COLLINS FOODS LIMITED Annual Queensland Conference

Transcription

1 COLLINS FOODS LIMITED Annual Queensland Conference 9 October 2013 COLLINS FOODS LIMITED 0

2 Today s agenda SECTION 1 Collins Foods Limited SECTION 2 KFC returns to growth SECTION 3 Sizzler in transition SECTION 4 - Financial information COLLINS FOODS LIMITED 1

3 COLLINS FOODS LIMITED Kevin Perkins, Managing Director & CEO COLLINS FOODS LIMITED 2

4 Our history and background COLLINS FOODS LIMITED 3

5 KFC returns to growth COLLINS FOODS LIMITED 4

6 QSR Industry at a glance Key statistics snapshot Revenue $12.6bn made up of approximately 13,000 businesses Market share major players Competitive Foods Australia Pty Ltd (Industry brand names - Hungry Jack s) Yum! Restaurants Australia Pty Limited (Industry brand names - KFC and Pizza Hut) McDonald s Australia Holdings Limited (Industry brand names McDonald s) 8.1% 10.0% 10.8% 18.2% 52.9% Doctor s Associates Inc. (Industry brand names - Subway) Other (includes Quick Service Restaurants, Domino s Pizza Enterprises Limited, Eagle Boys Dial-a- Pizza Pty Limited and Boost Juice) COLLINS FOODS LIMITED 5

7 Sales (Millions) KFC top-line returns to growth $million FY13 FY12* Change Restaurants: average period end Revenue % % SSSG 4.2% (1.8)% EBITDA % % margin 14.0% 15.6% 160bps EBIT % % margin 10.5% 11.9% 140bps KFC Sales 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 FY2011 FY2012 FY2013 Financial Year *FY2012 & FY Proforma Results * 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. COLLINS FOODS LIMITED 6

8 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 COLLINS FOODS LIMITED 7

9 $ millions New Store Openings KFC Capex focused on growth KFC Capex and Depreciation FY 12 FY 13 FY14 Budget 0.00 Depreciaton Maint / Systems Refurbishment / Rebuild / Relocate New Units New Unit Builds COLLINS FOODS LIMITED 8

10 New KFC restaurants North Lakes Opened 12 August 2013 Capital spend $1,264k Projected WSA $51.6k Actual WSA $56k Wurtulla Opened 11 September 2013 Capital spend Projected WSA Actual WSA $1,169.5k $46.8k $58.5k (2 week average only) Chinchilla Opened 12 September 2013 Capital spend Projected WSA Actual WSA $1,222k $45.5k $70.5k (2 week average only) WSA weekly store average COLLINS FOODS LIMITED 9

11 Major reimage and rebuild Maryborough (REIMAGE) Completed 21 June 2013 Capital spend $470k Projected WSA $55.7k Actual WSA $58.3k Kallangur (REIMAGE) Re-opened 19 June 2013 Capital spend $437k Projected WSA $69.9k Actual WSA $72.5k Gympie (REBUILD) Re-opened 24 July 2013 Capital spend $1,485k Projected WSA $73.4k Actual WSA $98.3k WSA weekly store average COLLINS FOODS LIMITED 10

12 Sizzler in transition COLLINS FOODS LIMITED 11

13 Sales (Millions) Sizzler performance reflects transition being undertaken $million FY13 FY12* Change Restaurants: average** period end** Revenue % % SSSG** (2.4%) (4.0%) EBITDA % % margin 9.6% 10.2% 60bps EBIT % % margin 5.7% 6.6% 90bps 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 106 Sizzler Sales limited price increases unable to fully offset input cost pressures FY2011 FY2012 FY2013 Financial Year 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 COLLINS FOODS LIMITED 12

14 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 COLLINS FOODS LIMITED 13

15 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 COLLINS FOODS LIMITED 14

16 Financial information COLLINS FOODS LIMITED 15

17 Consolidated income statement For the reporting period ended 28 April $000 $2012 $000 Revenue 423, ,970 Cost of sales (201,711) (192,587) Gross profit 222, ,383 Selling, marketing and royalty expenses (89,514) (83,814) Occupancy expenses Other expenses and income (33,327) (31,378) (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 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 COLLINS FOODS LIMITED 16

18 Strong balance sheet Balance sheet 28 April 2013 $m 29 April 2012 $m Cash and equivalents Total current assets Property, plant and equipment Total non-current assets Total assets Debt* Total current liabilities Total non-current liabilities Total liabilities NET ASSETS * net of capitalised costs $0.3m (FY12 $0.5m) 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 COLLINS FOODS LIMITED 17

19 Strong, growing cashflows $million FY13 FY12 Net operating cash flows before interest and tax Net interest paid (6.0) (15.8) Income tax paid (2.9) 0.2 Net operating cash flows 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 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) COLLINS FOODS LIMITED 18

20 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) with underlying business performance returning to growth (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. COLLINS FOODS LIMITED 19

21 Year to date and FY14 Outlook 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 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 COLLINS FOODS LIMITED 20

22 Questions COLLINS FOODS LIMITED 21

23 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. COLLINS FOODS LIMITED 22