Collins Foods Limited · ASX:CKF
Collins Foods — Merger or Acquisition (June 2017)
32 slides from Collins Foods's merger presentation, Jun 26, 2017
Slide 1: Acquisition of KFC Restaurants in Australia from Yum! Brands
Not for release or distribution in the United States For personal use only COLLINS FOODS LIMITED ACQUISITION OF KFC RESTAURANTS IN AUSTRALIA FROM YUM! BRANDS 26 JUNE 2017 ACN 151 420 781
Slide 2: Important notice and disclaimer
Important notice and disclaimer For personal use only This investor presentation and its appendices (“Presentation”) is dated 26 June 2017 and has been prepared by Collins Foods Limited (ACN 151 420 781) (“Collins Foods”). This Presentation has been prepared in relation to an accelerated non- renoun
Slide 3: Important notice and disclaimer (cont'd)
Important notice and disclaimer (cont’d) For personal use only Past Performance Past performance information given in this Presentation is given for illustration purposes only. Past performance is not necessarily (and should not be relied upon as) a guide to future performance and no representation
Slide 4: Executive summary
Executive summary For personal use only Overview of the A wholly-owned subsidiary of Collins Foods has entered into binding agreements with a subsidiary of Yum! Brands Inc acquisition ("Yum!") to acquire 28 KFC restaurants located in Australia (the "Acquisition")1 Purchase price of A$110.2 milli
Slide 5: Acquisition overview
For personal use only Section 1 Acquisition overview
Slide 6: Acquisition overview
Acquisition overview For personal use only • Collins Restaurants South Pty Ltd, a wholly owned subsidiary of Collins Foods, has agreed to acquire a portfolio of 28 KFC restaurants in Australia from a Subsidiary of Yum!1 • The portfolio of 28 KFC restaurants includes two restaurants in Western Austra
Slide 7: Strategically compelling acquisition
Strategically compelling acquisition For personal use only 1 Leverages the core strength of Collins Foods in developing and operating KFC restaurants 2 Enhances the scale of Collins Foods' KFC network in Australia Provides an attractive and scale entry into the Tasmanian and South Australian markets
Slide 8: Acquisition portfolio
For personal use only Section 2 Acquisition portfolio
Slide 9: Expansion of KFC Australia network
Expansion of KFC Australia network For personal use only Commentary KFC Australia portfolio overview • Acquisition includes 28 restaurants1 across Australia: 14 restaurants in Tasmania 4 8 restaurants in South Australia NORTHERN TERRITORY 6 restaurants in Western Australia 135 • 2 of these res
Slide 10: Acquisition portfolio financial profile
Acquisition portfolio For personal use only Financial profile • For the year ended 20 February 2017, the Acquisition portfolio generated revenue of A$93.7 million and EBITDA of A$15.7 million on a pro forma basis pro forma financials have been adjusted to include the estimated trading of two resta
Slide 11: Strengthening Australian executive management team
For personal use only Section 3 Strengthening Australian executive management team
Slide 12: Strengthening Australian executive management team
Strengthening Australian executive management team For personal use only Drew O’Malley • Drew O’Malley will join Collins Foods in the newly created position of Chief Operating Chief Operating Officer, Officer, Australia from September 2017 Australia • Drew will be responsible for the daily operation
Slide 13: Financial impact of the Acquisition
For personal use only Section 4 Financial impact of the Acquisition
Slide 14: Financial impact of the Acquisition
Financial impact of the Acquisition For personal use only • The Acquisition and associated costs for the equity raising to be funded through a combination of: fully underwritten accelerated non-renounceable entitlement offer to raise c.A$44.1 million; and debt of A$69.3 million from new enlarged
Slide 15: Pro forma balance sheet
Pro forma balance sheet For personal use only Impact to balance sheet Collins Foods Netherlands Australian as at 30 Apr acquisition Acquisition Funding has been structured to ensure a prudent A$m 17 adjustments1 adjustments2 Pro forma3 balance sheet is maintained Cash and equivalents 104.8 — — 104
Slide 16: FY17 full year results summary
For personal use only Section 5 FY17 full year results summary
Slide 17: FY17: strong growth across key financial metrics
