Sapphire Foods India Ltd. · NSE:SAPPHIRE
Sapphire Foods India — Q4 FY24 Earnings Presentation
51 slides from Sapphire Foods India's earnings presentation, May 10, 2024
Slide 1: Exchange filing cover letter
Date: 10th May 2024 To, National Stock Exchange of India Limited BSE Limited Exchange Plaza, Block G, C/1, Bandra Kurla Phiroze Jeejeebhoy Towers, Complex, Bandra (E), Mumbai – 400051 Dalal Street, Mumbai – 400001 Symbol: SAPPHIRE Scrip Code: 543397 Dear Sir/Madam, Subject: Press (Investor) Release
Slide 2: FY24 Highlights
Investor Release In a challenging year Sapphire Foods delivers 15% revenue growth at 18.2% EBITDA Margin [ 9%] led by highest ever KFC restaurant EBITDA % FY24 Highlights • Sapphire has delivered the best all-round performance in the industry (all parameters considered): Revenue scale & growth [ 1
Slide 3: Q4FY24 Highlights
Investor Release Sapphire Foods Q4 FY24 Consol Revenue (₹6,297 Mn) grew by 13% and EBITDA (₹1,102 Mn) grew by 7%, led by strong KFC performance Q4FY24 Highlights ➢ Our Q4 FY24 Consol Restaurant Sales (₹ 6,297 Mn) grew by 13% and EBITDA (₹ 1,102 Mn) grew by 7%. Demand across all consumer product cate
Slide 4: Pizza Hut performance and Melts launch
➢ Pizza Hut Restaurant Sales in Q4FY24 declined by 3% YoY and SSSG by 15% which considerably shrank Restaurant EBITDA margins. Coupled with our enhanced marketing investment, our Rest. EBITDA margin dropped to -2.7% in Q4 FY24. Excluding the additional marketing spend, the brand broke even at the Re
Slide 5: Q4 and FY24 Earnings Presentation
Sapphire SAPPHIREFoods FOODS India INDIA LLimited IMITED 3Q FY22 Q4 AND FY24 Earnings BUSINESSPresentation PERFORMANCE February 2022 MAY’2024
Slide 6: 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 7: Table of Contents
TABLE OF CONTENTS 1 THE SAPPHIRE STORY Page 04 2 Q4 AND FY24 FINANCIAL HIGHLIGHTS Page 05-18 3 BUSINESS PERFORMANCE ▪ KFC INDIA Page 19-28 ▪ PIZZA HUT INDIA Page 29-38 ▪ SRI LANKA Page 39-46 3
Slide 8: 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 9: Q4 and FY24 Consolidated Financial Highlights
Q4 AND FY24 CONSOLIDATED FINANCIAL HIGHLIGHTS
Slide 10: Sapphire Foods: 3-Year Scorecard
SAPPHIRE FOODS: 3-YEAR SCORECARD 3-Year Relentless Execution. Grit. CAGR Performance. 17% No. of 28% 26% 33% 743 872 FY24 Highlights Restaurants 579 437 • Sapphire has delivered the best all-round FY21 FY22 FY23 FY24 performance in the QSR industry (all 15% parameters considered): Revenue scale & 32
Slide 11: Key Highlights Q4 FY24
KEY HIGHLIGHTS Q4 FY24 ➢ Our Q4 FY24 Consol Restaurant Sales (₹ 6,297 Mn) grew by 13% and EBITDA (₹ 1,102 Mn) grew by 7%. Demand across all consumer product categories remains constrained as reflected in Private Final Consumption Expenditure data for previous quarters released by Government of India
Slide 12: Summary Consolidated Financials Q4 & FY24
