Sphera Franchise Group Sa · BVB:SFG
Sphera Franchise Group Sa — Investor Presentation (April 2023)
40 slides from Sphera Franchise Group Sa's investor presentation, April 2023
Slide 1: Sphera Franchise Group Investor Presentation
Sphera Franchise Group Investor Presentation April 2023
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: Contents
Contents 1 About Sphera Franchise Group 2 2022 Financial Highlights 3 2021-2022 Brand Performance 4 Q4 2022 Business Updates 5 Development Plan 6 Annex 1: Key 2022 Financials 3
Slide 4: About Sphera Franchise Group
About Sphera Franchise Group 4
Slide 5: Purpose, Vision, Mission
PURPOSE Development through relevance and trust. VISION Be the leaders in the Romanian food service industry and become an important player at the European level. MISSION Offer customers a memorable experience, through excellent services and unique products, prepared by passionate teams. 5
Slide 6: Sphera Franchise Group at a glance
Sphera Franchise Group at a glance • Sphera is the leading food operator in Romania, operating through subsidiaries in Moldova and in Italy. • Sphera Franchise Group was incorporated in May 2017 to consolidate all brands operated by the Group since 1994: KFC, Pizza Hut Dine-In, and Pizza Hut Deliver
Slide 7: 2nd QSR Operator in Romania, 1st Full-Service Restaurant Operator
2nd QSR Operator in 1st Full-Service Restaurant Almost 30 years track- Romania Operator in Romania record 3 iconic brands: KFC, Pizza 178 restaurants in 3 SFG shares included in BVB Hut, Taco Bell countries BET & FTSE Russell Micro- cap 7
Slide 8: Sphera Franchise Group at a glance
Sphera Franchise Group at a glance Locations split per brand Geographical footprint 2 18 27 156 3 15 22 19 70 9 11 Bucharest Food Court In Line Drive-through KFC restaurants PH and PH Delivery restaurants Taco Bell restaurants 8 Notes: Restaurants of of 04.04.2023, 1 Paul Store & 1 PHD sub-franchise
Slide 9: Sphera Franchise Group corporate structure
Sphera Franchise Group corporate structure 99.9% 99.9% 99.9% 100% 80% American Restaurant California Fresh US Food Network US Food Network US Food Network S.A. System S.A. Flavors S.R.L. S.R.L. - Italy S.R.L. - Moldova Holds the franchise rights to Holds the franchise and sub- Holds the franchise ri
Slide 10: Management team
Management team CALIN IONESCU VALENTIN BUDES MONICA EFTIMIE CRISTIAN OSIAC MARINA TOPSA CEO CFO CMO CDO Legal Director Mr Ionescu is the CEO of Sphera Mr Budes is the CFO of the Sphera Mrs Eftimie is the CMO of Sphera Mr Osiac has been the Chief Mrs Topsa is the Legal Director at Franchise Group sin
Slide 11: Leading foodservice group in Romania
Leading foodservice group in Romania QSR QSR #2 player on the chained QSR segment (21.4% market share) #1 player on the QSR chicken segment ü 88% aided brand awareness among Romanian customers (Dec’21) ü Stronger than McDonald’s in Brand Power, Usage Funnel and Main Product Attributes ü First Taco B
Slide 12: Key investment highlights
Key investment highlights Leading food service Scalable platform with Improved liquidity due Operational excellence group operating a fully fledged process in to Market Making, proven by consistent top portfolio of iconic, place allowing efficient attested by inclusion in ranked among YUM internatio
Slide 13: Track record of growth & network development
Track record of growth & network development KFC Pizza Hut Dine-In Pizza Hut Delivery Taco Bell VUCA Phase 175 176 Transformation Phase 168 15 15 Development Phases 156 13 154 10 11 20 20 138 19 Acceleration Phase 5 22 18 22 22 113 22 22 2 21 23 98 17 Initial Phase 23 86 12 76 9 22 74 75 21 10 9 9 1
Slide 14: Historical performance, slowed by the pandemic
Historical performance, slowed by the pandemic Turnover Normalized EBITDA 17% CAGR 2016-2022 96 102.3 73.5 69.3 72.4 73.5 44.1 2016 2017 2018 2019 2020 2021 2022 1323 Net profit 955 1000 771 711 619 514 64.2 51.6 32.6 39.1 24.3 -2.4 27.4 2016 2017 2018 2019 2020 2021 2022 2016 2017 2018 2019 2020 20
Slide 15: SFG on BVB
SHAREHOLDING STRUCTURE SFG on BVB Other shareholders 34.40% Tatika Investments Ltd 28.61% SFG is quoted on the Main Market of Bucharest Stock Exchange since November 2017. Since September 2018, SFG shares are included in the reference index of BVB, BET and since March 2022, in FTSE Global Micro Cap
Slide 16: Sustainability
Sustainability Sphera Franchise Group strategy is based on four pillars and relevant material topics defined together with the organization stakeholders. The management set general and specific medium and long-term objectives, with targets until 2025, aligned with the Sustainable Development Goals.
