Sphera Franchise Group Sa · BVB:SFG
Sphera Franchise Group Sa — H1 2019 Earnings Presentation
26 slides from Sphera Franchise Group Sa's earnings presentation, Jul 1, 2019
Slide 1: Sphera Franchise Group Interim results: Jan-Jun 2019
Sphera Franchise Group Interim results: Jan-Jun 2019 1
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: Sphera – H1-2019 key events
Sphera – H1-2019 key events All-store sales up 27.3% with same-store sales growth of 9.0% ▪ Same-store double-digit growth from KFC, improved performance of Pizza Hut, marginally positive for KFC Italy Total store openings: 7 in Q2; on track to deliver full-year target; network size 145 @ 30 June 20
Slide 4: Macro environment: CPI stabilizes as labour market remains tight
Macro environment CPI stabilizes as labour market remains tight Annualized CPI (RON) Salaries (Y/Y%) 6% 6,000 60% 5% Average gross salary (Y/Y% change) - rhs 5,000 Average gross salary 50% 4% Minimum salary 3% 4,000 40% 2% 1% 3,000 30% 0% 2,000 20% -1% -2% 1,000 10% -3% -4% 0 0% Jan-16 Jan-17 Jan-18
Slide 5: Sales performance by brands
(Np) Sales performance by brands
Slide 6: Brand performance: KFC Romania
Brand performance: KFC Romania Sales growth analysis ▪ All-store sales growth of 18.9% Y/Y in Q2-2019 30% 26.4% supported mainly by same-store growth of 13.0%; 25% 23.2% ▪ The 9 net openings (since Jan-2018) contributed 21.5% 20.4% c. 6pp to the Y/Y growth in Q2-2019, six of these 19.6%20.1% 19.5%18
Slide 7: Brand performance: Pizza Hut
Brand performance: Pizza Hut Sales growth analysis 30% 28.0% ▪ All-store sales growth of 7.4% Y/Y in Q2-2019, driven by the 6 stores opened starting Jan-2018 (of which 3 in existing cities); 25% 20% All-store 15.5% performance 15% 11.4% 9.5% 9.8% 10% 8.4% 8.5% 7.3% 7.4% 5% 0% 2016 2017 2018 Q1 Q2 Q3
Slide 8: Development
(Np) Development
Slide 9: Development: Restaurant openings in 2019
Development Restaurant openings in 2019 Total stores Openings Total stores 2019 Opening BoY Q2-2019 end Q2-2019 Plan 78 1 79 8 10 4 14 10 23 0 23 0 22 0 22 1 5 2 7 5 138 7 145 24 9
Slide 10: Brand news
(Np) Brandnews
Slide 11: Brand news: Q2-2019 highlights (KFC)
Brand news Q2-2019 highlights ▪ KFC focused on building favorability for its burger layer by successfully launching a new and innovative burger in Q2 called Real Burger, with a distinctive communication campaign and maintaining strong same-store sales growth ▪ The brand relaunched studycoin, a platf
Slide 12: Brand news: Q2-2019 highlights (Pizza Hut, Taco Bell)
Brand news Q2-2019 highlights ▪ Pizza Hut reinforced its product and menu variety by launching Ribs but leveraging in the communication our pizza superiority and enjoyed single-digit positive sales growth ▪ With the aim of increasing penetration among lapsed and new users, the brand communicates Cra
Slide 13: Marketing Q2-2019 campaigns
Marketing Q2-2019 campaigns 13
Slide 14: Sphera Sustainability Report 2018
Sphera Sustainability Report 2018 In April, we launched the first Sustainability Report of Sphera Group for 2018 with specific strategic goals to be reached by 2025 Our mission: ”Excellence in everything we do” Our vision: ”Development through relevance and trust” SAFEST AND EXCELLENCE IN HIGH-QUALI
Slide 15: Financials
Financials
Slide 16: H1-2019 Statement of comprehensive income
Financial performance: H1-2019 Statement of comprehensive income ▪ Sales up 27.3% Y/Y on strong performance from KFC Romania/Moldova (+19.3% Y/Y, 15.1pp contribution), with increasing contribu tion from KFC Italy (8.3pp) and Taco Bell (2.7pp); ▪ Restaurant operating profit up 9.2% Y/Y, with margin d
Slide 17: Impact of IFRS 16 - Leases on H1-2019 results
