Sapphire Foods India Limited has informed the Exchange about Investor Presentation
:
Date
February 21, 2023
National Stock Exchange of India Limited To,
BSE Limited
Exchange Plaza, Block G, C/1, Bandra Kurla Complex, Bandra (E), Mumbai – 400051
Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai – 400001
Symbol: SAPPHIRE
Scrip Code: 543397
Dear Sir/Madam, Subject: Corporate Presentation (Revised)
This has a reference to our intimation letter dated February 15, 2023, wherein the Company has submitted Corporate Presentation, inter-alia, to the Stock Exchanges.
In connection herewith, please find enclosed herewith revised corporate presentation, for the purpose of revision carried out in the following slide. The rest of the slides remain unchanged.
Slide No. 20
Particulars Revision in Management Team Member (Supply Chain)
Investor’s
on The (www.sapphirefoods.in/investors-relation/corporate-presentation).
Presentation will
available
be
Company’s website
Request you to kindly take the same on record.
For Sapphire Foods India Limited Thanking you,
Sachin Dudam Company Secretary and Compliance Officer
Encl:
a/a
Sapphire Foods India Limited (formerly known as Sapphire Foods India Private Limited) CIN: L55204MH2009PLC197005
+91 022 67522300 info@sapphirefoods.in www.sapphirefoods.in 702, Prism Tower, A-Wing, Mindspace, Link
Road, Goregaon (W), Mumbai- 400062
Sapphire Foods India Limited SAPPHIRE FOODS INDIA LIMITED 3Q FY22 Earnings Presentation CORPORATE PRESENTATION – FEB’23
February 2022
1
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 securities, and shall not form the basis or be
relied on in connection with any contract or binding commitment what so ever. No offering of securities of the Company will be made except by means of a statutory offering
document containing detailed information about the Company.
This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or
warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this
Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or
any omission from, this Presentation is expressly excluded
Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that are individually and
collectively forward-looking statements. Such forward-looking statements are not guarantees of
future performance and are subject
to known and unknown risks,
uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of the Indian economy and of the
economies of various international markets, the performance of the industry in India and world-wide, competition, the company’s ability to successfully implement its strategy,
the Company’s future levels of growth and expansion, technological implementation, changes and advancements, changes in Restaurant Sales, income or cash flows, the
Company’s market preferences and its exposure to market risks, as well as other risks. The Company’s actual results, levels of activity, performance or achievements could
differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no obligation to update any forward-looking information
