Sapphire Foods India Ltd. · NSE:SAPPHIRE
Sapphire Foods India — Q1 FY24 Earnings Presentation
44 slides from Sapphire Foods India's earnings presentation, August 2023
Slide 1: Sapphire Foods India Limited Q1 FY24 Earnings Presentation
Sapphire SAPPHIREFoods FOODS India INDIA LLimited IMITED 3Q FY22 Q1FY24 EarningsPERFORMANCE BUSINESS Presentation February AUG2022 2023
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 THE SAPPHIRE STORY Page 4 2 Q1 FY24 FINANCIAL HIGHLIGHTS Page 5-15 3 BUSINESS PERFORMANCE ▪ KFC INDIA Page 16-24 ▪ PIZZA HUT INDIA Page 25-34 ▪ SRI LANKA Page 35-42 4 ESG Page 43 3
Slide 4: 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 5: Q1 FY24 Consolidated Financial Highlights
Q1 FY24 CONSOLIDATED FINANCIAL HIGHLIGHTS
Slide 6: Key Highlights Q1 FY24
KEY HIGHLIGHTS Q1 FY24 ➢ Our Q1 FY24 Consol Restaurant Sales (₹ 6,526 Mn) grew by 20% despite the consumer demand headwinds. Raw Material inflation has cooled off thereby improving gross margins. In these conditions, both KFC and Pizza Hut focussed on winning consumer trust by delivering value and p
Slide 7: Summary Consolidated Financials Q1 FY24
SUMMARY CONSOLIDATED FINANCIALS Q1 FY24 Particulars FY23 Q1 FY23 Q1 FY24 Change YoY Restaurant Sales ₹ mn 22,571 5,436 6,526 20% Adj. EBITDA ₹ mn 2,647 722 772 7% % 11.7% 13.3% 11.8% -150 bps EBITDA ₹ mn 4,343 1,114 1,224 10% % 19.2% 20.5% 18.8% -170 bps PBT ₹ mn 1,084 356 336 -6% % 4.8% 6.6% 5.2% -
Slide 8: Sapphire Foods Current Presence
SAPPHIRE FOODS CURRENT PRESENCE RESTAURANT COUNT KFC India Pizza Hut India Sri Lanka + Maldives RESTAURANT DISTRIBUTION ACROSS INDIAN SUBCONTINENT 341 358 281 286 302 235 50 12 100 116 118 KFC – 9 6 PH – 7 62 Jun'22 Mar'23 Jun'23 20 616 743 778 KFC – 17 KFC – 14 RESTAURANT ADDITION PH – 37 PH – 10 K
Slide 9: Financial Highlights: Restaurant Sales
FINANCIAL HIGHLIGHTS Q1 FY24 CONSOLIDATED RESTAURANT SALES (₹ MN) INDIA RESTAURANT SALES (₹ MN) 22,571 19,744 ▲20% ▲19% 6,526 5,436 5,648 4,755 FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 9
Slide 10: Financial Highlights: Gross Margin
FINANCIAL HIGHLIGHTS Q1 FY24 CONSOLIDATED GROSS MARGIN (%) INDIA GROSS MARGIN (%) 69.8% ▲40 bps 68.8% 69.4% 68.7% ▲50 bps 67.6% 68.2% FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 10
Slide 11: Financial Highlights: Restaurant EBITDA
FINANCIAL HIGHLIGHTS Q1 FY24 CONSOLIDATED RESTAURANT EBITDA (₹ MN / %)# INDIA RESTAURANT EBITDA (₹ MN / %)# 20. 0% 20. 0% 17.8% 17.4% ▼130 18.0% ▼90 21. 0% 21. 0% 18. 0% 18.5% 18. 0% 18.9% 17.2% 19. 0% bps bps 19. 0% 3,929 16. 0% 16. 0% 14. 0% 17. 0% 3,510 14. 0% 17. 0% 12. 0% 15. 0% 12. 0% 15. 0% 1
Slide 12: Financial Highlights: Adj. EBITDA and EBITDA
FINANCIAL HIGHLIGHTS Q1 FY24 ADJ. EBITDA (₹ MN / %)# EBITDA (₹ MN / %) 19. 5% 23. 0% 20.5% 11.7% 19.2% 15. 0% 18.8% ▼170 bps 21. 0% 18. 0% 19. 0% 19. 0% 2,647 10. 0% 13.3% 16. 0% 4,343 11.8% ▼150 bps 18. 5% 17. 0% 14. 0% 12. 0% 15. 0% 5.0 % 18. 0% 10. 0% 0.0 % 8.0 % 1,114 1,224 13. 0% 722 772 6.0 %
Slide 13: Financial Highlights: PBT and PAT
FINANCIAL HIGHLIGHTS Q1 FY24 Adj. PROFIT BEFORE TAX (₹ MN / %)# PROFIT BEFORE TAX (₹ MN / %) 4.8% 6.2% 7.8% 6.6% 6.4% ▼ 140 bps 5.2% ▼ 140 bps 1,407 1,084 427 419 356 336 ▼2% ▼6% FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 Adj. PROFIT AFTER TAX (₹ MN / %)# PROFIT AFTER TAX (₹ MN / %) 11.8% # 10.3% # 2
Slide 14: Revenue & Adj. EBITDA Trend
FINANCIAL HIGHLIGHTS REVENUE & ADJ. EBITDA TREND REVENUE (₹ MN) & ADJ. EBITDA (%) YoY -24% 69% 32% Change % 13.3% 12.4% 11.7% 11.8% 11.1% 10.1% 9.4%* 22,571 5.0% 17,154 6,526 3.8% 5,604 5,939 5,592 13,284 5,436 10,160 FY 20 FY 21 FY 22 FY23 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 * Adj. EBITDA% afte
