Sphera Franchise Group Sa · BVB:SFG
Sphera Franchise Group Sa — Q3 2019 Earnings Presentation
25 slides from Sphera Franchise Group Sa's earnings presentation, Oct 1, 2019
Slide 1: Sphera Franchise Group Interim results: Jan-Sep 2019
Sphera Franchise Group Interim results: Jan-Sep 2019 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 – 9-mth 2019 key events
Sphera – 9-mth 2019 key events All-store sales up 25.9% with same-store sales growth of 8.2% ▪ Q3 overall sales growth of 23.5%, same-store sales growth of 6.8% Total store openings: 1 in Q3; network size 146 @ 30 September 2019 KFC sales remained strong, with another double-digit quarterly growth,
Slide 4: Macro environment: CPI stabilizes as labour market remains tight
Macro environment CPI stabilizes as labour market remains tight Annualized CPI (RON) Salaries (Y/Y%) 6% 6,000 60% 5% Average gross salary (Y/Y% change) - rhs 5,000 Average gross salary 50% 4% Minimum salary 3% 4,000 40% 2% 1% 3,000 30% 0% 2,000 20% -1% -2% 1,000 10% -3% -4% 0 0% Jan-16 Jan-17 Jan-18
Slide 5: Sales performance by brands
(Np) Sales performance by brands
Slide 6: Brand performance: KFC Romania
Brand performance: KFC Romania Sales growth analysis ▪ All-store sales growth of 17.1% Y/Y in Q3-2019 30% 26.4% with same-store growth reaching 7.7%; 25% 23.2% ▪ The 9 net openings (since Jan-2018) contributed 21.5% 20.4% c. 9.5pp to the Y/Y growth in Q3-2019. 19.6%20.1% 19.5%18.9% 20% 17.7% All-sto
Slide 7: Brand performance: Pizza Hut
Brand performance: Pizza Hut Sales growth analysis 30% 28.0% ▪ All-store sales growth of 7.1% Y/Y in Q3-2019, with majority of growth coming from the 6 stores opened starting Jan-2018; 25% 20% All-store 15.5% performance 15% 11.4% 9.5% 9.8% 10% 8.4% 8.5% 7.3% 7.4% 7.1% 5% 0% 2016 2017 2018 Q1 Q2 Q3
Slide 8: Development
(Np) Development
Slide 9: Development: Restaurant openings in 2019
Development Restaurant openings in 2019 Total stores Openings Openings Openings Total stores 2019 Opening BoY Q1-2019 Q2-2019 Q3-2019 end Q3-2019 Plan 78 0 1 0 79 8 10 0 4 1 15 10 23 0 0 0 23 0 22 0 0 0 22 1 5 0 2 0 7 5 138 0 7 1 146 24 9
Slide 10: Brand news
(Np) Brand news
Slide 11: Brand news: Q3-2019 highlights (KFC)
Brand news Q3-2019 highlights ▪ Already a summer tradition in KFC, this year innovation platform featured 3 limited-time offer products (Holiday Burger, Summer Twister and Crispy Box) aiming at increasing frequency of visits; ▪ For the back-to-school calendar window, KFC launched a new format produc
Slide 12: Brand news: Q3-2019 highlights (Pizza Hut)
Brand news Q3-2019 highlights ▪ To unlock new pizza territories and stay relevant to our clients, Pizza Hut introduced a new pizza innovation (San Francisco Dough) over the summer, made with Sourdough for more artisanal taste, with the aim of attracting new users. ▪ Targeting improving transaction l
Slide 13: Marketing: Q3-2019 campaigns
Marketing Q3-2019 campaigns 13
Slide 14: Financials
Financials
Slide 15: Financial performance: 9-mth 2019 Statement of comprehensive income
Financial performance: 9-mth 2019 Statement of comprehensive income ▪ Sales up 25.9% Y/Y on strong performance from KFC Romania/Moldova (+18.1% Y/Y, 13.5pp contribution), with increasing contribu tion from KFC Italy (8.6pp) and Taco Bell (2.7pp); ▪ Restaurant operating profit up 20.0% Y/Y, with marg
Slide 16: Impact of IFRS 16 - Leases on 9-mth 2019 results
