Sapphire Foods India Ltd. · NSE:SAPPHIRE
Sapphire Foods India — Q3 FY22 Earnings Presentation
54 slides from Sapphire Foods India's earnings presentation, Feb 12, 2022
Slide 1: Cover letter to stock exchanges
Sapphire Foods Date: February 11, 2022 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 - 40001 Symbol: SAPPHIRE Scrip Code: 543397 Dear Sir/Madam, Subject: Press R
Slide 2: Investor Release: highest ever Restaurant Sales, EBITDA, PAT
Investor Release Sapphire Foods India Ltd delivers highest ever Restaurant Sales, EBITDA, PAT and restaurant additions in Q3 FY22 Mumbai, 11th February, 2022 – Sapphire Foods India Ltd, a franchisee of Yum Brands in the Indian subcontinent announces its Unaudited Financial Results for the Quarter an
Slide 3: Management Commentary
Management Commentary We are pleased to announce our first financial results post the public listing of Sapphire Foods in Nov’21. Firstly, we would like to thank all our investors and stakeholders for supporting the Company during the IPO process and we look forward to a long and productive relation
Slide 4: About Sapphire Foods
About Sapphire Foods: Sapphire Foods started operations in September 2015, by the acquisition of about 250 KFC and Pizza Hut Stores in India and Sri Lanka, by a group of leading Private Equity firms and is managed by a team of professionals. Sapphire Foods is a leading YUM franchisee operator in the
Slide 5: Q3 FY22 Earnings Presentation
Sapphire SAPPHIREFoods FOODS India INDIA LLimited IMITED 3Q Q3FY22 FY22 Earnings EARNINGS PPresentation RESENTATION February FEBRUARY20222022
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: Whole Time Director & Group CEO's Commentary
WHOLE TIME DIRECTOR & GROUP CEO’S COMMENTARY We are pleased to announce our first financial results post the public listing of Sapphire Foods in Nov’21. Firstly, we would like to thank all our investors and stakeholders for supporting the Company during the IPO process and we look forward to a long
Slide 8: Table of Contents
TABLE OF CONTENTS 1 THE SAPPHIRE STORY Page 5 2 Q3 & 9M FY22 CONSOLIDATED FINANCIAL HIGHLIGHTS Page 7-12 3 SEGMENTAL PERFORMANCE ▪ KFC INDIA Page 14-20 ▪ PIZZA HUT INDIA Page 22-27 ▪ SRI LANKA BUSINESS Page 29-34 4 ESG & OTHER KEY INITIATIVES Page 36-40 5 COMPANY OVERVIEW Page 42-49 4
Slide 9: The Sapphire Story
THE SAPPHIRE STORY Two global brands Execution Mindset (KFC & Pizza Hut) with Scale Great Customer & PAT profitability among experience along with Top 3 QSR operators Value based work Superior Back-end operational excellence culture enabled by professional and experienced management Capability and c
Slide 10: Q3 FY22 & 9M FY22 Consolidated Financial Highlights
Q3 FY22 & 9M FY22 CONSOLIDATED FINANCIAL HIGHLIGHTS
Slide 11: Summary Consolidated Financials
SUMMARY CONSOLIDATED FINANCIALS Q3 & 9M FY22 Q3 FY22 9M FY22 Highest Ever Quarterly… Restaurant Sales ₹ mn 5,055 52% 12,212 80% ▪ …Restaurant Sales across KFC, Pizza Hut and Sri Lanka business due to strong brand activation and Sapphire’s omni EBITDA 1,170 2,212 channel execution 69% 90% ₹ mn [1,084