SUMMARY CONSOLIDATED FINANCIALS Q4 & FY24 Particulars Q4 FY24 Q4 FY23 Change YoY FY24 FY23 Change YoY Restaurant Sales ₹ mn 6,297 5,592 13% 25,880 22,571 15% Adj. EBITDA ₹ mn 544 563 -3% 2,717 2,647 3% % 8.6% 10.1% -150 bps 10.5% 11.7% -120 bps EBITDA ₹ mn 1,102 1,030 7% 4,718 4,343 9% % 17.5% 18.4%
Slide 13: Sapphire Foods Current Presence
SAPPHIRE FOODS CURRENT PRESENCE RESTAURANT COUNT KFC India Pizza Hut India Sri Lanka + Maldives RESTAURANT DISTRIBUTION ACROSS INDIAN SUBCONTINENT 429 341 263 286 319 219 58 14 97 116 124 KFC – 10 6 PH – 6 7 66 Mar'22 Mar'23 Mar'24 28 579 743 872 KFC – 21 KFC – 16 RESTAURANT ADDITION PH – 30 PH – 12
Slide 14: Financial Highlights: Restaurant Sales
FINANCIAL HIGHLIGHTS Q4 & FY24 CONSOLIDATED RESTAURANT SALES (₹ MN) ▲15% ▲13% 25,880 22,571 6,297 5,592 Q4 FY23 Q4 FY24 FY23 FY24 INDIA RESTAURANT SALES (₹ MN) ▲13% ▲11% 22,342 19,744 4,913 5,473 Q4 FY23 Q4 FY24 FY23 FY24 10
Slide 15: Financial Highlights: Gross Margin
FINANCIAL HIGHLIGHTS Q4 & FY24 CONSOLIDATED GROSS MARGIN (%) 69.1% 68.9% 68.1% 67.6% ▲100 bps ▲130 bps Q4 FY23 Q4 FY24 FY23 FY24 0.7 2 INDIA GROSS MARGIN (%) ▲140 bps 0.7 2 ▲140 bps 0.7 1 ▲120 bps 0.7 1 ▲120 bps 0.7 0 69.9% ▲100 bps 0.7 0 69.9% ▲100 bps 0.6 9 68.7% ▲80 bps 0.6 9 68.7% ▲80 bps 0.6 8
Slide 16: Financial Highlights: Restaurant EBITDA
FINANCIAL HIGHLIGHTS Q4 & FY24 CONSOLIDATED RESTAURANT EBITDA (₹ MN / %)# 21. 0% 2,4 99.93 4,092 19. 0% 3,929 16.2% 19. 0% 17. 0% 13.6% ▼260 bps 1,9 99.93 17.4% 15.8% ▼160 bps 14. 0% 15. 0% 1,4 99.93 13. 0% 9.0 % 999 .93 910 861 11. 0% 4.0 % 9.0 % 499 .93 -1.0% 7.0 % ▼5% ▲4% 5.0 % -0.07 -6.0% Q4 FY2
Slide 17: Financial Highlights: Adj. EBITDA and EBITDA
FINANCIAL HIGHLIGHTS Q4 & FY24 ADJ. EBITDA (₹ MN / %)# 1,9 97 20. 0% 18. 0% 16. 0% 11.7% 1,4 97 14. 0% 4,0 00 13.0% 10.1% 12. 0% 3,5 00 10.5% ▼120 bps 11.0% 997 8.6% ▼150 bps 10. 0% 3,0 00 2,647 2,717 9.0% 2,5 00 563 8.0 % 544 6.0 % 2,0 00 7.0% 1,5 00 497 5.0% 4.0 % 1,0 00 3.0% ▲3% 2.0 % ▼3% 500 -3
Slide 18: Financial Highlights: PBT
FINANCIAL HIGHLIGHTS Q4 & FY24 Adj. PROFIT BEFORE TAX (₹ MN / %)# 700 .00 600 .00 500 .00 3.7% 1,407 400 .00 1.3% 6.2% 1,057 4.1% 300 .00 208 ▼ 240 bps ▼ 210 bps 200 .00 83 ▼ 60% ▼ 25% 100 .00 0.0 0 Q4 FY23 Q4 FY24 FY23 FY24 PROFIT BEFORE TAX (₹ MN / %) 2.2% 1,084 123 4.8% 699 2.7% ▼ 210 bps 0.1% ▼
Slide 19: Financial Highlights: PAT
FINANCIAL HIGHLIGHTS Q4 & FY24 Adj. PROFIT AFTER TAX (₹ MN / %)# 1,600.00 1,440 ** 30. 0% 2,654 1,500.00 1,400.00 ** 25. 0% 1,300.00 3,0 00.00 11.8% 25.7% 11. 0% 1,200.00 20. 0% 1,100.00 2,5 00.00 9.0 % 1,000.00 7.0 % 15. 0% 900.00 2,0 00.00 800.00 700.00 10. 0% 1,5 00.00 3.0% 5.0 % 3.0 % 600.00 500
Slide 20: Restaurant Sales & Adj. EBITDA Trend
FINANCIAL HIGHLIGHTS RESTAURANT SALES & ADJ. EBITDA TREND REST. SALES (₹ MN) & ADJ. EBITDA (%) YoY 69% 32% 13% Change % 11.7% 11.8% 10.6% 10.9% 10.5% 10.1% 9.4% * 8.6% 22,571 25,880 6,526 6,414 6,643 6,297 3.8% 17,154 5,592 10,160 FY 21 FY 22 FY23 FY24 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 * Adj.