Slide 15: Consolidated Profit & Loss Statement
CONSOLIDATED PROFIT & LOSS STATEMENT Particulars (In Rs mn) FY23 Q1 FY23 Q1 FY24 YoY % Restaurant Sales 22,570.64 5,435.53 6,525.56 20% Other operating income 85.1 27.14 18.28 COGS 7,406.76 1,756.16 2,060.94 Gross Profit 15,248.98 3,706.51 4,482.90 21% Gross Margin% 67.6% 68.2% 68.7% Employee Expens
Slide 16: KFC India Business Performance
KFC India Business Performance
Slide 17: KFC Brand Priorities
KFC BRAND PRIORITIES Enhance Fried Chicken Category + Relevance - “Let’s KFC” communication + Craveable Taste - Innovation: Chicken Rolls + Value - Range of Snackers at ₹99/- campaign Frictionless Customer Improve Experience Operational + - Digital Kiosks - KFC App + Excellence - 7 Minutes express p
Slide 18: KFC Brand Priorities
KFC BRAND PRIORITIES Fried Chicken Category Relevance | Craveable Taste | Value 18
Slide 19: KFC Brand Priorities
KFC BRAND PRIORITIES Fried Chicken Category Relevance | Craveable Taste | Value 19
Slide 20: KFC Brand Priorities: Improving Accessibility
KFC BRAND PRIORITIES Improving Accessibility – Doubling Restaurant Count in 3-4 years (base Dec’21 count) KFC BALACHUR PUNJAB KFC ELIXA PARK KOLHAPUR KFC SANGRUR PUNJAB KFC PARAS CINEMA DELHI 20
Slide 21: KFC India Q1 FY24 Channel Sales Contribution
KFC INDIA Q1 FY24 - CHANNEL SALES CONTRIBUTION Delivery Takeaway Dine IN 36% 35% 36% 19% 19% 19% 45% 46% 45% FY23 Q1 FY23 Q1 FY24 21
Slide 22: KFC India Q1 FY24
KFC INDIA Q1 FY24 AVERAGE DAILY SALES (₹ ‘000) RESTAURANT SALES (₹ MN) Rest. 78 18 17 SSSG 15% 65% 0% Addition 144 14,529 135 138 ▲21% 4,286 3,537 FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 Rest. Count 341 281 358 Average daily sales is for all restaurants including new additions during the period 22
Slide 23: KFC India Q1 FY24
KFC INDIA Q1 FY24 GROSS MARGIN % RESTAURANT EBITDA# (%) 20.3% 20.8% ▲50 bps 19.4% 68.1% ▲80 bps 67.3% 66.6% FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 # Restaurant EBITDA figures are Pre-IND AS 116. 23
Slide 24: KFC India Restaurant Sales & EBITDA Trend
KFC INDIA RESTAURANT SALES & EBITDA TREND Rest. SALES (₹MN) & Rest. EBITDA % YoY -24% 75% 40% 20.3% 20.2% 20.8% Change % 19.1% 17.9% 19.4% 18.7% * 14.0% 13.2% 14,529 4,286 3,810 3,691 3,537 3,491 10,349 7,735 5,897 FY 20 FY 21 FY 22 FY23 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 * Restaurant EBITDA% a
Slide 25: Pizza Hut India Business Performance
Pizza Hut India – Business Performance
Slide 26: Pizza Hut Brand Priorities
PIZZA HUT BRAND PRIORITIES Build Top-of-Mind Taste Leadership in Value Pizza category + Awareness - Enhance marketing investments: + - Innovation: 10 New Pan Pizzas, 2 new Pastas, Keema Garlic + - Entry level value: Flavor Fun Pizzas - Attractive Meal options TV campaign Bread & Fries Improve Fricti
Slide 27: Pizza Hut Brand Priorities
PIZZA HUT BRAND PRIORITIES Build Top-of-Mind Awareness | Taste Leadership in Pizza Category | Creating Value 27
Slide 28: Pizza Hut Brand Priorities
PIZZA HUT BRAND PRIORITIES Build Top-of-Mind Awareness | Taste Leadership in Pizza Category | Creating Value 28
Slide 29: Pizza Hut Brand Priorities: Operational Excellence
PIZZA HUT BRAND PRIORITIES Operational Excellence 1st Globally Guest Experience Score Sapphire Foods Sapphire Foods Pizza Hut has been recognized by YUM! as No.1 franchisee globally for Guest Experience Scores Speed OSAT B2B Taste Scores OSAT: Overall Satisfaction Index | B2B: Bottom 2 Boxes on Over
