store Sales (SSS) decline of • Third and fourth restaurants • Sizzler Australia Same Store Sales 3.7% opened during second half of (SSS) growth of 4.4% • Same Store Sales (SSS)
Slide 5: KFC Australia
For personal use only Page 4 KFC Australia
Slide 6: Substantial growth delivered across KFC Australia
Substantial growth delivered across KFC Australia For personal use only FY18 FY19 FY19 FY19 Change • Revenue up 15.8% to $722.6m Statutory Statutory Significant Underlying • Overall SSS* growth of 3.7% with all States showing positive SSS (1) items growth Restaurants year end (no.) 223 231 231 8 ↑ •
Slide 7: Innovation and great value remains at the heart of KFC Australia
Innovation and great value remains at the heart of KFC Australia For personal use only Page 6
Slide 8: Strong performance in KFC Australia stemming from delivery, digital and operations
Strong performance in KFC Australia stemming from delivery, digital and operations For personal use only Delivery / digital Operations • 64 restaurants currently support delivery, with 40 of these covered • Focus on excellence in operational systems continues to yield gains by multiple delivery aggr
Slide 9: KFC Australia restaurant investment update
KFC Australia restaurant investment update For personal use only • FY19 capex of circa $23.0 m for KFC Australia network development: Banksia Grove, WA - 7 new restaurant openings - 2 in first half and 5 in second half New store - 18 major remodels, 23 minor remodels and 2 major relocations complete
Slide 10: KFC Europe
For personal use only Page 9 KFC Europe
Slide 11: Trading remained challenging in Europe
Trading remained challenging in Europe For personal use only FY18 FY19 FY19 FY19 Change • Europe SSS* decline of (3.7%) driven by lower than expected sales from Underlying(1) Statutory Significant Underlying underperforming new product promotional campaigns and fewer value items(2) offers than prior
Slide 12: Brand initiatives and regional focus to drive sales in Germany
Brand initiatives and regional focus to drive sales in Germany For personal use only Sales driving activities Operations and store development • National brand refresh launched (in June) • Continue to focus on delivering consistently high operation standards • Value layer to be a permanent feature g
Slide 13: Renewed value focus to drive transactions in the Netherlands
Renewed value focus to drive transactions in the Netherlands For personal use only Sales driving activities Operations and store development • An insight driven approach to new product • Continue to focus on delivering consistently promotional activity enhanced by the high operation standards recent
Slide 14: KFC Europe restaurant build and remodel update
KFC Europe restaurant build and remodel update For personal use only • FY19 capex of circa $13.6m for KFC Europe network development: - 4 new restaurant openings: ◦ 2 in first half being Moers and Duisburg (Germany) ◦ 2 in second half being Den Bosch and Vlaardingen (Netherlands) Damrak, NEL Major r
Slide 15: Taco Bell
For personal use only Page 14 Taco Bell
Slide 16: Successfully opened additional Taco Bell restaurants in Queensland
Successfully opened additional Taco Bell restaurants in Queensland For personal use only • Opened third and fourth restaurant in Cleveland, Qld (8 December 2018) and North Lakes, Qld (15 December 2018) • Overall restaurants are trading in-line with expectations • Great value products and contemporar
Slide 17: Exciting new products and unique customer experiences for Taco Bell
Exciting new products and unique customer experiences for Taco Bell For personal use only FREE TacoS International Taco Day Page 16
Slide 18: Taco Bell restaurant build update
Taco Bell restaurant build update For personal use only • 3 restaurants opened in Queensland at Robina, Cleveland and North Lakes during FY19, bringing the total restaurant count to 4 • Strong pipeline of sites, with development focus expanding to include Victoria • Development Agreement with Taco B
Slide 19: Sizzler
For personal use only Page 18 Sizzler
Slide 20: Sizzler Australia and Asia delivered solid results
Sizzler Australia and Asia delivered solid results For personal use only FY18 FY19 FY19 FY19 Change • Good same store sales growth in Australia of 4.4% Statutory Statutory Significant Underlying items • Overall revenue down 8.0% driven by fewer restaurants compared (2) to prior year Restaurants • 2
Slide 21: Sizzler Asia continues to grow
Sizzler Asia continues to grow For personal use only • Sizzler Asia continues to grow in both existing restaurant sales and new builds • Total of 77 restaurants in Asia as at year end (5 restaurant builds: 3 in Thailand and 2 in Japan with 1 closure in China) • Royalty revenue from Sizzler Asia up 1
Slide 22: Financial overview
For personal use only Financial overview Page 21
Slide 23: Strong operating cash flow supporting growth
Strong operating cash flow supporting growth For personal use only • Net operating cash flow of $97.5m up $23.0m on prior year $m FY18 FY19 • Capex cash spend of $50.7m: Net operating cash flows before interest and tax 101.4 125.0 - new store and remodels circa $34.9m Net interest paid (8.2) (10.2)
Slide 24: Net leverage ratio reduced due to strong operating cash flows
Net leverage ratio reduced due to strong operating cash flows For personal use only Net Debt / Net Leverage Ratio • Net leverage ratio at 1.87 250 2.75 227.2 212.5 2.50 • Net leverage ratio covenant maximum of 2.75 200 Net Leverage Ratio 2.25 • Net debt of $212.5m (2) Net Debt $m 150 133.1 2.14 2.00
Slide 25: Balance sheet
Balance sheet For personal use only $m 29-Apr-18 28-Apr-19 • Cash balance up $19.3m to $79.8m Cash and equivalents 60.5 79.8 • Property, plant and equipment up $11.8m to $176.7m mainly due to new restaurant builds, remodels and other capital, partially offset Total current assets 72.9 91.7 by deprec
Slide 26: Impact of new lease accounting standard
Impact of new lease accounting standard For personal use only • New lease accounting standard (AASB16) effective FY2020 Estimated pro forma impact on FY20 financials Impact $m • Operating leases move on the balance sheet: Income statement - lease asset (right to use the leased item) Occupancy expens
Slide 27: Key priorities for FY20
Key priorities for FY20 For personal use only KFC Australia KFC Europe Taco Bell Australia Further strengthen operational systems Sales growth through permanent value Establish and build the Taco Bell brand in /snacking layers Australia Continue expanding the delivery network Elevated focu
Slide 28: Appendix
For personal use only Page 27 Appendix
Slide 29: FY18 significant items summary
FY18 significant items summary For personal use only ($m) EBITDA EBIT NPAT Acquisition costs Acquisition costs: • Aggregated costs for the following acquisitions: Due diligence and legal advice 0.7 0.7 0.7 - the acquisition of Yum! restaurants in Australia Structuring and tax advice for acquisitions
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