Sphera Franchise Group Sa · BVB:SFG
Sphera Franchise Group Sa — Q3 2018 Earnings Presentation
28 slides from Sphera Franchise Group Sa's earnings presentation, November 2018
Slide 1: Sphera Franchise Group Interim results: Jan-Sep 2018
Sphera Franchise Group Interim results: Jan-Sep 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 – Q3 / 9-mth 2018 key events
Sphera – Q3 / 9-mth 2018 key events All-store sales up 23.4% with same-store sales growth of 8.6% (Q3: overall +26.6%, same-store +9.6%) ▪ continued strong growth from KFC, increasing contributions from KFC Italy and Taco Bell Total store openings: 13 (8x KFC, 4x PHD, 1x TB) in 9-mth, of which 5 in
Slide 4: 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 6% (Y/Y% growth rates) 30% 5% 4% 25% 3% 20% 2% 1% 15% 0% -1% 10% -2% 5% Average gross salary -3% Minimum gross salary -4% 0% Ja
Slide 5: Sales performance by brands
(Np) Sales performance by brands
Slide 6: Brand performance: KFC Romania
Brand performance: KFC Romania Sales growth analysis 30% ▪ All-store sales growth of 20.9% Y/Y in 9-mth 26.4% supported mainly by same-store growth of 10.5%; 25% ▪ 20.6% In Q3, all-store sales advanced 20.4%, with same- 18.8% 19.6% 20.1% 20.4% store sales improving by 11.4%; 20% 17.7% 18.0% All-stor
Slide 7: Brand performance: Pizza Hut
Brand performance: Pizza Hut Sales growth analysis 30% 28.0% ▪ All-store sales growth of 9.9% Y/Y in H1, with virtually all growth being contributed by the 9 25% stores opened starting Jan-2017 (of which 7 in existing cities); 20% 16.8% 16.6% ▪ In Q3, all store sales advanced 11.4% Y/Y, while 15.5%
Slide 8: Development
(Np) Development
Slide 9: Development: Restaurant openings in 2018
Development Restaurant openings in 2018 Total stores Openings Total stores QTD(1) 2018 Initial Total Total YTD(2) BoY 9-mth end-Q3 Openings Plan (2) Expected YE 72 8 80 3 83 16(2) 88 22 0 22 1 23 2 24 17 4 21 1 22 5 22 2 1 3 0 3 3 5 113 13 126 5 131 26 139 (1) As at 15-Nov-2018. (2) Of which 3 store
Slide 10: KFC Italy – Padova
KFC Italy – Padova 10
Slide 11: Pizza Hut Delivery Brasov
Pizza Hut Delivery Brasov 11
Slide 12: TB Bucharest Park Lake
B Bucharest Park Lake \ rat cues” Set | set
Slide 13: Brand news
(Np) Brandnews
Slide 14: Brand news: Q3-2018 highlights
Brand news Q3-2018 highlights ▪ KFC focused on building innovation for the summer and created new occasions to visit for our customers, successfully launching new recipes for a Teriyaki-inspired product platform maintaining strong double digit same-store sales growth ▪ Disruptive value was communica
Slide 15: Brand news: SOCIAL ME - Campaign results
Brand news SOCIAL ME - Campaign results +37.8m +7.4m +3.5m impressions views registered engagements delivered to date generated +137.8m sec of +67 ads content viewed Best practice at Instagram Summer promoted = 4.4 years in real School (on IGTV) life Click to run 15
Slide 16: Brand news: Q3-2018 highlights
Brand news Q3-2018 highlights ▪ Pizza Hut launched a national promotion in Q3 that offered prizes with the purchase of a Flatbread pizza with the aim of increasing transactions through attracting new users and bringing back lapsed clients; the decreasing transaction trend went through a slow down ov
Slide 17: Marketing Q3-2018 campaigns
Marketing Q3-2018 campaigns 17
Slide 18: Financials
Financials
Slide 19: Pro forma financials
Pro forma financials Note: Jan-Sep 2018 pro forma results are identical to consolidated results Jan-Sep 2017 pro forma results include ARS performance for the full period Jan-Sep 2017 consolidated results do not include ARS performance for Jan-May period
Slide 20: Financial performance: Q3-2018 Statement of comprehensive income
Financial performance: Q3-2018 Statement of comprehensive income ▪ Pro forma sales up 26.6% Y/Y on strong performance from KFC Romania/Moldova (+20.4% Y/Y) and Pizza Hut (+11.4% Y/Y) and increasing contributions from the new businesses (KFC Italy and Taco Bell); ▪ Restaurant operating profit up 17.3
Slide 21: Financial performance: Q3-2018 Quarterly trends in key indicators
Financial performance: Q3-2018 Quarterly trends in key indicators Net sales Restaurant operating profit 26.6% 15.3% 15.3% 15.1% 24.6% 23.4% 13.9% 22.5% 22.5% 13.3% 13.5% 21.6% 20.8% 11.4% Q1 Q2 Q3 Q1 Q2 Q3 Target Q1 Q2 Q3 Q1 Q2 Q3 Target FY FY 2018 2018 Quarter YTD Quarter YTD G&A expense Normalised
Slide 22: Financial performance: Jan-Sep 2018 Statement of comprehensive income
Financial performance: Jan-Sep 2018 (Consolidated) vs Jan-Sep 2017 (Pro-forma) Statement of comprehensive income ▪ Pro forma sales up 23.4% Y/Y on strong performance from KFC Romania/Moldova (+20.7% Y/Y) and Pizza Hut (+9.9% Y/Y) and increa sing contributions from the new businesses (KFC Italy and T
Slide 23: Breakdown of results by Group companies
Financial performance: Jan-Sep 2018 (Consolidated) vs Jan-Sep 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 424,966 89,210 6,843 21,394 8,054 18,789 (17,693) 551,562 Dividend revenue 0 0 0 0 0 61
Slide 24: Restaurant operating expenses and margin
Financial performance: Jan-Sep 2018 (Consolidated) vs Jan-Sep 2017 (Pro-forma) Restaurant operating expenses and margin Y/Y% % of Sales Contribution to change in restaurant opex ratio Data in RON'000 Sep-18 Sep-17 2018/2017 Sep-18 Sep-17 Δ% Restaurant expenses 476,993 372,303 28.1% 86.5% 83.3% 3.2%
Slide 25: G&A expenses
Financial performance: Jan-Sep 2018 (Consolidated) vs Jan-Sep 2017 (Pro-forma) G&A expenses Y/Y% % of Sales Contribution to growth in G&A expense Data in RON'000 Sep-18 Sep-17 2018/2017 Sep-18 Sep-17 General and adm inistration expenses (net), of w hich: 37,661 28,863 30.5% 6.8% 6.5% Payroll and emp
Slide 26: Consolidated financials
(Wp) Consolidated financials
Slide 27: Sphera – Consolidated financial performance
Sphera – Consolidated financial performance Statement of comprehensive income ▪ Consolidated sales up 37.4% Y/Y on strong performance from KFC Romania (+20.9% Y/Y), while the consolidation of ARS (Pizza Hu t restaurants), starting with June 2017, contributed 13.4pp in the consolidated sales growth r
Slide 28: Sphera – Consolidated financial performance: Statement of financial position
Sphera – Consolidated financial performance Statement of financial position Data in RON'000 30-Sep-18 31-Dec-17 Data in RON'000 30-Sep-18 31-Dec-17 Assets Equity and liabilities Non-current assets 212,218 176,123 Total equity 136,932 104,544 Property, plant and equipment 136,134 105,220 Equity attri
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