Sapphire Foods India Ltd. · NSE:SAPPHIRE
Sapphire Foods India — Q1 FY24 Earnings Presentation
47 slides from Sapphire Foods India's earnings presentation, Aug 2, 2023
Slide 1: Exchange filing cover letter
Sapphire Foods Date: August 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 (I
Slide 2: Investor Release
0 SapphireFoods Investor Release Sapphire Foods Q1 FY24 Consolidated Revenue grows 20%, despite the consumer demand headwinds. KFC delivers very strong financial performance -------------------------r-------------------------~------------------------,~------------------------ir----------------------
Slide 3: Brand performance and About Sapphire Foods
0 Sapphirefoods ➢ Despite flat SSSG (ADS improved over sequential quarter), KFC delivered strong financial performance. Overall Restaurant Sales grew YoY by 21%. Gross Margin recovery ( 130 bps over sequential quarter) and cost controls enabled KFC to deliver one of the highest ever Restaurant EBIT
Slide 4: Q1 FY24 Earnings Presentation
Sapphire SAPPHIREFoods FOODS India INDIA LLimited IMITED 3Q FY22 Q1FY24 EarningsPERFORMANCE BUSINESS Presentation February AUG2022 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 Q1 FY24 FINANCIAL HIGHLIGHTS Page 5-15 3 BUSINESS PERFORMANCE ▪ KFC INDIA Page 16-24 ▪ PIZZA HUT INDIA Page 25-34 I ▪ SRI LANKA Page 35-42 I 4 ESG Page 43 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: Q1 FY24 Consolidated Financial Highlights
Q1 FY24 CONSOLIDATED FINANCIAL HIGHLIGHTS
Slide 9: Key Highlights Q1 FY24
KEY HIGHLIGHTS Q1 FY24 ➢ Our Q1 FY24 Consol Restaurant Sales (₹ 6,526 Mn) grew by 20% despite the consumer demand headwinds. Raw Material inflation has cooled off thereby improving gross margins. In these conditions, both KFC and Pizza Hut focussed on winning consumer trust by delivering value and p
Slide 10: Summary Consolidated Financials
SUMMARY CONSOLIDATED FINANCIALS Q1 FY24 Particulars FY23 Q1 FY23 Q1 FY24 Change YoY - - -·- - - - - - - • Restaurant Sales ₹ mn 22,571 5,436 6,526 20% Adj. EBITDA ₹ mn 2,647 722 - - -i - - - ■ • 772 7% - - -~- - - - - - • % 11.7% 13.3% 11.8% -150 bps --- -------- • EBITDA ₹ mn 4,343 1,114 1,224 10%
Slide 11: Sapphire Foods Current Presence
SAPPHIRE FOODS CURRENT PRESENCE RESTAURANT COUNT RESTAURANT DISTRIBUTION ACROSS ■ KFC India ■ Pizza Hut India ■ Sri Lanka + Maldives INDIAN SUBCONTINENT 341 358 281 286 302 235 50 12 100 116 118 KFC – 9 6 PH – 7 62 Jun'22 Mar'23 Jun'23 20 616 743 778 KFC – 17 KFC – 14 RESTAURANT ADDITION PH – 37 PH
Slide 12: Financial Highlights: Restaurant Sales
FINANCIAL HIGHLIGHTS Q1 FY24 CONSOLIDATED RESTAURANT SALES (₹ MN) INDIA RESTAURANT SALES (₹ MN) 22,571 19,744 ▲20% ▲19% 6,526 5,436 5,648 4,755 FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 9
Slide 13: Financial Highlights: Gross Margin
FINANCIAL HIGHLIGHTS Q1 FY24 CONSOLIDATED GROSS MARGIN (%) INDIA GROSS MARGIN (%) 69.8% ▲40 bps 68.8% 69.4% 68.7% ▲50 bps 67.6% 68.2% FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 10