Slide 30: Pizza Hut Brand Priorities: Improve Accessibility
PIZZA HUT BRAND PRIORITIES Improve Accessibility: Doubling Restaurant Count in 3-4 years (base Dec’21 count) PH BARAMATI PUNE PH DABOLIM GOA PH PHOENIX MALL AHMEDABAD PH PHOENIX CITADEL INDORE 30
Slide 31: Pizza Hut India Q1 FY24 Channel Sales Contribution
PIZZA HUT INDIA Q1 FY24 - CHANNEL SALES CONTRIBUTION Delivery Takeaway Dine IN 50% 47% 50% 15% 16% 15% 35% 37% 35% FY23 Q1 FY23 Q1 FY24 31
Slide 32: Pizza Hut India Q1 FY24
PIZZA HUT INDIA Q1 FY24 AVERAGE DAILY SALES (₹ ‘000) RESTAURANT SALES (₹ MN) Rest. 67 SSSG 12% 47% -9% 16 16 Addition 61 58 52 ▲12% 5,214 1,219 1,362 FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 Rest. Count 286 235 302 Average daily sales is for all restaurants including new additions during the period
Slide 33: Pizza Hut India Q1 FY24
PIZZA HUT INDIA Q1 FY24 GROSS MARGIN (%) RESTAURANT EBITDA# (%) 14.8% 74.7% 75.3% 75.1% ▼20 bps 13.3% 9.0% ▼580 bps FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 # Restaurant EBITDA figures are Pre-IND AS 116. 33
Slide 34: Pizza Hut India Restaurant Sales & EBITDA Trend
PIZZA HUT INDIA RESTAURANT SALES & EBITDA TREND Rest. SALES (₹MN) & Rest. EBITDA % YoY 14.8% 15.1% -34% 67% 41% Change % 14.1% 13.3% 11.4%* 9.0% 8.6% 7.2% 1,410 1,364 1,362 5.0% 5,214 1,219 1,221 3,710 3,344 2,218 FY 20 FY 21 FY 22 FY23 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 * Restaurant EBITDA% af
Slide 35: Sri Lanka Business Performance
Sri Lanka Business Performance
Slide 36: Sri Lanka Business Branding and Marketing
SRI LANKA BUSINESS BRANDING AND MARKETING 36
Slide 37: Sri Lanka Business Q1 FY24 Channel Sales Contribution
SRI LANKA BUSINESS Q1 FY24 - CHANNEL SALES CONTRIBUTION Delivery Takeaway Dine IN 38% 37% 47% 35% 34% 31% 27% 29% 22% FY23 Q1 FY23 Q1 FY24 37
Slide 38: Sri Lanka Business Q1 FY24
SRI LANKA BUSINESS Q1 FY24 AVERAGE DAILY SALES (LKR ‘000) AVERAGE DAILY SALES (INR ‘000) SSSG% 22% 53% 0% 81 322 333 303 75 72 FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 Rest. Count 114 98 114 Average daily sales is for all restaurants including new additions during the period Note: LKR to INR conver
Slide 39: Sri Lanka Business Q1 FY24
SRI LANKA BUSINESS Q1 FY24 RESTAURANT SALES (LKR MN) RESTAURANT SALES (INR MN) Rest. 19 3 0 Addition 12,166 2,716 ▲27% ▲9% 825 3,145 650 2,893 FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 Rest. Count 114 98 114 39
Slide 40: Sri Lanka Business Q1 FY24
SRI LANKA BUSINESS Q1 FY24 GROSS MARGIN % RESTAURANT EBITDA# (%) 60.5% ▲170 bps 15.5% 58.8% 14.8% 58.1% 13.0% ▼250 bps FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 Absolute Rest. EBITDA declined by 9 % in LKR terms (increased by 8% in INR terms) # Restaurant EBITDA figures are Pre-IND AS 116. 40
Slide 41: Sri Lanka Restaurant Sales & EBITDA Trend
SRI LANKA BUSINESS RESTAURANT SALES & EBITDA TREND Rest. SALES (LKR MN) & Rest. EBITDA % YoY 0% 60% 48% Change % 22.0%* 19.6% 15.5% 15.0% 16.2% 14.6% 14.2% 13.0% 14.8% 12,166 3,282 3,121 3,145 2,893 2,867 8,229 5,144 5,145 FY 20 FY 21 FY 22 FY23 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 * EBITDA% afte
Slide 42: Maldives New Stores
MALDIVES NEW STORES PIZZA HUT HULHUMALE KFC HULHUMALE 42
Slide 43: 2nd ESG Report (FY23) – GRI / SASB / BRSR Norms
2ND ESG REPORT (FY23) – GRI / SASB / BRSR NORMS KEY HIGHLIGHTS GRI – Global Reporting Initiatives, SASB – Sustainability Accounting Standards Board, BRSR – Business Responsibility a Sustainability Report 43
Slide 44: Thank You
THANK YOU