Sapphire Foods India Ltd. · NSE:SAPPHIRE
Sapphire Foods India — Q2 FY24 Earnings Presentation
49 slides from Sapphire Foods India's earnings presentation, Nov 2, 2023
Slide 1: Exchange filing cover letter
Sapphire Foods Date: November 02, 2023 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
Slide 2: Investor Release: Q2 FY24 consolidated results
0 SapphireFoods Investor Release Sapphire Foods Q2 FY24 Consol Revenue (₹6,414 Mn) grew by 14% and EBITDA (₹1,166 Mn) grew by 13% led by strong KFC performance r------------------------,r------------------------,r------------------------,r------------------------,r------------------------1 36 Stores
Slide 3: Investor Release: Pizza Hut, Sri Lanka and About Sapphire Foods
0 Sapphirefoods ➢ Pizza Hut Overall Restaurant Sales declined by 6% and SSSG declined by 20% (Q2 FY23 SSSG grew by 23%) as a result of the tough macro conditions and specifically high competitive intensity in the Pizza category. Operating deleverage arising out of negative SSSG impacted Restaurant E
Slide 4: Q2 and 6M FY24 Earnings Presentation
Sapphire SAPPHIREFoods FOODS India INDIA LLimited IMITED 3Q6M Q2 AND FY22 Earnings FY24 Presentation BUSINESS PERFORMANCE February NOV2022 2023
Slide 5: 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 6: Table of Contents
TABLE OF CONTENTS 1 THE SAPPHIRE STORY Page 04 2 Q2 AND 6M FY24 FINANCIAL HIGHLIGHTS Page 05-17 3 BUSINESS PERFORMANCE ▪ KFC INDIA Page 18-26 ▪ PIZZA HUT INDIA Page 27-36 I ▪ SRI LANKA Page 37-45 I 3
Slide 7: 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 8: Q2 and 6M FY24 Consolidated Financial Highlights
Q2 AND 6M FY24 CONSOLIDATED FINANCIAL HIGHLIGHTS
Slide 9: Key Highlights Q2 FY24
KEY HIGHLIGHTS Q2 FY24 ➢ Our Q2 FY24 Consol Restaurant Sales (₹ 6,414 Mn) grew by 14% and EBITDA (₹ 1,166 Mn) grew by 13% despite the continuing demand headwinds further exacerbated by an additional month of vegetarian days. While Raw Material inflation has remained stable QoQ, Gross Margin has seen
Slide 10: Summary Consolidated Financials Q2 & 6M FY24
SUMMARY CONSOLIDATED FINANCIALS Q2 & 6M FY24 Particulars Q2 FY24 Q2 FY23 Change YoY 6M FY24 6M FY23 Change YoY FY23 Restaurant Sales ₹ mn 6,414 5,604 • 14% 12,939 11,040 • 17% .I 22,571 Adj. EBITDA ₹ mn 678 624 • 9% 1,450 1,346 • 8% I ■ 2,647 % 10.6% 11.1% • -50 bps 11.2% 12.2% • -100 bps f I 11.7%
Slide 11: Sapphire Foods Current Presence
SAPPHIRE FOODS CURRENT PRESENCE RESTAURANT COUNT ■ KFC India ■ Pizza Hut India ■ Sri Lanka + Maldives RESTAURANT DISTRIBUTION ACROSS INDIAN SUBCONTINENT 381 341 301 286 311 249 55 14 108 116 122 KFC – 9 6 PH – 7 62 Sep'22 Mar'23 Sep'23 21 658 743 814 KFC – 19 KFC – 14 RESTAURANT ADDITION PH – 30 PH
Slide 12: Financial Highlights: Restaurant Sales
FINANCIAL HIGHLIGHTS Q2 & 6M FY24 CONSOLIDATED RESTAURANT SALES (₹ MN) 22,571 ▲17% ▲14% 12,939 11,040 5,604 6,414 Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 INDIA RESTAURANT SALES (₹ MN) 19,744 ▲15% ▲12% 11,143 9,657 4,902 5,495 Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 9
Slide 13: Financial Highlights: Gross Margin
FINANCIAL HIGHLIGHTS Q2 & 6M FY24 CONSOLIDATED GROSS MARGIN (%) 68.9% 68.8% ▲220 bps ▲140 bps 67.6% 67.4% 66.7% Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 INDIA GROSS MARGIN (%) 69.9% 69.8% ▲170 bps 68.8% ▲100 bps 68.8% 68.2% Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 10
