There are some ASX shares that have big international growth plans.
Accessing the global market gives ASX shares a much larger total addressable market.
Here are two compelling businesses with international growth:
Collins Foods Ltd (ASX: CKF)
Collins Foods is a large franchisee of KFC and Taco Bell outlets in Australia. Indeed, it now has over 240 KFC Australian outlets. It is on track to open nine to twelve KFC Australia restaurants in FY21.
It also has a KFC outlet network in Europe with a total of 41 locations, across both Germany and the Netherlands. Collins Foods believes that there are acquisition opportunities in Europe. It has signed an agreement to acquire three restaurants in the Netherlands for €2.5 million.
In terms of Taco Bell, it has 13 outlets with ten in Queensland and three in Victoria.
In the recent FY21 half-year result Collins Foods reported that KFC Australia revenue grew by 15.6% on same store sales growth of 12.4%. The KFC Australia earnings before interest and tax (EBIT) went up 28% after a 150 basis point increase of the EBIT margin.
The ASX share's European operations have been affected more heavily than Australia because of COVID-19 impacts and the ability of the company to improve its takeaway channels to replace its dine-in channel.
Whilst the European division managed to grow revenue by 1.1%, its same store sales declined by 4.2%. The Europe underlying earnings before interest, tax, depreciation and amortisation (EBITDA) dropped by 43.6% to $1.5 million.
Collins Foods believes that KFC Europe still remains a significant opportunity for growth. It said that same store sales bounced 3% higher across two months after government COVID-19 restrictions were eased during the first half. The company also said that there had been a significant shift to the drive-thru channel, particularly in Germany, which is expected to have medium-term margin benefits. Collins Foods said that strong value and retail offers launched in Germany in the early weeks in the second half lifted same store sales growth to 7.8%.
The ASX share is expecting to build one to three additional drive-thru outlets in Europe during the second half. It's aiming for a new restaurant development pipeline building towards a minimum of three to four openings per year, all drive-thru.
At the current Collins Foods share price, it's valued at 18x FY23's estimated earnings according to Commsec data.
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is an ASX share which is predominantly growing in the US. It services the large and medium church sector with its electronic donation technology.
With this target market, it's aiming for annual revenue of US$1 billion over the longer term.
However, the company does also have plans to expand into other areas. It can target smaller churches, not just the megachurches.
The ASX share is demonstrating economies of scale and strong leverage as it grows in size. In the FY21 interim result it grew its earnings before interest, tax depreciation, amortisation and foreign currency (EBITDAF) margin by 14 percentage points from 17% to 31%.
In FY21, Pushpay is expecting to more than double its EBITDAF to a range of US$54 million to US$58 million.
Ben Griffiths, from fund manager Eley Griffiths, wrote earlier this year: "Over the last 12 months it has become clear PPH is at an inflection point for both cashflow and earnings. Under the stewardship of CEO Bruce Gordon, PPH has transitioned from a founder-led investment phase into an optimize/monetization phase. What is more surprising is the very conservative nature of the accounts (a rarity in small cap tech, outside Iress). We believe the next few years for PPH will be rewarding and that COVID-19 will accelerate the already entrenched trend to digital giving/engagement from cash."
At the current Pushpay share price, it's valued at 26x FY23's estimated earnings according to Commsec data.