contained in this Presentation. Any forward-looking statements and projections made by third parties included in this Presentation are not adopted by the Company and the
Company is not responsible for such third party statements and projections.
2
TABLE OF CONTENTS
1
2
3
4
5
SAPPHIRE FOODS AT A GLANCE
FINANCIAL OVERVIEW
SEGMENTAL PERFORMANCE KFC INDIA PIZZA HUT INDIA SRI LANKA BUSINESS UNIT ECONOMICS
▪ ▪ ▪ ▪
GROWTH STRATEGY
MANAGEMENT, BOARD & SHAREHOLDING PATTERN
Page 4-6
Page 7-11
Page 13 Page 14-15 Page 16 Page 17
Page 18-19
Page 20-22
3
SAPPHIRE FOODS AT A GLANCE
YUM’s Franchisee Operator in India, Sri Lanka and Maldives
Sri Lanka’s Largest International QSR chain (1)
₹ 5,939 MN Q3 FY23 Restaurant Sales
19.6% [21.5%]* Q3FY23 EBITDA margin ₹ 1,167 MN [1,084]* Q3FY23 EBITDA
19.5% [16.7%]* 9MFY23 EBITDA margin ₹ 3,313 MN [2,041]* 9MFY23 EBITDA
715 Total Restaurants Across India, Sri Lanka and Maldives (3)
326 KFC Restaurants (2) 380 Pizza Hut Restaurants (2) 9 Taco Bell Restaurants (2)
Omni Channel Mix (3)
Delivery 39%
Dine-in 40%
Take-away 21%
Source: Company data, Technopak industry report *3M & 9M FY22 EBITDA% and ₹ value is Normalzed for additional incentives accrued in that period (1) In terms of Restaurant Sales for FY21 and number of restaurants operated as of March 31, 2021; (2) As of Dec 31, 2022; (3) Pertains to 9M FY23
4
JOURNEY OF SAPPHIRE FOODS BUILT A PLATFORM OF 715 OUTLETS (1)
325
274
Restaurants Cities
87
64
114
52
INDIA
SRI LANKA
~ KFC and Pizza Hut Brands Operate in States that cover 56% of GDP (2) KFC and Pizza Hut present in 10 and 11 states of India respectively
KFC and Pizza Hut present in 5 and 6 of the Top 8 cities of India respectively
Top 8 Cities in India contribute 87% of
Chain Food Services Market (3)
22 Cities where 305 restaurants of both KFC and Pizza Hut are operated
SAPPHIRE FOODS: GEOGRAPHICAL PRESENCE (1)
46
KFC – 9 PH – 7
53
10
19
KFC – 15 PH – 36
KFC – 13 PH – 7
KFC – 6 PH – 3
KFC – 77 PH – 63
5
48
31
8
Pizza Hut, KFC Pizza Hut, Taco Bell
Pizza Hut only
KFC only
KFC – 77 PH – 42
24
Maldives
KFC 1 PH 1
Sri Lanka
PH – 105 TB – 9
Source: Company data, Technopak Industry Report (1) As of Dec 31, 2022; (2) GDP contribution of states In FY19 where Pizza Hut and KFC restaurants are located; (3) In FY20
5
THE SAPPHIRE STORY
Two global brands (KFC & Pizza Hut) with Scale & PAT profitability among Top 3 QSR operators
Capability and capital to rapidly drive organic and inorganic growth plans
Value based work culture, high on governance enabled by professional management, board and promoters
Execution Mindset Great Customer experience along with Superior Back-end operational excellence
Optimal capital allocation drives new restaurant expansion model - focus on smaller sized omni-channel restaurants
6
FINANCIAL OVERVIEW
SUMMARY CONSOLIDATED FINANCIALS Q3 & 9M FY23 VS NORMALIZED Q3 & 9M FY22
*Note: YoY comparison is with Normalized numbers for Q3 & 9M FY22 (Normalized for additional incentive from Yum in FY22) PAT including additional incentives for Q3 FY22 is ₹510 Mn at 10.1% and 9M FY22 is ₹ 195 Mn at 1.6%
8