Slide 21: Consolidated Profit & Loss Statement
CONSOLIDATED PROFIT & LOSS STATEMENT Particulars (In Rs mn) Q4 FY24 Q4 FY23 YoY % FY24 FY23 YoY % Restaurant Sales 6,297.42 5,592.23 13% 25,879.61 22,570.64 15% Other operating income 19.53 11.86 63.18 85.10 COGS 1,966.03 1,796.72 8,109.06 7,406.76 Gross Profit 4,350.92 3,807.37 14% 17,833.73 15,248
Slide 22: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET Particulars (In Rs mn) As on 31.3.24 As on 31.3.23 Total Assets 28,400.81 25,940.54 Fixed assets other than Goodwill 11,017.65 8,917.55 Goodwill 1,621.59 1,621.59 Right of use assets 9,818.21 7,914.73 Inventories 968.82 993.04 Trade receivables 343.84 179.49 Cash and bank
Slide 23: KFC India Business Performance
KFC India Business Performance
Slide 24: 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 ‒ International Burger Fest + with advertising at ₹149/- - Snackers range at ₹99/- - New valu
Slide 25: KFC Brand Priorities: Category Relevance
KFC BRAND PRIORITIES Fried Chicken Category Relevance | Craveable taste | Value Burger Fest Lunch Chizza 21
Slide 26: KFC Brand Priorities: Craveable Taste, Value
KFC BRAND PRIORITIES Fried Chicken Category Relevance | Craveable taste | Value Rice Bowlz Wednesday Offer Sunday Feast 22
Slide 27: KFC Brand Priorities: Digital
KFC BRAND PRIORITIES Frictionless customer experience | Digital Total App downloads – 33.29 Mn+ Digital KIOSKs implemented at 163 Monthly Active Users – 1.25 Mn Restaurants 23
Slide 28: KFC Brand Priorities: Improving Accessibility
KFC BRAND PRIORITIES Improving Accessibility – On track to double Restaurant Count in ~3 years (base Dec’21 count) MORADABAD, UP THANE, MAHARASHTRA ROHTAK, HARYANA AHMEDABAD, GUJARAT 24
Slide 29: KFC India Channel Sales Contribution
KFC INDIA Q4 & FY24 - CHANNEL SALES CONTRIBUTION Delivery Takeaway Dine IN Delivery Takeaway Dine IN 38% 39% 36% 38% 19% 19% 20% 21% 43% 40% 45% 42% Q4 FY23 Q4 FY24 FY23 FY24 25
Slide 30: KFC India Q4 & FY24
KFC INDIA Q4 & FY24 AVERAGE DAILY SALES (₹ ‘000) SSSG% 2% -3% SSSG% 15% -1% 127 135 125 114 Q4 FY23 Q4 FY24 FY23 FY24 RESTAURANT SALES (₹ MN) Rest. 78 88 16 23 Addition 11 ,99 9.00 9,9 99 .00 ▲18% 17,157 ▲16% 14,529 7,9 99 .00 5,9 99 .00 3,691 4,285 3,9 99 .00 1,9 99 .00 -1.0 0 Q4 FY23 Q4 FY24 FY23
Slide 31: KFC India Gross Margin and Restaurant EBITDA