Slide 14: Financial Highlights: Restaurant EBITDA
FINANCIAL HIGHLIGHTS Q1 FY24 CONSOLIDATED RESTAURANT EBITDA (₹ MN / %)# INDIA RESTAURANT EBITDA (₹ MN / %)# 20. 0% 20. 0% 17.8% 17.4% ▼130 18.0% ▼90 21. 0% 21. 0% 18. 0% 18.5% 18. 0% 18.9% 17.2% 19. 0% bps bps 19. 0% 3,929 16. 0% 16. 0% 14. 0% 17. 0% 3,510 14. 0% 17. 0% 12. 0% 15. 0% 12. 0% 15. 0% 1
Slide 15: Financial Highlights: Adj. EBITDA and EBITDA
FINANCIAL HIGHLIGHTS Q1 FY24 ADJ. EBITDA (₹ MN / %)# EBITDA (₹ MN / %) 19. 5% 23. 0% 20.5% 11.7% 19.2% 15. 0% 18.8% ▼170 bps 21. 0% 18. 0% 19. 0% 19. 0% 2,647 10. 0% 13.3% 16. 0% 4,343 11.8% ▼150 bps 18. 5% 17. 0% 14. 0% 12. 0% 15. 0% 5.0 % 18. 0% 10. 0% 0.0 % 8.0 % 1,114 1,224 13. 0% 722 772 6.0 %
Slide 16: Financial Highlights: PBT and PAT
FINANCIAL HIGHLIGHTS Q1 FY24 Adj. PROFIT BEFORE TAX (₹ MN / %)# PROFIT BEFORE TAX (₹ MN / %) 4.8% 6.2% 7.8% 6.6% 6.4% ▼ 140 bps 5.2% ▼ 140 bps 1,407 1,084 427 419 356 336 ▼2% ▼6% 1- FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 Adj. PROFIT AFTER TAX (₹ MN / %)# PROFIT AFTER TAX (₹ MN / %) 11.8% # 10.3%
Slide 17: Revenue & Adj. EBITDA Trend
FINANCIAL HIGHLIGHTS REVENUE & ADJ. EBITDA TREND REVENUE (₹ MN) & ADJ. EBITDA (%) YoY -24% 69% 32% Change % 13.3% 12.4% 11.7% 11.8% 11.1% 10.1% 9.4%* 22,571 5.0% 17,154 6,526 3.8% 5,604 5,939 5,592 13,284 5,436 10,160 FY 20 FY 21 FY 22 FY23 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 * Adj. EBITDA% afte
Slide 18: Consolidated Profit & Loss Statement
CONSOLIDATED PROFIT & LOSS STATEMENT Particulars (In Rs mn) FY23 Q1 FY23 Q1 FY24 YoY % Restaurant Sales 22,570.64 5,435.53 6,525.56 20% Other operating income 85.1 27.14 18.28 COGS 7,406.76 1,756.16 2,060.94 Gross Profit 15,248.98 3,706.51 4,482.90 21% Gross Margin% 67.6% 68.2% 68.7% Employee Expens
Slide 19: KFC India Business Performance
KFC India Business Performance
Slide 20: KFC Brand Priorities
KFC BRAND PRIORITIES Enhance Fried Chicken Category + Relevance - “Let’s KFC” communication + Craveable Taste - Innovation: Chicken Rolls + Value - Range of Snackers at ₹99/- campaign Frictionless Customer Improve Experience Operational + - Digital Kiosks - KFC App + Excellence - 7 Minutes express p
Slide 21: KFC Brand Priorities
KFC BRAND PRIORITIES Fried Chicken Category Relevance | Craveable Taste | Value C /F>- fC ~ ~ _____.. tdc ~ IWALK-IN) DINE-IN EXCLUSIVE LET'SKFC" 18
Slide 22: KFC Brand Priorities
KFC BRAND PRIORITIES Fried Chicken Category Relevance | Craveable Taste | Value JobNo.:«7/l(fCChlCQnF-IW..kPr-Ad(£N)/$1H:'MIWll25Hcm/Datt: 29.0).2023 747 I KFC~I inoneBucketPress Ad 16x2Scm I 31-05-23 19
Slide 23: KFC: Improving Accessibility, Doubling Restaurant Count
KFC BRAND PRIORITIES Improving Accessibility – Doubling Restaurant Count in 3-4 years (base Dec’21 count) KFC BALACHUR PUNJAB KFC ELIXA PARK KOLHAPUR KFC SANGRUR PUNJAB KFC PARAS CINEMA DELHI 20
Slide 24: KFC India Q1 FY24 Channel Sales Contribution
