Sapphire Foods India Ltd. · NSE:SAPPHIRE
Sapphire Foods India — Q3 FY22 Earnings Presentation
29 slides from Sapphire Foods India's earnings presentation, Feb 22, 2022
Slide 1: Exchange filing cover letter: Investor Presentation
Date: February 22, 2022 To, National Stock Exchange of India Limited BSE Limited Exchange Plaza, Block G, C/1, Bandra Kurla Phiroze Jeejeebhoy Towers, Complex, Bandra (E), Mumbai – 400051 Dalal Street, Mumbai – 40001 Symbol: SAPPHIRE Scrip Code: 543397 Dear Sir/Madam, Subject: Investor Presentation
Slide 2: 3Q FY22 Earnings Presentation
Sapphire Foods India Limited SAPPHIRE FOODS IPresentation 3Q FY22 Earnings NDIA LIMITED February 2022 1
Slide 3: Safe Harbor
SAFE HARBOR This presentation and the accompanying slides (the “Presentation”), which have been prepared by Sapphire Foods India Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any
Slide 4: Table of Contents
TABLE OF CONTENTS 1 SAPPHIRE FOODS AT A GLANCE Page 4-6 2 FINANCIAL OVERVIEW Page 8-10 3 SEGMENTAL PERFORMANCE KFC INDIA Page 12 PIZZA HUT INDIA Page 13-14 SRI LANKA BUSINESS Page 15 4 KEY CONSIDERATIONS Page 17-27 3
Slide 5: Sapphire Foods at a Glance
SAPPHIRE FOODS AT A GLANCE YUM’s Franchisee Operator in 550 Total Restaurants India, Sri Lanka and Maldives Across India, Sri Lanka and Maldives (3) Sri Lanka’s Largest International QSR chain (1) 251 KFC Restaurants (3) 294 Pizza Hut Restaurants (3) 5 Taco Bell Restaurants (3) ₹ 12,212 mn 9MFY22 Re
Slide 6: Journey of Sapphire Foods: Built a Platform of 550 Outlets
JOURNEY OF SAPPHIRE FOODS BUILT A PLATFORM OF 550 OUTLETS (1) 250 SAPPHIRE FOODS: GEOGRAPHICAL PRESENCE (1) 209 Restaurants Cities 89 68 49 49 37 9 INDIA SRI LANKA KFC – 6 PH – 7 42 14 KFC – 14 KFC – 7 PH – 22 PH – 5 KFC – 5 ~ KFC and Pizza Hut Brands Operate in States that PH – 1 cover 56% of GDP (
Slide 7: The Sapphire Story
THE SAPPHIRE STORY Two global brands Execution Mindset (KFC & Pizza Hut) with Scale Great Customer & PAT profitability among experience along with Top 3 QSR operators Value based work Superior Back-end operational excellence culture enabled by professional and experienced management Capability and c
Slide 8: Financial Overview
FINANCIAL OVERVIEW
Slide 9: Summary Consolidated Financials Q3 & 9M FY22
SUMMARY CONSOLIDATED FINANCIALS Q3 & 9M FY22 Q3 FY22 9M FY22 Highest Ever Quarterly… Restaurant Sales 5,055 52% 12,212 80% …Restaurant Sales across KFC, Pizza Hut and Sri Lanka ₹ mn business due to strong brand activation and Sapphire’s omni EBITDA 1,170 2,212 channel execution 69% 90% ₹ mn [1,084
Slide 10: Operational & Financial Overview
OPERATIONAL & FINANCIAL OVERVIEW NUMBER OF RESTAURANTS Gross 67 62 36 14 32 70 Restaurant Additions 550 482 437 450 427 376 31-Mar-19 31-Mar-20 31-Mar-21 30-Jun-21 30-Sep-21 31-Dec-21 Restaurant 10 11 26 1 0 2 Closures REVENUE (1) (INR mm) 52% Increase 80% Increase 23.5% decline 13,296 on Y-O-Y on Y
Slide 11: Profitability Overview