KFC INDIA Q4 & FY24 GROSS MARGIN % 68.3% ▲150 bps 68.2% ▲160 bps 66.8% 66.6% Q4 FY23 Q4 FY24 Q4 FY23 Q4 FY24 RESTAURANT EBITDA (%)# 19.1% 19.4% 19.7% ▲30 bps 18.7% ▼40 bps Q4 FY23 Q4 FY24 FY23 FY24 # Restaurant EBITDA figures are Pre-IND AS 116. 27
Slide 32: KFC India Restaurant Sales & EBITDA Trend
KFC INDIA RESTAURANT SALES & EBITDA TREND Rest. SALES (₹MN) & Rest. EBITDA % YoY 20.8% 75% 40% 18% 20.1% Change % 19.1% 19.2% 18.7% 19.4% 19.7% 18.7% * 14.0% 17,157 4,286 4,421 4,285 4,165 14,529 3,691 10,349 5,897 FY 21 FY 22 FY23 FY24 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 ADS (₹ 000)# 106 130 13
Slide 33: Pizza Hut India Business Performance
Pizza Hut India – Business Performance
Slide 34: Update on Pizza Hut Action Plan
UPDATE ON PIZZA HUT ACTION PLAN Actionable Status Comment A. Build Brand: - Product Innovation Launched Melts, Thin Crust Pizza and revamped Pasta range in Mar-24 - Enhanced Marketing Rolled out mass media campaign for Melts Investments B. Grow Dine In / Home Service: Dragon Tail (kitchen planning t
Slide 35: Pizza Hut Brand Priorities: Product Innovations
PIZZA HUT BRAND PRIORITIES Build Brand Salience | Product Innovations 31
Slide 36: Pizza Hut Brand Priorities: Marketing Investments
PIZZA HUT BRAND PRIORITIES Build Brand Salience | Marketing Investments On Television On Ecommerce platforms 32
Slide 37: Pizza Hut Brand Priorities: Building Occasions
PIZZA HUT BRAND PRIORITIES Build Brand Salience | Building Occasions 33
Slide 38: Pizza Hut Brand Priorities: Digital
PIZZA HUT BRAND PRIORITIES Digital | Operational Excellence Total App Downloads – 11.6 Mn+ Self Ordering QR Code 15% of Dine In Mix Monthly Active Users – 0.8 Mn 34
Slide 39: Pizza Hut India Channel Sales Contribution
PIZZA HUT INDIA Q4 & FY24 - CHANNEL SALES CONTRIBUTION Delivery Takeaway Dine IN Delivery Takeaway Dine IN 52% 50% 50% 49% 15% 15% 15% 16% 33% 35% 35% 35% Q4 FY23 Q4 FY24 FY23 FY24 35
Slide 40: Pizza Hut India Q4 & FY24
PIZZA HUT INDIA Q4 & FY24 AVERAGE DAILY SALES (₹ ‘000) SSSG% -4% -15% SSSG% 12% -16% 58 50 46 41 Q4 FY23 Q4 FY24 FY23 FY24 RESTAURANT SALES (₹ MN) Rest. Addition 12 0 67 33 ▼1% ▼3% 5,214 5,185 1,221 1,188 Q4 FY23 Q4 FY24 FY23 FY24 Rest. Count 286 319 286 319 Average daily sales is for all restaurant
Slide 41: Pizza Hut India Gross Margin and Restaurant EBITDA
PIZZA HUT INDIA Q4 & FY24 GROSS MARGIN (%) 75.5% ▲120 bps 75.6% ▲90 bps 74.3% 74.7% Q4 FY23 Q4 FY24 FY23 FY24 0.25 ▲0 bps 0.20 RESTAURANT EBITDA# (%) ▼100 bps ▼200 bps 0.15 ▼300 bps 13.3% Excl Addnl Mktg ▼400 bps 0.10 8.6% Investments, ▼500 bps breakeven at Rest. 4.9% ▼840 bps ▼600 bps EBITDA level
