Sphera Franchise Group Sa · BVB:SFG
Sphera Franchise Group Sa — Investor Presentation (September 2023)
50 slides from Sphera Franchise Group Sa's investor presentation, September 2023
Slide 1: Sphera Franchise Group Investor Presentation
Sphera Franchise Group Investor Presentation September 2023
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: Contents
Contents 1 About Sphera Franchise Group 2 H1 2023 Financial Highlights 3 Brand Performance 4 Latest Business Updates 5 Development Plan 6 Annex 1: Key H1 2023 Financials 7 Annex 2: Key 2022 Financials 3
Slide 4: About Sphera Franchise Group
About Sphera Franchise Group 4
Slide 5: Purpose, Vision, Mission
PURPOSE Development through relevance and trust. VISION Be the leaders in the Romanian food service industry and become an important player at the European level. MISSION Offer customers a memorable experience, through excellent services and unique products, prepared by passionate teams. 5
Slide 6: Sphera Franchise Group at a glance
Sphera Franchise Group at a glance • Sphera is the leading food operator in Romania, operating through subsidiaries in Moldova and in Italy. • Sphera Franchise Group was incorporated in May 2017 to consolidate all brands operated by the Group since 1994: KFC, Pizza Hut Dine-In, and Pizza Hut Deliver
Slide 7: Key facts: 1st QSR operator in Romania
1st QSR Operator in 1st Full-Service Restaurant Almost 30 years track- Romania Operator in Romania record 3 iconic brands: KFC, Pizza 179 restaurants in 3 SFG shares included in BVB Hut, Taco Bell countries BET & FTSE Russell Micro- cap 7
Slide 8: Sphera Franchise Group at a glance
Sphera Franchise Group at a glance Locations split per brand Geographical footprint 2 18 27 157 15 14 25 28 68 Bucharest Food Court In Line Drive-through KFC restaurants PH and PH Delivery restaurants Taco Bell restaurants 8 Notes: Restaurants as of 30.06.2023, 1 Paul Store & 1 PHD sub-franchise baa
Slide 9: Sphera Franchise Group corporate structure
Sphera Franchise Group corporate structure 99.9% 99.9% 99.9% 100% 80% American Restaurant California Fresh US Food Network US Food Network US Food Network S.A. System S.A. Flavors S.R.L. S.R.L. - Italy S.R.L. - Moldova Holds the franchise rights to Holds the franchise and sub- Holds the franchise ri
Slide 10: Management team
Management team CALIN IONESCU VALENTIN BUDES MONICA EFTIMIE CEO CFO CMO Mr Ionescu is the CEO of Sphera Franchise Group Mr Budes is the CFO of the Sphera Franchise Group Mrs Eftimie is the CMO of Sphera Franchise Group since October 2020. Mr. Ionescu has been involved in since May 2019. Mr. Budes is
Slide 11: Leading foodservice group in Romania
Leading foodservice group in Romania QSR QSR #2 player on the chained QSR segment (21.4% market share) #1 player on the QSR chicken segment ü 88% aided brand awareness among Romanian customers (Dec’21) ü Stronger than McDonald’s in Brand Power, Usage Funnel and Main Product Attributes ü First Taco B
Slide 12: Key investment highlights
Key investment highlights Leading food service Scalable platform with Improved liquidity due Operational excellence group operating a fully fledged process in to Market Making, proven by consistent top portfolio of iconic, place allowing efficient attested by inclusion in ranked among YUM internatio
Slide 13: Track record of growth & network development
Track record of growth & network development KFC Pizza Hut Dine-In Pizza Hut Delivery Taco Bell VUCA Phase 175 177 Transformation Phase 168 15 15 Development Phases 156 13 154 10 11 20 20 138 19 Acceleration Phase 5 22 18 22 22 113 22 22 2 21 23 98 17 Initial Phase 23 86 12 76 9 22 74 75 21 10 9 9 1
Slide 14: Historical performance, slowed by the pandemic
Historical performance, slowed by the pandemic Turnover Normalized EBITDA 17% CAGR 2016-2022 96 102.3 73.5 69.3 72.4 73.5 44.1 2016 2017 2018 2019 2020 2021 2022 1323 Net profit 955 1000 771 711 619 514 64.2 51.6 32.6 39.1 24.3 -2.4 27.4 2016 2017 2018 2019 2020 2021 2022 2016 2017 2018 2019 2020 20
Slide 15: SFG on BVB
SHAREHOLDING STRUCTURE SFG on BVB Other shareholders 34.40% Tatika Investments Ltd 28.61% SFG is quoted on the Main Market of Bucharest Stock Exchange as of November 2017. Since September 2018, SFG shares are included in the reference index of BVB, BET, as of March 2022, in the FTSE Global Micro Cap
Slide 16: Sustainability
Sustainability Sphera Franchise Group strategy is based on four pillars and relevant material topics defined together with the organization stakeholders. The management set general and specific medium and long-term objectives, with targets until 2025, aligned with the Sustainable Development Goals.
