Sapphire Foods India Ltd. · NSE:SAPPHIRE
Sapphire Foods India — Q4 FY23 Earnings Presentation
56 slides from Sapphire Foods India's earnings presentation, May 12, 2023
Slide 1: Exchange filing cover letter
Sapphire Foods Date: May 12, 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 (Inve
Slide 2: Investor Release: best ever annual performance in FY23
Investor Release 0 Sapphirefoods Sapphire Foods delivers best ever annual performance in FY23. Q4FY23: Consolidated Revenue grows 13%. India Revenue grows by 23% and Restaurant EBITDA grows by 19% Particulars Q4 FY22 Q4 FY23 Change YoY FY22 FY23 Change YoY Restaurant Sales ₹ mn 4,943 5,592 13% 17,15
Slide 3: Brand results commentary and About Sapphire Foods
0 Sapphirefoods ➢ KFC overall Restaurant Sales grew YoY by 24% with SSSG of 2%. Despite the headwinds, KFC delivered healthy Restaurant EBITDA of 19.1% ( 10 bps YoY), on account of cost efficiencies and gross margin recovery ( 30 bps over sequential quarter). We are excited about the launch of our
Slide 4: Q4 and FY23 Earnings Presentation
Sapphire SAPPHIREFoods FOODS India INDIA LLimited IMITED 3Q FY22 Q4 AND Earnings Presentation FY23 EARNINGS PRESENTATION February MAY2022 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 4 2 Q4 & FY23 FINANCIAL HIGHLIGHTS Page 5-17 3 BUSINESS PERFORMANCE ▪ KFC INDIA Page 18-31 ▪ PIZZA HUT INDIA Page 32-45 I ▪ SRI LANKA Page 46-52 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: Q4 & FY23 Consolidated Financial Highlights
Q4 & FY23 CONSOLIDATED FINANCIAL HIGHLIGHTS
Slide 9: Sapphire Foods: FY23 Highlights
SAPPHIRE FOODS: FY23 HIGHLIGHTS 2-Year CAGR FY23 - Best Ever Annual Performance 29% No. of 30% 743 Restaurants 33% 579 Highest Restaurant Sales: ₹22.6 Bn 437 FY21 FY22 FY23 Highest Adj. EBITDA: ₹2.6 Bn and . Highest margin of 11.7% 32% Restaurant . I - 22,571 69% 17,154 49% Highest Adj. PAT (before
Slide 10: Key Highlights Q4 FY23
KEY HIGHLIGHTS Q4 FY23 ➢ Our Q4 FY23 Consol Restaurant Sales (₹ 5,592 Mn) grew by 13%, wherein India Restaurant Sales delivered robust growth of 23%. ➢ Same stores sales growth was however challenged, as experienced since Diwali’22. In such macro demand conditions, we believe that our 2 power brands
Slide 11: Summary Consolidated Financials
SUMMARY CONSOLIDATED FINANCIALS Q4 & FY23 Particulars Q4 FY22 Q4 FY23 Change YoY FY22 FY23 Change YoY Restaurant Sales ₹ mn 4,943 5,592 13% 17,154 22,571 A 32% Adj. EBITDA ₹ mn 636 563 -11% 1,615 2,647 A 64% % 12.9% 10.1% -280 bps 9.4%* 11.7% A 230 bps EBITDA ₹ mn 1,036 1,030 -1% 3,054 4,343 A 42% %
