Embed Size (px)
Citation preview
9 October 2013
COLLINS FOODS LIMITED – RBS MORGANS ANNUAL QUEENSLAND CONFERENCE
Collins Foods Limited (ASX:CKF) refers to the RBS Morgans Annual Queensland Conference.
The Company will be a participant at this Conference and attached, is a copy of the presentation to be presented by Kevin Perkins, Managing Director & CEO on 9 October 2013.
ENDS
For further information, please contact:
Kevin Perkins Ronn Bechler – Investor Relations Managing Director & CEO Market Eye P: +61-7 3352 0800 P: +61-400 009 774 Graham Maxwell COO & Group CFO P: +61-7 3352 0800
For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 0
COLLINS FOODS LIMITED Annual Queensland Conference
9 October 2013
For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 1
Today’s agenda
SECTION 1 – Collins Foods Limited
SECTION 2 – KFC returns to growth
SECTION 3 – Sizzler in transition
SECTION 4 - Financial information
For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 2
COLLINS FOODS LIMITED Kevin Perkins, Managing Director & CEO
For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 3
Our history and background
For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 4
KFC returns to growth
For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 5
QSR Industry at a glance
Key statistics snapshot
• Revenue $12.6bn made up of approximately 13,000 businesses
Market share – major players
Doctor’s Associates Inc. (Industry brand names - Subway)
8.1% 10.0% 10.8% 18.2% 52.9%
Other (includes Quick Service Restaurants, Domino’s Pizza Enterprises Limited, Eagle Boys Dial-a-Pizza Pty Limited and Boost Juice)
McDonald’s Australia Holdings Limited (Industry brand names – McDonald’s)
Yum! Restaurants Australia Pty Limited (Industry brand names - KFC and Pizza Hut)
Competitive Foods Australia Pty Ltd (Industry brand names - Hungry Jack’s)
For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 6
KFC top-line returns to growth
• Revenue up 5.8% to $318.2m
– SSSG of 4.2% (FY12: down 1.8%)
– free-standing and service centre locations driving growth
– new restaurants performing well
– food courts continue to be challenging
• EBITDA down 4.9%* to $44.7m
– lower gross margin from input pressures and promotional discounting
– one-off labour savings in prior year
– energy cost increase in line with expectations, primarily from carbon tax
– labour productivity and energy reduction initiatives partly offsetting cost pressures
$million FY13 FY12* Change Restaurants: – average – period end
120.9 122.0
119.5 121.0
1.4 1.0
Revenue 318.2 300.8 5.8%
% SSSG 4.2% (1.8)%
EBITDA 44.7 47.0 4.9%
% margin 14.0% 15.6% 160bps
EBIT 33.3 35.7 6.7%
% margin 10.5% 11.9% 140bps
* FY12 numbers are pro forma measures, which differ from statutory presentation to reflect the full year impact of the operating and capital structure of the Group that was established upon the IPO and capital reconstruction together with the elimination of IPO costs and related adjustments which are not expected to recur in the future. 290
295
300
305
310
315
320
FY2011 FY2012 FY2013
Sale
s (M
illio
ns)
Financial Year
KFC Sales
*FY2012 & FY2011 - Proforma Results
For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 7
KFC promotions driving sales…
• WOW dinners – 9 for $9.95 value offer, keeps showing increase in demand versus prior year
• Successful Spring Campaign with a new variant that mixes 2 ideas loved by Australians, KFC Zinger flavour and pies
• Breakfast trial including coffee, introduced in several stores in May/June, keeps strengthening its product demand
• ‘Goodification’ continuing with emphasis on preparation in-store, ingredients and providence
• Continued focus on increasing customer transactions in all store types through the Value Layer
…through targeted ‘value’ deals and new innovative menu items F
or p
erso
nal u
se o
nly
COLLINS FOODS LIMITED 8
KFC Capex focused on growth
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
0.0
5.0
10.0
15.0
20.0
25.0
FY 12 FY 13 FY14 Budget
KFC Capex and Depreciation
Depreciaton Maint / Systems Refurbishment / Rebuild / Relocate New Units New Unit Builds
New
Sto
re O
peni
ngs
$ m
illio
ns
For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 9
New KFC restaurants
WSA – weekly store average
North Lakes
Opened 12 August 2013
Capital spend $1,264k Projected WSA $51.6k Actual WSA $56k
Opened 11 September 2013