Slide 12: Sapphire Foods Current Presence
SAPPHIRE FOODS CURRENT PRESENCE RESTAURANT COUNT RESTAURANT DISTRIBUTION ACROSS KFC India Pizza Hut India Sri Lanka INDIAN SUBCONTINENT 250 183 196 209 37 173 161 9 KFC – 6 PH – 7 42 68 66 89 14 Dec'19 Dec'20 Dec'21 426* 425* 550* KFC – 14 KFC – 7 PH – 22 PH – 5 KFC – 5 PH – 1 RESTAURANT ADDITION KF
Slide 13: Consolidated Financial Highlights
CONSOLIDATED FINANCIAL HIGHLIGHTS Q3 & 9M FY22 RESTAURANT SALES (₹ MN) 12,212 10,122 5,055 6,774 3,575 3,328 7% 52% 33% 80% Q3 FY20 Q3 FY21 Q3 FY22 9M FY20 9M FY21 9M FY22 GROSS MARGIN % 69.8% 69.8% 69.4% 69.3% 68.1% 68.2% 170 40 110 50 bps bps bps bps Q3 FY20 Q3 FY21 Q3 FY22 9M FY20 9M FY21 9M FY22
Slide 14: Consolidated Financial Highlights: EBITDA
CONSOLIDATED FINANCIAL HIGHLIGHTS Q3 & 9M FY22 RESTAURANT EBITDA** 25 .0% 18.9% 19 .0% 840 [17.5%]*17 .0% bps 21.9% 470 2,307 17.2% [20.2%]* 20 .0% 15 .0% bps 10.5% 14.2% 13 .0% 11.9% 1,109 15 .0% 11 .0% 1,201 9.0 % 10 .0% 7.0 % 572 508 714 5.0 % 5.0 % 3.0 % 13% 94% 41% 223% 1.0 % 0.0 % -1.0 % Q3 FY
Slide 15: Consolidated Financial Highlights: EBITDA and PAT
CONSOLIDATED FINANCIAL HIGHLIGHTS Q3 & 9M FY22 COMPANY EBITDA 25 .0% 17.2% 18.1% 19 .0% 90 20.8% 23.2% 240 [16.7%]* 17 .0% bps [21.5%]* 20 .0% bps 2,212 15 .0% 15.8% 13.7% 13 .0% 1,170 15 .0% 11 .0% 1,383 9.0 % 691 10 .0% 1,165 7.0 % 565 5.0 % 5.0 % 3.0 % 22% 69% 16% 90% 1.0 % 0.0 % -1.0 % Q3 FY20 Q
Slide 16: Consolidated Profit & Loss Statement
CONSOLIDATED PROFIT & LOSS STATEMENT Sl No. Particulars (In Rs mn) Q3 FY22 Q3 FY21 YoY % 9M FY22 9M FY21 YoY % A) Restaurant Sales 5,055.18 3,327.87 52% 12,211.55 6,773.95 80% B) Other operating income 20.24 10.36 35.91 16.08 C) COGS 1,565.13 1,015.20 3,723.29 2,092.92 D) Gross Profit 3,510.29 2,323
Slide 17: KFC India Business Performance
KFC India Business Performance
Slide 18: KFC India Channel Sales Contribution
KFC INDIA Q3 & 9M FY22 - CHANNEL SALES CONTRIBUTION % Delivery Takeaway Dine IN Recovery Delivery Takeaway Dine IN vs FY20 19% 20% 34% 37% 210% 41% 45% 20% 20% 28% 20% 107% 31% 23% 61% 60% 38% 43% 80% 28% 32% Q3 FY20 Q3 FY21 Q3 FY22 9M FY20 9M FY21 9M FY22 14
Slide 19: KFC India Branding & Promotions
KFC INDIA BRANDING & PROMOTIONS 15
Slide 20: KFC India Digital Activation
KFC INDIA DIGITAL ACTIVATION CELEBS & CONTENT CREATORS PT USHA KENNY SEBASTIAN KUBBRA SAIT ZAKIR KHAN JASPRIT BUMRAH 16
Slide 21: KFC India Express Pick-up
KFC INDIA – EXPRESS PICK-UP UNLOCKING A NEW OPPORTUNITY FOR THE BRAND Taste & Speed Promise Disruptive & Distinctive MILE TEZ, TASTE AMAZE 17
Slide 22: KFC India New Restaurant Launches
KFC INDIA NEW RESTAURANT LAUNCHES KFC BELAPUR KFC TIRUPUR KFC SALEM KFC OOTY 18
Slide 23: KFC India Q3 & 9M FY22
KFC INDIA Q3 & 9M FY22 AVERAGE DAILY SALES (₹ ‘000) SSSG 12% (10%) 29% 9% (42%) 70% 144 132 133 129 115 101 13% 25% 24% 28% Q3 FY20 Q3 FY21 Q3 FY22 9M FY20 9M FY21 9MFY22 RESTAURANT SALES (₹ MN) 7,384 5,974 3,031 3,817 2,086 1,983 5% 53% 36% 93% Q3 FY20 Q3 FY21 Q3 FY22 9M FY20 9M FY21 9M FY22 Rest.