Slide 12: Sapphire Foods Current Presence
SAPPHIRE FOODS CURRENT PRESENCE RESTAURANT COUNT RESTAURANT DISTRIBUTION ACROSS ■ KFC India ■ Pizza Hut India ■ Sri Lanka INDIAN SUBCONTINENT 341 263 203 286 219 162 47 70 95 114 11 KFC – 9 PH – 7 58 Mar'21 Mar'22 Mar'23 19 437* 579* 743* KFC – 15 KFC – 13 RESTAURANT ADDITION PH – 36 PH – 8 KFC – 6
Slide 13: Financial Highlights: Restaurant Sales
FINANCIAL HIGHLIGHTS Q4 & FY23 CONSOLIDATED RESTAURANT SALES (₹ MN) ▲32% 22,571 17,154 ▲13% 4,943 5,592 Q4 FY22 Q4 FY23 FY22 FY23 INDIA RESTAURANT SALES (₹ MN) ▲40% 19,744 ▲23% 14,059 3,997 4,913 Q4 FY22 Q4 FY23 FY22 FY23 10
Slide 14: Financial Highlights: Gross Margin
FINANCIAL HIGHLIGHTS Q4 & FY23 CONSOLIDATED GROSS MARGIN (%) 69.6% 69.1% 68.1% 67.6% ▼100 bps ▼200 bps Q4 FY22 Q4 FY23 FY22 FY23 11
Slide 15: Financial Highlights: Restaurant EBITDA
FINANCIAL HIGHLIGHTS Q4 & FY23 CONSOLIDATED RESTAURANT EBITDA (₹ MN / %)# 18.7% [17.6%]* 17.4% ▼20 bps* 20. 0% 21. 0% 18.3% 18. 0% 19. 0% 16.2% ▼210 bps 3,929 16. 0% 17. 0% 14. 0% 15. 0% 3,219 12. 0% 10. 0% 13. 0% 8.0 % 11. 0% 6.0 % 912 910 9.0 % 4.0 % 7.0 % ▲22% 2.0 % 5.0 % 0.0 % Q4 FY22 Q4 FY23 FY
Slide 16: Financial Highlights: Adj. EBITDA and EBITDA
FINANCIAL HIGHLIGHTS Q4 & FY23 ADJ. EBITDA (₹ MN / %)# 11.7% ▲230 bps* 15. 0% 18. 0% 10.5% [9.4%]* 16. 0% 12.9% 10. 0% 14. 0% 2,647 10.1% ▼280 bps 12. 0% 5.0 % 10. 0% 1,808 8.0 % 0.0 % 636 563 6.0 % 4.0 % -5.0% ▼11% ▲46% 2.0 % 0.0 % -10.0% Q4 FY22 Q4 FY23 FY22 FY23 EBITDA (₹ MN / %) 21.0% 23. 0% 19.
Slide 17: Financial Highlights: Profit After Tax
FINANCIAL HIGHLIGHTS Q4 & FY23 Adj. PROFIT AFTER TAX (₹ MN / %)# - 6.3% -25.7% 1,440 ** ▲ 1940 bps - 3.8% [2.7%]* -11.8% 2,654 ** ▲910 bps* 310 650 ▲365% ▲308% Q4 FY22 Q4 FY23 FY22 FY23 PROFIT AFTER TAX (₹ MN / %) - 5.4% - 24.2% 1,355 ** ▲ 1880 bps - 2.7% [1.6%]* - 10.3% ▲870 bps* 2,332 ** 265 460 ▲
Slide 18: Revenue & Adj. EBITDA Trend
FINANCIAL HIGHLIGHTS REVENUE & ADJ. EBITDA TREND REVENUE (₹ MN) & ADJ. EBITDA (%) YoY -24% 69% 32% Change % 13.3% 12.9% 12.4% 11.7% 11.1% 10.1% 9.4%* 22,571 5.0% 17,154 3.8% 5,604 5,939 5,592 13,284 4,943 5,436 10,160 FY 20 FY 21 FY 22 FY23 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 * Adj. EBITDA% afte
Slide 19: Consolidated Profit & Loss Statement
CONSOLIDATED PROFIT & LOSS STATEMENT Particulars (In Rs mn) Q4 FY22 Q4 FY23 YoY % FY22 FY23 YoY % Restaurant Sales 4,942.91 5,592.23 13% 17,154.46 22,570.64 32% Other operating income 25.35 11.86 61.26 85.1 COGS 1,554.68 1,796.72 5,277.97 7,406.76 Gross Profit 3,413.58 3,807.37 12% 11,937.75 15,248.