KFC INDIA Q1 FY24 - CHANNEL SALES CONTRIBUTION ■ Delivery ■ Takeaway ■ Dine IN I ■ I ■ I 35% 36% ■ 36% I ■ I ■ 19% 19% 19% I ■ I ■ I 45% ■ 46% 45% I ■ I ■ I FY23 ■ Q1 FY23 Q1 FY24 - 21
Slide 25: KFC India Q1 FY24
KFC INDIA Q1 FY24 AVERAGE DAILY SALES (₹ ‘000) RESTAURANT SALES (₹ MN) Rest. 78 18 17 SSSG 15% 65% 0% Addition 144 14,529 135 138 ▲21% 4,286 3,537 FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 Rest. Count 341 281 358 Average daily sales is for all restaurants including new additions during the period 22
Slide 26: KFC India Q1 FY24 Margins
KFC INDIA Q1 FY24 GROSS MARGIN % RESTAURANT EBITDA# (%) I • 20.3% 20.8% ▲50 bps 68.1% ▲80 bps 19.4% - .I 67.3% I 66.6% • .I FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 # Restaurant EBITDA figures are Pre-IND AS 116. 23
Slide 27: KFC India Restaurant Sales & EBITDA Trend
KFC INDIA RESTAURANT SALES & EBITDA TREND Rest. SALES (₹MN) & Rest. EBITDA % YoY -24% 75% 40% 20.3% 20.2% 20.8% Change % 19.1% 17.9% 19.4% 18.7% * 14.0% 13.2% 14,529 4,286 3,810 3,691 3,537 3,491 10,349 7,735 5,897 FY 20 FY 21 FY 22 FY23 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 * Restaurant EBITDA% a
Slide 28: Pizza Hut India Business Performance
Pizza Hut India – Business Performance
Slide 29: 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 & Fries Improve Fricti
Slide 30: Pizza Hut Brand Priorities
PIZZA HUT BRAND PRIORITIES Build Top-of-Mind Awareness | Taste Leadership in Pizza Category | Creating Value 27
Slide 31: Pizza Hut Brand Priorities
PIZZA HUT BRAND PRIORITIES Build Top-of-Mind Awareness | Taste Leadership in Pizza Category | Creating Value a •I • '"T&Csopply. 28
Slide 32: Pizza Hut Brand Priorities: Operational Excellence
PIZZA HUT BRAND PRIORITIES Operational Excellence 1st Globally Guest Experience Score Sapphire Foods Sapphire Foods Pizza Hut has been recognized by YUM! as No.1 franchisee globally for Guest Experience Scores Speed OSAT B2B Taste Scores OSAT: Overall Satisfaction Index | B2B: Bottom 2 Boxes on Over
Slide 33: Pizza Hut: Improve Accessibility
PIZZA HUT BRAND PRIORITIES Improve Accessibility: Doubling Restaurant Count in 3-4 years (base Dec’21 count) PH BARAMATI PUNE PH DABOLIM GOA PH PHOENIX MALL AHMEDABAD PH PHOENIX CITADEL INDORE 30
Slide 34: Pizza Hut India Q1 FY24 Channel Sales Contribution
PIZZA HUT INDIA Q1 FY24 - CHANNEL SALES CONTRIBUTION ■ Delivery ■ Takeaway ■ Dine IN I ■ I ■ I ■ 50% I 47% 50% ■ I ■ I 15% ■ 16% 15% I ■ I ■ 35% I 37% 35% ■ I ■ I FY23 ■ Q1 FY23 Q1 FY24 - 31
Slide 35: Pizza Hut India Q1 FY24
PIZZA HUT INDIA Q1 FY24 AVERAGE DAILY SALES (₹ ‘000) RESTAURANT SALES (₹ MN) Rest. 67 SSSG 12% 47% -9% 16 16 Addition 61 58 52 ▲12% 5,214 1,219 1,362 FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 Rest. Count 286 235 302 Average daily sales is for all restaurants including new additions during the period
Slide 36: Pizza Hut India Q1 FY24 Margins