Financial performance: H1-2019 Impact of IFRS 16 - Leases on H1-2019 results ▪ Starting 1 January 2019, Sphera applied IFRS 16 that sets out the principles for the recognition, measurement, presentation a nd disclosure of leases. Sphera uses the modified retrospective approach for this transition, t
Slide 18: H1-2019 Statement of comprehensive income (excluding IFRS 16)
Financial performance: H1-2019 Statement of comprehensive income (excluding impact of IFRS 16 adoption) ▪ Sales up 27.3% Y/Y on strong performance from KFC Romania/Moldova (+19.3% Y/Y, 15.1pp contribution), with increasing contribu tion from KFC Italy (8.3pp) and Taco Bell (2.7pp); ▪ Restaurant oper
Slide 19: Q2-2019 Statement of comprehensive income (excluding IFRS 16)
Financial performance: Q2-2019 Statement of comprehensive income (excluding impact of IFRS 16 adoption) ▪ Sales up 28.4% Y/Y on strong performance from KFC Romania/Moldova (+18.9% Y/Y, 15.0pp contribution), with significant contrib ution from KFC Italy (8.8pp) and Taco Bell (3.4pp); ▪ Restaurant ope
Slide 20: Margin trend Q2-2019 vs Q1-2019 vs Q2-2018
Financial performance: Margin trend Q2-2019 vs Q1-2019 vs Q2-2018 Statement of comprehensive income (excluding impact of IFRS 16 adoption) % of Sales Quarter Change Half-year Change 2019-Q2 2019-Q1 2018-Q2 2019-Q2 2019-Q2 2019-H1 2018-H1 2019-H1 vs 2019-Q1 vs 2018-Q2 vs 2018-H1 Restaurant expenses 8
Slide 21: H1-2019 Breakdown of results by Group companies
Financial performance: H1-2019 Breakdown of results by Group companies Data in RON'000 USFN (RO) ARS USFN (MD) USFN (IT) CFF SFG Cons.Adj SFG Cons. Restaurant sales 322,861 63,508 5,411 39,196 13,956 13,402 (12,767) 445,567 Dividend revenue 0 0 0 0 0 51,239 (51,239) 0 Restaurant expenses 274,228 62,
Slide 22: H1-2019 Breakdown of results by Group companies (excluding IFRS 16)
Financial performance: H1-2019 Breakdown of results by Group companies (excluding impact of IFRS 16 adoption) Data in RON'000 USFN (RO) ARS USFN (MD) USFN (IT) CFF SFG Cons.Adj SFG Cons. Restaurant sales 322,861 63,508 5,411 39,196 13,956 13,402 (12,767) 445,567 Dividend revenue 0 0 0 0 0 51,239 (51
Slide 23: H1-2019 Restaurant operating expenses and margin
Financial performance: H1-2019 Restaurant operating expenses and margin Including the impact of IFRS 16 adoption Contribution to change in restaurant opex ratio* Y/Y% % of Sales Data in RON'000 Jun-19 Jun-18 2019/2018 Jun-19 Jun-18 Δ% Restaurant expenses 394,721 303,503 30.1% 88.6% 86.7% 1.9% Food a
Slide 24: Q2-2019 Restaurant operating expenses and margin
Financial performance: Q2-2019 Restaurant operating expenses and margin Including the impact of IFRS 16 adoption Contribution to change in restaurant opex ratio* Y/Y% % of Sales Data in RON'000 Q2-2019 Q2-2018 2019/2018 Q2-2019 Q2-2018 Δ% Restaurant expenses 202,790 159,384 27.2% 87.8% 88.6% -0.8% F
Slide 25: H1-2019 G&A expenses
Financial performance: H1-2019 G&A expenses Including the impact of IFRS 16 adoption Contribution to growth in G&A expense* Y/Y% % of Sales Data in RON'000 Jun-19 Jun-18 2019/2018 Jun-19 Jun-18 General and adm inistration expenses (net), of w hich: 26,410 25,239 4.6% 5.9% 7.2% Employee benefits 15,8
Slide 26: Sphera – Consolidated financial performance: Statement of financial position
Sphera – Consolidated financial performance Statement of financial position Excluding impact of Impact of IFRS 16 IFRS 16 adoption adoption Data in RON'000 30-Jun-19 31-Dec-18 Change 30-Jun-19 Assets Non-current assets 465,557 229,173 236,384 260,800 204,757 Property, plant and equipment 385,168 158
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