Slide 20: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET Particulars (In Rs mn) FY23 FY22 Total Assets 25,940.54 21,639.25 Fixed assets other than Goodwill 8,917.55 6,354.14 Right of use assets 7,914.73 6,248.57 Goodwill 1,621.59 1,621.59 Inventories 993.04 651.64 Trade receivables 179.49 140.71 Cash and bank balances, Investmen
Slide 21: KFC India Business Performance
KFC India Business Performance
Slide 22: KFC India: Channel Sales Contribution
KFC INDIA Q4 & FY23 - CHANNEL SALES CONTRIBUTION ■ Delivery ■ Takeaway ■ Dine IN ■ Delivery ■ Takeaway ■ Dine IN 40% 38% 36% 44% 19% 19% 21% 22% 39% 43% 45% 34% r r Q4 FY22 Q4 FY23 FY22 FY23 19
Slide 23: KFC Brand Priorities
KFC BRAND PRIORITIES Enhance Fried Value Chicken Category Craveable Taste + Relevance - “Let’s KFC” communication + ‒ Innovation: Chizza, Chicken Popcorn with Maggi, Popcorn Nachos + - Entry value innovation: Chicken Rolls - Abundant Value: Bucket Options campaign Frictionless Customer Improve Exper
Slide 24: KFC: Enhance Fried Chicken Category Relevance
KFC BRAND PRIORITIES Enhance Fried Chicken Category Relevance: Let’s KFC Campaign 21
Slide 25: KFC: Our Craveable Innovations
KFC BRAND PRIORITIES Our Craveable Innovations ChocoLava ,99 22
Slide 26: KFC: Entry & Abundant Value, New Launch April'23
KFC BRAND PRIORITIES Offering Value to Customers: Entry & Abundant Value New Launch: April’23 23
Slide 27: KFC: Offering Value to Customers
KFC BRAND PRIORITIES Offering Value to Customers: Entry & Abundant Value 24
Slide 28: KFC: Frictionless Customer Experience, Kiosks & App
KFC BRAND PRIORITIES Frictionless Customer Experience: KIOSKs & App Digital KIOSKs piloted at 16 Restaurants Total App downloads – 7.9 MN+ Aggressive scaleup in FY24 Monthly Active Users – 1.4 Mn 25
Slide 29: KFC: Operational Excellence, 7 Min Express Pickup
KFC BRAND PRIORITIES Operational Excellence: Speed of Service through 7 Min express pickup project EXPRESS PICKUP 26
Slide 30: KFC: Improving Accessibility, Doubling Restaurant Count
KFC BRAND PRIORITIES Improving Accessibility – Doubling Restaurant Count in 3-4 years (base Dec’21 count) KFC AEROCITY - MOHALI KFC NFC – NEW DELHI KFC BARAMATI -PUNE KFC RAMANATHAPURAM – TAMIL NADU 27
Slide 31: KFC India: Average Daily Sales
KFC INDIA Q4 & FY23 AVERAGE DAILY SALES (₹ ‘000) SSSG 15% 2% SSSG 52% 15% 132 127 129 135 Q4 FY22 Q4 FY23 FY22 FY23 Rest. Count 263 341 263 341 Average daily sales is for all restaurants including new additions during the period 28
Slide 32: KFC India: Restaurant Sales
KFC INDIA Q4 & FY23 RESTAURANT SALES (₹ MN) Rest. Rest. Addition 13 16 Addition 60 78 ▲40% 14,529 ▲24% 10,349 3,691 2,966 Q4 FY22 Q4 FY23 FY22 FY23 Rest. Rest. 263 341 Count 263 341 Count 29
Slide 33: KFC India: Gross Margin and Restaurant EBITDA
KFC INDIA Q4 & FY23 GROSS MARGIN (%) 67.9% 68.4% 66.8% ▼110 bps 66.6% ▼180 bps Q4 FY22 Q4 FY23 FY22 FY23 RESTAURANT EBITDA# (%) 19.5% [18.7%]* 19.4% ▲70 bps* 19.0% 19.1% ▲10 bps Q4 FY22 Q4 FY23 FY22 FY23 # Restaurant EBITDA figures are Pre-IND AS 116. *EBITDA% after Normalizing for additional incent
