Collins Foods Limited · ASX:CKF
Collins Foods — HY18 Earnings Presentation
27 slides from Collins Foods's earnings presentation, Nov 29, 2017
Slide 1: FY18 Interim Results
For personal use only COLLINS FOODS LIMITED FY18 INTERIM RESULTS 29 November 2017 ACN 151 420 781
Slide 2: HY18: solid revenue and earnings growth
HY18: solid revenue and earnings growth For personal use only HY17 HY18 HY18 HY18 Change • Revenue up 14.0% to $322.1m Underlying Statutory Significant Underlying [1] items • Statutory EBITDA is in line with the prior half year ($m) [2] with underlying EBITDA up 5.7% to $40.8m Revenue 282.5 322.1 32
Slide 3: HY18: significant items summary
HY18: significant items summary For personal use only Acquisition costs EBITDA EBIT NPAT ($m) • Aggregated costs for the following acquisitions: Acquisition costs: - 5 restaurants in WA, with a further 23 to be Due diligence and legal advice 0.5 0.5 0.5 acquired by year end in WA, SA and TAS Structu
Slide 4: HY18: operational snapshot
HY18: operational snapshot For personal use only • Sizzler Australia SSS decline of (1.3%) • Further 2 Sizzler restaurants closed Australia during the period, bringing store • First restaurant opened on • Top line revenue growth of 8.5% 4 November count to 14 at half year • Same Store Sales (SSS) gr
Slide 5: KFC: Continuing the growth story
For personal use only KFC Continuing the growth story Page 4
Slide 6: KFC Australia: continuing to build on growth platform
KFC Australia: continuing to build on growth platform For personal use only HY17 HY18 Change • Revenue up 8.5% to $270.8m (of which $8.3m or Underlying Statutory 3.3% contributed by 13 store acquisition in [1] NSW/Vic border completed in July 2017) Restaurants • Overall SSS growth of 1.2% dampened -
Slide 7: KFC Australia: update on progress of domestic acquisition
KFC Australia: update on progress of domestic acquisition For personal use only • Acquisition of 28* restaurants in Australia announced on 26 June 2017 4 • Completion has occurred as follows: NORTHERN TERRITORY - WA (4* restaurants) on 9 October 2017 - SA (5 restaurants) on 23 October 2017 - WA (1 r
Slide 8: KFC Australia: continuing to create innovate products
KFC Australia: continuing to create innovate products For personal use only Value offers such as 15 for $10 Wicked Wings and $10 Popcorn Chicken bucket, continue to drive transaction growth and provide value Great value Core product innovation Gravy Mashies, Zinger Mozzarella Burger, Smoky BBQ Crunc
Slide 9: KFC Australia: operations, technology and delivery
KFC Australia: operations, technology and delivery For personal use only Operations App Delivery Delivery trial with • Post-acquisitions, operational Foodora has been well focus will be on increased systematisation: aligning and received by customers with upgrading all operational minimal marketing
Slide 10: KFC Australia: continuing to build and open stores
KFC Australia: continuing to build and open stores For personal use only • HY18 capex of circa $6.8m for KFC network development: – 1 new opening in WA with a further 2 opened in QLD post half year – 6 major remodels – 8 minor remodels • HY18 core maintenance capital circa $2.6m • Expecting a furthe
Slide 11: KFC Europe: market overview
KFC Europe: market overview For personal use only • Total of 31 KFC restaurants at half year: - 15 KFC restaurants in Germany - 16 KFC restaurants in Netherlands NETHERLANDS • Built and opened 2 restaurants in Germany during the half year (Kirchheim-Teck and 16 Munster). Siegburg opened on 25 April
Slide 12: KFC Europe: HY18 proforma P&L
KFC Europe: HY18 proforma P&L For personal use only HY18 • Proforma P&L based on Collins Foods owning all proforma acquired restaurants for the half year: Europe - Total revenue of $50.3m Restaurants - half year end 31 - EBITDA margin of 9.6% Revenue ($m) 50.3 - SSS growth of 1.8% (Netherlands 2.5%,
Slide 13: KFC Europe: transformation of Germany underway, Netherlands performing to expectations