Slide 24: KFC India Gross Margin and Restaurant EBITDA
KFC INDIA Q3 & 9M FY22 GROSS MARGIN (%) 0.7 68.5% 68.1% 0.8 68.0% 67.5% 0.5 0.7 0.3 0.6 65.0% 0.5 65.3% 0.1 0.4 -0.1 0.3 -0.3 0.2 310 10 0.1 220 100 -0.5 bps bps bps bps -0.7 0 Q3 FY20 Q3 FY21 Q3 FY22 9M FY20 9M FY21 9MFY22 RESTAURANT EBITDA(1) (%) 22.5% 19.7% [21.2%]* [18.6%]* 18.7% 12.8% 15.1% 11.
Slide 25: Pizza Hut India Business Performance
Pizza Hut India Business Performance
Slide 26: Pizza Hut India Channel Sales Contribution
PIZZA HUT INDIA Q3 & 9M FY22 - CHANNEL SALES CONTRIBUTION % Recovery Delivery Takeaway Dine IN Delivery Takeaway Dine IN vs FY20 32% 33% 49% 49% 158% 57% 60% 16% 16% 16% 114% 23% 25% 17% 51% 51% 34% 76% 27% 24% 18% Q3 FY20 Q3 FY21 Q3 FY22 9M FY20 9M FY21 9M FY22 AS DINE IN SALE RECOVERS AND DELIVERY
Slide 27: Pizza Hut India Promotions
PIZZA HUT INDIA PROMOTIONS 23
Slide 28: Pizza Hut Digital Activation
PIZZA HUT DIGITAL ACTIVATION 24
Slide 29: Pizza Hut India New Restaurant Launches
PIZZA HUT INDIA NEW RESTAURANT LAUNCHES PH LULU MALL TRIVANDRUM PH DHARWAD PH ANNAPURNA INDORE PH OOTY 25
Slide 30: Pizza Hut India Q3 & 9M FY22
PIZZA HUT INDIA Q3 & 9M FY22 AVERAGE DAILY SALES (₹ ‘000) SSSG 1% (19%) 22% (7%) (48%) 62% 61 64 60 57 53 45 13% 21% 25% 27% Q3 FY20 Q3 FY21 Q3 FY22 9M FY20 9M FY21 9MFY22 RESTAURANT SALES (₹ MN) 2,603 2,678 1,134 919 751 1,441 18% 51% 45% 86% Q3 FY20 Q3 FY21 Q3 FY22 9M FY20 9M FY21 9M FY22 Rest. 13
Slide 31: Pizza Hut India Gross Margin and Restaurant EBITDA
PIZZA HUT INDIA Q3 & 9M FY22 GROSS MARGIN (%) 76.0% 76.4% 76.3% 75.4% 75.8% 75.4% 40 100 90 40 bps bps bps bps Q3 FY20 Q3 FY21 Q3 FY22 9M FY20 9M FY21 9MFY22 RESTAURANT EBITDA(1) (%) 17.3% [14.9%]* 14.1% [11.5%]* 8.8% 11.2% 10.2% 100 610 750 1280 bps bps 1.3% bps bps Q3 FY20 Q3 FY21 Q3 FY22 9M FY20
Slide 32: Sri Lanka Business Performance
Sri Lanka Business Performance
Slide 33: Sri Lanka Business Channel Sales Contribution
SRI LANKA BUSINESS Q3 & 9M FY22 - CHANNEL SALES CONTRIBUTION % Recovery Delivery Takeaway Dine IN Delivery Takeaway Dine IN vs FY20 36% 38% 49% 191% 56% 56% 61% 32% 31% 35% 172% 31% 33% 29% 31% 31% 15% 75% 13% 10% 11% Q3 FY20 Q3 FY21 Q3 FY22 9M FY20 9M FY21 9M FY22 29
Slide 34: Sri Lanka Business New Products
SRI LANKA BUSINESS NEW PRODUCTS SRI LANKAN SPICY CHICKEN POPCORN VEGGIE CHOCO MALLOW DESSERT PIZZA 30
Slide 35: Sri Lanka Business Digital Activation
SRI LANKA BUSINESS DIGITAL ACTIVATION 31
Slide 36: Sri Lanka Business New Restaurant Launches
SRI LANKA BUSINESS NEW RESTAURANT LAUNCHES PIZZA HUT BADULLA TACO BELL RAJAGIRIYA PIZZA HUT PINHENA 32
Slide 37: Sri Lanka Business Q3 & 9M FY22