PROFITABILITY OVERVIEW GROSS MARGIN (INR mm) 160 40 50 69.9% bps 69.4% 69.8% 68.3% bps bps 67.5% 7,981 9,084 7,103 8,524 3,510 FY19 FY20 FY21 Q3FY22 9M FY22 Gross Margin % EBITDA (INR mm) 600 18.1% 800 360 23.2% 17.6% bps [16.7%]* bps 14.0% bps [21.5%]* 12.6% 1,856 1,787 2,212 1,487 1,170 FY19 FY20
Slide 12: Segmental Performance
SEGMENTAL PERFORMANCE
Slide 13: Core Composition of Our Business: KFC India
CORE COMPOSITION OF OUR BUSINESS: KFC INDIA AS OF MAR 31, 2020 AS OF MAR 31, 2021 AS OF DEC 31, 2021 AS OF DEC 31, 2021 / FOR FY20 /FOR FY21 /FOR Q3 FY22 /FOR 9M FY22 Total Restaurant Count 187 203 250 250 Average Daily Sales per 130 106 144 129 Restaurant (INR‘000s) Restaurant Related 7,753 5,897 2
Slide 14: Core Composition of Our Business: Pizza Hut India
CORE COMPOSITION OF OUR BUSINESS: PIZZA HUT INDIA AS OF MAR 31, 2020 AS OF MAR 31, 2021 AS OF DEC 31, 2021 AS OF DEC 31, 2021 / FOR FY20 /FOR FY21 /FOR Q3 FY22 /FOR 9M FY22 Total Restaurant Count 174 162 209 209 Average Daily Sales per Restaurant (INR‘000s) 58 48 64 57 Restaurant Related Revenue (in
Slide 15: Pizza Hut India Transformed
CORE COMPOSITION OF OUR BUSINESS: PIZZA HUT INDIA Retain product quality and dining experience Transformed Value Positioning on Omni-channel smaller Business par with other QSR size stores Model brands Cost optimization Source: Company data 14
Slide 16: Core Composition of Our Business: Sri Lanka Operations
CORE COMPOSITION OF OUR BUSINESS: SRI LANKA OPERATIONS AS OF MAR 31, 2020 AS OF MAR 31, 2021 AS OF DEC 31, 2021 AS OF DEC 31, 2021 / FOR FY20 /FOR FY21 /FOR Q3 FY22 /FOR 9M FY22 Total Restaurant Count 64 70 89 89 Average Daily Sales per Restaurant (INR‘000s) 87 90 121 108 Restaurant Related Revenue
Slide 17: Key Considerations
KEY CONSIDERATIONS
Slide 18: Key Considerations
KEY CONSIDERATIONS 1 Large addressable food service market driven by macro fundamentals and industry tailwinds 2 Leading QSR brands with differentiated product and value offerings 3 Strong relationship with YUM 4 Continuous focus on delivering great customer experience on quality and value parameter
Slide 19: Large Addressable Food Service Market Driven by Macro Fundamentals
LARGE ADDRESSABLE FOOD SERVICE MARKET DRIVEN BY MACRO FUNDAMENTALS AND INDUSTRY TAILWINDS ORGANIZED FOOD SERVICES QSR PROJECTED TO MARKET IS EXPECTED TO GROW GROW FASTER AT A CAGR OF 15% FROM (CONTRIBUTION FROM 47% IN FY20-25 AND PROJECTED TO FY20 TO 54% IN FY25 OF REACH INR 3,189 BN BY FY25… CHAIN
Slide 20: Leading QSR Brands with Differentiated Product and Value Offerings
LEADING QSR BRANDS WITH DIFFERENTIATED PRODUCT AND VALUE OFFERINGS Second largest Largest QSR chain pizza chain in serving chicken India and in India and largest pizza chain the world (1) in Asia (2) Source: Technopak industry report Note: Metrics for KFC and Pizza Hut are at an aggregate level (1)
Slide 21: Leading QSR Brands: Key Pillars of Customer Proposition