FY17: strong growth across key financial metrics For personal use only • Revenue up 10.3% to $633.6m FY17 Change vs FY16 FY17 FY17 $m Significant FY16 Underlying[1] Statutory Underlying • Statutory EBITDA up 5.0% and underlying EBITDA Items[2] Underlying up 8.9% to $81.3m Revenue 574.3 633.6 633.6 1
Slide 18: Equity offer structure
For personal use only Section 6 Equity offer structure
Slide 19: Equity raising details
Equity raising details For personal use only Offer size and • A$44.1m offer comprising a 1 for 11 pro-rata accelerated non-renounceable entitlement offer (“Entitlement structure Offer”) • Approximately 9.7 million new Collins Foods shares to be issued (“New Shares”), representing 9.1% of current Col
Slide 20: Equity raising details
Equity raising details For personal use only Retail • The Retail Entitlement Offer will be open to eligible retail shareholders in Australia and New Zealand Entitlement the Retail Entitlement Offer opens 3 July 2017 and closes 12 July 2017 Offer Joint Lead • UBS AG, Australia Branch and Wilsons ar
Slide 21: Equity raising timetable
Equity raising timetable For personal use only Date1 Event • Commencement of trading halt Monday, 26 June 2017 • Announce Acquisition and Capital Raising to market • Institutional Entitlement Offer opens • Institutional Entitlement Offer and institutional bookbuild closes (pre-market open) Tuesday,
Slide 22: Key risks and selling jurisdictions
For personal use only Section 7 Key risks and selling jurisdictions
Slide 23: Key risks
Key risks This section outlines some of the key risks associated with an investment in Collins Foods shares, together with risks relating specifically to the Acquisitions and For personal use only participation in the Offer. This is not an exhaustive list of the relevant risks and the risks set out
Slide 24: Key risks: transaction specific risks
Key risks For personal use only Transaction specific risks Risk Explanation Integration risk • The Acquisitions contemplate the successful integration of the acquired restaurants. The failure to execute a successful integration may negatively impact Collins Foods' expansion Equity raising • If share
Slide 25: Key risks: risks specific to Collins Foods
Key risks For personal use only Risks specific to Collins Foods Risk Explanation Acquisition • Collins Foods may pursue further acquisitions to complement its organic growth. There are risks associated with an acquisition strategy, related risks including that Collins Foods is unable to identify sui
Slide 26: Key risks: risks specific to Collins Foods
Key risks For personal use only Risks specific to Collins Foods Risk Explanation Termination of • There is a risk that Yum! could terminate KFC franchise arrangements with Collins Foods as a result of a breach by Collins Foods of its franchise obligations to Yum! under those arrangements (including
Slide 27: Key risks: risks specific to Collins Foods
Key risks For personal use only Risks specific to Collins Foods Risk Explanation Failure to continue • There is a risk that Collins Foods will be unable to open new restaurants in accordance with business plan and the existing and proposed to open sufficient Development Agreements, including as a re
Slide 28: Key risks: general risks
Key risks For personal use only General risks Risk Explanation General market • There are general risks associated with any investment in the share market. The price of Collins Foods shares may increase or decrease due to and share price a number of factors. Those factors include fluctuations in dom
Slide 29: Foreign selling/offer jurisdictions
Foreign selling/offer jurisdictions For personal use only International Offer Restrictions This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any per
Slide 30: Foreign selling/offer jurisdictions: New Zealand
Foreign selling/offer jurisdictions For personal use only New Zealand This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (the "FMC Act"). The New Shares are not being offered to the public within New Zeal
Slide 31: Foreign selling/offer jurisdictions: Singapore
Foreign selling/offer jurisdictions For personal use only Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other do
Slide 32: Foreign selling/offer jurisdictions: United Kingdom
Foreign selling/offer jurisdictions For personal use only United Kingdom Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85