FY22Q3 FY22Q3 FY239M FY229M FY23Restaurant Sales ₹ mn 17,1545,0555,93917%12,21216,97839%Adj. EBITDA ₹ mn *1,6157377380%1,0012,084108%%9.4%14.6%12.4%-220 bps8.2%12.3%410 bpsEBITDA ₹ mn *3,0541,0841,1678%2,0413,31362%%17.8%21.5%19.6%-190 bps16.7%19.5%280 bpsPAT ₹ mn *266424327-23%249773971%%1.6%8.4%5.5%-290 bps0.2%5.8%560 bpsRestaurant Additions1426857113136Change YoYChange YoY OPERATIONAL & FINANCIAL OVERVIEW
Gross Restaurant Additions
Restaurant Closures
62
36
427
437
NUMBER OF RESTAURANTS
154
579
39
616
43
658
57
715
31-Mar-20
31-Mar-21
31-Mar-22
30-Jun-22
30-Sep-22
31-Dec-22
11
26
12
2
1
0
(INR mm)
13,284
10,160
RESTAURANT SALES
68.8% increase
17,154
39% Increase on Y-O-Y
16,978
5,436
5,604
5,939
FY20
FY21
FY22
Q1FY23
Q2FY23
Q3FY23
9M FY23
9
PROFITABILITY OVERVIEW
GROSS MARGIN %
68.3%
69.9%
69.6%
30 bps
68.2%
66.7%
67.3%
67.4%
FY20
FY21
FY22
Q1 FY23
Q2 FY23
Q3 FY23
9M FY23
RESTAURANT EBITDA (₹ MN / %)#
11.9%
1,579
FY20
13.0%
1,321
FY21
460 bps
17.6%
*
3,025
FY22
18.5%
1,004
Q1FY23
16.8%
940
Q2FY23
18.1%
17.8%
1,070
Q3FY23
3,019
9MFY23
240 bps YoY
30 bps YoY*
KEY INITIATIVES
Zero-based cost budgeting leading to permanent cost reduction
PACE SETTER program for benchmarking cost amongst restaurants
Optimization of restaurant size
Increase in revenue from Delivery from 21% in FY19 to 39% in 9MFY23
# Restaurant EBITDA is before Ind-AS 116 adjustments *Restaurant EBITDA % and ₹ Value is Normalized for additional incentives accrued in that period and YoY comparison is with Normalized numbers of 9M FY22
10
PROFITABILITY OVERVIEW
ADJ. EBITDA (₹ MN / %)#
5.0% 662
FY20
14.0%
1,856
FY20
3.8% 382
FY21
17.6%
1,787
FY21
9.4%
*
1,614
560 bps
13.3%
11.1%
12.4%
722
624
738
12.3%
2,084
410 bps YoY*
FY22
Q1 FY23
Q2 FY23
Q3 FY23
9M FY23
EBITDA (₹ MN / %)
20.5%
20 bps
1,114
Q1FY23
17.8%
*
3,054
FY22
18.4%
1,032
Q2FY23
19.6%
1,167
Q3FY23
19.5%
3,313
9MFY23
280 bps YoY*
KEY INITIATIVES
Zero-based cost budgeting leading to permanent cost reduction
PACE SETTER program for benchmarking cost amongst restaurants
Optimization of restaurant size
Increase in revenue from Delivery from 21% in FY19 to 39% in 9MFY23
# Adj. EBITDA is before Ind-AS 116 adjustments *Adj.EBITDA and EBITDA % and ₹ Value is Normalized for additional incentives accrued in that period and YoY comparison is with Normalized numbers of 9M FY22
11
SEGMENTAL PERFORMANCE
CORE COMPOSITION OF OUR BUSINESS: KFC INDIA
AS OF MAR 31, 2020 / FOR FY20
AS OF MAR 31, 2021 / FOR FY21
AS OF MAR 31, 2022 / FOR FY22
AS OF DEC 31, 2022 /FOR 9M FY23
Total Restaurant Count
Average Daily Sales per Restaurant (INR‘000s)
187
130
203
106
263
130
325
138
Restaurant Related Revenue (in INR mm)
7,753
5,897
24%
10,349
75%
10,838
47% YoY
Restaurant EBITDA (in %)
13.0%
14.0%
100 bps
18.7%*
470 bps*
19.5%
90 bps YoY*
Net restaurant additions of 24 in Q3 FY23 and 62 in 9M FY23
Source: Company data *Restaurant EBITDA % is Normalized for additional incentives accrued in that period and YoY comparison is with Normalized numbers of 9M FY22
13
CORE COMPOSITION OF OUR BUSINESS: PIZZA HUT INDIA
AS OF MAR 31, 2020 / FOR FY20
AS OF MAR 31, 2021 / FOR FY21
AS OF MAR 31, 2022 / FOR FY22
AS OF DEC 31, 2022 / FOR 9M FY23
Total Restaurant Count