Slide 14: Financial Highlights: Restaurant EBITDA
FINANCIAL HIGHLIGHTS Q2 & 6M FY24 CONSOLIDATED RESTAURANT EBITDA (₹ MN / %)# 20. 0% 17.4% 21. 0% 21. 0% 18. 0% 19. 0% 3,929 17.6% 16.7% ▼90 bps 19. 0% 16.8% 16.1% ▼70 bps 16. 0% 17. 0% 17. 0% 14. 0% 12. 0% 15. 0% 15. 0% 940 1,037 13. 0% 10. 0% 1,944 2,164 13. 0% 8.0 % 11. 0% 11. 0% 6.0 % 9.0 % 9.0 %
Slide 15: Financial Highlights: Adj. EBITDA and EBITDA
FINANCIAL HIGHLIGHTS Q2 & 6M FY24 ADJ. EBITDA (₹ MN / %)# 11.7% 15. 0% 18. 0% 18. 0% 16. 0% 2,647 16. 0% 10. 0% 12.2% 14. 0% 11.2% ▼100 bps 14. 0% 11.1% 10.6% ▼50 bps 12. 0% 5.0 % 12. 0% 10. 0% 1,346 1,450 10. 0% 624 678 8.0 % 0.0 % 8.0 % 6.0 % 6.0 % 4.0 % 4.0 % -5.0% ▲9% ▲8% 2.0 % 2.0 % -10.0% 0.0
Slide 16: Financial Highlights: Adj. PBT and Adj. PAT
FINANCIAL HIGHLIGHTS Q2 & 6M FY24 Adj. PROFIT BEFORE TAX (₹ MN / %)# 6.3% 4.7% ▼ 160 bps 7.1% 6.2% 5.5% ▼ 160 bps 353 780 718 299 1,407 ▼15% ▼8% Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 Adj. PROFIT AFTER TAX (₹ MN / %)# 11.8% 6.3% 4.7% 3.4%▼ 290 7.3% 2,654 * 4.6% 4.1%▼ 320 bps 804 bps 352 620 317 526 21
Slide 17: Financial Highlights: PBT and PAT
FINANCIAL HIGHLIGHTS Q2 & 6M FY24 PROFIT BEFORE TAX (₹ MN / %) 4.8% 3.3% ▼ 150 4.8% 5.7% 4.3% ▼ 140 bps 269 626 bps 550 214 1,084 ▼21% ▼12% Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 PROFIT AFTER TAX (₹ MN / %) 4.8% 2.4% ▼ 240 10.3% * 5.9% 3.1% ▼ 280 bps 650 bps 269 2,332 401 152 ▼43% ▼38% Q2 FY23 Q2 FY24
Slide 18: Revenue & Adj. EBITDA Trend
FINANCIAL HIGHLIGHTS REVENUE & ADJ. EBITDA TREND REVENUE (₹ MN) & ADJ. EBITDA (%) YoY -24% 69% 32% Change % 12.4% 11.7% 11.8% 11.1% 10.6% 10.1% 9.4%* 22,571 5.0% 17,154 6,526 6,414 3.8% 5,604 5,939 5,592 13,284 10,160 FY 20 FY 21 FY 22 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 * Adj. EBITDA% afte
Slide 19: Consolidated Profit & Loss Statement
CONSOLIDATED PROFIT & LOSS STATEMENT Particulars (In Rs mn) Q2 FY24 Q2 FY23 YoY % 6M FY24 6M FY23 YoY% FY23 Restaurant Sales 6,413.87 5,604.12 14% 12,939.43 11,039.65 17% 22,570.64 Other operating income 12.53 23.54 30.81 50.68 85.10 COGS 2,009.86 1,890.22 4,070.80 3,646.38 7,406.76 Gross Profit 4,4
Slide 20: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET Particulars (In Rs mn) As on 30.9.23 As on 31.3.23 Total Assets 27,557.16 25,940.54 Fixed assets other than Goodwill 10,350.90 8,917.55 Goodwill 1,621.59 1,621.59 Right of use assets 8,968.04 7,914.73 Inventories 805.48 993.04 Trade receivables 285.38 179.49 Cash and bank
Slide 21: KFC India Business Performance
KFC India Business Performance
Slide 22: KFC Brand Priorities
KFC BRAND PRIORITIES Enhance Fried Chicken Category Craveable Taste + Relevance - “Let’s KFC” communication + ‒ Innovation: Double Down Burger + Value - Range of Snackers at ₹99/- campaign Frictionless Customer Improve Experience Operational + - Digital Kiosks - KFC App + Excellence - 7 Minutes expr
Slide 23: KFC Brand Priorities: Category Relevance
KFC BRAND PRIORITIES Fried Chicken Category Relevance: Building Occasions | Craveable taste CRICKET OCCASION BUCKETS DOUBLE DOWN 20
Slide 24: KFC Brand Priorities: Digital
KFC BRAND PRIORITIES Frictionless customer experience | Digital Total App downloads – 29.6 MN+ Digital KIOSKs implemented at 115 Monthly Active Users – 1.5 Mn Restaurants 21
Slide 25: KFC Brand Priorities: Improving Accessibility
