Collins Foods Limited · ASX:CKF

Collins Foods — H1 FY22 Earnings Presentation

34 slides from Collins Foods's earnings presentation, Nov 30, 2021

  1. Slide 1: Authorised for release by the Board

    Authorised for release by the Board ACN 151 420781

  2. Slide 2: Group results: revenue up 8.5% to $534.2m

    • Revenue up 8.5% to $534.2m with growth across all segments, including strong recovery in KFC Europe ($m) POST AASB 16 POST AASB 16 PRE AASB 16 • Statutory NPAT continuing of $26.4m (HY21: $20.9m) 492.3 534.2 8.5%  534.2 • Underlying EBITDA continuing (post AASB 16) up 13.1% to $94.9m due to margi

  3. Slide 3: Same store sales growth modest but positive in first half

    • Same store sales (SSS) growth modest • Strong KFC Europe rebound, • Growing brand awareness and trial but positive in first half, despite supported by market expansion in of Taco Bell Australia within fastest cycling record growth in the prior the Netherlands and easing of growing QSR segment comp

  4. Slide 4: KFC Australia

    KFC AUSTRALIA

  5. Slide 5: Revenue up 4.4% to $433.7m

    • Revenue up 4.4% to $433.7m • SSS growth of 0.1%, cycling +12.4% prior year (2-year ($m) POST AASB 16 POST AASB 16 PRE AASB 16 CAGR of +6.1%) • 12 new restaurants opened since HY21 242 254 12  254 415.5 433.7 4.4%  433.7 • Underlying EBITDA margin (post AASB 16) of 21.7%, slightly under HY21 marg

  6. Slide 6: High consumer trust and brand loyalty

    • High consumer trust and brand loyalty, driven by strong marketing execution and enhanced customer experience • KFC "King of Treats" brand positioning has led to #1 ranking amongst major QSR brands on the following attributes[1] ‒ has great tasting food ‒ a way to treat myself ‒ my family & friends

  7. Slide 7: Growth underpinned by investment in digital, delivery and innovation

    Long-term sustainable growth underpinned App-based click and collect sales and Investments in innovation improving by ongoing investment in digital, delivery and monthly active users increased >8% over operational efficiency, customer experience innovation PCP • Digital menu boards modernising drive

  8. Slide 8: Opened new restaurants in HY22

    • Opened 3 new restaurants in HY22 ‒ on track for 9 to 12 new restaurants in FY22, representing approximately half of all new KFC restaurants in Australia in calendar year 2021 • At least 55 new restaurants planned by 2028 ‒ KFC is still underpenetrated relative to McDonalds ‒ disciplined approach t

  9. Slide 9: KFC Europe

    KFC EUROPE

  10. Slide 10: Overall Europe SSS growth of 14.6% on PCP

    • Overall Europe SSS growth of 14.6% on PCP (and 7.9% growth on HY20) bolstered by the easing of COVID-19 restrictions ($m) POST AASB 16 POST AASB 16 PRE AASB 16 ‒ Netherlands SSS growth of 17.2% (6.7% on HY20) 41 51 10  51 ‒ Germany SSS growth of 8.9% (10.1% on HY20) 64.3 84.7 31.7%  84.7 • Reven

  11. Slide 11: New leadership and enhanced marketing activities

    • New leadership and enhanced marketing activities driving a renewed focus on KFC’s core value proposition -- providing KFC's craveable chicken in a variety of convenient formats • A shift in value strategy from disruptive value to a combination of everyday value and disruptive value make marketing

  12. Slide 12: Netherlands restaurants acquired in separate deals

    • 8 Netherlands restaurants acquired in 3 separate deals (2 net in late FY21 and 6 in early HY22) successfully integrated and outperforming expectations • Announced additional acquisition of second largest KFC Netherlands franchisee with 9 restaurants in October 2021 (expected close early 2022) ‒ up

  13. Slide 13: First KFC Corporate Franchise Agreement of its kind globally

    • First KFC Corporate Franchise Agreement (CFA) of its kind globally, reflecting Collins Foods' QSR operational excellence, experience and reputation ‒ market development pipeline of up to 130 net new restaurants over next 10 years ‒ Collins to manage, oversee and support independent franchisees and

  14. Slide 14: Taco Bell Australia

    TACO BELL AUSTRALIA

  15. Slide 15: Revenue up 33.0% to $14.8m

    • Revenue up 33.0% to $14.8m reflecting contribution of 5 new restaurants ($m) POST AASB 16 POST AASB 16 PRE AASB 16 • SSS decline of 11.2% due to variability in performance often seen during early stages of brand development and impact of COVID 12 17 5 17 trading restrictions in Victoria 11.1 14.8

  16. Slide 16: Taco Bell is a pure play QSR brand in the Mexican category

    • Taco Bell is a pure play QSR brand in the fast-growing Mexican category ‒ value-oriented menu, focused on taste and convenience, innovating to make Mexican cuisine fun and locally relevant • Strong adoption through digital and delivery channels, accounting for approximately 20% of sales • Leveragi

  17. Slide 17: Restaurant count increased to 18

    • Restaurant count increased to 18 (QLD: 13, VIC: 4, WA: 1) ‒ Midland, WA opened on 29 September ‒ Eatons Hill, Queensland opened on 2 November (being the 18th restaurant) • Expect 6 to 8 new restaurant openings in FY22, decrease from prior expectations due to delays caused by COVID-related building