Average Daily Sales per Restaurant (INR‘000s)
Restaurant Related Revenue (in INR mm)
174
58
162
48
219
57
274
61
3,344
2,218
34%
3,710
67%
3,993
49% YoY
Restaurant EBITDA (in %)
7.2%
5.0%
220 bps
11.4%*
640 bps
14.7%
320 bps* YoY
Net restaurant additions of 25 in Q3 FY23 and 55 in 9M FY23
Source: Company data *Restaurant EBITDA % is Normalized for additional incentives accrued in that period and YoY comparison is with Normalized numbers of 9M FY22
14
CORE COMPOSITION OF OUR BUSINESS: PIZZA HUT INDIA
Retain product quality and dining experience
Omni-channel smaller size stores
Transformed Business Model
Value Positioning on par with other QSR brands
Cost optimization
Source: Company data
15
CORE COMPOSITION OF OUR BUSINESS: SRI LANKA OPERATIONS
Total Restaurant Count
Average Daily Sales per Restaurant (INR‘000s)
Restaurant Related Revenue (in INR mm)
AS OF MAR 31, 2020 / FOR FY20
AS OF MAR 31, 2021 / FOR FY21
AS OF MAR 31, 2022 / FOR FY22
AS OF DEC 31, 2022 / FOR 9M FY23
64
92
70
94
95
108
114
74
2,038
1,966
4%
2,983
52% (INR) 60% (LKR)
2,049
YoY 1% INR) 65% (LKR)
Restaurant EBITDA (in %)
16.2%
19.6%
340 bps
22.0%*
240 bps
15.0%
YoY 640 bps*
Net restaurant additions of 8 in Q3 FY23 and 19 in 9M FY23
Source: Company data *Restaurant EBITDA % is Normalized for additional incentives accrued in that period and YoY comparison is with Normalized numbers of 9M FY22
16
UNIT ECONOMICS
Avg Size of Restaurant (in Sq. ft.)
Average Daily Sales per Restaurant (in ₹ ’000)
Restaurant EBITDA %
INDIA
As of 31-Mar-19
2,736
FY19
125
FY19
12.7%
Current
~ 1,500
Reduction in Avg Restaurant size ~45%
9M FY23
138
9M FY23
19.5%
INDIA
As of 31-Mar-19
Current
~ 1,200
2,427
FY19
61
FY19
7.5%
Reduction in Avg Restaurant size ~45%
6M FY23
61
9M FY23
14.7%
17
WELL POSITIONED TO CAPTURE FUTURE OPPORTUNITIES
Accelerate conversion from unorganized food services to KFC and PH brands
Explore acquisition of high quality and scalable QSR and food brands in existing and new geographies..
Capability + Capital Cash net of debt of Rs. 3,370 Mn as on 30th Sep 22
18
SCALABILITY IN FOOD BUSINESS
19
MANAGEMENT TEAM
RIGHT PEOPLE IN KEY SEATS
MANAGEMENT TEAM WITH DIVERSE EXPERIENCES
Finance
KFC
Pizza Hut
People
Supply Chain
Technology
Business Development
Projects
Legal
Ashu Khanna
Source: Company data
20
BOARD OF DIRECTORS
OUR DIRECTORS
*
INTERNAL AUDIT
STATUTORY AUDIT
ESG
Source: Company data * Mr. Norbert Fernandes is Alternate Director to Mr. Paul Robine
21
SHAREHOLDING PATTERN
Shareholding Pattern (As on 31st Dec 2022)
% Holding
Promoters & Promoter Group
Foreign Company
Foreign Portfolio Investors / Non-Resident Indians
Domestic
Mutual Funds
Insurance Companies
Alternate Investment Funds
Resident Individuals
Others
Total
Source: Company data
44.9
6.4
17.0
31.7
18.2
4.7
2.1
5.9
0.8
100.0
22
THANK YOU
Company:
Investor Relations Partner:
Sapphire Foods India Limited CIN: L55204MH2009PLC197005
Mr. Rahul Kapoor
Orient Capital (a division of Link Group) Mr. Nachiket Kale
Email ID: nachiket.kale@linkintime.co.in
Email ID: rahul.kapoor@sapphirefoods.in
www.sapphirefoods.in
+91 9920940808
www.orientcap.com