KFC BRAND PRIORITIES Improving Accessibility – Doubling Restaurant Count in 3-4 years (base Dec’21 count) KFC - GARHSHANKAR, PUNJAB KFC - NIKOL, AHMEDABAD KFC - THE MILLENIUM MALL, WAKAD PUNE KFC - SHOOLAGIRI HIGHWAY, HOSUR 22
Slide 26: KFC India Channel Sales Contribution
KFC INDIA Q2 & 6M FY24 - CHANNEL SALES CONTRIBUTION ■ Delivery ■ Takeaway ■ Dine IN ■ Delivery ■ Takeaway ■ Dine IN 36% 38% 36% 35% 37% 20% 19% 19% 20% 19% 44% 43% 45% 45% 44% Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 23
Slide 27: KFC India Q2 & 6M FY24
KFC INDIA Q2 & 6M FY24 AVERAGE DAILY SALES (₹ ‘000) SSSG% 15% 0% 15% 41% 0% 134 135 139 131 125 Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 RESTAURANT SALES (₹ MN) Rest. 20 23 78 38 40 Addition 14,529 ▲19% ▲20% 4,165 8,451 3,491 7,028 Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 Rest. Count 301 381 341 301 381 Ave
Slide 28: KFC India Gross Margin and Restaurant EBITDA
KFC INDIA Q2 & 6M FY24 GROSS MARGIN % 67.9% 68.0% 66.6% ▲160 bps ▲230 bps 66.4% 65.6% Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 RESTAURANT EBITDA (%)# 20.0% 19.2% 19.4% 19.1% ▲90 bps 17.9% ▲130 bps Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 # Restaurant EBITDA figures are Pre-IND AS 116. 25
Slide 29: 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% Change % 19.1% 19.2% 17.9% 19.4% 18.7% * 14.0% 13.2% 14,529 4,286 4,165 3,810 3,691 3,491 10,349 7,735 ■ 5,897 I ■ I FY 20 FY 21 FY 22 I FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 ■ I ADS (₹ 0
Slide 30: Pizza Hut India Business Performance
Pizza Hut India – Business Performance
Slide 31: Pizza Hut India Specific Plans Next 6-12 Months
PIZZA HUT INDIA SPECIFIC PLANS NEXT 6-12 MONTHS 1--------------------------------------------------------------------------------------------------------· I I I I I I I I I I Build Brand Salience I I I I Grow Dine-In Sales I I I I I I I I I I I I Operations I I ▪ Speed of service & quality of custom
Slide 32: Pizza Hut Brand Priorities: Build Brand Salience
PIZZA HUT BRAND PRIORITIES Build Brand Salience: New commercials on TV/Digital https://youtu.be/U1LOQ1wXhj4 29
Slide 33: Pizza Hut Brand Priorities: Product Innovation
PIZZA HUT BRAND PRIORITIES Product Innovation O P/Wlllut: ..... ....._.· BITES, ................ • SAVINGS! INTRODUCING LAAAAAAAARGE PIZZAS! (Serves 4 Guests) Large Pizzas launched in Gujarat & Kerala 30
Slide 34: Pizza Hut Brand Priorities: Digital and Operational Excellence
PIZZA HUT BRAND PRIORITIES Digital | Operational Excellence 14:37 m - e Welcome back priya! •· Se l ect D e l ivery or Takea vvay to see l oca l dea l s De liv e ry Let u s knovv your l ocation > Hot deals Takeaway F ind your nearest hut > Vievv deals - - -- =------ TABLE lflt, A H om e ~ M e nu @ I
Slide 35: Pizza Hut Brand Priorities: Improve Accessibility
PIZZA HUT BRAND PRIORITIES Improve Accessibility: Doubling Restaurant Count in 3-4 years (base Dec’21 count) PH - THE MILLENIUM MALL, WAKAD PUNE PH – STAR PLAZA, BORIVALI MUMBAI PH – MARUTI NAGAR, BANGALORE PH-ATRIA MALL, WORLI MUMBAI 32
Slide 36: Pizza Hut India Channel Sales Contribution
PIZZA HUT INDIA Q2 & 6M FY24 - CHANNEL SALES CONTRIBUTION ■ Delivery ■ Takeaway ■ Dine IN ■ Delivery ■ Takeaway ■ Dine IN 50% 49% 50% 49% 49% 15% 16% 15% 16% 16% 35% 35% 35% 35% 35% Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 33
Slide 37: Pizza Hut India Q2 & 6M FY24
