Sphera Franchise Group Sa · BVB:SFG
Sphera Franchise Group Sa — 9M 2023 Earnings Presentation
49 slides from Sphera Franchise Group Sa's earnings presentation, Nov 20, 2023
Slide 1: Sphera Franchise Group Investor Presentation
Sphera Franchise Group Investor Presentation November 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 9M 2023 Financial Highlights 3 Brand Performance 4 Latest Business Updates 5 Development Plan 6 Annex 1: Key 9M 2023 Financials 7 Annex 2: 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: 1st QSR Operator in Romania
1st QSR Operator in 1st Full-Service Restaurant 30 years track-record Romania Operator in Romania 3 iconic brands: KFC, Pizza 173 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 28 153 15 11 24 24 70 Bucharest Food Court In Line Drive-through KFC restaurants PH restaurants Taco Bell restaurants 8 Notes: Restaurants as of 31.10.2023; 1 PHD sub-franchise based in Romania is not included a
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 CEO CFO CMO Mr Ionescu is the Chief Executive Officer of Sphera Mr Budes is the Chief Financial Officer of the Sphera Mrs Eftimie is the Chief Marketing Officer of Sphera Franchise Group since October 2020. Mr. Ionescu has Franchise Group s
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 175 172 Transformation Phase 168 15 15 Development Phases 156 13 154 10 11 20 138 19 Acceleration Phase 35 5 22 18 22 113 22 22 2 21 23 98 17 Initial Phase 23 86 12 76 9 22 74 75 21 10 9 9 18 6
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 AS OF 30.06.2023 SFG on BVB Other shareholders 33.79% Tatika Investments Ltd 28.61% SFG is quoted on the Main Market of Bucharest Stock Exchange as of November 2017. Since September 2018, SFG shares are included in the reference index of BVB, BET, as of March 2022, in the FTSE
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: 9M 2023 Financial Highlights
9M 2023 Financial Highlights 17
Slide 18: SFG Performance in 9M 2023
SFG Performance in 9M 2023 Data in RON’000 9M-23 9M-22 Y/Y % • Strong performance: the revenues overpassed, for the first time, the milestone of RON 1 billion in sales generated within the first three quarters of the year. This Restaurant sales 1,074,736 953,594 12.7% milestone was supported by a 12
Slide 19: SFG 9M 2023 Performance
SFG 9M 2023 Performance 3% 1,074.7 +1 953.6 379.2 1,020.5 0% 94.7 347.6 929.7 +1 9M +9% 355.3 63% + 321.7 0% 42.4 Q3 +1 360.5 58.3 % +14 327.4 342.5 285.7 322.3 0% +1 37.0 Q2 28.8 % +6 5% 278.6 335.1 322.7 3% +6 17.5 +1 23.5 Q1 0% +2 26 % +5 3.8 2022 2023 2022 2023 2022 2023 Restaurant Sales Expense
Slide 20: SFG 9M 2023 Performance breakdown
SFG 9M 2023 Performance breakdown Contribution to 9M 2023 turnover 12.6% 5.8% 1.4% 8.1% 86% 86.1% Per market Per brand 20
Slide 21: 2022 Financial Highlights
2022 Financial Highlights 21
Slide 22: 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 23: 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 24: 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 24
Slide 25: Brand Performance
Brand Performance NY SPHERA z Krc @ {3
Slide 26: KFC Romania
All Store Performance KFC Romania 37.3% 35.0% 23.6% 20.1% 19.6% 10.7% • Q3’23 was another strong quarter of consolidation for KFC 10.5% Romania as all store performance improved 10.7% YoY due to solid same store results (+6.9%). • The sales for delivery in Q3’23 amounted to 16%, stable Q1’22 Q2’22 Q
Slide 27: KFC Italy & KFC Republic of Moldova
KFC Italy & KFC Republic of Moldova KFC Italy All Store Performance 70.3% 58.4% • All-stores recorded 9.2% sales increase in Q3’23 vs. Q3’22. • 6% of all orders in Q3’23 were for delivery, 1pp QoQ decrease. 37.5% 31.6% • USFN Italy took EBITDA from negative, as reported in 9M’22, to positive 22.1% t