PIZZA HUT INDIA Q1 FY24 GROSS MARGIN (%) RESTAURANT EBITDA# (%) 14.8% 74.7% 75.3% 75.1% ▼20 bps 13.3% 9.0% ▼580 bps FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 # Restaurant EBITDA figures are Pre-IND AS 116. 33
Slide 37: 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% 11.4%* 9.0% 8.6% 7.2% 1,410 1,364 1,362 5.0% 5,214 1,219 1,221 3,710 3,344 2,218 FY 20 FY 21 FY 22 FY23 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 * Restaurant EBITDA% af
Slide 38: Sri Lanka Business Performance
Sri Lanka T~CC> Business Performance BELL
Slide 39: Sri Lanka Business Branding and Marketing
SRI LANKA BUSINESS BRANDING AND MARKETING n LUNCH BUY ANY 2URGE PAN PIZZAS & GET ASB.ECT LARGE PIZZA FREE OR GET RS. 1000 OFF TIME BUY ANY DINE-IN 2MEDIUM PAN PIZZAS & GET ASELECT FROM 12.00PM MEDIUM PIZZA FREE OR TO3.00PM GET RS. 500 OFF V ALID TILL 16"H APRIL 2023 a BUY BUY 1LITE LARGE PAN PIZZA 1
Slide 40: Sri Lanka Q1 FY24 Channel Sales Contribution
SRI LANKA BUSINESS Q1 FY24 - CHANNEL SALES CONTRIBUTION ■ Delivery ■ Takeaway ■ Dine IN I ■ I ■ I 38% ■ 37% I 47% ■ I ■ I 35% ■ 34% I ■ 31% I ■ I 27% ■ 29% I 22% ■ I FY23 ■ Q1 FY23 Q1 FY24 - 37
Slide 41: Sri Lanka Business Q1 FY24 Average Daily Sales
SRI LANKA BUSINESS Q1 FY24 AVERAGE DAILY SALES (LKR ‘000) AVERAGE DAILY SALES (INR ‘000) SSSG% 22% 53% 0% 81 322 333 303 75 72 FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 Rest. Count 114 98 114 Average daily sales is for all restaurants including new additions during the period Note: LKR to INR conver
Slide 42: Sri Lanka Business Restaurant Sales
SRI LANKA BUSINESS Q1 FY24 RESTAURANT SALES (LKR MN) RESTAURANT SALES (INR MN) Rest. 19 3 0 Addition 12,166 2,716 ▲27% ▲9% 825 3,145 650 2,893 FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 Rest. Count 114 98 114 39
Slide 43: Sri Lanka Business Margins
SRI LANKA BUSINESS Q1 FY24 GROSS MARGIN % RESTAURANT EBITDA# (%) 60.5% ▲170 bps 15.5% 58.8% 14.8% 58.1% 13.0% ▼250 bps FY23 Q1 FY23 Q1 FY24 FY23 Q1 FY23 Q1 FY24 Absolute Rest. EBITDA declined by 9 % in LKR terms (increased by 8% in INR terms) # Restaurant EBITDA figures are Pre-IND AS 116. 40
Slide 44: Sri Lanka Restaurant Sales & EBITDA Trend
SRI LANKA BUSINESS RESTAURANT SALES & EBITDA TREND Rest. SALES (LKR MN) & Rest. EBITDA % YoY 0% 60% 48% Change % 22.0%* 19.6% 15.5% 15.0% 16.2% 14.6% 14.2% 13.0% 14.8% 12,166 3,282 3,121 3,145 2,893 2,867 8,229 5,144 5,145 FY 20 FY 21 FY 22 FY23 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 * EBITDA% afte
Slide 45: Maldives New Stores
MALDIVES NEW STORES PIZZA HUT HULHUMALE KFC HULHUMALE 42
Slide 46: 2nd ESG Report (FY23) – GRI / SASB / BRSR Norms
2ND ESG REPORT (FY23) – GRI / SASB / BRSR NORMS KEY HIGHLIGHTS Governance ProfalllCNllload Ii, lnde_pendent Director as Chairman 2 ESG Committee DUI Zero 19,627.76 3,910.88 0 nNI IDIII £B 40°/4 54% GRI – Global Reporting Initiatives, SASB – Sustainability Accounting Standards Board, BRSR – Business
Slide 47: Thank You
THANK YOU