Slide 17: 2022 Financial Highlights
2022 Financial Highlights 17
Slide 18: SFG Performance in 2022
SFG Performance in 2022 • Best quarter in Group’s history: Q4’22 continued the positive trend of QoQ increases, with the Group closing the period with record-high results, registering RON 369.2 mn in Data in RON’000 2022A 2021A Y/Y % consolidated sales, a 36% increase compared to Q4’21 and normalize
Slide 19: SFG 2022 Performance
SFG 2022 Performance 1,322.8 % +32 369.2 1,270.8 1,000.3 % Q4 +3 6% +31 271.6 341.1 102.7 967.7 +40 % 347.6 Q3 2% 6% +2 271.4 +2 73.5 44.4 321.7 43% +2 284.2 12.9 3% 327.4 262.3 +2 Q2 1% 37.0 +4 322.3 4% 233.1 29.8 +2 3% 225.8 +4 -1% Q1 278.6 17.6 +3 2% 7% 285.7 211.4 208.3 +3 -71% 17.5 13.1 3.8 202
Slide 20: SFG 2022 Performance breakdown
SFG 2022 Performance breakdown Contribution to 2022 turnover 5.2% 12.6% 1.3% 9.3% Q1 Q4 21.1% 27.9% 24.8% 86.1% 85.5% Q2: 15% 26.3% Q3: 27.8% Q2 Q3 Per market Per brand Per quarter 20
Slide 21: 2021-2022 Brand Performance
2021-2022 Brand Performance 21
Slide 22: KFC Romania
All Store Performance KFC Romania 114.9% 42.8% • Q4’22 was another quarter of continued increases for KFC 37.3% 35.0% 23.6% Romania as all store performance improved 35% YoY due to 14.3% 20.3% 20.1% excellent same store results (+31%) paired with the sales generated by the new KFC restaurants that w
Slide 23: KFC Italy & KFC Republic of Moldova
All Store Performance KFC Italy & KFC Republic of Moldova 114.5% 88.0% 70.3% 58.4% KFC Italy 26.0% 37.5% 31.6% 2.5% • All-stores recorded 32% sales increase in Q4’22 vs. Q4’21, while the Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 same store evolution saw a 29% sales increase. Same Store Perform
Slide 24: Pizza Hut & Taco Bell
Pizza Hut & Taco Bell All Store Performance Pizza Hut 108.4% • The YoY increase dynamic took up again in Q4’22 as the brand registered 71.4% 39% increase in all store performance and a 34% increase in the same store 54.6% 55.3% 45.5% performance. In 2022, ARS opened 2 new units. 38.5% • 39% of all o
Slide 25: Q4 2022 Business Updates
Q4 2022 Business Updates 25
Slide 26: COVID-19 & staff updates
COVID-19 & staff updates COVID-19 updates • Lifting of the restrictions in all markets of activity in Q2’22: Romania lifted all the COVID-19 restrictions as of 09.03.2022, Republic of Moldova as of 19.04.2022, and Italy as of 01.05.2022. • Not substantial facilities granted: With the lifting of the
Slide 27: Restaurant development & fiscal updates
Restaurant development & fiscal updates Number of stores • 177 restaurants operated: SFG operated 177 restaurants as of 31.12.2022, out of which 96 KFC restaurants in Romania, 2 in Moldova and 20 in Italy, as well as 15 Taco Bell restaurants, 42 Pizza Hut restaurants (of which 22 Pizza Hut and 20 Pi
Slide 28: Capital markets updates
Capital markets updates SFG evolution on BVB • Increases registered in Q4 2022 after volatile 9 months: The total traded value on SFG shares between 01.10.2022 and 31.12.2022, was RON 5.5 mn, as 404,931 shares were traded (3.1% of the free float). SFG shares registered in Q4 2022 a positive evolutio
Slide 29: Marketing
Marketing Pricing adaptation to the market conditions • In the current economic climate, SFG increased the prices in December for the three brands in order to protect the bottom line and absorb the increased cost of inputs. At the same time, the Group focused on value offerings to the customer to en
Slide 30: Marketing
Marketing Pizza Hut: Build sales and increase distinctiveness • For the winter campaign Pizza Hut brought into focus one of its iconic products – Cheesy Bites, and added an innovation called Meaty Bites. The campaign successfully delivered sales and increased consideration by building on distinctive
Slide 31: Development Plan
NY SPHERA Krc @ ,{3., Development Plan
Slide 32: Efficient restaurant roll-out
Efficient restaurant roll-out Restaurant-selection criteria New restaurant opening process Market Analysis Generators Identify Best Locations (leisure – e.g. shopping centres, cinemas or retail – Traffic Traffic & Market Research e.g. DIY, hypermarkets, furniture stores etc) Project Management Archi
Slide 33: 2023 Guidance
2023 Guidance Indicator RON millions (mn Restaurant Sales (*) Other Income Food and Material Restaurant Gross Margin Restaurant Operational Expenses Restaurant Operating Profit G&A expenses EBITDA (normalized, excluding IFRS 16 impact) (*) Normalized Profit for the year (*) Free Cash Flow (*) Nn SPH
Slide 34: 2023 Guidance
2023 Guidance General context: the budget is based on information available as of end of February 2023, under presumption of a normal course of business and considering that the overall inflation will be around 10% in 2023. The budget also takes into consideration the increase of the minimum wage st
Slide 35: Annex 1: Key 2022 Financials
Annex 1: Key 2022 Financials 35
Slide 36: Summary of 2022 Consolidated FS
Summary of 2022 Consolidated FS 36 Results excl. IFRS16
Slide 37: Summary of 2022 Consolidated FS
Summary of 2022 Consolidated FS (with and without IFRS 16 impact) 37
Slide 38: Breakdown of 2022 results by entity
Breakdown of 2022 results by entity 38 Results excl. IFRS16
Slide 39: Overview of the 2022 G&A expenses
Overview of the 2022 G&A expenses (with and without IFRS 16 impact) 39
Slide 40: Thank you!
SFG 2023 Financial Calendar 27.04.2023 – Annual GSM 15.05.2023 – Q1 2023 Results 15.05.2023 – Q1 2023 Results Call 30.08.2023 – H1 2023 Results 30.08.2023 – H1 2023 Results Call 15.11.2023 – Q3 2023 Results 15.11.2023 – Q3 2023 Results Call Thank you! For any follow-up questions related to Sphera Fr
Sphera Franchise Group — Investor Presentation (April 2023) on 6ix