Sales of over RON 1.3 bn, up by 32%, and normalized net profit of RON 44.3 mn, +71%, for Sphera Franchise Group in 2022
· Record high sales of over RON 1.3 bn, up by 32%, with normalized net profit of RON 44.3 mn, +71% vs. 2021 following efficient cost management
· Normalized EBITDA of RON 102.7 mn in 2022, a 40% increase vs. 2021
· Healthy profitability in 2022, with operating profit of RON 53.2 mn, +51% YoY in 2022
· Double digit sales growth across all markets and brands in 2022
· Strong results delivered last year, due to excellent topline performance and positive bottom line particularly in Q4 2022
· Record sales registered of RON 369.2 mn in Q4 2022, +36%YoY
· The best quarter in the history of the Group also in terms of EBITDA, of RON 44.4 mn, +243% yoy (normalized)
· All brands on all markets registered restaurant operating profit in Q4, a clear indication of the strength and resilience of Sphera’s business
Bucharest, February 27, 2023. Sphera Franchise Group (“Sphera”), the largest group in the food service industry in Romania, closed 2022 with RON 1.3 billion in consolidated restaurant sales, a 32% increase compared to 2021, the highest level ever achieved by the Group. Due to efficient cost management, increase in transactions overall and price adjustments, normalized EBITDA reached RON 102.7 million, up by 40% YoY. Thus, Sphera closes 2022 with a healthy profitability, with normalized net profit of RON 44.3 million, 71% higher than in 2021.
“The strong results of Sphera in 2022 are testament to the efficiency of our strategy and the strength of our brands in attaining healthy growth that supports performance. We are committed to long term sustainable development, while delivering excellent products and services to our customers, a fostering environment for our employees, positive returns to our investors and support in the community, and 2022 is proof that we deliver on this promise despite the challenges. We have faced a tough year and the volatility of the economic environment persists, but Sphera is based on strong fundamentals and we will continue to build on this to carry out our strategy and achieve our goals, to the benefit of our clients, investors, employees and communities alike”, stated Calin Ionescu, CEO, Sphera Franchise Group.
The performance in 2022 was due to strong results across markets and brands, with double digit growth in sales. KFC Romania contributed with sales of RON 946.9 million (+29% YoY), KFC Italy with RON 166.3 million (+46% YoY), Pizza Hut with RON 122.9 million (+37% YoY), Taco Bell with RON 69.3 million (+42% YoY) and KFC Moldova with RON 17.4 million (+40% YoY).
Sales generated in Romania amounted to RON 1.14 billion (+30% YoY), followed by Italy with RON 166.3 million (+46% YoY) and the Republic of Moldova with RON 17.4 million (+40% YoY).
Due to efficient cost management, the weight of G&A in sales decreased with 0.8pp in 2022 vs. 2021, despite a 12% YoY increase. As a result, the operating profit reached RON 53.2 million in 2022, a 51% increase compared to 2021.
Another record high in Q4, supporting 2022 overall performance
The positive results in 2022 were heavily sustained by the excellent performance in Q4, a new record high in terms of sales. All store revenues reached RON 369.2 million, a 36% increase compared to Q4 2021, supported by opening of 8 new restaurants during 2022. Due to growing customer presence in stores leading to an increase in transactions overall, together with price adjustments and efficient cost management, Sphera registered EBITDA of RON 43.9 million RON, up by 239% YoY, and a net profit of 23.4 million, compared to a net loss of RON 0.7 million in Q4 2021.
“With the results in Q4, as well as in 2022 overall, Sphera has confirmed, once again, its potential in delivering performance. We have successfully navigated a difficult year, with massive increases in the cost of inputs, volatile macroeconomic context and inflationary pressures. While uncertainty persists, we are confident in our rigorous cost management and insightful customer strategy to continue the profitable growth trajectory”, stated Valentin Budeș, CFO, Sphera Franchise Group.
Sales generated in Q4 2022 in Romania contributed with RON 315.6 million, Italy with RON 48.5 million, while the Republic of Moldova reached a historical milestone with the results for the quarter overpassing RON 5.1 million. In terms of split per brand, in Q4 2022, KFC brought revenues in the total amount of RON 315.1 million, Pizza Hut – RON 34.2 million and Taco Bell – RON 19.9 million.
The excellent performance in Q4 2022 contributed to the full year result with RON 44.6 million in restaurant operating profit, triple compared to Q4 2021.
The Group continued to leverage its own channels, the rate of sales generated instore and through its own delivery channels reaching 84% of the revenues in Q4 2022 vs. 74% in Q4 2021.
Restaurant expenses in Q4 2022 grew significantly slower than the sales, by 25% YoY, with food & material costs up by 34% YoY, due to the general inflationary environment and growing energy costs. The second largest contributor to the restaurant expenses of the quarter was the payroll cost, resulting from average wage increases and higher performance incentives. However, payroll shows an increased productivity as the weight of this cost line related to sales decreased from 23.4% in Q4 2021 to 20.2% in Q4 2022.
In 2022, Sphera opened 8 new restaurants: 4 KFC in Romania, 2 Pizza Hut and 2 Taco Bell. As of December 31, 2022, Sphera Franchise Group operated 177 restaurants: 96 KFC restaurants in Romania, 2 in Moldova and 20 in Italy, as well as 43 Pizza Hut restaurants (including one Pizza Hut Delivery subfranchise), 15 Taco Bell restaurants, and one Paul restaurant.
As of December 31 2022, the Group had 4,935 employees, out of which 4,450 in Romania, 411 in Italy and 74 in the Republic of Moldova.
Note: When analyzing the performance of the Group, the management’s focus is on the financial results that exclude the impact of IFRS 16. Therefore, the basis for the financial analysis are the results excluding IFRS 16.