• Wed. Oct 5th, 2022

Sphera Franchise Group had its best ever sales quarter in the second quarter of 2022

ByStephanie M. Akbar

Aug 30, 2022

Sphera Franchise Group (“Sphera”) achieved its best ever sales quarter in the second quarter of 2022, with revenues amounting to RON 327.4 million, an increase of 40% compared to the second quarter of 2021. The three brands – KFC, Pizza Hut and Taco Bell – recorded record sales in all markets – Romania, Italy and the Republic of Moldova – in a rapid ramp-up following the lifting of COVID-19 restrictions.

The significant increase over the previous quarter is due to three major factors. First, the lifting of indoor dining restrictions and the elimination of Covid certificate entry requirements in Romania, Italy and the Republic of Moldova, leading to an overall increase in transactions. Second, the contribution of stores opened in the previous 12 months and, third, the continuation of the strategy to grow our loved and trusted brands.

The second Quarter 2022 has been excellent for Sphera. We delivered double-digit increases across all brands, in all markets, with total revenues up 40% over the same quarter of 2021. More importantly, with the lifting of pandemic-related restrictions, we achieved the highest share of clean sales channels since the start of the pandemic, as 81% of all Q2 orders were delivered to our restaurants or through our own delivery capabilities, allowing us to retain greater part of the commercial margin. We are pleased to have continued to invest in growing our restaurant network in Romania and Italy over the past two years, bringing our iconic brands closer to our customers, as the results of this decision are beginning to bear fruit,” said Călin Ionescu, CEO of Sphera Franchise Group.

The Group ended Q2 2022 with a positive result, recording an EBITDA of RON 17.5 million (1% increase compared to Q2 2021) and a net profit of RON 2.2 million (a decrease of 54% compared to Q2 2021). The decline in net profit in Q2 2022 was due to inflationary pressures on the cost side, higher energy prices resulting from the war in Ukraine and a less favorable context than in Q2 2021, which contributed to improving the net result (that is to say, government facilities such as technical unemployment or opportunities to renegotiate rental charges). However, the net profit of the second quarter of 2022 recorded a substantial increase of RON 13.1 million compared to the first quarter of 2022.

Q2 2022 like-for-like sales increased 32% across all Sphera brands. Between June 30, 2021 and June 30, 2022, Sphera opened 14 new restaurants – 13 in Romania and one in Italy. The new locations contributed to group performance, with 5 new Pizza Hut locations contributing to the 46% increase in all store performance in Q2 2022, the 6 new KFC locations increasing 37% YoY and the 2 new Taco Bell locations all improving store performance by 39% YoY in Q2 2022.

In terms of channels, restaurant sales recorded a significant increase in Q2 2022 compared to Q1 2022, due to the full lifting of indoor dining and mall entry restrictions, as well as good weather which has historically boosted sales in the second quarter of the year. year. On the other hand, delivery sales decreased by 10% quarter-on-quarter in the second quarter of 2022, reaching RON 70.3 million. This channel’s contribution to total sales in the first six months of 2022 was RON 148.4 million, of which 12% was delivered using Sphera’s delivery capacity. Sphera has its own delivery service in Romania for KFC and Pizza Hut, while for Taco Bell as well as for KFC in Italy and the Republic of Moldova, the Group delivers exclusively through food aggregation platforms such as Glovo, Tazz, Uber Eats or Bolt.

Significant increases across all brands and markets in H1 2022

The excellent revenue performance and the positive result of the second quarter allowed to recover part of the losses of the Group recorded in the first quarter of 2022. Consequently, for the first six months of 2022, the Group recorded, compared to in the first half of 2021, RON 606 million of consolidated profit. revenue (an increase of 36%), EBITDA of RON 21.2 million (a decrease of 29%) and a net loss of RON 8.7 million, compared to a net profit of RON 5.2 million. RON.

The excellent sales performance and positive second quarter result helped to recover some of the losses we incurred during a difficult first quarter of this year. Despite the continued challenges caused by inflation, we managed to successfully offset some restaurant spending in the second quarter of this year, as their share of total sales increased from 98%, as recorded in the first quarter of 2022, at 95%. We will continue our efforts to improve results through strict cost control measures across the Group for the remainder of the year. We expect further challenges from rising food prices, rising energy costs, wage increases and the general inflationary environment, but we remain optimistic about the ability of our group to deal with it and maximize the bottom line. » said Valentin Budeș, Chief Financial Officer, Sphera Franchise Group.

The Group closed the first six months of 2022 with a 33% increase in sales in Romania, 34% in the Republic of Moldova and 64% in Italy.

In terms of individual performance, all Group companies recorded significant sales increases in the first half of 2022 compared to the same period of 2021, and KFC Romania and KFC Moldova closed the first half of 2022 with profits. Thanks to a strong performance in Q2 2022, KFC Italy reduced the net loss by 36% despite an increase in sales of only 16% due to the maturity of existing units, thus validating the Group’s business model in Italy.

As of June 30, 2022, the Group had 5,230 employees, including 4,885 in Romania, 260 in Italy and 85 in the Republic of Moldova.


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