Collins Foods Limited · ASX:CKF
Collins Foods — HY23 Earnings Presentation
35 slides from Collins Foods's earnings presentation, Nov 29, 2022
Slide 1: Collins Foods Limited HY23 Results
Collins Foods Limited HY23 RESULTS 2 May 2022 to 16 OCTOBER 2022 29 November 2022 Authorised for release by the Board ACN 151 420781
Slide 2: Sales momentum maintained amidst challenging landscape
Sales momentum maintained amidst challenging landscape • Revenue up 15.0% to $614.3m with growth across all business HY22 HY23 HY23 Underlying Underlying* Change Underlying units ($m) POST AASB 16 POST AASB 16 PRE AASB 16 • Statutory NPAT of $11.0m (HY22: $26.4m) includes $11.9 million after tax non
Slide 3: KFC same store sales growth the highlight in HY23
Kfc same store sales growth the HIGHLIGHT in HY23 KFC KFC Taco Bell Australia Europe Australia • HY23 SSS growth of +5.1% • HY23 SSS growth of +10.4% reflecting • HY23 SSS decline of –7.8% as brand predominantly driven by growth in combination of increased ticket and works through transition of new
Slide 4: Kentucky Fried Chicken Australia
Kentucky Fried Chicken Australia
Slide 5: Solid top-line growth mitigates margin headwinds
Solid top-line growth mitigates margin headwinds HY22 HY23 HY23 • Revenue up 10.6% to $479.6m Change Underlying Underlying* Underlying • SSS growth of +5.1% reflects ticket increase from combined POST AASB 16 POST AASB 16 PRE AASB 16 impacts of pricing and shifts toward delivery and dinner Restauran
Slide 6: KFC brand continues to be well positioned
KFC brand continues to be well positioned • KFC retains leadership position amongst QSR brands in critical Value and Quality metrics*, with consideration continuing to improve • Brand strength and heritage considered critical attributes for weathering periods of economic uncertainty and low consumer
Slide 7: E-commerce sales have grown to >22% of total sales
E-commerce sales have grown to >22% of total sales • Ongoing growth in digital and delivery, continuing the strategy of meeting customers where they are, with e- commerce (delivery, web, app) accounting for 22.2% of total sales in HY23, up from 16.3% prior year ‒ delivery sales (including Delivery-a
Slide 8: Innovation a key feature in development initiatives
INNOVATION a key feature in DEVELOPMENT initiatives • 2 new restaurants opened in HY23 and 1 restaurant acquired, 2 additional openings so far in H2 Queen street mall, QLD • On track to build 9 to 12 restaurants in FY23, ahead of development agreement requirement of 7 to 8 restaurants per annum • Br
Slide 9: Kentucky Fried Chicken Europe
Kentucky Fried Chicken Europe
Slide 10: Impressive same store sales growth in KFC Europe
Impressive same store sales growth in kfc europe HY22 HY23 HY23 • Revenue up 32.0% to $111.8m underpinned by strong SSS growth Change Underlying Underlying* Underlying and benefit of acquisitions made during FY22 POST AASB 16 POST AASB 16 PRE AASB 16 • Significant further growth in KFC Europe with S
Slide 11: Focus on core products and everyday value is resonating with consumers
Focus on core products and everyday value is resonating with consumers • Sales in both European markets now considerably over pre-COVID levels: +15.9%* in Netherlands, +24.7%* in Germany • In Netherlands, shift from disruptive value to everyday value, menu mix shifts, re-bundling, and pricing have u
Slide 12: Pipeline continues to expand as Netherlands grows to scale
pipeline continues to expand as netherlands grows to scale • Netherlands development potential being unlocked under CFA New Drive-thru opening ‒ 2 KFC restaurants opened by sub-franchisees in HY23, 3 new Collins Foods KFC restaurants to open in December ‒ on track to achieve total market growth targ
Slide 13: Benefits from Netherlands CFA now starting to show
Benefits from netherlands cfa now starting to show Successful start to CFA underpins Collins Foods' position as a KFC growth partner • Successful integration of Yum! and Collins Foods' support teams achieved under CFL leadership, enhancing local capability and a unified culture • Franchisee engageme
Slide 14: Taco Bell Australia
Taco bell Australia
Slide 15: Revenue growth driven by increased restaurant count
Revenue growth driven by increased Restaurant count HY22 HY23 HY23 • Revenue up 42.6% to $21.1m reflecting increase in restaurant Change Underlying Underlying* Underlying numbers from 17 to 24 POST AASB 16 POST AASB 16 PRE AASB 16 • SSS decline of –7.8% Restaurants • EBITDA profitability (post AASB1
Slide 16: Value-oriented marketing and delivery expansion expected to drive H2 sales
focus on value-oriented marketing, combined with delivery expansion, expected to drive sales in H2 • Negative same store sales in H1 attributable to ‒ economic uncertainty shifting consumers back towards traditional brands ‒ increasingly competitive QSR landscape ‒ marketing transition with new agen
Slide 17: New restaurant rollout paused to regain sales traction
