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Sphera Franchise Group sales accelerate to 23.4% in the first nine months of 2018 to over RON 551 million, on stronger Q3 performance

Key events:
– Higher sales growth in Q3 supported by double-digit like-for-like performance in KFC, increasing contribution from KFC Italy and improving sales in Pizza Hut
– Restaurant operating profit improves by 17.3% and EBITDA margin hits 10.4% in Q3

Sphera Franchise Group (“Sphera”) reports consolidated sales of RON 551.6 million for the first nine months of the year, representing an increase of 23.4% over the pro-forma sales of the same period of 2017.

This improved performance was helped by an increase of 26.6% in the third-quarter sales, driven mainly by an 11.4% growth in the like-for-like sales of KFC Romania stores and increasing contribution from KFC Italy and improving sales in Pizza Hut.

“Sphera Franchise Group continued its upward trend in recent months, and financial results in the third quarter of this year confirm our sustained efforts to strengthen our operations, as well as the dedication to constantly delivering the best services for our customers. The Q3 results show that we have continued to grow in line with our objectives, with the significant 26.6% increase in sales, being only one of the indicators supporting our progress”, said Mark Hilton, CEO, Sphera Franchise Group.

Restaurant operating profit increased 17.3% year-on-year in the third quarter of the year to RON 28.0m, which was due both to the increased restaurant margin (13.9% in Q3 vs 11.4% in Q2) and the reduction of the margin loss compared to the previous year. At the same time, Sphera’s normalized EBITDA increased by 9.4% year-on-year in the third quarter of the year to RON 21.0m, or 10.4% of sales.

Due to the significantly better third-quarter results, in the first nine-months of this year restaurant operating profit declined by only 0.1% year-on-year to RON 74.6m (compared to a decline of 8.3% at half-year), while normalized EBITDA fell by 7.4% year-on year to RON 53.4m (compared to a loss of 15.9% at half-year).

The performance in the third quarter, was the result of improving performance among almost all restaurant expense categories driven by seasonally higher sales: most of the margin improvement came from lower cost of labour and other operating expenses.

“Figures represent more than financial achievements for us, they stand as proof of our unrelenting commitment to outperform ourselves, and, most importantly, they are a reflection of our team efforts. We are lucky to depend on a team of professionals who reliably ensure our day to day activities and with that bring us closer to reaching our goals”, added Mr. Hilton.