SRI LANKA BUSINESS Q3 & 9M FY22 AVERAGE DAILY SALES (₹ ‘000) SSSG 1% 3% 40% (1%) (3%) 39% 121 108 98 90 86 93 5% 24% 5% 20% Q3 FY20 Q3 FY21 Q3 FY22 9M FY20 9M FY21 9M FY22 RESTAURANT SALES (₹ MN) 2,066 858 1,443 1,464 570 537 51% 1% 41% 6% Q3 FY20 Q3 FY21 Q3 FY22 9M FY20 9M FY21 9M FY22 Rest. Rest.
Slide 38: Sri Lanka Business Gross Margin and Restaurant EBITDA
SRI LANKA BUSINESS Q3 & 9M FY22 GROSS MARGIN (%) 68.1% 67.2% 66.8% 66.8% 66.3% 66.0% 50 40 210 130 bps bps bps bps Q3 FY20 Q3 FY21 Q3 FY22 9M FY20 9M FY21 9MFY22 RESTAURANT EBITDA (1) (%) 26.4% [23.9%]* 22.6% [21.4%]* 20.2% 17.8% 17.3% 14.4% 240 620 290 530 bps bps bps bps Q3 FY20 Q3 FY21 Q3 FY22 9M
Slide 39: ESG and Other Initiatives
ESG AND OTHER INITIATIVES
Slide 40: ESG Initiatives
ESG INITIATIVES • Defined policy for integration of ESG principles into regular operations • Adherence to Global Quality Standards of YUM through regular operational audits • Onboarded Professional Firm (PWC) for continuous engagement and review of progress on ESG • Adherence to FOOD SAFETY • FAIR E
Slide 41: People Initiatives: Great Place to Work Certified
PEOPLE INITIATIVES GREAT PLACE TO WORK CERTIFIED! INDIA SRI LANKA SAPPHIRE INDIA IS NOW GREAT PLACE TO WORK CERTIFIED IN SRI LANKA LISTED IN ‘BEST 40 GREAT PLACES TO WORK IN SRI LANKA”, FIRST YEAR OF PARTICIPATION FOR THE 7TH CONSECUTIVE YEAR | 18TH BEST WORKPLACE IN ASIA 37
Slide 42: People Initiatives: ESOPs
PEOPLE INITIATIVES ESOPS ESOPs extended to ~ 1000 employees including restaurant Managers & subsidiaries 38
Slide 43: Diversity & Inclusiveness
DIVERSITY & INCLUSIVENESS SPECIALLY ABLED RESTAURANTS K F C KFC Santhome,Chennai ~150 Specially Abled Sign Language Takeover across all Employees across KFC and specially-abled restaurants in the Pizza Hut restaurants country on International Day of Sign Language 39
Slide 44: People Initiatives: Diversity & Inclusiveness
PEOPLE INITIATIVES DIVERSITY & INCLUSIVENESS Our First Economic Times recognised Sapphire: All Women restaurant at KFC Rcity, Best Workplace for Women Mumbai Ongoing Know Your Leader series 40
Slide 45: Company Overview
COMPANY OVERVIEW
Slide 46: Sapphire Foods at a Glance
SAPPHIRE FOODS AT A GLANCE YUM’s Franchisee Operator in 550 Total Restaurants India, Sri Lanka and Maldives Across India, Sri Lanka and Maldives (3) Sri Lanka’s Largest International QSR chain (1) 251 KFC Restaurants (3) 294 Pizza Hut Restaurants (3) 5 Taco Bell Restaurants (3) ₹ 12,212 mn 9MFY22 Re
Slide 47: Journey of Sapphire Foods: Platform of 550 Outlets
