Sapphire Foods India Ltd. · NSE:SAPPHIRE
Sapphire Foods India — Investor Presentation (August 2022)
29 slides from Sapphire Foods India's investor presentation, August 2022
Slide 1: Sapphire Foods India Corporate Presentation
Sapphire Foods India Limited SAPPHIRE FOODS INDIA LIMITED 3Q FY22 Earnings Presentation CORPORATE PFebruary RESENTATION 2022 – AUG’22 1
Slide 2: 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 3: Table of Contents
TABLE OF CONTENTS 1 SAPPHIRE FOODS AT A GLANCE Page 4-6 2 FINANCIAL OVERVIEW Page 8-11 3 SEGMENTAL PERFORMANCE ▪ KFC INDIA Page 13 ▪ PIZZA HUT INDIA Page 14-15 ▪ SRI LANKA BUSINESS Page 16 4 KEY CONSIDERATIONS Page 18-28 3
Slide 4: Sapphire Foods at a Glance
SAPPHIRE FOODS AT A GLANCE YUM’s Franchisee Operator in 616 Total Restaurants India, Sri Lanka and Maldives Across India, Sri Lanka and Maldives (3) Sri Lanka’s Largest International QSR chain (1) 282 KFC Restaurants (2) 328 Pizza Hut Restaurants (2) 6 Taco Bell Restaurants (2) ₹ 5,436 MN Q1 FY23 Re
Slide 5: Journey of Sapphire Foods: Built a Platform of 616 Outlets
JOURNEY OF SAPPHIRE FOODS BUILT A PLATFORM OF 616 OUTLETS (1) 281 SAPPHIRE FOODS: GEOGRAPHICAL PRESENCE (1) 235 Restaurants Cities 98 73 55 52 40 9 INDIA SRI LANKA KFC – 5 PH – 7 52 15 KFC – 14 KFC – 10 PH – 24 PH – 5 KFC – 5 ~ KFC and Pizza Hut Brands Operate in States that cover 56% of PH – 1 KFC
Slide 6: The Sapphire Story
THE SAPPHIRE STORY Two global brands Execution Mindset (KFC & Pizza Hut) with Scale Great Customer & PAT profitability among experience along with Value based work Superior Back-end Top 3 QSR operators culture, high on operational excellence governance enabled by professional management, board and p
Slide 7: Financial Overview
FINANCIAL OVERVIEW
Slide 8: Summary Consolidated Financials
SUMMARY CONSOLIDATED FINANCIALS Q1FY23 FY22 Q1 FY22 Q1 FY23 Change YoY Restaurant Sales ₹ mn 17,154 3,027 5,436 80% Adj. EBITDA ₹ mn 1,808 93 722 676% Adj. EBITDA % 10.5% 3.1% 13.3% 1020 bps EBITDA ₹ mn 3,248 427 1,114 161% EBITDA % 18.9% 14.1% 20.5% 640 bps PAT ₹ mn 460 -264 381 N.M. PAT % 2.7% -8.
Slide 9: Operational & Financial Overview
OPERATIONAL & FINANCIAL OVERVIEW NUMBER OF RESTAURANTS Gross Restaurant 62 36 154 39 Additions 579 616 427 437 31-Mar-20 31-Mar-21 31-Mar-22 30-Jun-22 Restaurant 11 26 12 2 Closures RESTAURANT SALES (INR mm) 68.8% increase 17,154 80% Increase 13,284 on Y-O-Y 10,160 5,436 3,027 FY20 FY21 FY22 Q1FY22
Slide 10: Profitability Overview
PROFITABILITY OVERVIEW GROSS MARGIN % 69.9% 69.6% 70.4% 68.3% 68.2% 220 30 bps bps FY20 FY21 FY22 Q1 FY22 Q1 FY23 RESTAURANT EBITDA (₹ MN / %)# 570 18.7% * 690 bps 18.5% bps 13.0% 3,219 12.6% 11.9% 1,579 1,321 381 1,004 FY20 FY21 FY22 Q1FY22 Q1FY23 KEY Zero-based cost budgeting PACE SETTER program O
Slide 11: Profitability Overview
PROFITABILITY OVERVIEW ADJ. EBITDA (₹ MN / %)# 13.3% 1020 670 10.5% * bps bps 5.0% 1,808 3.1% 3.8% 662 382 93 722 FY20 FY21 FY22 Q1 FY22 Q1 FY23 EBITDA (₹ MN / %) 18.9% * 130 bps 20.5% 640 bps 17.6% 14.0% 14.1% 3,248 1,856 1,787 427 1,114 FY20 FY21 FY22 Q1FY22 Q1FY23 KEY Zero-based cost budgeting PA
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 MAR 31, 2022 AS OF JUN 30, 2022 / FOR FY20 / FOR FY21 / FOR FY22 /FOR Q1 FY23 Total Restaurant Count 187 203 263 281 Average Daily Sales per 130 106 130 144 Restaurant (INR‘000s) Restaurant Related 98% 7,753 5,89
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 MAR 31, 2022 AS OF JUN 30, 2022 / FOR FY20 / FOR FY21 / FOR FY22 / FOR Q1 FY23 Total Restaurant Count 174 162 219 235 Average Daily Sales per Restaurant (INR‘000s) 58 48 57 61 Restaurant Related 85% Revenue
Slide 15: Pizza Hut India Transformed Business Model
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 15
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 MAR 31, 2022 AS OF JUN 30, 2022 / FOR FY20 / FOR FY21 / FOR FY22 / FOR Q1 FY23 Total Restaurant Count 64 70 95 98 Average Daily Sales per Restaurant (INR‘000s) 92 94 108 75 Restaurant Related 52% (INR)
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 21
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 49% Income from Delivery Channel (1) (INR mm) 42% 8,323 24% 21% TAKE AWAY - CONTACTLESS ORDERING AND PA
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 Current As of 31-Mar-19 Current Avg Size of Restaurant ~ 1,500 ~ 1,200 (in Sq. ft.) 2,736 2,427 Reduction in Avg Reduction in Avg Restaurant size ~45% Restaurant size ~45% FY19 Q1 FY23 FY19 Q1FY23 Average Daily Sales
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 Cash net of debt of Rs. 3,990 Mn as on 31st Mar22 28
Slide 29: Thank You
THANK YOU Company: Investor Relations Partner: Sapphire Foods India Limited Orient Capital (a division of Link Group) CIN: L55204MH2009PLC197005 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
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