PIZZA HUT INDIA Q2 & 6M FY24 AVERAGE DAILY SALES (₹ ‘000) SSSG% 23% -20% 12% 34% -15% 64 62 58 48 50 Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 RESTAURANT SALES (₹ MN) Rest. 14 9 67 30 25 Addition 5,214 ▲2% ▼6% 2,629 2,692 1,410 1,330 Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 Rest. Count 249 311 286 249 311 Av
Slide 38: Pizza Hut India Gross Margin and Restaurant EBITDA
PIZZA HUT INDIA Q2 & 6M FY24 GROSS MARGIN (%) 76.1% 75.6% 74.7% ▲140 bps 74.7% 75.0% ▲60 bps Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 RESTAURANT EBITDA# (%) 15.1% 14.9% 13.3% 7.6% 8.3% ▼660 bps ▼750 bps Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 # Restaurant EBITDA figures are Pre-IND AS 116. 35
Slide 39: Pizza Hut India Restaurant Sales & EBITDA Trend
PIZZA HUT INDIA RESTAURANT SALES & EBITDA TREND Rest. SALES (₹MN) & Rest. EBITDA % YoY 15.1% -34% 67% 41% Change % 14.1% 13.3% 11.4%* 9.0% 8.6% 7.6% 7.2% 1,410 1,362 1,364 1,330 5.0% 5,214 1,221 3,710 3,344 2,218 FY 20 FY 21 FY 22 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 ADS (₹ 000)# 0 58 0 48 0
Slide 40: Sri Lanka Business Performance
Sri Lanka T~CC> Business Performance BELL
Slide 41: Sri Lanka Business Product Innovation
SRI LANKA BUSINESS PRODUCT INNOVATION 38
Slide 42: Sri Lanka Business Branding and Marketing
SRI LANKA BUSINESS BRANDING AND MARKETING G) UI~-~~ =-= SPEND RS. 600 AND GET 1BAKED RICE & 1COKE 1CLASSIC PERSONAL PAN PIZZA & 1COKE VALID ONLY FOR DINE-IN EX[LUSl!JE ONLINE OFFERS • • CYBER SAVINGS:·, BUY ANY VALIDFROM JST TO JJST AUGUST 2023 ,~ LARGE PAN PIZZA .!. .!. .!. .!. .!. .!. .!..!..!..!.
Slide 43: Sri Lanka Business New Stores Addition
SRI LANKA BUSINESS NEW STORES ADDITION MATTAKULIYA KILINOCHCHI 40
Slide 44: Sri Lanka Channel Sales Contribution
SRI LANKA BUSINESS Q2 & 6M FY24 - CHANNEL SALES CONTRIBUTION ■ Delivery ■ Takeaway ■ Dine IN ■ Delivery ■ Takeaway ■ Dine IN 34% 36% 38% 40% 37% 39% 34% 35% 34% 35% 27% 30% 27% 25% 29% Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 41
Slide 45: Sri Lanka Average Daily Sales
SRI LANKA BUSINESS Q2 & 6M FY24 AVERAGE DAILY SALES (LKR ‘000) SSSG% 37% 1% SSSG% 22% 44% 1% 335 318 322 334 311 Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 AVERAGE DAILY SALES (INR ‘000) 81 81 73 72 74 Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 Rest. Rest. Count 106 118 Count 114 106 118 Average daily sales is
Slide 46: Sri Lanka Restaurant Sales
SRI LANKA BUSINESS Q2 & 6M FY24 RESTAURANT SALES (LKR MN) Rest. Rest. 8 4 Addition 19 11 4 Addition 12,166 ▲8% ▲8% 6,524 6,014 3,379 3,121 Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 Rest. Rest. Count 106 118 Count 114 106 118 RESTAURANT SALES (INR MN) ▲28% ▲29% 2,716 1,689 864 1,319 669 Q2 FY23 Q2 FY24 FY
Slide 47: Sri Lanka Gross Margin and Restaurant EBITDA
SRI LANKA BUSINESS Q2 & 6M FY24 GROSS MARGIN % 62.2% 61.4% ▲430 bps ▲680 bps 58.1% 57.1% 55.4% Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 RESTAURANT EBITDA (%)# 15.3% 15.2% 15.0% 14.8% ▲30 bps 14.2% ▼100 bps Q2 FY23 Q2 FY24 FY23 6M FY23 6M FY24 Absolute Rest. EBITDA increased by 9 % in LKR terms (increase
Slide 48: 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% 22.0% * 15.0% 19.6% 14.6% 14.2% 16.2% 14.8% 3,379 3,282 13.0% 12,166 3,145 3,121 2,867 8,229 5,144 5,145 FY 20 FY 21 FY 22 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 ADS (LKR ‘000
Slide 49: Thank You
THANK YOU