Collins Foods Limited · ASX:CKF
Collins Foods — FY2021 Earnings Presentation
39 slides from Collins Foods's earnings presentation, Jun 29, 2021
Slide 1: ASX announcement cover letter
29 June 2021 ASX Market Announcements Office 10 Bridge Street SYDNEY NSW 2000 Via ASX Online Dear Sir/ Madam ANNOUNCEMENT FOR RELEASE VIA MARKET ANNOUNCEMENTS PLATFORM Please find attached an announcement for release via the ASX Market Announcements Platform entitled, “Collins Foods Limited FY21 Res
Slide 2: Collins Foods Limited FY21 Results
COLLINS FOODS LIMITED FY21 RESULTS 4 May 2020 – 2 May 2021 29 June 2021 ACN 151 420781
Slide 3: Record earnings delivered despite COVID-19
Record earnings delivered despite COVID-19 FY20 FY21 FY21 FY21 Change FY21 Financial highlights Underlying Statutory Non-trading Underlying Statutory items* ♦ ► Revenue up 12.4% to $1,065.9m due to ($m) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) (Post AASB 16) exceptional performance of
Slide 4: Strategic focus on world-class, scaleable brands underlies current strength and future growth potential
Strategic focus on world-class, scaleable brands underlies current strength and future growth potential Strategic highlights ► Core KFC Australia division delivered record 12.9% same-store-sales and 17.9% EBITDA margins, reflecting extraordinary brand health and successful expansion of delivery and
Slide 5: KFC Australia
KFC AUSTRALIA 3
Slide 6: KFC Australia caps record year of same-store sales and margins
KFC Australia caps record year of same-store sales and margins FY20 FY21 FY21 FY21 Change FY21 ► Revenue up 13.8% to $900.4m Underlying Statutory Non-trading Underlying Statutory items ♦ ► SSS growth of 12.9%. Second half year SSS growth of 13.4% includes rolling over COVID (Pre AASB 16) (Pre AASB 1
Slide 7: High brand trust and digital initiatives underpin sustainability of sales
High brand trust and digital initiatives underpin sustainability of sales ► KFC Australia has responded to COVID-19 challenges by growing its user base, re- engaging lapsed users and increasing market share, supporting confidence around sustainability of sales levels ► KFC traffic grew by 5% during
Slide 8: Accelerated store openings despite COVID-19 related delays
Accelerated store openings despite COVID-19 related delays ► FY21 capex of $18.3m for network development: - 11 new restaurant openings - 17 major remodel and 25 minor remodels completed ► FY21 sustaining and other capital of $10.7m – containing a mix of equipment replacement, digital menu boards, u
Slide 9: KFC Europe
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Slide 10: FY21 result impacted by extensive COVID-19 lockdowns
FY21 result impacted by extensive COVID-19 lockdowns FY20 FY21 FY21 FY21 Change FY21 ► Overall Europe SSS decline of –0.6%, due to Underlying Statutory Non-trading Underlying Statutory the impact of COVID-19 lockdowns and items ♦ restrictions*: (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16)
Slide 11: Existing footprint well positioned for recovery as restrictions ease
Existing footprint well positioned for recovery as restrictions ease ► Drive-thru restaurants showed strong double digit positive SSS throughout FY21 in both Netherlands and Germany, indicative of underlying local demand: - Germany drive-thru SSS at +12.6% - Netherlands drive-thru SSS at +9.5% ► Ger
Slide 12: Netherlands Development Agreement features incentives, achievable targets
Netherlands Development Agreement features incentives, achievable targets ► Selective developments in high quality locations continued in FY21, with 3 new openings in the Netherlands ► New Netherlands Development Agreement signed with Yum! ► Key terms of the Development Agreement to 2025 include: -
