Collins Foods Limited · ASX:CKF
Collins Foods — HY21 Earnings Presentation
29 slides from Collins Foods's earnings presentation, Dec 1, 2020
Slide 1: ASX cover letter for HY21 Results announcement
For personal use only 1 December 2020 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 entitled, “Collins Foods Limited HY21 Results” (Announcement) for rele
Slide 2: Collins Foods Limited HY21 Results
COLLINS For personal use only FOODS LIMITED HY21 RESULTS 4 May 2020 – 18 October 2020 (24 weeks) 1 December 2020 ACN 151 420781
Slide 3: Strong earnings growth delivered again despite COVID-19 turbulence
Strong earnings growth delivered again despite COVID-19 turbulence For personal use only HY20 HY21 HY21 HY21 HY21 HY21 highlights Underlying (1) Statutory Non trading (2) Underlying Change Statutory (Pre AASB 16) (Pre AASB 16) items (Pre AASB 16) (Post AASB 16) • Double digit revenue increase led by
Slide 4: Core foundational strengths go beyond COVID-19 resilience
Core foundational strengths go beyond COVID-19 resilience For personal use only AUSTRALIA EUROPE AUSTRALIA • Same Store Sales (SSS) growth of 12.4% • Same Store Sales (SSS) decline of 4.2% • Sales fully recovered to pre COVID-19 due to higher mix of in-line/food court levels. Victoria in-lines more
Slide 5: KFC Australia
For personal use only Page 3 KFC AUSTRALIA
Slide 6: Sales and margins demonstrate continuing power of KFC Australia
Sales and margins demonstrate continuing power of KFC Australia For personal use only HY20 HY21 HY21 HY21 HY21 • Revenue up 15.6% to $415.5m Underlying (1) Statutory Non trading (2) Underlying Change Statutory ($m) (Pre AASB 16) (Pre AASB 16) items (Pre AASB 16) (Post AASB 16) • Same store sales (SS
Slide 7: Stellar marketing and consistent operations underpin core brand strength
Stellar marketing and consistent operations underpin core brand strength... For personal use only • Accessibility of take-away channels during COVID-19 more than offset loss of dine-in channel in the early months of the crisis • High brand trust enabled KFC to grow sales and market share while total
Slide 8: Acceleration of Delivery and Digital initiatives support future growth
… while acceleration of Delivery and Digital initiatives support future growth For personal use only Long-term trends toward the ease and convenience of digital channels have accelerated during COVID-19, leading to a doubling of e-commerce sales and further expansion of digital initiatives: • Delive
Slide 9: On track to open new KFC restaurants in FY21
On track to open 9 to 12 new KFC restaurants in FY21 For personal use only • HY21 capex of circa $4.8m for network development: - 2 new restaurant openings - 1 major remodel and 8 minor remodels completed • HY21 sustaining capital and other capital circa $3.2m - being used to unlock capacity growth
Slide 10: KFC Europe
For personal use only Page 8 KFC EUROPE
Slide 11: Drive-thru growth helping to reduce negative impact of COVID-19 in KFC Europe
Drive-thru growth helping to reduce negative impact of COVID-19 in KFC Europe For personal use only HY20 HY21 HY21 HY21 HY21 • Overall Europe SSS decline of 4.2%, due to the (1) Change ongoing impact of COVID-19: Statutory Statutory Non trading Underlying Statutory ($m) (Pre AASB 16) (Pre AASB 16) i
Slide 12: KFC Europe remains a significant opportunity for growth
Despite COVID-19, KFC Europe remains a significant opportunity for growth For personal use only • Sales showed ability to bounce back strongly (+3% SSS across 2 months) once government COVID-19 related restrictions were eased during the first half, boding well for when restrictions fully ease • Sign
Slide 13: Development efforts continue in Europe, focused on Netherlands
Development efforts continue in Europe, focused on Netherlands For personal use only • Capex of circa $2.5m for KFC Europe network development covering 1 new restaurant opening and 1 renovation in the Netherlands • Expecting to build 1 to 3 additional new drive-thru restaurants during second half of
