Sphera Franchise Group Sa · BVB:SFG
Sphera Franchise Group Sa — FY2019 Earnings Presentation
26 slides from Sphera Franchise Group Sa's earnings presentation, Nov 18, 2019
Slide 1: Sphera Franchise Group Preliminary results: Year 2019
Sphera Franchise Group Preliminary results: Year 2019 1
Slide 2: Disclaimer
Disclaimer This presentation is not, and nothing in it should be construed as, an offer, invitation or recommendation in respect of shares issued by Sphera Franchise Group SA ("Sphera"), or an offer, invitation or recommendation to sell, or a solicitation of an offer to buy shares in Sphera. Neither
Slide 3: Sphera – FY-2019 key events
Sphera – FY-2019 key events All-store sales up 23.8% with same-store sales growth of 7.8% ▪ Q4 overall sales growth of 18.6%, same-store sales growth of 6.2% Total store openings: 8 in Q4; network size 154 @ 31 December 2019 KFC sales slowed down in Q4 as a result of the health hazard issue, while d
Slide 4: Macro environment: CPI stabilizes as labour market remains tight
Macro environment CPI stabilizes as labour market remains tight Annualized CPI (RON) Salaries (Y/Y%) 6% 6,000 60% 5% Average gross salary (Y/Y% change) - rhs 5,000 Average gross salary 50% 4% Minimum salary 3% 4,000 40% 2% 1% 3,000 30% 0% 2,000 20% -1% -2% 1,000 10% -3% -4% 0 0% Jan-16 Jan-17 Jan-18
Slide 5: Sales performance by brands
(Np) Sales performance by brands
Slide 6: Brand performance: KFC Romania Sales growth analysis
Brand performance: KFC Romania Sales growth analysis ▪ All-store sales growth of 12.6% Y/Y in Q4-2019 25% 23.2% with same-store growth reaching 5.9%; 21.5% 20.4% 19.6%20.1% 19.5%18.9% ▪ The 14 net openings (since Jan-2018) contributed 20% 17.7% c. 7.0pp to the Y/Y growth in Q4-2019. 15.9% All-store
Slide 7: Brand performance: Pizza Hut Sales growth analysis
Brand performance: Pizza Hut Sales growth analysis ▪ All-store sales growth of 7.5% Y/Y in Q4-2019, 18% with majority of growth coming from the same- 15.5% 16% store units; 14% 12% 11.4% All-store 9.8% 9.5% performance 10% 8.4% 8.5% 7.3% 7.3% 7.4% 7.5% 8% 6.7% 6% 4% 2% 0% 2017 2018 2019 Q1 Q2 Q3 Q4
Slide 8: Development
(Np) Development
Slide 9: Development: Restaurant openings in 2019
Development Restaurant openings in 2019 Total stores Openings Openings Openings Openings Total Total stores Opening Plan BoY Q1-2019 Q2-2019 Q3-2019 Q4-2019 openings 2019 end-2019 2019 78 0 1 0 5 6 84 8 10 0 4 1 0 5 15 10 23 0 0 0 0 0 23 0 22 0 0 0 0 0 22 1 5 0 2 0 3 5 10 5 138 0 7 1 8 16 154 24 9
Slide 10: Brand news
(Np) Brandnews
Slide 11: Brand News Q4-2019 highlights (KFC)
Brand News Q4-2019 highlights ▪ For the last window of the year, KFC successfully launched an iconic KFC product: the Double Down Burger. The product is both an innovation in format and it supports our efforts of strengthening a new territory, while building on our differentiator, the always origina
Slide 12: Brand News Q4-2019 highlights (Pizza Hut)
Brand News Q4-2019 highlights ▪ For the winter marketing campaign Pizza Hut & Pizza Hut Delivery brought into focus one of their iconic products – Cheesy Bites, the dough with 24 bites filled inside with delicious Mozzarella. The campaign successfully delivered sales and increased consideration by b
Slide 13: Marketing Q4-2019 campaigns
Marketing Q4-2019 campaigns 13
Slide 14: CSR Projects - Community involvement
CSR Projects - Community involvement ‘I want to go to high-school’ program running each October in all KFC & Pizza Hut restaurants - Fund raising campaign in collaboration with World Vision Romania as part of Yum!’s “World Hunger Relief” international effort – in 2019 we celebrated the 12th annivers
Slide 15: Financials
Financials
Slide 16: Financial performance: FY-2019 Statement of comprehensive income