Slide 42: Pizza Hut India Restaurant Sales & EBITDA Trend
PIZZA HUT INDIA RESTAURANT SALES & EBITDA TREND Rest. SALES (₹MN) & Rest. EBITDA % 15 .0% YoY 67% 41% -1% Change % 9.0% 8.6% 7.6% 10 .0% 4.6% 13.3% 5.0 % 11.4% * -2.7% 0.0 % -5.0 % -10 .0% 1,362 1,330 1,305 5.0% 5,214 5,185 1,221 1,188 -15 .0% 4.9% 3,710 -20 .0% 2,218 -25 .0% -30 .0% FY 21 FY 22 FY2
Slide 43: Sri Lanka Business Performance
Sri Lanka Business Performance
Slide 44: Sri Lanka Business Branding and Marketing
SRI LANKA BUSINESS BRANDING AND MARKETING 40
Slide 45: Sri Lanka Business Awards & Recognition
SRI LANKA BUSINESS AWARDS & RECOGNITION 41
Slide 46: Sri Lanka Channel Sales Contribution
SRI LANKA BUSINESS Q4 & FY24 - CHANNEL SALES CONTRIBUTION Delivery Takeaway Dine IN Delivery Takeaway Dine IN 36% 37% 37% 38% 35% 35% 35% 35% 29% 28% 28% 27% Q4 FY23 Q4 FY24 FY23 FY24 42
Slide 47: Sri Lanka Business Q4 & FY24 Average Daily Sales
SRI LANKA BUSINESS Q4 & FY24 AVERAGE DAILY SALES (LKR ‘000) SSSG% -3% 4% SSSG% 22% 2% 322 282 305 281 Q4 FY23 Q4 FY24 FY23 FY24 AVERAGE DAILY SALES (INR ‘000) 79 75 72 65 Q4 FY23 Q4 FY24 FY23 FY24 Rest. 114 120 Rest. Count Count 114 120 Average daily sales is for all restaurants including new additi
Slide 48: Sri Lanka Restaurant Sales
SRI LANKA BUSINESS Q4 & FY24 RESTAURANT SALES (LKR MN) Rest. Rest. 0 -1 Addition 19 6 Addition ▲8% ▲8% 12,166 13,123 2,867 3,085 Q4 FY23 Q4 FY24 FY23 FY24 Rest. Rest. Count 114 120 Count 114 120 RESTAURANT SALES (INR MN) ▲25% ▲22% 3,397 816 2,716 667 Q4 FY23 Q4 FY24 FY23 FY24 44
Slide 49: Sri Lanka Gross Margin and Restaurant EBITDA
SRI LANKA BUSINESS Q4 & FY24 GROSS MARGIN % 61.6% ▲350 bps 61.9% ▲90 bps 61.0% 58.1% Q4 FY23 Q4 FY24 FY23 FY24 RESTAURANT EBITDA (%)# 0.19 0.18 0.17 0.16 0.15 14.2% 14.8% 0.14 0.13 12.3% ▼190 bps 13.7% ▼110 bps 0.12 0.11 0.10 Q4 FY23 Q4 FY24 FY23 FY24 Absolute Rest. EBITDA decreased by 3 % in LKR te
Slide 50: Sri Lanka Restaurant Sales & EBITDA Trend
SRI LANKA BUSINESS RESTAURANT SALES & EBITDA TREND Rest. SALES (LKR MN) & Rest. EBITDA % YoY 60% 48% Change % 22.0%* 15.3% 14.2% 19.6% 14.2% 13.0% 12.3% 14.8% 13.7% 3,514 13,123 3,379 12,166 3,145 3,085 2,867 8,229 5,145 FY 21 FY 22 FY23 FY24 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 ADS (LKR 236 298
Slide 51: Thank You
THANK YOU