Collins Foods Limited · ASX:CKF
Collins Foods — FY2013 Earnings Presentation
30 slides from Collins Foods's earnings presentation, Jun 25, 2013
Slide 1: Results for the financial year ended 28 April 2013
For personal use only Results for the financial year ended 28 April 2013 25 June 2013 COLLINS FOODS LIMITED 0
Slide 2: Kevin Perkins and Graham Maxwell
For personal use only Kevin Perkins Chief Executive Officer Graham Maxwell Chief Operating Officer & Group CFO COLLINS FOODS LIMITED 1
Slide 3: Today's agenda
Today’s agenda For personal use only SECTION 1 – FY13 IN REVIEW SECTION 2 – FINANCIAL PERFORMANCE IN LINE WITH EXPECTATIONS SECTION 3 – KFC RETURNS TO GROWTH SECTION 4 – SIZZLER IN TRANSITION SECTION 5 – POSITIVE OUTLOOK COLLINS FOODS LIMITED 2
Slide 4: FY13 financial results – in line with expectations
FY13 financial results – in line with expectations For personal use only • Revenue up 4.3%(i) to $423.9m • EBITDA down 7.6%(i) to $47.2m • NPAT of $16.4m in line with expectations vs FY12 statutory NPAT of $11.4m and FY12 pro forma(i) NPAT of $18.4m • EPS of 17.6 cents up 22.2% vs FY12 statutory EPS
Slide 5: FY13 operational snapshot
FY13 operational snapshot For personal use only • Continued improvement in trading – KFC growing; Sizzler flat – KFC overall sales up with SSSG of 4.2% – Sizzler overall sales flat with Australian SSSG of (2.4%) • Ongoing focus on brand building and marketing campaigns – positive response to KFC “Su
Slide 6: Financial performance in line with expectations
For personal use only FINANCIAL PERFORMANCE IN LINE WITH EXPECTATIONS COLLINS FOODS LIMITED 5
Slide 7: Return of top line growth
Return of top line growth • Revenue up 4.3%(i) to $423.9m For personal use only Total revenue 430 • KFC revenue up 5.8% to $318.2m 420 – SSSG of 4.2% Revenue $m – 2 new restaurants, 1 closure 410 – strong summer campaign, targeted 400 value offers and new innovative products 390 FY10 FY11 FY12 FY13
Slide 8: EBITDA margins stabilising
EBITDA margins stabilising For personal use only • Ability to pass on increased input costs through pricing increases limited by EBITDA margin challenging trading environment 14.0% • Pipeline of new innovative products has 12.0% largely offset targeted “value” driven 10.0% promotions 8.0% • Producti
Slide 9: Strong balance sheet
Strong balance sheet For personal use only Balance sheet 28 April 2013 29 April 2012 • Cash up $4.4m to $23.6m $m $m – strong cash flow generation Cash and equivalents 23.6 19.2 • Property, plant and equipment up $1.6m Total current assets 31.8 25.3 to $59.1m Property, plant and 59.1 57.5 – new rest
Slide 10: Strong, growing cashflows
Strong, growing cashflows For personal use only $million FY13 FY12 • Operating cashflow up 15.7% to $41.2m – interest down $9.8m Net operating cash flows before 50.1 51.2 interest and tax rate and debt down on prior year Net interest paid (6.0) (15.8) – tax paid up $3.1m (tax losses utilised from
Slide 11: KFC returns to growth
For personal use only KFC RETURNS TO GROWTH COLLINS FOODS LIMITED 10
Slide 12: KFC sales performance continues to improve
KFC sales performance continues to improve • For personal use only $million FY13 FY12* Change Revenue up 5.8% to $318.2m Restaurants: – SSSG of 4.2% (FY12: down 1.8%) – average 120.9 119.5 1.4 – free‐standing and service centre – period end 122.0 121.0 1.0 locations driving growth Revenue 318.2
Slide 13: KFC capex focused on growth
KFC capex focused on growth For personal use only FY13 Total • Total capex of $15.8m, up $1.2m on FY12 Growth capex = $11.6m Maintenance = $3.1m − $2.4m: 2 new restaurants IT = $1.1m − $4.3m: 2 rebuilds/relocates and existing site in Gladstone purchased − $4.9m: 8 major refurbishments in New restaur
Slide 14: New restaurants
New restaurants For personal use only Springfield Financial snapshot Capital spend $1,337,700 WSA $68,200 Projected WSA $44,200 WSA – weekly store average COLLINS FOODS LIMITED 13
Slide 15: Major reimage and relocation
Major reimage and relocation For personal use only Atherton Nathan Plaza Financial snapshot Financial snapshot Capital spend $330,400 Capital spend $707,000 WSA $35,100 WSA $27,400 Projected WSA $34,300 Projected WSA $22,100 WSA – weekly store average COLLINS FOODS LIMITED 14
Slide 16: Successful marketing campaigns...