Slide 17: H1 2023 Financial Highlights
H1 2023 Financial Highlights 17
Slide 18: SFG Performance in H1 2023
SFG Performance in H1 2023 • Strong Q2’23 with steady growth on all markets: Group generated sales of RON 360.5 mn in the Q2’23, a 10.1% increase vs Q2’22, when the Group saw revenues of RON 327.4 mn. Q2’23 is the first quarter where results are compared to post-pandemic figures from Q2’22, resultin
Slide 19: SFG H1 2023 Performance
SFG H1 2023 Performance 695.6 5% 665.2 +1 % 606 608 +9 360.5 H1 52.4 342.5 327.4 0% 322.3 +1 % 47 17.6 28.8 +6 % +1 Q2 5% 21.2 +6 335.1 322.7 0% 278.6 285.7 +2 3% 23.5 17.5 Q1 +1 % 526 + 3.8 2022 2023 2022 2023 2022 2023 Restaurant Sales Expenses (Restaurant + G&A) EBITDA in RON m in RON m, excl. IF
Slide 20: SFG H1 2023 Performance breakdown
SFG H1 2023 Performance breakdown Contribution to H1 2023 turnover 12.3% 1.4% 5.8% 8.5% 86.3% 85.7% Per market Per brand 20
Slide 21: 2022 Financial Highlights
2022 Financial Highlights 21
Slide 22: SFG Performance in 2022
SFG Performance in 2022 • Best quarter in Group’s history: Q4’22 continued the positive trend of QoQ increases, with the Group closing the period with record-high results, registering RON 369.2 mn in Data in RON’000 2022A 2021A Y/Y % consolidated sales, a 36% increase compared to Q4’21 and normalize
Slide 23: SFG 2022 Performance
SFG 2022 Performance 1,322.8 % +32 369.2 1,270.8 1,000.3 % Q4 +3 6% +31 271.6 341.1 102.7 967.7 +40 % 347.6 Q3 2% 6% +2 271.4 +2 73.5 44.4 321.7 43% +2 284.2 12.9 3% 327.4 262.3 +2 Q2 1% 37.0 +4 322.3 4% 233.1 29.8 +2 3% 225.8 +4 -1% Q1 278.6 17.6 +3 2% 7% 285.7 211.4 208.3 +3 -71% 17.5 13.1 3.8 202
Slide 24: SFG 2022 Performance breakdown
SFG 2022 Performance breakdown Contribution to 2022 turnover 5.2% 12.6% 1.3% 9.3% Q1 Q4 21.1% 27.9% 24.8% 86.1% 85.5% Q2: 15% 26.3% Q3: 27.8% Q2 Q3 Per market Per brand Per quarter 24
Slide 25: Brand Performance
Brand Performance NY SPHERA z Krc @ {3
Slide 26: KFC Romania
All Store Performance KFC Romania 37.3% 35.0% 23.6% 20.1% 19.6% 10.5% • Q2’23 was another strong quarter of consolidation for KFC Romania as all store performance improved 10.5% YoY due to solid same store results (+6.5%) paired with the sales Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 generated by the 6 n
Slide 27: KFC Italy & KFC Republic of Moldova
KFC Italy & KFC Republic of Moldova KFC Italy All Store Performance 70.3% 58.4% • All-stores recorded 14.4% sales increase in Q2’23 vs. Q2’22. • 7% of all orders in Q2’23 were for delivery, 1pp QoQ decrease. 37.5% 31.6% • USFN Italy took EBITDA from negative, as reported in H1’22, to positive 22.1%
Slide 28: Pizza Hut & Taco Bell
Pizza Hut & Taco Bell All Store Performance Pizza Hut 55.3% 45.5% • The YoY all store performance registered a 6.2% decrease while the same 38.5% store sales decreased 6.8%. • 34% of all orders were made for delivery in Q2’23, a 2pp decline QoQ. 15.1% • Pizza Hut closed H1’23 with EBITDA of -3.1 mn,
Slide 29: Latest Business Updates
Latest Business Updates 29
Slide 30: Development & staff updates
Development & staff updates Number of stores • 179 restaurants operated: out of which 100 KFC restaurants in Romania, 2 in Moldova and 18 in Italy, as well as 42 Pizza Hut restaurants, 15 Taco Bell restaurants, one PHD subfranchise and one Paul restaurant as of 30.06.2023 • 4 openings in H1’23: 2 ne
Slide 31: Capital markets updates
Capital markets updates SFG evolution on BVB • SFG outperforms reference indices in H1 2023: In H1 2023, SFG shares appreciated 29%, while the BET index grew 7%. The Total Return on SFG shares in H1 2023, including the dividend paid on March 31st, 2023, was 32.6%, versus 10% increase for the BET-TR