KFC Europe: transformation of Germany underway, Netherlands performing to expectations For personal use only HY18 HY18 HY18 • Revenue of $25.7m Statutory Significant Underlying • Netherlands completed on 31 August 2017(6 weeks items [1] trading) Restaurants • Same Store Sales of (0.2%) - end of half
Slide 14: KFC Europe: development summary and roadmap
KFC Europe: development summary and roadmap For personal use only • Development during the half year: - 2 new restaurants built and opened in Germany - 1 major remodel in Germany • HY18 capex of circa $4.5m • Second half development expectations are: Siegburg, Bahnhof - 2 to 3 additional restaurants
Slide 15: Taco Bell
For personal use only Taco Bell Exciting opportunity for Collins Foods to open its first restaurant in Australia Page 14
Slide 16: Taco Bell: introducing Mexican QSR to Australia
Taco Bell: introducing Mexican QSR to Australia For personal use only • Opened Annerley store on 4 November 2017 • Trading well above expectations during first 3 weeks • Very positive customer acceptance of the brand • Second restaurant to open in the first half of 2018, with a further restaurant to
Slide 17: Taco Bell: product offering and social engagement
Taco Bell: product offering and social engagement For personal use only Significant response to initial news of Taco Bell launch: 7.8k comments Engage- Food [36 other posts by Courier Mail ment on same day, with an average of 211 comments) 26k+ followers 16 members to 328 within one week Page 16
Slide 18: Sizzler
For personal use only Sizzler Asia growing & Australia performing to expectations Page 17
Slide 19: Sizzler: Asia growing and Australia performing to expectations
Sizzler: Asia growing and Australia performing to expectations For personal use only HY17 HY18 Change • Overall revenue down 23% with fewer Statutory Statutory restaurants compared to prior half year Restaurants • Half year store count of 14 reflects - end of half year (no.) [1] 21 14 7↓ 2 closures
Slide 20: Sizzler Asia continues to grow
Sizzler Asia continues to grow For personal use only • Sizzler Asia continues to expand its footprint • Thailand opened 2 restaurants and China opened 1 restaurant • Royalty revenue down 3% vs last year due to softer sales in China and the significant impact on the Thailand sales after the King’s pa
Slide 21: Financial overview
For personal use only Financial overview Page 20
Slide 22: Continued growth in net operating cash flow
Continued growth in net operating cash flow For personal use only • Net operating cash flow of $27.2m up $0.9m on ($m) HY17 HY18 prior half year Net operating cash flows before interest and tax 38.3 40.0 • Capex cash spend of $17.1m: Net interest paid (3.9) (3.6) - new store and remodels circa $11.8
Slide 23: Net leverage ratio is 1.55 after Netherlands & WA acquisitions
Net leverage ratio is 1.55 after Netherlands & WA acquisitions For personal use only • Net leverage ratio at 1.55 Net debt / Net leverage ratio [1] 160 151.0 2.75 • Net leverage ratio covenant maximum 133.1 of 2.75 2.50 Net debt up $17.9m to $151.0m, driven Net leverage ratio 120 112.5 • 2.25 by acq
Slide 24: Balance sheet
Balance sheet For personal use only ($m) 30-Apr-17 15-Oct-17 • Cash balance down $44.2m to $60.6m following completion of Netherlands and Cash and equivalents 104.8 60.6 part of Australian acquisition. Total current assets 114.1 75.3 • Property, plant and equipment up Property, plant and equipment 1
Slide 25: Priorities for FY18
Priorities for FY18 For personal use only • Growing the core KFC Australian business through: - transaction led same store sales growth, with particular focus on WA - position delivery for further roll-out - building a further 3 restaurants - disciplined focus on operational improvement and margins
Slide 26: Questions
For personal use only Page 25 Questions
Slide 27: 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