Press release – Sphera Franchise Group estimates 63% higher sales in 2021 compared to 2020 and budgets investments of over EUR 14 million

Key facts:

 

  • The General Meeting of Shareholders (GMS) of Sphera Franchise Group approved the budget for the current year, with restaurant sales estimates of over EUR 230 million, up 63% compared to 2020;
  • Normalized EBITDA is estimated at EUR 19 million, up 115% compared to the previous year;
  • This budget is based on company’s consideration of a gradual return of demand due to the relaxation of restrictions imposed because of the pandemic, so that in the second half of the year the activity will come close to normal;
  • The company will invest EUR 10.2 million this year for opening 16 restaurants;
  • Another EUR 3.8 million will be invested in revamping other units.

 

 Sphera Franchise Group (“Sphera”), the owner of the companies operating the KFC, Pizza Hut, and Taco Bell brands in franchise system in Romania, budgeted for 2021 sales in restaurants of over EUR 230 million, 63% higher compared to 2020, of which 25% are estimated to be done through the delivery channel. Normalized EBITDA is estimated to increase by 115% to EUR 19 million.

“After 2020 when we, the companies, and the entire economy, faced completely unusual challenges, we expect a significant return of the business in 2021, especially in the second half of the year. We are confident that the investments budgeted for this year will help increase sales, alongside the adjustment of expenses and maintaining costs in line with 2020. Despite the situation created by the health crisis, we can say that it is an extremely favorable time for investment, so we have budgeted over EUR 14 million for the opening of new restaurants and the revamping of existing ones”, said Călin Ionescu, CEO of Sphera.

This budget proposal is based on the macroeconomic context that will continue to be influenced by the effects of the COVID-19 pandemic in the first part of the year, because of restrictions imposed by the authorities. Thus, because of the increase of the current account deficit, a slight depreciation of the national currency against the EUR, the increase of the minimum wage in the economy by 3%, and an estimation of annual inflation of 2.5-3% are taken into consideration.

Starting the second half of the year, a gradual return to normal restaurant capacity is being considered, due to the expansion of the national vaccination campaign, which the company also supports among its employees. Thus, Sphera together with the Bucharest Public Health Directorate facilitates the access to vaccination of employees who want to be immunized, through a mobile unit made available to them, in an annex-type space, specially arranged, within a KFC restaurant in Bucharest.

“We are confident that we can contribute to the efforts made by the authorities in order to return to normal and, at the same time, to succeed in restarting the HoReCa industry,” Călin Ionescu, CEO of Sphera Franchise Group added.

In 2021, following the contract negotiated with the franchisor Yum!, the company planned to open 16 restaurants (8 KFC, 3 Pizza Hut and 3 Taco Bell in Romania, and 2 KFC in Italy). The budget allotted to these investments amounts EUR 10.2 million. At the same time, under the negotiated plan with Yum!, the investment in the revamping of the existing restaurants is estimated at EUR 3.8 million.

At the end of 2020, Sphera had 158 restaurants, of which 138 in Romania, 18 in Italy and 2 in the Republic of Moldova.