Capital spend $1,169.5k Projected WSA $46.8k Actual WSA $58.5k (2 week average only)
Wurtulla
Opened 12 September 2013
Capital spend $1,222k Projected WSA $45.5k Actual WSA $70.5k (2 week average only)
Chinchilla
For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 10
Major reimage and rebuild
WSA – weekly store average
Maryborough (REIMAGE)
Completed 21 June 2013
Capital spend $470k Projected WSA $55.7k Actual WSA $58.3k
Re-opened 19 June 2013
Capital spend $437k Projected WSA $69.9k Actual WSA $72.5k
Kallangur (REIMAGE)
Re-opened 24 July 2013
Capital spend $1,485k Projected WSA $73.4k Actual WSA $98.3k
Gympie (REBUILD)
For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 11
Sizzler in transition
For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 12
Sizzler performance reflects transition being undertaken
• Overall revenue flat at $105.6m with Australian SSSG down 2.4%
− casual dining sector impacted more than QSR in current economic climate
− price sensitivity and ‘relevance’ continue to hamper sales
− restaurants outside of Brisbane performing better
• EBITDA down $0.6m to $10.1m
− margin tightened 60bps
→ limited price increases unable to fully offset input cost pressures
→ promotional discounting squeezing margins
→ labour productivity and energy reduction initiatives offsetting labour and utilities cost pressures
* FY12 numbers are pro forma measures, which differ from statutory presentation to reflect the full year impact of the operating and capital structure of the Group that was established upon the IPO and capital reconstruction together with the elimination of IPO costs and related adjustments which are not expected to recur in the future. ** Australia only
$million FY13 FY12* Change Restaurants: – average** – period end**
27.0 27.0
26.4 27.0
0.6
–
Revenue 105.6 105.8 0.2%
% SSSG** (2.4%) (4.0%)
EBITDA 10.1 10.7 5.6%
% margin 9.6% 10.2% 60bps
EBIT 6.0 7.0 14.3%
% margin 5.7% 6.6% 90bps
101
102
103
104
105
106
FY2011 FY2012 FY2013
Sale
s (M
illio
ns)
Financial Year
Sizzler Sales
For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 13
Repositioning Sizzler for growth
• Repositioning the Sizzler menu to offer ‘More Choice/Better Value’
− detailed menu development
− lunch menu implemented and dinner menu currently being tested
• Introducing more relevant and frequent food news through a stronger marketing calendar
• Using more effective promotional tactics to drive transactions during softer periods of trade specifically early week
• Leveraging and building on the ‘Now You’re Talking’ campaign and ‘The Legendary Salad Bar’
• Introducing a series of initiatives to improve in-store customer experience – from enhanced hospitality through to more physical aspects such as plateware, tableware and uniforms
• Continuing to review all areas of the business to identify ways to reduce costs
For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 14
Sizzler strategic review at core of transformation
• 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 economics
• Introduce a more contemporary store design that reflects next generation of Sizzler
• Reframe brand positioning to be more relevant to changing consumer landscape
• Integrate brand communication to effectively express brand proposition
• First new restaurant likely in FY15 For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 15
Financial information
For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 16
Consolidated income statement
2013 $000
$2012 $000
Revenue 423,885 405,970
Cost of sales (201,711) (192,587)
Gross profit 222,174 213,383
Selling, marketing and royalty expenses (89,514) (83,814)
Occupancy expenses (33,327) (31,378)
Other expenses and income (69,556) (65,436)
Profit from continuing operations before finance income, finance costs and income tax (EBIT) 29,777 32,755
Finance income and costs (6,182) (25,663)
Share of net profit of associate accounted for using the equity method 92 87
Profit from continuing operations before income tax 23,687 7,179
Income tax (expense)/benefit (7,319) 4,250
Profit from continuing operations 16,368 11,429
Net profit attributable to members of Collins Foods Limited 16,368 11,429
For the reporting period ended 28 April 2013
For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 17
Strong balance sheet
• Cash up $4.4m to $23.6m
– strong cash flow generation