JOURNEY OF SAPPHIRE FOODS BUILT A PLATFORM OF 550 OUTLETS (1) 250 SAPPHIRE FOODS: GEOGRAPHICAL PRESENCE (1) 209 Restaurants Cities 89 68 49 49 37 9 INDIA SRI LANKA KFC – 6 PH – 7 42 14 KFC – 14 KFC – 7 PH – 22 PH – 5 KFC – 5 ~ KFC and Pizza Hut Brands Operate in States that PH – 1 cover 56% of GDP (
Slide 48: Key Takeaway for Investors
KEY TAKEAWAY FOR INVESTORS Two global brands Execution Mindset (KFC & Pizza Hut) with Scale Great Customer & EBITDA profitability experience along with among Top 3 QSR Value based work Superior Back-end operators operational excellence culture enabled by professional and experienced management Capab
Slide 49: Key Takeaway for Investors: Franchisee Arrangement
KEY TAKEAWAY FOR INVESTORS Under franchisee arrangement YUM has provided us rights to operate restaurants as one of the franchisee operator FRANCHISEE in Indian subcontinent in the specified Territories ARRANGEMENT With respect to each restaurant is 10 years (Original term) + 10 years (Renewal term)
Slide 50: Calibrated New Restaurant Economic Model for Expansion
CALIBRATED NEW RESTAURANT ECONOMIC MODEL FOR EXPANSION INDIA INDIA As of 31-Mar-19 RECENT As of 31-Mar-19 RECENT Avg Size of Restaurant ~ 1,500 (1) ~ 1,300 (1) (in Sq. ft.) 2,736 2,427 Reduction in Avg Reduction in Avg Restaurant size ~45% (2) Restaurant size ~46% (2) FY19 Q3 FY22 FY19 Q3 FY22 Avera
Slide 51: Well Positioned to Capture Future Opportunities
WELL POSITIONED TO CAPTURE FUTURE OPPORTUNITIES Explore Accelerate acquisition of conversion from high quality and unorganized food scalable QSR and services to KFC food brands in and PH brands existing and new geographies.. Capability + Capital Raised INR 4,743Mn in Aug 2021 through preferential al
Slide 52: Experienced Leadership Supported by Marquee Investors
EXPERIENCED LEADERSHIP SUPPORTED BY MARQUEE INVESTORS TOP MANAGEMENT BOARD OF DIRECTORS Sanjay Purohit Sunil Chandiramani Sanjay Purohit ◼ Levi Strauss & Co India Whole time Director and Chairman and Independent Whole Time Director Group CEO Director ◼ Cadbury India Limited and Group CEO – Sapphire
Slide 53: Shareholding Pattern
SHAREHOLDING PATTERN Shareholding Pattern (As on 31st December 2021) % Holding Top Holders* Promoters & Promoter Group 51.3 Public Shareholding Foreign Company 12.5 WWD Ruby Limited (Goldman Sachs) 9.8 Fennel Private Limited (CX Partners) 2.8 Alternate Investment Funds 6.8 Edelweiss Crossover Opport
Slide 54: Thank You
THANK YOU Company: Investor Relations Partner: Sapphire Foods India Limited Orient Capital (a division of Link Group) CIN: L55204MH2009PLC197005 Mr. Nachiket Kale Mr. Rahul Kapoor Email ID: [email protected] Email ID: [email protected] +91 9920940808 www.sapphirefoods.in www