Slide 13: Acquisition of smaller KFC franchisees providing additional growth
Acquisition of smaller KFC franchisees providing additional growth ► The challenging FY21 trading environment Key Franchisee No. of Completion Acquisition EBITDA - 12m to has created opportunities to acquire other acquired stores price 31 Dec 2019 franchisees and further consolidate the Maas 2 (net)
Slide 14: Taco Bell
TACO BELL 12
Slide 15: Taco Bell improvement evident in still-early stages of brand
Taco Bell improvement evident in still-early stages of brand FY20 FY21 FY21 FY21 Change FY21 ► Revenue up 57% to $28.0m reflecting sales Underlying Statutory Non-trading Underlying Statutory from the 4 new restaurants that were items ♦ opened during FY21 and full year effect of (Pre AASB 16) (Pre AA
Slide 16: Focus on 'core' and 'value' to strengthen brand in growing category
Focus on 'core' and 'value' to strengthen brand in growing category ► Taco Bell continues to differentiate itself as the only pure QSR offering in the Mexican category, with a fun and edgy brand personality ► Marketing strategy and execution is being refined and simplified to increasingly drive awar
Slide 17: Organic growth on track to resume acceleration in second half of 2021
Organic growth on track to resume acceleration in second half of 2021 ► 4 restaurants opened in H2 FY21 – total capex $4.4m, with typical new build trending towards $1m ► Following recent opening of Cairns, total restaurant count now at 16 (QLD: 12, VIC: 4) ► New restaurant development continues to
Slide 18: Sizzler Asia
SIZZLER ASIA 16
Slide 19: Sizzler Asia remains profitable despite unprecedented trading conditions
Sizzler Asia remains profitable despite unprecedented trading conditions FY20 FY21 Change FY21 Statutory Statutory Statutory ♦ ♦ ♦ (Pre AASB 16) (Pre AASB 16) (Post AASB 16) Revenue ($m) 4.7 2.5 (46.8)% 2.5 JAPAN EBITDA ($m) 3.4 1.6 (52.9)% 1.6 % margin 72.3% 64.0% (8.3)% 64.0% 10 EBIT ($m) 2.
Slide 20: Financial overview
Financial overview 18
Slide 21: Net operating cashflow remains consistently healthy
Net operating cashflow remains consistently healthy FY2020 FY2021 FY2021 ► Net operating cash flow (pre AASB 16) of $95.9m, down $0.5m on FY20, due to higher instalment ($m) (Pre AASB 16) (Pre AASB 16) (Post AASB 16) payments for income tax and the FY21 reversal of some working capital timing benefi
Slide 22: Strong balance sheet supports growth initiatives
Strong balance sheet supports growth initiatives 3 MAY 2020 2 MAY 2021 2 MAY 2021 ► Cash balance (pre AASB 16) down $20.6m to $95.7m due to repayment of ($m) (Pre AASB 16) (Pre AASB 16) (Post AASB 16) previously drawn down debt Cash and equivalents 116.3 95.7 95.7 ► Net debt down to $175.8m from $20
Slide 23: Substantial funding capacity and covenant headroom supports growth initiatives
Substantial funding capacity and covenant headroom supports growth initiatives Net Debt / Net Leverage Ratio* $212.5 $203.2 ► Net leverage ratio (pre AASB 16) at 1.33 – significant headroom to covenant maximum of 2.75 $177.4 ► Net debt of $177.4m(1) – significant headroom to current facility of circ
Slide 24: ESG strategy
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Slide 25: New ESG strategy includes bold initiatives on emissions and waste reduction
New ESG strategy includes bold initiatives on emissions and waste reduction Our people, our communities and our planet deserve our wholehearted commitment. We want our growth to be sustainable People & communities Planet Governance Primary goal Primary goals Primary goal Establish Collins Foods Givi
Slide 26: FY22 priorities
FY22 priorities 24
Slide 27: FY22 priorities target future growth
