Sphera Franchise Group Sa · BVB:SFG
Sphera Franchise Group Sa — H1 2018 Earnings Presentation
27 slides from Sphera Franchise Group Sa's earnings presentation, August 2018
Slide 1: Sphera Franchise Group Interim results: Jan-Jun 2018
Sphera Franchise Group Interim results: Jan-Jun 2018 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 – H1-2018 key events
Sphera – H1-2018 key events All-store sales up 21.6% with same-store sales growth of 8.0% ▪ continued strong growth from KFC, increasing contributions from KFC Italy and Taco Bell Total store openings: 7 (6x KFC, 1x PHD), of which 3 in Q1 ▪ An additional 4 stores opened so far in Q3-2018 (1x KFC, 2x
Slide 4: KFC – “Franchisee of the Year” award
KFC – “Franchisee of the Year” award The Franchisee of the Year award is the highest recognition YUM! offers around the globe and is offered to the franchise that proves constant excellence in all business activities and that is an authentic ambassador for the KFC brand. It is also worth mentioning
Slide 5: Macro environment becomes increasingly challenging
Macro environment becomes increasingly challenging Retail sales have cooled down notably amid rampant inflation Annualized CPI Annualized average and minimum gross salaries (Y/Y% growth rates) 6% 5% 30% 4% 25% 3% 20% 2% 15% 1% 0% 10% -1% 5% -2% 0% -3% Jan-15 Jan-16 Jan-17 Jan-18 -4% Jan-15 Jan-16 Ja
Slide 6: Sales performance by brands
(Np) Sales performance by brands
Slide 7: Brand performance: KFC Romania
Brand performance: KFC Romania Sales growth analysis 30% ▪ All-store sales growth of 19.8% Y/Y in H1 26.4% supported mainly by same-store growth of 10.1%; 25% ▪ 20.6% In Q2, all-store sales advanced 20.1%, with same- 18.8% 19.6% 20.1% store sales improving by 8.5%; 20% 17.7% 18.0% All-store ▪ The 9
Slide 8: Brand performance: Pizza Hut
Brand performance: Pizza Hut Sales growth analysis 30% 28.0% ▪ All-store sales growth of 9.1% Y/Y in H1, with virtually all growth being contributed by the 7 25% stores opened starting Jan-2017 (of which 5 in existing cities); 20% 16.8% 16.6% ▪ In Q2, all store sales advanced 8.4% Y/Y, while 15.5% 1
Slide 9: Development
(Np) Development
Slide 10: Development: Restaurant openings in H1-2018
Development Restaurant openings in H1-2018 Total stores Total stores QTD(2) 2018 Initial 2018 Total Openings(1) Total YTD(2) BoY EoP Openings Plan Expectation Expected YE 72 7 79 1 80 13 16 91 22 0 22 0 22 2 2 24 17 1 18 2 20 5 5 22 2 0 2 1 3 3 3 5 113 8 121 4 125 23 26 142 (1) Of which three KFC re
Slide 11: KFC Bistrita (DT)
KFC Bistrita (DT) 11
Slide 12: PHD Bucurestii Noi (Delivery)
12 PHD Bucurestii Noi (Delivery)
Slide 13: KFC Italy – Udine Citta Fiera
KFC Italy – Udine Citta Fiera 13
Slide 14: Brand news
(Np) Brand news
Slide 15: Brand news: H1-2018 highlights
Brand news H1-2018 highlights ▪ KFC focused on building innovation by driving share of burger occasion in Q2, successfully launching new recipes for well-known products like Zinger & Fillet and maintaining strong same-store sales growth; ▪ Launched studycoin, a platform that rewarded teens who solve
Slide 16: Brand news: H1-2018 highlights
Brand news H1-2018 highlights ▪ Pizza Hut reinforced its product innovation superiority by launching Extra Cheesy Bites, a twist on an iconic dough type, with the aim of increasing average spend; ▪ The new menu designed by a well-know chef was rolled-out in all the restaurants with the aim of launch
Slide 17: Brand awareness consolidating for KFC, improving for Pizza Hut
Brand news Brand awareness consolidating for KFC, improving for Pizza Hut KFC Pizza Hut 100 100 90 90 80 80 70 70 60 60 50 50 40 30 40 20 30 10 20 0 10 0 2016-Q2 2016-Q3 2017-Q2 2017-Q3 2018-Q2 Top of mind awareness Spontaneous awareness Top of mind awareness Spontaneous awareness ▪ KFC has closed t
Slide 18: Marketing: H1-2018 campaigns
Marketing H1-2018 campaigns
Slide 19: Financials
Financials
Slide 20: Pro forma financials
Pro forma financials Note: H1-2018 pro forma results are identical to consolidated results H1-2017 pro forma results include ARS performance for the full period H1-2017 consolidated results do not include ARS performance for Jan-May period
Slide 21: Financial performance: H1-2018 vs H1-2017 – Statement of comprehensive income
Financial performance: H1-2018 (Consolidated) vs H1-2017 (Pro-forma) Statement of comprehensive income ▪ Pro forma sales up 21.6% Y/Y on strong performance from KFC Romania/Moldova and Pizza Hut and increasing contributions from t he new businesses (KFC Italy and Taco Bell); ▪ Restaurant operating p
Slide 22: Breakdown of results by Group companies
Financial performance: H1-2018 (Consolidated) vs H1-2017 (Pro-forma) 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 270,870 59,146 4,406 10,200 4,643 12,507 (11,706) 350,068 Restaurant expenses 227,953 56,207 3,82
Slide 23: Restaurant operating expenses and margin
Financial performance: H1-2018 (Consolidated) vs H1-2017 (Pro-forma) Restaurant operating expenses and margin Y/Y% % of Sales Data in RON'000 Jun-18 Jun-17 2018/2017 Jun-18 Jun-17 Contribution to change in restaurant opex ratio Restaurant expenses 303,503 237,034 28.0% 86.7% 82.4% Food and material
Slide 24: G&A expenses
Financial performance: H1-2018 (Consolidated) vs H1-2017 (Pro-forma) G&A expenses Y/Y% % of Sales Contribution to growth in G&A expense Data in RON'000 Jun-18 Jun-17 2018/2017 Jun-18 Jun-17 General and adm inistration expenses (net), of w hich: 25,238 20,204 24.9% 7.2% 7.0% Payroll and employee bene
Slide 25: Consolidated financials
(Wp) Consolidated financials
Slide 26: Sphera – Consolidated financial performance
Sphera – Consolidated financial performance Statement of comprehensive income ▪ Consolidated sales up 44.5% Y/Y on strong performance from KFC Romania (+21.2% Y/Y), while the consolidation of ARS (Pizza Hu t restaurants), starting with June 2017, contributed 20.9pp in the consolidated sales growth r
Slide 27: Sphera – Consolidated financial performance: Statement of financial position
Sphera – Consolidated financial performance Statement of financial position Data in RON'000 30-Jun-18 31-Dec-17 Data in RON'000 30-Jun-18 31-Dec-17 Assets Equity and liabilities Non-current assets 196,937 176,123 Total equity 123,326 104,544 Property, plant and equipment 123,132 105,220 Equity attri
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