Sapphire Foods India Ltd. · NSE:SAPPHIRE
Sapphire Foods India — Q3 FY24 Earnings Presentation
46 slides from Sapphire Foods India's earnings presentation, February 2024
Slide 1: Q3 and 9M FY24 Earnings Presentation
Sapphire SAPPHIREFoods FOODS India INDIA LLimited IMITED 3Q9M Q3 AND FY22 Earnings FY24 Presentation BUSINESS PERFORMANCE February 2022 FEB’2024
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 04 2 Q3 AND 9M FY24 FINANCIAL HIGHLIGHTS Page 05-16 3 BUSINESS PERFORMANCE ▪ KFC INDIA Page 17-25 ▪ PIZZA HUT INDIA Page 26-35 ▪ SRI LANKA Page 36-44 4 ESG Page 45 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: Q3 and 9M FY24 Consolidated Financial Highlights
Q3 AND 9M FY24 CONSOLIDATED FINANCIAL HIGHLIGHTS
Slide 6: Key Highlights Q3 FY24
KEY HIGHLIGHTS Q3 FY24 ➢ Our Q3 FY24 Consol Restaurant Sales (₹ 6,643 Mn) grew by 12% and EBITDA (₹ 1,225 Mn) grew by 5%. Demand across all consumer product categories remains weak while raw material Inflation is stable. ➢ In Q3 FY24 we added 36 restaurants (25 KFC, 8 Pizza Hut in India and 3 Pizza
Slide 7: Summary Consolidated Financials
SUMMARY CONSOLIDATED FINANCIALS Q3 & 9M FY24 Particulars Q3 FY24 Q3 FY23 Change YoY 9M FY24 9M FY23 Change YoY FY23 Restaurant Sales ₹ mn 6,643 5,939 12% 19,582 16,978 15% 22,571 Adj. EBITDA ₹ mn 722 738 -2% 2,172 2,084 4% 2,647 % 10.9% 12.4% -150 bps 11.1% 12.3% -120 bps 11.7% EBITDA ₹ mn 1,225 1,1
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 406 325 341 274 286 319 57 14 114 116 125 KFC – 10 6 PH – 7 63 Dec'22 Mar'23 Dec'23 25 715 743 850 KFC – 20 KFC – 15 RESTAURANT ADDITION PH – 32 PH – 11
Slide 9: Financial Highlights: Restaurant Sales
FINANCIAL HIGHLIGHTS Q3 & 9M FY24 CONSOLIDATED RESTAURANT SALES (₹ MN) ▲15% ▲12% 22,571 19,582 16,978 6,643 5,939 Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 INDIA RESTAURANT SALES (₹ MN) 19,744 ▲14% ▲11% 16,869 14,831 5,174 5,726 Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 9
Slide 10: Financial Highlights: Gross Margin
FINANCIAL HIGHLIGHTS Q3 & 9M FY24 CONSOLIDATED GROSS MARGIN (%) 69.0% ▲170 bps 68.9% ▲150 bps 67.6% 67.3% 67.4% Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 INDIA GROSS MARGIN (%) 70.1% ▲150 bps 69.9% ▲120 bps 68.8% 68.6% 68.7% Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 10
Slide 11: Financial Highlights: Restaurant EBITDA
FINANCIAL HIGHLIGHTS Q3 & 9M FY24 CONSOLIDATED RESTAURANT EBITDA (₹ MN / %)# 20. 0% 17.4% 21. 0% 21. 0% 18. 0% 18.1% 17.8% 16.0%▼210 bps 16.5%▼130 bps 19. 0% 19. 0% 3,929 16. 0% 3,231 17. 0% 17. 0% 14. 0% 15. 0% 12. 0% 3,019 15. 0% 1,070 1,067 13. 0% 10. 0% 13. 0% 8.0 % 11. 0% 11. 0% 6.0 % 9.0 % 9.0
Slide 12: Financial Highlights: Adj. EBITDA and EBITDA
FINANCIAL HIGHLIGHTS Q3 & 9M FY24 ADJ. EBITDA (₹ MN / %)# 11.7% 15. 0% 12.3% 18. 0% 16. 0% 11.1% ▼120 bps 15. 0% 2,647 10. 0% 12.4% 14. 0% 10. 0% 10.9% ▼150 bps 2,172 12. 0% 5.0 % 2,084 5.0 % 10. 0% 738 722 8.0 % 0.0 % 0.0 % 6.0 % -5.0% 4.0 % -5.0% -10.0% ▼2% ▲4% 2.0 % 0.0 % -10.0% -15.0% Q3 FY23 Q3