Slide 34: KFC India Restaurant Sales & EBITDA Trend
KFC INDIA RESTAURANT SALES & EBITDA TREND Rest. SALES (₹MN) & Rest. EBITDA % YoY Change % -24% 75% 40% 20.3% 20.2% 19.0% 19.1% 17.9% 19.4% 18.7% * 14.0% 13.2% 14,529 3,810 3,691 3,537 3,491 10,349 2,966 7,735 5,897 FY 20 FY 21 FY 22 FY23 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 * Restaurant EBITDA% a
Slide 35: Pizza Hut India Business Performance
Pizza Hut India – Business Performance
Slide 36: Pizza Hut India: Channel Sales Contribution
PIZZA HUT INDIA Q4 & FY23 - CHANNEL SALES CONTRIBUTION ■ Delivery ■ Takeaway ■ Dine IN ■ Delivery ■ Takeaway ■ Dine IN 52% 52% 50% 57% 15% 15% 15% 17% 33% 33% 35% 26% Q4 FY22 Q4 FY23 FY22 FY23 33
Slide 37: Pizza Hut Brand Priorities
PIZZA HUT BRAND PRIORITIES Build Top-of-Mind Taste Leadership in Value Pizza category + Awareness - Enhance marketing investments: + - Innovation: 10 New Pan Pizzas, 2 new Pastas, Keema Garlic + - Entry level value: Flavor Fun Pizzas - Attractive Meal options TV campaign Bread Operational Improve Fr
Slide 38: Pizza Hut: Top-of-Mind Awareness, TV Campaign
PIZZA HUT BRAND PRIORITIES Build Top-of-Mind Awareness: TV Campaign & Marketing Investments 35
Slide 39: Pizza Hut: Taste Leadership, Core Innovations
PIZZA HUT BRAND PRIORITIES Taste Leadership in Pizza Category: Core Innovations Momo Mia Pizza 36
Slide 40: Pizza Hut: Core Innovations, New Launch April'23
PIZZA HUT BRAND PRIORITIES Taste Leadership in Pizza Category: Core Innovations New Launch: April’23 KEEMA MAKHNI PASTA 37
Slide 41: Pizza Hut: Creating Value, Entry Level and Meal Options
PIZZA HUT BRAND PRIORITIES Creating Value: Entry Level and Meal Options ,,J/1. CHOOSEANY FROM 'fl IOUR FLAVOUR FUN PIZZAS SET OF 2 f·u1 1PIZZA 229 289 ~ . I I DEALS MORE FlAVOURS! MORE FUN! [!]VEG [!]NON VEG -~ 38
Slide 42: Pizza Hut: Frictionless Customer Experience, App and QR
PIZZA HUT BRAND PRIORITIES Frictionless Customer Experience: App and Self Ordering QR code on Dine In Table 14:37 • a e Welcome back priya! •· Select Delivery or Takeaway to see local dea l s Delivery Let us know your location > =------ Takeaway > - -- Find yo u r nearest hut Hot deals View deals TA
Slide 43: Pizza Hut: Operational Excellence Using Technology
PIZZA HUT BRAND PRIORITIES Operational Excellence: Using Technology to simplify process & improve customer experience HutBot Kitchen Management System Simplifying operations for Partnering with Aggregators Rider Tracking Restaurant Teams to deliver Hot Pizzas 40
Slide 44: Pizza Hut: Improve Accessibility, Doubling Restaurant Count
PIZZA HUT BRAND PRIORITIES Improve Accessibility: Doubling Restaurant Count in 3-4 years (base Dec’21 count) PH MISSION STREET - PONDICHERRY PH MAHIM - MUMBAI PH URBAN OASIS HUBLI- KARNATAKA PH PANJIM - GOA 41
Slide 45: Pizza Hut India: Average Daily Sales
