Sapphire Foods India Ltd. · NSE:SAPPHIRE
Sapphire Foods India — Q4 FY22 Earnings Presentation
28 slides from Sapphire Foods India's earnings presentation, February 2022
Slide 1: Sapphire Foods India Limited Earnings Presentation
Sapphire Foods India Limited SAPPHIRE FOODS IPresentation 3Q FY22 Earnings NDIA LIMITED February 2022 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 8-10 3 SEGMENTAL PERFORMANCE ▪ KFC INDIA Page 12 ▪ PIZZA HUT INDIA Page 13-14 ▪ SRI LANKA BUSINESS Page 15 4 KEY CONSIDERATIONS Page 17-27 3
Slide 4: Sapphire Foods at a Glance
SAPPHIRE FOODS AT A GLANCE YUM’s Franchisee Operator in 579 Total Restaurants India, Sri Lanka and Maldives Across India, Sri Lanka and Maldives (2) Sri Lanka’s Largest International QSR chain (1) 264 KFC Restaurants (2) 310 Pizza Hut Restaurants (2) 5 Taco Bell Restaurants (2) ₹ 17,154 mn FY22 Rest
Slide 5: Journey of Sapphire Foods
JOURNEY OF SAPPHIRE FOODS BUILT A PLATFORM OF 579 OUTLETS (1) 263 SAPPHIRE FOODS: GEOGRAPHICAL PRESENCE (1) 219 Restaurants Cities 95 75 52 49 40 9 INDIA SRI LANKA KFC – 5 PH – 7 45 15 KFC – 14 KFC – 9 PH – 23 PH – 6 KFC – 5 ~ KFC and Pizza Hut Brands Operate in States that cover 56% of PH – 1 GDP (
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 Q4 & FY22 Q4 FY22 FY22 Despite Q1 and Q4 FY22 being impacted by operational disruptions due to Covid pandemic, we Restaurant Sales ₹ mn 4,943 46% 17,154 69% delivered our best financial performance in FY22 In Q4 FY22 EBITDA ₹ mn 1,036 66% 3,248 * 82% ▪ Revenue grew in
Slide 9: Operational & Financial Overview
OPERATIONAL & FINANCIAL OVERVIEW NUMBER OF RESTAURANTS Gross Restaurant 62 36 14 32 70 35 Additions 550 579 450 482 427 437 31-Mar-20 31-Mar-21 30-Jun-21 30-Sep-21 31-Dec-21 31-Mar-22 Restaurant 11 26 1 0 2 6 Closures RESTAURANT SALES (INR mm) 68.8% increase 17,154 46% Increase 7% Increase on Y-O-Y
Slide 10: Profitability Overview
PROFITABILITY OVERVIEW GROSS MARGIN (INR mm) 69.6% 30 bps 68.3% 69.9% 70.9% 11,974 69.1% 180 bps 9,084 7,103 2,400 3,414 FY20 FY21 FY22 Q4 FY21 Q4 FY22 Gross Margin % EBITDA (INR mm) 18.9% 130 bps 17.6% 14.0% 3,248 21.0% 260 bps 1,856 1,787 18.4% 1,036 623 FY20 FY21 FY22 Q4FY21 Q4FY22 EBITDA Margin
Slide 11: Segmental Performance
SEGMENTAL PERFORMANCE
Slide 12: 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 MAR 31, 2022 / FOR FY20 / FOR FY21 / FOR FY22 /FOR Q4 FY22 Total Restaurant Count 187 203 263 263 Average Daily Sales per 130 106 130 132 Restaurant (INR‘000s) Restaurant Related 43% 7,753 5,89
Slide 13: 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 MAR 31, 2022 / FOR FY20 / FOR FY21 / FOR FY22 / FOR Q4 FY22 Total Restaurant Count 174 162 219 219 Average Daily Sales per Restaurant (INR‘000s) 58 48 57 55 Restaurant Related 33% Revenue
Slide 14: 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 14
Slide 15: 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 MAR 31, 2022 / FOR FY20 / FOR FY21 / FOR FY22 / FOR Q4 FY22 Total Restaurant Count 64 70 95 95 Average Daily Sales per Restaurant (INR‘000s) 92 94 108 112 Restaurant Related 52% (INR
Slide 16: Key Considerations
KEY CONSIDERATIONS
Slide 17: 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 18: 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 19: 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 20: 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 20
Slide 21: 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 22: 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 23: 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 24: Operational Excellence Led by In-House Supply Chain and Technology
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 25: Calibrated New Restaurant Economic Model for Expansion
CALIBRATED NEW RESTAURANT ECONOMIC MODEL FOR EXPANSION INDIA INDIA As of 31-Mar-19 Recent As of 31-Mar-19 Recent Avg Size of Restaurant ~ 1,500 (1) ~ 1,300 (1) (in Sq. ft.) 2,736 2,427 Reduction in Avg Reduction in Avg Restaurant size ~45% (2) Restaurant size ~46% (2) FY19 FY22 FY19 FY22 Average Dai
Slide 26: 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 27: 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 27
Slide 28: 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