Slide 13: Financial Highlights: Profit Before Tax
FINANCIAL HIGHLIGHTS Q3 & 9M FY24 Adj. PROFIT BEFORE TAX (₹ MN / %)# 7.1% 3.8% ▼ 330 bps 7.1% 5.0% ▼ 210 bps 6.2% 1,199 1,407 973 419 256 ▼39% ▼19% Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 PROFIT BEFORE TAX (₹ MN / %) 5.7% 4.8% 500.00 2.1% ▼ 360 bps 961 691 400.00 336 5.7% 300.00 3.5% ▼ 220 bps 200.00 1
Slide 14: Financial Highlights: Profit After Tax
FINANCIAL HIGHLIGHTS Q3 & 9M FY24 Adj. PROFIT AFTER TAX (₹ MN / %)# 6.9% 2.8% ▼ 410 bps 7.2% 11.8% 3.6% ▼ 360 bps 1,214 2,654 410 710 184 ▼55% ▼42% Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 PROFIT AFTER TAX (₹ MN / %) 5.5% 1.5% ▼ 400 bps 10.3% 977 327 5.8% 499 2,332 2.5% ▼ 330 bps 98 ▼70% ▼49% Q3 FY23 Q3
Slide 15: Restaurant Sales & Adj. EBITDA Trend
FINANCIAL HIGHLIGHTS RESTAURANT SALES & ADJ. EBITDA TREND REST. SALES (₹ MN) & ADJ. EBITDA (%) YoY -24% 69% 32% Change % 12.4% 11.7% 11.8% 10.6% 10.9% 10.1% 9.4%* 22,571 5.0% 17,154 6,526 6,414 6,643 3.8% 5,939 5,592 13,284 10,160 FY 20 FY 21 FY 22 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 * Adj.
Slide 16: Consolidated Profit & Loss Statement
CONSOLIDATED PROFIT & LOSS STATEMENT Particulars (In Rs mn) Q3FY24 Q3FY23 YoY % 9M FY24 9M FY23 YoY % FY23 Restaurant Sales 6,642.76 5,938.76 12% 19,582.19 16,978.41 15% 22,570.64 Other operating income 12.84 22.56 43.65 73.24 85.10 COGS 2,072.23 1,963.66 6,143.03 5,610.04 7,406.76 Gross Profit 4,58
Slide 17: KFC India Business Performance
KFC India Business Performance
Slide 18: KFC Brand Priorities
KFC BRAND PRIORITIES Enhance Fried Value Chicken Category Craveable Taste - Lunch variety menu launch + Relevance - Build day part occasions of + ‒ Innovation: Reintroduction of Chizza as limited time offer + with advertising at ₹149/- - Snackers range at ₹99/- - New value construct on consumption:
Slide 19: KFC Brand Priorities
KFC BRAND PRIORITIES Fried Chicken Category Relevance | Craveable taste | Value 19
Slide 20: KFC Brand Priorities: Digital
KFC BRAND PRIORITIES Frictionless customer experience | Digital Total App downloads -23.6 MN+ Digital KIOSKs implemented at 130 Monthly Active Users – 1.2 Mn Restaurants 20
Slide 21: Improving Accessibility – Double Restaurant Count
KFC BRAND PRIORITIES Improving Accessibility – On track to double Restaurant Count in ~3 years (base Dec’21 count) TAMBARAM, CHENNAI BATALA CITY, PUNJAB DOMBIVLI, MAHARASHTRA KARNAL HAVELI, HARYANA 21
Slide 22: KFC India Channel Sales Contribution
KFC INDIA Q3 & 9M FY24 - CHANNEL SALES CONTRIBUTION Delivery Takeaway Dine IN Delivery Takeaway Dine IN 36% 38% 36% 36% 38% 19% 19% 19% 19% 19% 45% 43% 45% 45% 43% Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 22
Slide 23: KFC India Average Daily Sales and Restaurant Sales
KFC INDIA Q3 & 9M FY24 AVERAGE DAILY SALES (₹ ‘000) SSSG% 3% -2% SSSG% 15% 20% -1% 136 135 138 129 125 Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 RESTAURANT SALES (₹ MN) Rest. 24 25 78 62 65 Addition 14,529 ▲19% ▲16% 12,872 10,838 4,421 3,810 Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 Rest. Count 325 406 341 32