LEADING QSR BRANDS WITH DIFFERENTIATED PRODUCT AND VALUE OFFERINGS KEY PILLARS OF OUR CUSTOMER PROPOSITION Differentiated Freshly Made Menu Straddling Consistent with Value Offerings Omni-channel Product Offerings Products All Parts of the Global Platform day Standards Source: Company data 20
Slide 22: Strong Relationship with YUM
STRONG RELATIONSHIP WITH YUM YUM BRANDS IS ONE OF THE GLOBAL FOOD BRAND OPERATORS WITH MORE THAN 50,000 RESTAURANTS WORLDWIDE (1) Economies of scale Access to YUM’s global because of ‘One System’ expertise commercial negotiations Source: Technopak industry report, company data (1) As of December 31
Slide 23: Strong Relationship with YUM: Franchise Terms
STRONG RELATIONSHIP WITH YUM Under franchisee arrangement YUM has provided us rights to operate stores as one of the franchisee operator in FRANCHISEE Indian subcontinent in the specified Territories ARRANGEMENT With respect to each store is 10 years (Original term) + 10 years (Renewal term) TERM Pu
Slide 24: Omni Channel Platform and Enhanced Digital Ecosystem
OMNI CHANNEL PLATFORM AND ENHANCED DIGITAL ECOSYSTEM OMNI CHANNEL ALLOWS OPTIMAL USE OF ASSETS DINE IN - CONTEMPORARY CUSTOMER EXPERIENCE DELIVERY - HYBRID MODEL OF OWN AND THIRD-PARTY AGGREGATORS 51% Income from Delivery Channel (1) 42% 6,221 (INR mm) 24% 21% 3,364 TAKE AWAY - CONTACTLESS ORDERING
Slide 25: Operational Excellence Led by In-House Supply Chain
OPERATIONAL EXCELLENCE LED BY IN-HOUSE SUPPLY CHAIN, FINANCIAL CONTROLS AND TECHNOLOGY INFRASTRUCTURE FOOD TECHNOLOGICAL FINANCIAL CONTROLS SUPPLY CHAIN INITIATIVES SAFETY PROCESS INFRASTRUCTURE AND GOVERNANCE Global standards of Direct relationships Restaurant-level SAP Regular audits at KFC, Pizza
Slide 26: Calibrated New Restaurant Economic Model for Expansion
CALIBRATED NEW RESTAURANT ECONOMIC MODEL FOR EXPANSION INDIA INDIA As of 31-Mar-19 RECENT As of 31-Mar-19 RECENT Avg Size of Restaurant ~ 1,500 (1) ~ 1,300 (1) (in Sq. ft.) 2,736 2,427 Reduction in Avg Reduction in Avg Restaurant size ~45% (2) Restaurant size ~46% (2) FY19 Q3 FY22 FY19 Q3 FY22 Avera
Slide 27: Experienced Leadership Supported by Marquee Investors
EXPERIENCED LEADERSHIP SUPPORTED BY MARQUEE INVESTORS TOP MANAGEMENT BOARD OF DIRECTORS Sanjay Purohit Sunil Chandiramani Sanjay Purohit Levi Strauss & Co India Whole time Director and Chairman and Independent Whole Time Director Group CEO Director Cadbury India Limited and Group CEO – Sapphire
Slide 28: Well Positioned to Capture Future Opportunities
WELL POSITIONED TO CAPTURE FUTURE OPPORTUNITIES Explore Accelerate acquisition of conversion from high quality and unorganized food scalable QSR and services to KFC food brands in and PH brands existing and new geographies.. Capability + Capital Raised INR 4,743Mn in Aug 2021 through preferential al
Slide 29: Thank You
THANK YOU Company: Investor Relations Partner: Sapphire Foods India Limited Orient Capital (a division of Link Group) CIN: U55204MH2009PLC197005 Mr. Nachiket Kale Mr. Rahul Kapoor Email ID: nachiket.kale@linkintime.co.in Email ID: rahul.kapoor@sapphirefoods.in +91 9920940808 www.sapphirefoods.in www