Sphera Franchise Group Sa · BVB:SFG
Sphera Franchise Group Sa — 9M 2022 Earnings Presentation
43 slides from Sphera Franchise Group Sa's earnings presentation, December 2022
Slide 1: Sphera Franchise Group Investor Presentation
Sphera Franchise Group Investor Presentation December 2022
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 9M 2022 Highlights 3 2021-2022 Brand Performance 4 2022 Business Updates 5 Development Plan 6 Annex 1: Key 9M 2022 Financials 7 Annex 2: Key 2021 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: 2nd QSR Operator in Romania, 1st Full-Service Restaurant Operator
2nd QSR Operator in 1st Full-Service Restaurant 25 years track-record Romania Operator in Romania 3 iconic brands: KFC, Pizza 175 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 20 23 153 3 14 24 19 70 9 11 Bucharest Food Court In Line Drive-through KFC restaurants PH and PH Delivery restaurants Taco Bell restaurants 8 Notes: Restaurants of of 20.11.2022, 1 Paul Store & 1 PHD sub-franchise
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 CRISTIAN OSIAC MARINA TOPSA CEO CFO CMO CDO Legal Director Mr Ionescu is the CEO of Sphera Mr Budes is the CFO of the Sphera Mrs Eftimie is the CMO of Sphera Mr Osiac has been the Chief Mrs Topsa is the Legal Director at Franchise Group sin
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 Transformation Phase 168 Development Phases 14 154 156 13 10 11 20 138 19 Acceleration Phase 5 18 22 113 22 22 22 2 21 23 98 17 Initial Phase 23 86 12 74 75 76 9 22 21 64 10 9 9 18 60 54 8
Slide 14: Historical performance, slowed by the pandemic
Historical performance, slowed by the pandemic Turnover Normalized EBITDA 14% CAGR 2016-2021 96 73.5 69.3 72.4 73.5 44.1 2016 2017 2018 2019 2020 2021 1000 955 Net profit 771 711 619 514 64.2 51.6 32.6 24.3 27.4 -2.4 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021 14
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 since November 2017. Since September 2018, SFG shares are included in the reference index of BVB, BET and since March 2022, in 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: 9M 2022 Highlights
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Slide 18: SFG Performance in 9M 2022
SFG Performance in 9M 2022 • Best quarter in history: Q3’22 continued the positive trend of quarter-on-quarter increases, with Sphera Franchise Group closing the period with record-high results, Data in RON’000 9M-22 9M-21 Y/Y % registering RON 347.6 million in consolidated sales, a 22% increase com
Slide 19: SFG 9M 2022 Performance
SFG 9M 2022 Performance 953.6 929.7 1% +3 4% 347.6 +3 -4% 728.7 60.5 321.7 9M 696.4 58.3 Q3 3% 211.4 233.1 284.2 2% +2 +2 208.3 225.8 262.3 4% 29.8 +2 37.0 327.4 322.3 0% +4 Q2 3% -1% +4 13.1 17.6 278.6 285.7 17.5 Q1 7% 2% +3 -71% +3 3.8 2021 2022 2021 2022 2021 2022 Restaurant Sales Expenses (Resta
Slide 20: SFG 9M 2022 Performance breakdown
SFG 9M 2022 Performance breakdown Contribution to 9M 2022 turnover 5.2% 12.4% 1.3% 9.3% Q3 Q1 29.2% 36.5% 86.3% 85.5% Q2: 15% Q3: 27.8% 34.3% Q2 Per market Per brand Per quarter 20
Slide 21: 2021-2022 Brand Performance
2021-2022 Brand Performance 21
Slide 22: KFC Romania
All Store Performance KFC Romania 114.9% 42.8% • Q3’22 was another quarter of continued increase for 37.3% 23.6% KFC Romania as all store performance improved 20% 14.3% 20.3% 20.1% YoY due to good same store performance (+13%) paired with the sales generated by the 5 new KFC Q2’21 Q2’22 Q3’22 restau
Slide 23: KFC Italy & KFC Republic of Moldova