Slide 24: KFC India Gross Margin and Restaurant EBITDA
KFC INDIA Q3 & 9M FY24 GROSS MARGIN % 68.4% ▲190 bps 68.1%▲160 bps 66.5% 66.6% 66.5% Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 RESTAURANT EBITDA (%)# 20.2% 20.1% ▼10 bps 19.5% 20.0% ▲50 bps 19.4% Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 # Restaurant EBITDA figures are Pre-IND AS 116. 24
Slide 25: KFC India Restaurant Sales & EBITDA Trend
KFC INDIA RESTAURANT SALES & EBITDA TREND Rest. SALES (₹MN) & Rest. EBITDA % YoY -24% 75% 40% 20.2% 20.8% 20.1% Change % 19.1% 19.2% 19.4% 18.7% * 14.0% 13.2% 14,529 4,286 4,421 4,165 3,810 3,691 10,349 7,735 5,897 FY 20 FY 21 FY 22 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 ADS (₹ 000)# 130 106 1
Slide 26: Pizza Hut India – Business Performance
Pizza Hut India – Business Performance
Slide 27: Update on Pizza Hut Action Plan
UPDATE ON PIZZA HUT ACTION PLAN Actionable Status Comment A. Build Brand: - Product Innovation Innovation to start rolling out over the next 2 quarters - Enhanced Marketing Additional Investments to back product innovation Investments B. Grow Dine In / Home Service: Dragon Tail (kitchen planning too
Slide 28: Pizza Hut Brand Priorities
PIZZA HUT BRAND PRIORITIES Build Brand Salience | Build Occasions for consumption 28
Slide 29: Pizza Hut Brand Priorities
PIZZA HUT BRAND PRIORITIES Build Brand Salience | Build Occasions for consumption 29
Slide 30: Pizza Hut Brand Priorities: Digital
PIZZA HUT BRAND PRIORITIES Digital | Operational Excellence Total App Downloads – 11.2 Mn+ Self Ordering QR Code 15% of Dine In Mix Monthly Active Users – 0.9 Mn 30
Slide 31: Improve Accessibility: Cautious Restaurant Expansion
PIZZA HUT BRAND PRIORITIES Improve Accessibility: Cautious restaurant expansion CHANDIVALI, MUMBAI SOUTH AVENUE MALL JABALPUR V-SQUARE MALL, CUDDALORE THANISANDRA, BENGALURU 31
Slide 32: Pizza Hut India Channel Sales Contribution
PIZZA HUT INDIA Q3 & 9M FY24 - CHANNEL SALES CONTRIBUTION Delivery Takeaway Dine IN Delivery Takeaway Dine IN 50% 49% 50% 49% 50% 15% 16% 15% 16% 15% 35% 35% 35% 35% 35% Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 32
Slide 33: Pizza Hut India Average Daily Sales and Restaurant Sales
PIZZA HUT INDIA Q3 & 9M FY24 AVERAGE DAILY SALES (₹ ‘000) SSSG% -4% -19% SSSG% 12% 18% -16% 61 58 58 48 45 Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 RESTAURANT SALES (₹ MN) Rest. 67 55 33 25 8 Addition 5,214 ▲0% ▼4% 3,993 3,997 1,364 1,305 Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 Rest. Count 274 319 286 274
Slide 34: Pizza Hut India Gross Margin and Restaurant EBITDA
PIZZA HUT INDIA Q3 & 9M FY24 GROSS MARGIN (%) 75.7% ▲130 bps 75.6% ▲80 bps 74.4% 74.7% 74.8% Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 ▲0 bps RESTAURANT EBITDA# (%) ▼100 bps ▼200 bps ▼300 bps 14.1% ▼400 bps 14.7% 13.3% ▼500 bps ▼600 bps 7.1% ▼760 bps 4.6% ▼950 ▼700 bps ▼800 bps bps ▼900 bps ▼1000 bps Q3