Slide 32: Marketing
Marketing KFC: Increase transactions and maximize relevance • KFC focused on strengthening favorability for the burger layer by successfully re-launching an innovative burger in Q2 called Zinger Mozzarella. The unique communication campaign resulted in strong same-store sales growth and an increase
Slide 33: Marketing
Marketing Pizza Hut: Build sales and increase distinctiveness • Pizza Hut continued its value journey in Q2 by launching buy a medium, get a large with the aim of increasing transactions by attracting new users and reinforcing our pizza expert attribute. • In June we brought into focus Crown Pizza,
Slide 34: Marketing
Marketing The digital normal • Focusing on ease of access for our consumers who expect frictionless experiences, we continued our digital journey and communicated through digital media our “click & collect” services and ecommerce platforms, with the objective of expanding our user base and gaining r
Slide 35: Development Plan
NY SPHERA Krc @ ,{3., Development Plan
Slide 36: Efficient restaurant roll-out
Efficient restaurant roll-out Restaurant-selection criteria New restaurant opening process Market Analysis Generators Identify Best Locations (leisure – e.g. shopping centres, cinemas or retail – Traffic Traffic & Market Research e.g. DIY, hypermarkets, furniture stores etc) Project Management Archi
Slide 37: 2023 Guidance
2023 Guidance Indicator RON millions (mn Restaurant Sales (*) Other Income Food and Material Restaurant Gross Margin Restaurant Operational Expenses Restaurant Operating Profit G&A expenses EBITDA (normalized, excluding IFRS 16 impact) (*) Normalized Profit for the year (*) Free Cash Flow (*) Nn SPH
Slide 38: 2023 Guidance
2023 Guidance General context: the budget is based on information available as of end of February 2023, under presumption of a normal course of business and considering that the overall inflation will be around 10% in 2023. The budget also takes into consideration the increase of the minimum wage st
Slide 39: Annex 1: Key H1 2023 Financials
Annex 1: Key H1 2023 Financials 39
Slide 40: Summary of consolidated H1 2023 FS
Summary of consolidated H1 2023 FS 40 Results excl. IFRS16
Slide 41: Summary of consolidated H1 2023 FS
Summary of consolidated H1 2023 FS (with and without IFRS 16 impact) 41
Slide 42: Breakdown of H1 2023 results by entity
Breakdown of H1 2023 results by entity 42 Results excl. IFRS16
Slide 43: Overview of the H1 2023 G&A expenses
Overview of the H1 2023 G&A expenses (with and without IFRS 16 impact) 43
Slide 44: Annex 2: Key 2022 Financials
Annex 2: Key 2022 Financials 44
Slide 45: Summary of 2022 Consolidated FS
Summary of 2022 Consolidated FS 45 Results excl. IFRS16
Slide 46: Summary of 2022 Consolidated FS
Summary of 2022 Consolidated FS (with and without IFRS 16 impact) 46
Slide 47: Breakdown of 2022 results by entity
Breakdown of 2022 results by entity 47 Results excl. IFRS16
Slide 48: Overview of the 2022 G&A expenses
Overview of the 2022 G&A expenses (with and without IFRS 16 impact) 48
Slide 49: Notes
Nn SPHERA Notes xrc @ 4.
Slide 50: Thank you!
SFG 2023 Financial Calendar 15.11.2023 – Q3 2023 Results 15.11.2023 – Q3 2023 Results Call Thank you! For any follow-up questions related to Sphera Franchise Group’s activity on the Bucharest Stock Exchange, please contact Zuzanna Kurek, IRO at: investor.relations@spheragroup.com. 50
Sphera Franchise Group — Investor Presentation (September 2023) on 6ix