Slide 14: Acquisition opportunities emerging in Netherlands to support organic growth
Acquisition opportunities emerging in Netherlands to support organic growth For personal use only • Signed agreement to acquire 3 KFC Netherlands Franchisee landscape restaurants in Netherlands for €2.5m: - two of the KFC restaurants at ‘low-teens’ margins with the third KFC restaurant at breakeven
Slide 15: Taco Bell
For personal use only Page 13 TACO BELL
Slide 16: High awareness and consumer enthusiasm for the brand continues
High awareness and consumer enthusiasm for the brand continues For personal use only • Exceptional consumer response to innovative Naked Chicken Taco promotion: - highly successful launch on ‘International Taco Day’ (4 October) - product sold out 3 weeks early due to significant sales lift and high
Slide 17: Solid progress on refining business model, focusing on trial and ops efficiencies
Solid progress on refining business model, focusing on trial and ops efficiencies For personal use only • Strong focus on growing brand awareness and brand trial through strong Value offers • Steadily increasing delivery sales, with delivery channel now representing over 15% of sales: - Menulog part
Slide 18: Growing to scale within the next 3-5 years
Growing to scale within the next 3-5 years For personal use only • COVID-19 impacted the pace of development during HY21 • Total restaurant count now at 13 with recent opening of Roxburgh Park: - 10 in Queensland - 3 in Victoria • Innovative development model provides opportunity in select locations
Slide 19: Sizzler
For personal use only Page 17 SIZZLER
Slide 20: Sizzler Australia business has now closed
Significantly impacted by COVID-19, Sizzler Australia business has now closed For personal use only • Sizzler Australia closed on 15 November 2020 HY20 HY21 HY21 HY21 HY21 Statutory Statutory Non trading (1) Underlying Change Statutory • Sizzler Australia exit costs of $3.1m including (Pre AASB 16)
Slide 21: Financial overview
For personal use only Financial overview Page 19
Slide 22: Strong growth in operating cash flow, up 70.0% to $57.3m
Strong growth in operating cash flow, up 70.0% to $57.3m For personal use only • Net operating cash flow (pre AASB 16) of HY20 HY21 HY21 $57.3m, up $23.6m on HY20, due to strong (Pre AASB 16) (Pre AASB 16) (Post AASB 16) ($m) earnings and some working capital timing Net operating cash flows before i
Slide 23: Balance sheet
Balance sheet For personal use only 3-May-20 18-Oct-20 18-Oct-20 (Pre AASB 16) (Pre AASB 16) (Post AASB 16) ($m) • Cash balance (pre AASB 16) up Cash and equivalents 116.3 145.8 145.8 $29.5m to $145.8m Total current assets 132.5 162.5 157.7 Property, plant and equipment 187.5 183.3 183.3 • Property,
Slide 24: Substantial funding capacity and covenant headroom to support growth initiatives
Substantial funding capacity and covenant headroom to support growth initiatives For personal use only Net Debt $m / Net Leverage Ratio* • Net leverage ratio (pre AASB 16) at 1.35 – significant headroom to covenant maximum of 2.75 • Net debt of $170.7m(1) – significant $212.5 headroom to current fac
Slide 25: Key second half of FY21 strategic priorities underpin further growth
Key second half of FY21 strategic priorities underpin further growth For personal use only KFC Australia KFC Europe Taco Bell Australia ✓ Accelerate customer-facing and ✓ Continue to build on sales momentum in ✓ Drive awareness and trial via bold operational digital initiatives to support Germany; s
Slide 26: Questions
For personal use only Page 24 Questions
Slide 27: Appendix
For personal use only Page 25 Appendix
Slide 28: HY21 non trading items summary
HY21 non trading items summary For personal use only EBITDA EBIT NPAT ($m) Sizzler closure provision 3.1 3.3 2.3 Sizzler DTA derecognition - - 0.9 Netherlands development agreement fee 0.5 0.5 0.4 Netherlands DTA derecognition - - 1.1 Marketing expenditure redirected to digital technology (0.8) (0.8
Slide 29: 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