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The Group ended H1 with a thriving net profit of RON 19.4 million, compared to net loss, of RON 8.7 million, in H1 2022. This turnaround is the result of the strong performance of KFC Romania and KFC Moldova, which together registered a combined net profit of RON 27.5 million and USFN Italy, where the Group has effectively controlled expenses and streamlined activities, including the closing of the two non-viable units, and has reached breakeven.

This improvement in profitability can be mainly attributed to effective cost-control measures taken across the Group companies. After a challenging 2022, restaurant expenses weight in sales decreased by almost 5pp, reaching 91.3% of sales in H1 2023 vs. 96% in H1 2022, due to a faster increase in restaurant revenues than restaurant expenses.

All brands registered revenues higher in the first six months of 2023 compared to the similar period of the previous year – KFC: +15.4%, to RON 595.9 million, Pizza Hut +1.7%, to RON 59 million, Taco Bell +29.1%, to RON 40.7 million.

Improved performance across brands and regions in Q2 2023

Sphera reported growth in all its markets and for every brand in its portfolio in the second quarter of 2023. Sales reached RON 360.5 million, up by 10.1% vs. Q2 2022. Sales in Romania contributed with RON 311.3 million (+9.4% YoY), Italy with RON 44.4 million (+14.4% YoY) and the Republic of Moldova with RON 4.9 million (+19.7% YoY).

"In the second quarter of this year, our strong top-line and bottom-line outcomes led to the most profitable first half of the year in our Group's history. Despite the hurdles, sales consistently rose in the first six months of 2023 and, thanks to our effective commercial strategy and rigorous cost management, the profitability has significantly improved. This performance meets our expectations, bolstering our outlook for the year. We will stay committed to the strategy that has delivered, well anchored in the strength of our brands and the constant attunement to market conditions." said Valentin Budes, CFO at Sphera Franchise Group.

The robust performance across all markets in Q2 2023 led to favorable overall results. The Group achieved an EBITDA of RON 28.8 million in Q2 2023, a substantial 65% increase compared to Q2 2022. The net profit soared to RON 12.1 million, representing a remarkable 453.2% growth YoY and a 64.3% increase from the previous quarter.

Positive capital market evolution

In H1 2023, SFG shares appreciated 29%, compared to 7% for the BET index. The Total Return, including the dividend paid on March 31, 2023, was 32.6%, versus a 10% increase for the BET-TR index for the same period. Investors traded almost 920,000 SFG shares, 7% of the free float.

In recognition of improved liquidity and growing market capitalization, global index provider MSCI decided to include SFG shares, as of August 31, 2023, in the MSCI Frontier Markets Small Cap and MSCI Romania Small Cap indices. The inclusion in the MSCI indices was part of Sphera’s strategy to increase the visibility of the Group in an international arena and improve the stock’s daily liquidity.

Upcoming General Shareholders Meeting

On July 31, 2023, the Board of Directors of Sphera Franchise Group convened the Ordinary General Shareholders Meeting for September 4, 2023. The key point on the agenda is the approval of the dividend distribution amounting to RON 45,007,234.40 from the undistributed net profit of financial years 2020-2022, fixing a gross dividend per share at RON 1.16.

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.

* This is a press release.

Simona Fodor · 4 Sept · 1 min read