Collins Foods Limited · ASX:CKF
Collins Foods — HY21 Earnings Presentation
28 slides from Collins Foods's earnings presentation, Dec 1, 2020
Slide 1: Collins Foods Limited HY21 Results
COLLINS FOODS LIMITED HY21 RESULTS 4 May 2020 – 18 October 2020 (24 weeks) 1 December 2020 ACN 151 420781
Slide 2: Strong earnings growth delivered again despite COVID-19 turbulence
Strong earnings growth delivered again despite COVID-19 turbulence 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 ($m) KFC Australia re
Slide 3: Core foundational strengths go beyond COVID-19 resilience
Core foundational strengths go beyond COVID-19 resilience 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 impacted • E-commerce
Slide 4: KFC Australia
KFC AUSTRALIA Page 3
Slide 5: Sales and margins demonstrate continuing power of KFC Australia
Sales and margins demonstrate continuing power of KFC Australia 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 (SSS) growth of 12.4% Res
Slide 6: Stellar marketing and consistent operations underpin core brand strength
Stellar marketing and consistent operations underpin core brand strength... • 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 foodservice spend dec
Slide 7: Acceleration of Delivery and Digital initiatives support future growth
… while acceleration of Delivery and Digital initiatives support future growth 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: • Delivery: Sales have more th
Slide 8: On track to open 9 to 12 new KFC restaurants in FY21
On track to open 9 to 12 new KFC restaurants in FY21 • 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 $3.2m - being used to unlock capacity growth at restaurant level •
Slide 9: KFC Europe
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Slide 10: Drive-thru growth helping to reduce negative impact of COVID-19 in KFC Europe
Drive-thru growth helping to reduce negative impact of COVID-19 in KFC Europe HY20 HY21 HY21 HY21 HY21 • Overall Europe SSS decline of 4.2%, due to the (1) Change ongoing impact of COVID-19: Statutory Statutory Non trading Underlying Statutory ($m) (Pre AASB 16) (Pre AASB 16) items (Pre AASB 16) (Po
Slide 11: Despite COVID-19, KFC Europe remains a significant opportunity for growth
Despite COVID-19, KFC Europe remains a significant opportunity for growth • 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 • Significant shift towards
Slide 12: Development efforts continue in Europe, focused on Netherlands
Development efforts continue in Europe, focused on Netherlands • 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 FY21 • New restaurant
Slide 13: Acquisition opportunities emerging in Netherlands to support organic growth
Acquisition opportunities emerging in Netherlands to support organic growth • 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 and likely to close in
Slide 14: Taco Bell
TACO BELL Page 13
Slide 15: High awareness and consumer enthusiasm for the brand continues
High awareness and consumer enthusiasm for the brand continues • 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 menu mix • Very strong
Slide 16: Solid progress on refining business model, focusing on trial and ops efficiencies
Solid progress on refining business model, focusing on trial and ops efficiencies • 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 partnership in place since
Slide 17: Growing to scale within the next 3-5 years
Growing to scale within the next 3-5 years • 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 for new build capex b
Slide 18: Sizzler
SIZZLER Page 17
Slide 19: Sizzler Australia business has now closed
Significantly impacted by COVID-19, Sizzler Australia business has now closed • 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) (Pre AASB 16) items (P
Slide 20: Financial overview
Financial overview Page 19
Slide 21: Strong growth in operating cash flow, up 70.0% to $57.3m
Strong growth in operating cash flow, up 70.0% to $57.3m • 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 interest and tax 49.0 7
Slide 22: Balance sheet
Balance sheet 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, plant and equipment d
Slide 23: Substantial funding capacity and covenant headroom to support growth initiatives
Substantial funding capacity and covenant headroom to support growth initiatives 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 facility of circa $203.2
Slide 24: Key second half of FY21 strategic priorities underpin further growth
Key second half of FY21 strategic priorities underpin further growth KFC Australia KFC Europe Taco Bell Australia ✓ Accelerate customer-facing and ✓ Continue to build on sales momentum in ✓ Drive awareness and trial via bold operational digital initiatives to support Germany; strengthen Value in mar
Slide 25: Questions
Questions Page 24
Slide 26: Appendix
Appendix Page 25
Slide 27: HY21 non trading items summary
HY21 non trading items summary EBITDA EBIT NPAT ($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) (0.5) Total non trad
Slide 28: Disclaimer
Disclaimer 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. Circumstances may change and