Financial performance: FY-2019 Statement of comprehensive income ▪ Sales up 23.8% Y/Y on strong performance from KFC Romania/Moldova (+15.9% Y/Y, 12.1pp contribution), with significant contrib ution from KFC Italy (7.8pp) and Taco Bell (2.7pp); ▪ Restaurant operating profit up 22.5% Y/Y, with margin
Slide 17: Financial performance: FY-2019 Impact of IFRS 16 - Leases
Financial performance: FY-2019 Impact of IFRS 16 - Leases on FY-2019 results ▪ Starting 1 January 2019, Sphera applied IFRS 16 that sets out the principles for the recognition, measurement, presentation a nd disclosure of leases. Sphera uses the modified retrospective approach for this transition, t
Slide 18: FY-2019 Statement of comprehensive income (excluding IFRS 16)
Financial performance: FY-2019 Statement of comprehensive income (excluding impact of IFRS 16 adoption) ▪ Sales up 23.8% Y/Y on strong performance from KFC Romania/Moldova (+15.9% Y/Y, 12.1pp contribution), with significant contrib ution from KFC Italy (7.8pp) and Taco Bell (2.7pp); ▪ Restaurant ope
Slide 19: Q4-2019 Statement of comprehensive income (excluding IFRS 16)
Financial performance: Q4-2019 Statement of comprehensive income (excluding impact of IFRS 16 adoption) ▪ Sales up 18.6% Y/Y on strong performance from KFC Romania/Moldova (+12.5% Y/Y, 9.3pp contribution), with solid contribution f rom KFC Italy (6.2pp) and Taco Bell (2.9pp); ▪ Restaurant operating
Slide 20: Financial performance: Margin trend (Quarterly and YTD)
2018-Q1 7.3% 2018-Q1 22.5% Q2 6.6% Q2 20.8% Q3 6.2% Q3 26.6% Q4 7.1% Q4 27.8% 2019-Q1 6.1% 2019-Q1 26.1% Quarter Quarter Q2 5.9% Q2 28.4% Q3 6.4% Q3 23.5% Q4 6.4% Q4 18.6% 2018-Q1 7.3% 2018-Q1 22.5% Q2 6.9% Q2 21.6% Q3 6.7% Q3 23.4% Q4 6.8% Q4 24.6% Normalized G&A ratio 2019-Q1 7.3% 2019-Q1 22.5% YT
Slide 21: FY-2019 Breakdown of results by Group companies
Financial performance: FY-2019 Breakdown of results by Group companies Data in RON'000 USFN (RO) ARS USFN (MD) USFN (IT) CFF SFG Cons.Adj SFG Cons. Restaurant sales 679,644 131,728 11,328 98,430 32,627 30,360 (29,389) 954,728 Dividend revenue 0 0 0 0 0 51,239 (51,239) 0 Restaurant expenses 568,009 1
Slide 22: FY-2019 Breakdown of results by Group companies (excluding IFRS 16)
Financial performance: FY-2019 Breakdown of results by Group companies (excluding impact of IFRS 16 adoption) Data in RON'000 USFN (RO) ARS USFN (MD) USFN (IT) CFF SFG Cons.Adj SFG Cons. Restaurant sales 679,644 131,728 11,328 98,430 32,627 30,360 (29,389) 954,728 Dividend revenue 0 0 0 0 0 51,239 (
Slide 23: FY-2019 Restaurant operating expenses and margin
Financial performance: FY-2019 Restaurant operating expenses and margin Including the impact of IFRS 16 adoption Contribution to change in restaurant opex ratio* Δ% % of Sales Data in RON'000 Dec-19 Dec-18 2019/2018 Dec-19 Dec-18 Δ% Restaurant expenses 828,334 668,018 24.0% 86.8% 86.6% 0.1% Food and
Slide 24: Q4-2019 Restaurant operating expenses and margin
Financial performance: Q4-2019 Restaurant operating expenses and margin Including the impact of IFRS 16 adoption Contribution to change in restaurant opex ratio* Y/Y% % of Sales Data in RON'000 Q4-2019 Q4-2018 2019/2018 Q4-2019 Q4-2018 Δ% Restaurant expenses 223,509 191,025 17.0% 85.8% 87.0% -1.1% F
Slide 25: Financial performance: FY-2019 G&A expenses
Financial performance: FY-2019 G&A expenses Including the impact of IFRS 16 adoption Contribution to growth in G&A expense* Y/Y% % of Sales Data in RON'000 Dec-19 Dec-18 2019/2018 Dec-19 Dec-18 General and adm inistration expenses (net), of w hich: 50,022 73,047 -31.5% 5.2% 9.5% Employee benefits 35
Slide 26: Sphera – Consolidated financial performance: Statement of financial position
Sphera – Consolidated financial performance Statement of financial position Excluding impact of Impact of IFRS 16 IFRS 16 adoption adoption Data in RON'000 30-Dec-19 31-Dec-18 Change 30-Dec-19 Assets Non-current assets 508,730 229,173 279,558 281,592 227,138 Property, plant and equipment 199,959 158
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