All Store Performance KFC Italy & KFC Republic of Moldova 114.5% 88% 70.3% 58.4% KFC Italy 26% 37.5% 2.5% • All-store performance registered 38% sales increase in Q3’22 vs. Q3’21, Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 while the same store evolution was second best of all the Group, registering a
Slide 24: Pizza Hut & Taco Bell
Pizza Hut & Taco Bell All Store Performance Pizza Hut 108.4% • The YoY increase dynamic has slowed downed for Pizza Hut, as the brand 71.4% registered 15% increase in all store performance in Q3’22 and a 6% increase 54.6% 55.3% 45.5% in the same store performance. Between Q4’21 and Q3’22, Sphera ope
Slide 25: 2022 Business Updates
2022 Business Updates 25
Slide 26: Restaurant development, staff
Restaurant development, staff Number of stores • 174 restaurants operated: SFG operated 174 restaurants as of 30.09.2022, out of which 94 KFC restaurants in Romania, 2 in Moldova and 20 in Italy, as well as 14 Taco Bell restaurants, 42 Pizza Hut restaurants (of which 22 Pizza Hut and 20 Pizza Hut De
Slide 27: Marketing
Marketing Pricing adaptation to the market conditions • In the current economic climate, we increased the prices in September for the three brands in order to protect the bottom line and absorb the increased cost of inputs. At the same time, we focused on value offerings to the customer to ensure co
Slide 28: Marketing
Marketing Pizza Hut: Build sales and increase distinctiveness • To reverse the sales trend and to bring to life the power of the brand, Pizza Hut included gamification in its three-month repositioning campaign “the favorite pizza of Romanian families”. The campaign delivered strong same-store sales
Slide 29: Development Plan
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Slide 30: 2022 Guidance
2022 Guidance • Inflation in 2022 exceeded the levels estimated in Budget approved in April 2022 GSM: the food and material costs due to inflation are expected to exceed the estimates used in preparing the 2022 budget. This is due to the increase in all material costs categories with the greatest im
Slide 31: Restaurant Development Plan
Restaurant Development Plan 2022 2023 2024 2025 2026 Total Food Court 1 1 1 1 1 5 KFC Romania* Drive-Thru 2 5 5 5 5 22 In-line 3 - - - - 3 Pizza Hut FCD 1 3 - - - 4 Romania Express 1 1 - - - 2 Taco Bell Food Court 2 3 3 3 3 14 Romania In-line - 2 2 2 2 8 KFC Italy Drive-Thru - 1 1 1 1 4 In-line - -
Slide 32: 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 33: Annex 1: Key 9M 2022 Financials
Annex 1: Key 9M 2022 Financials 33
Slide 34: Summary of 9M 2022 Consolidated FS
Summary of 9M 2022 Consolidated FS (excluding IFRS 16 impact) 34
Slide 35: Summary of 9M 2022 Consolidated FS
Summary of 9M 2022 Consolidated FS (with and without IFRS 16 impact) 35
Slide 36: Breakdown of 9M 2022 results by entity
Breakdown of 9M 2022 results by entity (excluding IFRS 16 impact) 36
Slide 37: Annex 2: Key 2021 Financials
Annex 2: Key 2021 Financials 37
Slide 38: Summary of 2021 Consolidated FS
Summary of 2021 Consolidated FS (excluding IFRS 16 impact) 38
Slide 39: Summary of 2021 Consolidated FS
Summary of 2021 Consolidated FS (with and without IFRS 16 impact) 39
Slide 40: Breakdown of 2021 results by entity
Breakdown of 2021 results by entity (excluding IFRS 16 impact) 40
Slide 41: Notes
Notes 41
Slide 42: Notes
Notes 42
Slide 43: Thank you!
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. 43
Sphera Franchise Group — 9M 2022 Earnings Presentation on 6ix