Successful marketing campaigns... For personal use only • “Goodification” campaign featuring the switch to Australian grown canola oils was positively received • “Summer Cricket” campaign featuring Madden brothers was successful in re‐engaging customers with the brand • Value deals continue to reson
Slide 17: KFC promotions driving sales…
KFC promotions driving sales… For personal use only • Targeted high end value offers (eg Family Dinner Box and WOW Dinner) resonating well with customers • Successful Winter campaign with a new chicken on the bone variant (Sweet Sesame Chicken) running for 8 weeks • Breakfast trial including coffee
Slide 18: Operating efficiencies driving improved margins
Operating efficiencies driving improved margins For personal use only • Cost pressures from rising input costs have impacted margins given inability to pass on full cost increases to customers • We continue to seek efficiencies that limit extent that increased costs need to be passed on to customers
Slide 19: Sizzler in transition
For personal use only SIZZLER IN TRANSITION SIZZLER COLLINS FOODS LIMITED 18
Slide 20: Sizzler performance flat
Sizzler performance flat For personal use only $million FY13 FY12* Change • Overall revenue flat at $105.6m with Australian Restaurants: SSSG down 2.4% – average** 27.0 26.4 0.6 − casual dining sector impacted more than QSR – period end** 27.0 27.0 – in current economic climate Revenue 105.6 105.8
Slide 21: Repositioning Sizzler for growth
Repositioning Sizzler for growth For personal use only • Repositioning the Sizzler menu to offer “More Choice/Better Value” − detailed menu development and costing nearing completion − lunch and dinner menu currently being tested • Introducing more relevant and frequent food news through a stronger
Slide 22: Sizzler strategic review at core of transformation
Sizzler strategic review at core of transformation For personal use only • Review of Sizzler format, layout and design for a cost efficient and ‘investable’ model − design and layout of a smaller footprint − ideal seating capacity and flow − salad bar format layout and design − improved store econom
Slide 23: Positive outlook
For personal use only POSITIVE OUTLOOK COLLINS FOODS LIMITED 22
Slide 24: QSR/casual dining landscape
QSR/casual dining landscape For personal use only • Rising costs present an ongoing challenge … building economies of scale and maximising cost efficiencies is key • Retail environment remains challenging • Growth opportunities are prevalent in under developed territories/growth corridors • Focus on
Slide 25: Qld economic outlook
Qld economic outlook For personal use only • Cost of living pressures persist with QLD retail indicators higher energy and insurance costs Unemployment 5.8% Up for the month of May and above national • Impact from state government average of 5.5% cutbacks is peaking although may soon Inflation 2.1
Slide 26: FY14 outlook
FY14 outlook For personal use only • Low single digit same store sales growth in KFC with 5‐7 new restaurants • Sizzler growth expected to remain flat, with a stronger second half • EBITDA and NPAT growth as margins have now stabilised – ongoing focus on productivity and efficiency measures without
Slide 27: Medium term outlook
Medium term outlook For personal use only • Where financially viable look to expand Sizzler Thailand KFC scale in Australia • Continue to explore different formats to increase our Brand’s reach/distribution • Investigate avenues to expand Sizzler China footprint Sizzler China Sizzler Thailand COLLIN
Slide 28: In summary …
In summary … For personal use only • FY13 financial performance driven by improved KFC top line • Strong balance sheet • Total FY13 fully franked dividends of 9.5 cps • Continued focus on growing and rebuilding core businesses – productivity and efficiency improvements to combat cost pressures – com
Slide 29: Thank you & questions
For personal use only THANK YOU & QUESTIONS COLLINS FOODS LIMITED 28
Slide 30: 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. Circum