Slide 35: Pizza Hut India Restaurant Sales & EBITDA Trend
PIZZA HUT INDIA RESTAURANT SALES & EBITDA TREND Rest. SALES (₹MN) & Rest. EBITDA % YoY -34% 67% 41% Change % 14.1% 13.3% 11.4%* 9.0% 8.6% 7.6% 7.2% 5.0% 5,214 4.6% 3,710 3,344 1,364 1,221 1,362 1,330 1,305 2,218 FY 20 FY 21 FY 22 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 ADS 58 48 57 58 58 50 52
Slide 36: Sri Lanka Business Performance
Sri Lanka Business Performance
Slide 37: Sri Lanka Business Product Innovation
SRI LANKA BUSINESS PRODUCT INNOVATION 37
Slide 38: Sri Lanka Business Branding and Marketing
SRI LANKA BUSINESS BRANDING AND MARKETING 38
Slide 39: Sri Lanka Business New Stores Addition
SRI LANKA BUSINESS NEW STORES ADDITION AKURESSA ARYAMPATHI 39
Slide 40: Sri Lanka Channel Sales Contribution
SRI LANKA BUSINESS Q3 & 9M FY24 - CHANNEL SALES CONTRIBUTION Delivery Takeaway Dine IN Delivery Takeaway Dine IN 36% 37% 38% 38% 37% 29% 36% 35% 35% 35% 35% 27% 27% 27% 28% Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 40
Slide 41: Sri Lanka Average Daily Sales
SRI LANKA BUSINESS Q3 & 9M FY24 AVERAGE DAILY SALES (LKR ‘000) SSSG% 18% 1% SSSG% 22% 33% 1% 335 318 322 336 313 Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 AVERAGE DAILY SALES (INR ‘000) 81 81 75 74 72 Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 Rest. Rest. Count 114 121 Count 114 114 121 Average daily sales is
Slide 42: Sri Lanka Restaurant Sales
SRI LANKA BUSINESS Q3 & 9M FY24 RESTAURANT SALES (LKR MN) Rest. Rest. Addition 8 3 Addition 19 19 7 ▲8% 12,166 10,038 ▲7% 9,299 3,282 3,514 Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 Rest. Rest. Count 114 121 Count 114 114 121 RESTAURANT SALES (INR MN) ▲26% ▲22% 2,716 2,581 892 2,049 731 Q3 FY23 Q3 FY24 F
Slide 43: Sri Lanka Gross Margin and Restaurant EBITDA
SRI LANKA BUSINESS Q3 & 9M FY24 GROSS MARGIN % 61.5% ▲440 bps 61.8% ▲450 bps 58.1% 57.3% 57.1% Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 RESTAURANT EBITDA (%)# 15.0% 14.6% 14.8% 14.2% ▼40 bps 14.2% ▼80 bps Q3 FY23 Q3 FY24 FY23 9M FY23 9M FY24 Absolute Rest. EBITDA increased by 4 % in LKR terms (increased
Slide 44: Sri Lanka Restaurant Sales & EBITDA Trend
SRI LANKA BUSINESS RESTAURANT SALES & EBITDA TREND Rest. SALES (LKR MN) & Rest. EBITDA % YoY 0% 60% 48% Change % 15.3% 14.6% 14.2% 22.0% * 14.2% 19.6% 13.0% 16.2% 14.8% 3,514 3,379 12,166 3,282 3,145 2,867 8,229 5,144 5,145 FY 20 FY 21 FY 22 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 ADS (LKR 218
Slide 45: DJSI ESG Ratings: S&P Corporate Sustainability Assessment
DJSI ESG RATINGS S&P CORPORATE SUSTAINABILITY ASSESSMENT ➢ 1st amongst QSR brands in India ➢ 95th Percentile Ratings amongst Global QSR companies ➢ Key Areas of Impact: a. Human Capital Development b. Business Ethics c. Customer Relationship Management https://www.spglobal.com/esg/scores/results?cid
Slide 46: Thank You
THANK YOU