Financial performance: 9-mth 2019 Impact of IFRS 16 - Leases on 9-mth 2019 results ▪ Starting 1 January 2019, Sphera applied IFRS 16 that sets out the principles for the recognition, measurement, presentation a nd disclosure of leases. Sphera uses the modified retrospective approach for this transit
Slide 17: 9-mth 2019 Statement of comprehensive income (excluding IFRS 16)
Financial performance: 9-mth 2019 Statement of comprehensive income (excluding impact of IFRS 16 adoption) ▪ Sales up 25.9% Y/Y on strong performance from KFC Romania/Moldova (+18.1% Y/Y, 13.5pp contribution), with increasing contribu tion from KFC Italy (8.6pp) and Taco Bell (2.7pp); ▪ Restaurant o
Slide 18: Q3-2019 Statement of comprehensive income (excluding IFRS 16)
Financial performance: Q3-2019 Statement of comprehensive income (excluding impact of IFRS 16 adoption) ▪ Sales up 23.5% Y/Y on strong performance from KFC Romania/Moldova (+13.6% Y/Y, 10.5pp contribution), with significant contrib ution from KFC Italy (9.2pp) and Taco Bell (2.7pp); ▪ Restaurant ope
Slide 19: Financial performance: Margin trend (Quarterly and YTD)
2018-Q1 7.3% 2018-Q1 22.5% Q2 6.6% Q2 20.8% Q3 6.2% Q3 26.6% Q4 7.1% Q4 27.8% 2019-Q1 6.1% 2019-Q1 26.1% Quarter Quarter Q2 5.9% Q2 28.4% Q3 6.4% Q3 23.5% 2018-Q1 7.3% 2018-Q1 22.5% Q2 6.9% Q2 21.6% Q3 6.7% Q3 23.4% Normalized G&A ratio Q4 6.8% Q4 24.6% YTD YTD 2019-Q1 7.3% 2019-Q1 22.5% Restaurant
Slide 20: 9-mth 2019 Breakdown of results by Group companies
Financial performance: 9-mth 2019 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 497,837 95,584 8,214 68,968 22,844 22,370 (21,500) 694,317 Dividend revenue 0 0 0 0 0 51,239 (51,239) 0 Restaurant expenses 417,582
Slide 21: Breakdown of results by Group companies (excluding IFRS 16)
Financial performance: 9-mth 2019 Breakdown of results by Group companies (excluding impact of IFRS 16 adoption) Data in RON'000 USFN (RO) ARS USFN (MD) USFN (IT) CFF SFG Cons.Adj SFG Cons. Restaurant sales 497,837 95,584 8,214 68,968 22,844 22,370 (21,500) 694,317 Dividend revenue 0 0 0 0 0 51,239
Slide 22: 9-mth 2019 Restaurant operating expenses and margin
Financial performance: 9-mth 2019 Restaurant operating expenses and margin Including the impact of IFRS 16 adoption Contribution to change in restaurant opex ratio* Y/Y% % of Sales Data in RON'000 Sep-19 Sep-18 2019/2018 Sep-19 Sep-18 Δ% Restaurant expenses 604,825 476,993 26.8% 87.1% 86.5% 0.6% Foo
Slide 23: Q3-2019 Restaurant operating expenses and margin
Financial performance: Q3-2019 Restaurant operating expenses and margin Including the impact of IFRS 16 adoption Contribution to change in restaurant opex ratio* Y/Y% % of Sales Data in RON'000 Q2-2019 Q2-2018 2019/2018 Q2-2019 Q2-2018 Δ% Restaurant expenses 210,104 173,490 21.1% 84.5% 86.1% -1.6% F
Slide 24: 9-mth 2019 G&A expenses
Financial performance: 9-mth 2019 G&A expenses Including the impact of IFRS 16 adoption Contribution to growth in G&A expense* Y/Y% % of Sales Data in RON'000 Sep-19 Sep-18 2019/2018 Sep-19 Sep-18 General and adm inistration expenses (net), of w hich: 42,285 37,661 12.3% 6.1% 6.8% Employee benefits
Slide 25: Sphera – Consolidated financial performance: Statement of financial position
Sphera – Consolidated financial performance Statement of financial position Excluding impact of Impact of IFRS 16 IFRS 16 adoption adoption Data in RON'000 30-Sep-19 31-Dec-18 Change 30-Sep-19 Assets Non-current assets 486,396 229,173 257,223 270,405 215,991 Property, plant and equipment 188,104 158
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