  18. Slide 18: Sizzler Asia

  19. Slide 19: COVID-19 dining restrictions continued in Japan and Thailand

    1.3 0.9 (28.1)%  0.9 0.4 (54.3)%  71.9% 45.7% (26.2)%  0.5 0.2 (69.5)%  39.3% 16.7% (22.6)%  # There is no impact from AASB 16 • COVID-19 dining restrictions continued during the period in both Japan and Thailand, though restrictions have eased as infection rates have declined in recent months

  20. Slide 20: Financial Performance

    Bm FINANCIAL / PERFORMANCE

  21. Slide 21: Net operating cash flow of $72.3m

    • Net operating cash flow (post AASB 16) of $72.3m, down $5.9m due to due to the ($m) POST AASB 16 POST AASB 16 PRE AASB 16 reversal of a working capital benefit in 97.5 89.8 65.0 HY21, partly offset by lower interest (4.8) (3.0) (3.0) payments (14.4) (14.5) (14.5) • Capex cash spend of $35.9m 78.2

  22. Slide 22: Cash balance slightly lower at $90.0m

    • Cash balance slightly lower at $90.0m, with net debt of $197.6m, up by $20.2m ($m) POST AASB 16 POST AASB 16 PRE AASB 16 principally due to acquisitions 95.7 90.0 90.0 • Property, plant and equipment of 110.8 106.9 108.6 $205.9m, up $17.0m reflecting new 188.9 205.9 205.9 restaurant builds less th

  23. Slide 23: Net leverage ratio of 1.41

    • Net leverage ratio* (pre AASB 16) of 1.41 ‒ significant headroom to covenant maximum of 2.75 • Net debt of $197.6m(1) ‒ significant headroom to current facility of c$390.0m(2) • Net leverage ratio of 1.41, although slightly higher than FY21 year-end, remains at a comfortable level * Net Leverage R

  24. Slide 24: Strategic Priorities

    STRATEGIC PRIORITIES

  25. Slide 25: Strategic priorities by business and FY22 openings

    • KFC Australia: Build new restaurants ahead of Development Agreement requirements; continue to invest in digital & delivery and innovate around customer experience to keep core SSS growth and strong, stable margins • KFC Europe: Implement CFA and integrate newly acquired restaurants; near-term orga

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    ray a = = 5 a a co) 9 2 a Zz 5 a 3 u

  27. Slide 27: Appendix

    COLLINS FOODS LIMITED APPENDIX = /

  28. Slide 28: Group statutory to underlying reconciliation

    ($m) POST AASB 16 POST AASB 16 POST AASB 16 POST AASB 16 PRE AASB 16 PRE AASB 16 PRE AASB 16 PRE AASB 16 492.3 534.2 – 534.2 8.5%  492.3 534.2 – 534.2 8.5%  83.8 92.5 2.4 94.9 13.1%  65.3 66.5 4.4 70.9 8.7%  47.1 51.8 2.4 54.2 15.1%  46.4 44.6 4.4 49.0 5.6%  21.9 26.4 2.5 28.9 31.6%  28.7 27.

  29. Slide 29: KFC Australia reconciliation

    ($m) PRE AASB 16 PRE AASB 16 242 254 12  415.5 433.7 4.4%  12.4% 0.1% 77.2 77.2 (0.1)%  18.6% 17.8% (0.8)%  64.4 62.6 (2.9)%  15.5% 14.4% (1.1)% 

  30. Slide 30: KFC Europe reconciliation

    ($m) POST AASB 16 POST AASB 16 POST AASB 16 POST AASB 16 PRE AASB 16 PRE AASB 16 PRE AASB 16 PRE AASB 16 41 51 51 10  41 51 51 10  64.3 84.7 – 84.7 31.7%  64.3 84.7 – 84.7 31.7%  (4.2)% 14.6% 14.6% (4.2)% 14.6% 14.6% 5.4 11.4 1.0 12.5 128.9%  1.5 3.9 3.0 7.0 349.3%  8.5% 13.5% 14.7% 6.2%  2.4

  31. Slide 31: Taco Bell Australia reconciliation

    ($m) PRE AASB 16 PRE AASB 16 13 17 4 11.1 14.8 33.0%  (2.6)% (11.2)% 0.6 0.5 (1.7)% 5.0% 3.7% (1.3%) (0.6) (1.1) (81.7)%  (5.4)% (7.4)% (2.0)%  (1.8) (2.4) (33.4)%  (16.3)% (16.3)% 0.0% 

  32. Slide 32: Significant items reconciliation

    ($m) POST AASB 16 POST AASB 16 POST AASB 16 PRE AASB 16 PRE AASB 16 PRE AASB 16 0.3 0.3 0.3 2.3 2.3 2.3 1.1 1.1 1.1 1.1 1.1 1.1 1.0 1.0 1.0 1.0 1.0 1.0 - - 0.3 - - 0.3 2.4 2.4 2.5 4.4 4.4 4.5 * $0.4m included within Europe business segment, remainder in ‘Other’ segment ** $0.3m included within Europ

  33. Slide 33: Establish Collins Foods Giving as a best-in-class signature program

    Establish Collins Foods Giving Reduce our carbon Commitment to as a best-in-class footprint by achieving a signature program by 2026 with in greenhouse gas emissions in best practice by 2026 governance standards in all our business Increase diversion of waste activities from landfill by by 2026

  34. Slide 34: Corporate

    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 This presentation contains forward looking statements which

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