FY22 priorities target future growth ► Maintain positive SSS growth and stable margins in KFC Australia while leveraging technology to take customer and employee experiences to new levels ► Recover financial performance in KFC Europe toward pre-COVID 19 levels as restrictions ease ► Expand our KFC E
Slide 28: Appendix
COLLINS FOODS LIMITED APPENDIX
Slide 29: Our vision, mission and values
Our vision, mission and values 27
Slide 30: Consistent sustainable growth over the past years
Consistent sustainable growth over the past 5 years Collins Foods owned 136.3 313 301 Underlying EBITDA 120.6 284 113.5 271 229 94.5 81.3 restaurants AUD$ MILLION NUMBERS FY17 FY18 FY19 FY20 FY21 ^ FY17 FY18 FY19 FY20 FY21 ^ 1065.9 54.6 981.7 Underlying NPAT 901.2 47.3 45.0 770.9 38.9 633.6 34.3 AUD
Slide 31: Brand presence in Australia and Europe clustered to provide scale
Brand presence in Australia and Europe clustered to provide scale AUSTRALIA EUROPE 5 NETHERLANDS 29 158 12 GERMANY 9 Düsseldorf region 50 9 11 4 4 8 Stuttgart region 15 NB: Restaurant numbers quoted are, as at today’s date 29
Slide 32: FY21 non trading items summary – pre AASB 16
FY21 non trading items summary – pre AASB 16 EBITDA EBIT NPAT ($m) (Pre AASB 16) (Pre AASB 16) (Pre AASB 16) Taco Bell restaurants impairment – 2.2 1.6 KFC Europe restaurants impairment – 2.5 2.5 KFC Europe closure provision 0.7 0.7 0.7 Netherlands development agreement fee 1.3 1.3 1.3 Netherlands a
Slide 33: FY21 to FY20 Statutory Continuing Operations - post AASB 16
FY21 to FY20 Statutory Continuing Operations - post AASB 16 FY20 FY20 FY20 FY21 Change Statutory Statutory Statutory Prior year Discontinued Continuing Continuing FY21 vs FY20 Annual Report Operations Operations Operations Continuing Operations ($m) (Post AASB 16) adjustments (Post AASB 16) (Post AA
Slide 34: Collins Foods FY21 vs FY20 Statutory Pre & Post
Collins Foods FY21 vs FY20 Statutory Pre & Post FY20 FY20 FY20 FY21 FY21 FY21 Change Statutory AASB 16 Statutory Statutory AASB 16 Statutory ($m) (Post AASB 16) Adjustments (Pre AASB 16) (Post AASB 16) Adjustments (Pre AASB 16) Revenue continuing operations 948.1 – 948.1 1,065.9 – 1,065.9 12.4% EBIT
Slide 35: KFC Australia – post AASB 16 information
KFC Australia – post AASB 16 information FY20 FY21 FY21 FY21 Change Underlying Statutory Non-trading Underlying ♦ items (Post AASB 16) (Post AASB 16) (Post AASB 16) (Post AASB 16) Restaurants Year end (no.) 240 251 251 11 Revenue ($m) 791.5 900.4 – 900.4 13.8% % SSS 3.5% 12.9% 12.9% EBITDA ($m) 168.
Slide 36: KFC Europe – post AASB 16 information
KFC Europe – post AASB 16 information FY20 FY21 FY21 FY21 Change Underlying Statutory Non-trading Underlying ♦ items (Post AASB 16) (Post AASB 16) (Post AASB 16) (Post AASB 16) Restaurants Year end (no.) 40 46 46 6 Revenue ($m) 134.1 134.9 – 134.9 0.6% % SSS (5.8)% (0.6)% (0.6)% 5.2% EBITDA ($m) 19.
Slide 37: Taco Bell Australia – post AASB 16 information
Taco Bell Australia – post AASB 16 information FY20 FY21 FY21 FY21 Change Underlying Statutory Non-trading Underlying ♦ items (Post AASB 16) (Post AASB 16) (Post AASB 16) (Post AASB 16) Restaurants Year end (no.) 12 16 16 4 Revenue ($m) 17.8 28.0 – 28.0 57.4% % SSS EBITDA ($m) (1.5) 0.2 – 0.2 113.3%
Slide 38: FY21 non trading items summary – post AASB 16
FY21 non trading items summary – post AASB 16 EBITDA EBIT NPAT ($m) (Post AASB 16) (Post AASB 16) (Post AASB 16) Taco Bell restaurants impairment – 4.7 3.3 KFC Europe restaurants impairment – 4.9 4.9 KFC Europe closure provision 0.7 0.7 0.7 Netherlands development agreement fee 1.3 1.3 1.3 Netherlan
Slide 39: Disclaimer
Disclaimer ► 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. ► Circumstances may chang