PIZZA HUT INDIA Q4 & FY23 AVERAGE DAILY SALES (₹ ‘000) SSSG 3% -4% SSSG 42% 12% 57 58 55 50 Q4 FY22 Q4 FY23 FY22 FY23 Rest. 219 286 219 286 Count Average daily sales is for all restaurants including new additions during the period 42
Slide 46: Pizza Hut India: Restaurant Sales
PIZZA HUT INDIA Q4 & FY23 RESTAURANT SALES (₹ MN) Rest. Rest. Addition 10 12 Addition 57 67 ▲41% 5,214 ▲18% 3,710 1,221 1,032 Q4 FY22 Q4 FY23 FY22 FY23 Rest. Rest. 219 286 219 286 Count Count 43
Slide 47: Pizza Hut India: Gross Margin and Restaurant EBITDA
PIZZA HUT INDIA Q4 & FY23 GROSS MARGIN (%) 75.5% 74.8% 74.7% 74.3% ▼50 bps ▼80 bps Q4 FY22 Q4 FY23 FY22 FY23 RESTAURANT EBITDA# (%) 13.4% [11.4%]* 13.3% ▲190 bps* 11.5% 8.6% ▼290 bps Q4 FY22 Q4 FY23 FY22 FY23 # Restaurant EBITDA figures are Pre-IND AS 116. *EBITDA% after Normalizing for additional i
Slide 48: Pizza Hut India Restaurant Sales & EBITDA Trend
PIZZA HUT INDIA RESTAURANT SALES & EBITDA TREND Rest. SALES (₹MN) & Rest. EBITDA % YoY 14.8% 15.1% -34% 67% 41% Change % 14.1% 13.3% 11.5% 11.4%* 8.6% 7.2% 1,410 1,364 5.0% 5,214 1,219 1,221 1,032 3,710 3,344 2,218 FY 20 FY 21 FY 22 FY23 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 * Restaurant EBITDA% a
Slide 49: Sri Lanka Business Performance
Sri Lanka T~CC> Business Performance BELL
Slide 50: Sri Lanka Business: Channel Sales Contribution
SRI LANKA BUSINESS Q4 & FY23 - CHANNEL SALES CONTRIBUTION ■ Delivery ■ Takeaway ■ Dine IN ■ Delivery ■ Takeaway ■ Dine IN 36% 38% 46% 56% 35% 35% 34% 31% 29% 27% 20% 13% r Q4 FY22 Q4 FY23 FY22 FY23 47
Slide 51: Sri Lanka Business: Product Innovations
SRI LANKA BUSINESS PRODUCT INNOVATIONS 48
Slide 52: Sri Lanka Business: Average Daily Sales
SRI LANKA BUSINESS Q4 & FY23 AVERAGE DAILY SALES (LKR ‘000) SSSG% 47% -3% SSSG% 42% 22% 319 322 281 LKR 298 Q4 FY22 Q4 FY23 FY22 FY23 Rest. Count 95 114 95 114 AVERAGE DAILY SALES (INR ‘000) 108 112 INR 72 65 Q4 FY22 Q4 FY23 FY22 FY23 Average daily sales is for all restaurants including new addition
Slide 53: Sri Lanka Business: Restaurant Sales
SRI LANKA BUSINESS Q4 & FY23 RESTAURANT SALES (LKR MN) Rest. 25 0 Rest. 25 19 Addition Addition ▲48% 12,166 ▲10% LKR 8,229 2,867 2,599 Q4 FY22 Q4 FY23 FY22 FY23 Rest. Rest. Count 95 114 Count 95 114 RESTAURANT SALES (INR MN) ▼9% INR 2,983 2,716 ▼27% 917 667 Q4 FY22 Q4 FY23 FY22 FY23 50
Slide 54: Sri Lanka Business: Gross Margin and Restaurant EBITDA
SRI LANKA BUSINESS Q4 & FY23 GROSS MARGIN (%) 64.9% 66.2% 67.1% 61.0% 58.1% ▼390 bps ▼810 bps Q4 FY22 Q4 FY23 FY22 AOP FY23 FY23 RESTAURANT EBITDA# (%) 23.2% [22.0%]* 24.4% 14.8% ▼720 bps* 14.2% ▼1020 bps Q4 FY22 Q4 FY23 FY22 FY23 Absolute Rest. EBTDA declined by 1 % in LKR terms vs Normalized Rest.
Slide 55: Sri Lanka Restaurant Sales & EBITDA Trend
SRI LANKA BUSINESS RESTAURANT SALES & EBITDA TREND Rest. SALES (LKR MN) & Rest. EBITDA % YoY 0% 60% 48% 24.4% Change % 22.0%* 19.6% 15.5% 15.0% 16.2% 14.6% 14.2% 14.8% 12,166 3,282 3,121 2,893 2,867 8,229 2,599 5,144 5,145 FY 20 FY 21 FY 22 FY23 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 * EBITDA% afte
Slide 56: Thank You
THANK YOU