Slide 28: Pizza Hut & Taco Bell
Pizza Hut & Taco Bell All Store Performance Pizza Hut 55.3% 45.5% 38.5% • The YoY all store performance registered a 9.8% decrease while the same store sales decreased 9.5%. • 35% of all orders were made for delivery in Q2’23, a 1pp increase QoQ. 15.1% 10.0% • Pizza Hut closed 9M’23 with a negative
Slide 29: Latest Business Updates
Latest Business Updates 29
Slide 30: Development updates
Development updates Number of stores • 178 restaurants operated: Out of which 101 KFC restaurants in Romania, 2 in Moldova and 18 in Italy, as well as 40 Pizza Hut restaurants, 15 Taco Bell restaurants, 1 PHD subfranchise and 1 Paul restaurant as of 30.09.2023 • Network evolution in Q3’23: 1 new KFC
Slide 31: Staff & fiscal updates
Staff & fiscal updates Staff • Employees: As of 30.09.2023, the Group had 5,143 employees, of which 4,670 were in Romania, 400 in Italy and 73 in the Republic of Moldova. • Continuing the digitalization to simplify the sales process: In Q3 2023, the Group continued the process of digitalizing its ne
Slide 32: Capital markets updates
Capital markets updates SFG evolution on BVB • SFG outperforms reference indices in 9M 2023: In 9M 2023, SFG shares appreciated 47.9%, while the BET index grew 22.9%. The Total Return on SFG shares in 9M 2023, including the dividend paid on March 31st, 2023, was 51.5%, versus 29.3% increase for the
Slide 33: Marketing updates
Marketing updates The digital normal • Focusing on ease of access for our consumers who expect frictionless experiences, we continued our digital journey and communicated through digital media our “click & collect” services and ecommerce platforms, with the objective of expanding our user base and g
Slide 34: Marketing updates
Marketing updates Pizza Hut: Build sales and increase distinctiveness • To stay relevant to our clients and unlock new pizza territories, over the summer Pizza Hut introduced a new pizza innovation, Crown pizza, with the aim of attracting both new and lapsed users. • With the objective of improving
Slide 35: Development Plan
NY SPHERA Krc @ ,{3., Development Plan
Slide 36: 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 37: 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 38: 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 39: Annex 1: Key 9M 2023 Financials
Annex 1: Key 9M 2023 Financials 39
Slide 40: Summary of 9M 2023 Consolidated FS
Summary of 9M 2023 Consolidated FS 40 Results excl. IFRS16
Slide 41: Summary of 9M Consolidated FS
Summary of 9M Consolidated FS (with and without IFRS 16 impact) 41
Slide 42: Breakdown of 9M 2023 results by entity
Breakdown of 9M 2023 results by entity 42 Results excl. IFRS16
Slide 43: Overview of the 9M 2023 G&A expenses
Overview of the 9M 2023 G&A expenses (with and without IFRS 16 impact) 43
Slide 44: Annex 2: Key 2022 Financials
Annex 2: Key 2022 Financials 44
Slide 45: Summary of 2022 Consolidated FS
Summary of 2022 Consolidated FS 45 Results excl. IFRS16
Slide 46: Summary of 2022 Consolidated FS
Summary of 2022 Consolidated FS (with and without IFRS 16 impact) 46
Slide 47: Breakdown of 2022 results by entity
Breakdown of 2022 results by entity 47 Results excl. IFRS16
Slide 48: Overview of the 2022 G&A expenses
Overview of the 2022 G&A expenses (with and without IFRS 16 impact) 48
Slide 49: Thank you!
Thank you! For any follow-up questions related to Sphera Franchise Group’s activity on the Bucharest Stock Exchange, please contact Zuzanna Kurek, IRO at: investor.relations@spheragroup.com. 49
Sphera Franchise Group — 9M 2023 Earnings Presentation on 6ix