New restaurant rollout paused to regain sales traction • 4 drive-thru restaurants opened in HY23 ‒ Hoppers Crossing, VIC on 17 May 2022 ‒ Ellenbrook, WA on 19 May 2022 ‒ Narre Warren, VIC on 16 June 2022 ‒ Canning Vale, WA on 15 July 2022 Hoppers crossing, VIC • 24 total restaurants: 13 in QLD, 8 in
Slide 18: Sizzler Asia
COLLINS FooDS UNITED
Slide 19: Positive recovery in Sizzler Asia
Positive recovery in Sizzler Asia HY22 HY23 # # Change Statutory Statutory Revenue ($m) 0.9 1.8 100.0% EBITDA ($m) 0.4 1.2 200.0% JAPAN % margin 45.7% 66.7% 2,100 bps 10 EBIT ($m) 0.2 0.9 350.0% % margin 16.7% 50.0% 3,330 bps # There is no impact from AASB 16 • Royalty revenue of $1.8m up
Slide 20: Financial Performance
Financial Performance
Slide 21: Cash flow supports growth initiatives and dividends
Cash flow supports growth initiatives and dividends HY22 Hy23 HY23 • Net operating cash flow (post AASB 16) of $69.1m, supports business investment and interim POST AASB 16 POST AASB 16 PRE AASB 16 ($m) dividend Net operating cash flow before interest and tax 89.8 85.4 59.1 • Net operating cash flow
Slide 22: Balance sheet reflects growing restaurant footprint
Balance sheet reflects growing restaurant footprint • Cash balance of $93.4m, down $3.8m from 1 MAY 2022 16 Oct 2022 16 Oct 2022 prior year end ($m) POST AASB 16 POST AASB 16 PRE AASB 16 • Property, plant and equipment of $211.4m Cash and equivalents 97.2 93.4 93.4 reflects new restaurant builds and
Slide 23: Significant funding capacity and covenant headroom supports growth initiatives
Significant Funding capacity and covenant headroom supports growth initiatives • Net leverage ratio* (pre AASB 16) of 1.31x Net debt ($m)/ net leverage ratio* ‒ significant headroom to covenant maximum of 2.75x • Net debt of $191.1m(1) $203.2 ‒ Increased by $16.2m since FY22 due in part to acquisiti
Slide 24: Outlook
OUTLOOK
Slide 25: Strong KFC top-line underpins growth plans, Taco Bell rollout pause
Strong kfc top-line underpins growth plans, with taco bell rollout pause to regain sales traction KFC KFC Taco Bell Australia Europe Australia • First 6 weeks H2 FY23 SSS growth of +5.6% • First 6 weeks H2 FY23 SSS growth of +14.8% • First 6 weeks H2 FY23 SSS decline of –8.5%, ‒ Netherlands +15.1% t
Slide 26: Collins Foods' long-term success recipe
COLLINS FOODS' LONG-TERM SUCCESS RECIPE Collins foods' strengths are well-suited to navigate a turbulent environment • A healthy balance sheet • World-class, scalable brands • Specialisation in the resilient, value-centric QSR sector • Operational excellence focus • Management team capability • Prov
Slide 27: Collins Foods Limited
COLLINS FOODS LIMITED
Slide 28: Appendix
COLLINS FOODS LIMITED APPENDIX q =
Slide 29: Making a positive impact
Making a positive impact Our people, our communities and our planet deserve our wholehearted commitment. We want our growth to be sustainable Currently, the three primary goals remain unchanged. Significant progress to highlight during HY23 • Installation of solar panel systems to all available KFC
Slide 30: Group results summary
Group results summary Post AASB 16 Pre AASB 16 HY23 HY23 HY22 HY23 HY23 HY22 HY23 HY23 Non-trading Change Non-trading Change Underlying Statutory Underlying Underlying Statutory Underlying items items ($m) POST AASB 16 POST AASB 16 POST AASB 16 POST AASB 16 PRE AASB 16 PRE AASB 16 PRE AASB 16 PRE AA
Slide 31: KFC Australia results summary - pre AASB 16
KFC Australia results summary - pre AASB 16 HY23 HY22 Statutory & Change Underlying Underlying PRE AASB 16 PRE AASB 16 Restaurants Half year end (no.) 254 264 10 Revenue ($m) 433.7 479.6 10.6% % SSS 0.1% 5.1% EBITDA ($m) 77.2 75.6 (2.1%) % margin 17.8% 15.8% (200) bps EBIT ($m) 62.6 60.2 (3.
Slide 32: KFC Europe results summary
KFC Europe results summary Post aasb 16 Pre aasb 16 HY23 HY23 HY22 HY23 HY23 HY22 HY23 HY23 Non-trading Change Non-trading Change Underlying Statutory Underlying Underlying Statutory Underlying items items POST AASB 16 POST AASB 16 POST AASB 16 POST AASB 16 PRE AASB 16 PRE AASB 16 PRE AASB 16 PRE AA
Slide 33: Taco Bell results summary
Taco Bell results summary Post aasb 16 Pre aasb 16 HY23 HY23 HY22 HY23 HY23 HY22 HY23 HY23 Non-trading Change Non-trading Change Underlying Statutory Underlying Underlying Statutory Underlying items items POST AASB 16 POST AASB 16 POST AASB 16 POST AASB 16 PRE AASB 16 PRE AASB 16 PRE AASB 16 PRE AAS
Slide 34: Non trading items summary
non trading items summary Post aasb 16 Pre aasb 16 EBITDA EBIT NPAT EBITDA EBIT NPAT ($m) POST AASB 16 POST AASB 16 POST AASB 16 PRE AASB 16 PRE AASB 16 PRE AASB 16 Restaurant impairments – taco bell 0.1 16.9 11.9 0.1 7.9 5.6 Acquisition and operational integration costs 1.9 1.9 1.9 1.9 1.9 1.9 Tota
Slide 35: For further information please contact
For further information please contact CORPORATE Drew O’Malley Managing Director & CEO P: +61-7 3352 0800 INVESTORS Ronn Bechler Automic Markets P: +61-400 009 774 E: ronn.bechler@automicgroup.com.au MEDIA Tristan Everett Automic Markets P: +61-403 789 096 E: tristan.everett@automicgroup.com.au Disc