• Property, plant and equipment up $1.6m to $59.1m
– new restaurants and rebuilds partially offset by depreciation
• Undrawn debt facilities of $40m
• Remain comfortably within debt covenants
– net leverage ratio of 1.72x (maximum 2.75x)
– lease adjusted cover ratio of 2.42x (minimum 1.75x)
• Successfully refinanced debt on improved terms in July 2013
Balance sheet
28 April 2013 $m
29 April 2012 $m
Cash and equivalents 23.6 19.2
Total current assets 31.8 25.3
Property, plant and equipment 59.1 57.5
Total non-current assets 309.0 308.9
Total assets 340.8 334.3
Debt* 104.7 104.5
Total current liabilities 48.5 48.9
Total non-current liabilities 106.8 106.1
Total liabilities 155.3 155.0
NET ASSETS 185.5 179.3
* net of capitalised costs $0.3m (FY12 $0.5m)
For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 18
Strong, growing cashflows
• Operating cashflow up 15.7% to $41.2m – interest down $9.8m
→ rate and debt down on prior year – tax paid up $3.1m (tax losses utilised from
prior period) • Net investing cash outflows down $0.4m to
$18.0m – restaurant rollout and refurbishment
program continues • Cash outflow from financing down to $18.9m
– FY13 includes payment of maiden dividend (FY12) and interim FY13 dividend
– prior period reflects impact of IPO • Strong cashflows enabled FY13 final fully
franked dividend of 5.5 cps (FY12: 6.5 cps) and total FY13 fully franked dividends of 9.5 cps (FY12: 6.5 cps)
$million FY13 FY12
Net operating cash flows before interest and tax 50.1 51.2
Net interest paid (6.0) (15.8)
Income tax paid (2.9) 0.2
Net operating cash flows 41.2 35.6
Capex* (17.9) (18.8)
Other (0.1) 0.4
Net cash flow from investing (18.0) (18.4)
Net cash flow from financing (18.9) (41.7)
Net cash flow 4.3 (24.5)
* Capex reflects actual Capex spent, excludes accruals at period end
For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 19
FY13 financial results – in line with expectations
• 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 of 14.4 cents and down 11.1% vs FY12 pro forma(i) EPS of 19.8 cents
• Operating cashflow up 15.7% to $41.2m
• Strong balance sheet with net debt down $4.2m to $81.1m
• Remain comfortably within covenants with $40m of undrawn debt facilities
• Final fully franked dividend of 5.5 cps bringing total FY13 dividend to 9.5 cps fully franked… 54% payout ratio (FY12: 6.5 cps fully franked)
(i) Pro forma measures, which are unaudited, differ from statutory presentation to reflect the full year impact of the operating and capital structure of the Group that was established upon the IPO and capital reconstruction together with the elimination of IPO costs and related adjustments which are not expected to recur in the future.
… with underlying business performance returning to growth For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 20
Year to date and FY14 Outlook
• FY14 EBITDA and NPAT growth still expected
• Improving return on assets
• Capex spend of $15.0m - $17.5m … on five-seven new KFC restaurants and 12 KFC refurbishments; and approximately $8.0m on KFC and Sizzler maintenance and support centre (primarily IT related) capex
• Strong cashflows underpin capex spend and reduced net debt
• Expect to maintain dividend policy
• Expect to release half year results on 28 November 2013
• Gympie rebuild resulted in a sales record for the first seven days
• Three new KFC stores opened in July and September 2013
• On target to open one more new KFC store before December 2013 with three more to open late in the fourth quarter
• KFC same store sales performance flat
• KFC Food Court stores performance showing improvement due to operational initiatives undertaken
• Sizzler same store sales performance softer than expected F
or p
erso
nal u
se o
nly
COLLINS FOODS LIMITED 21
Questions
For
per
sona
l use
onl
y
COLLINS FOODS LIMITED 22
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 the forward looking statements may become outdated as a result so you are cautioned not to place undue reliance on any forward looking statement.
All financial amounts contained in this presentation are expressed in Australian currency and rounded to the nearest $0.1 million unless otherwise stated.
Any discrepancies between totals, sums of components and differences in tables and percentage variances calculated contained in this presentation are due to rounding.
For
per
sona
l use
onl
y
