Sphera Group Achieves Significant Financial Milestone in 2024: Sales Exceed RON 1.5 Billion and Net Profit Reaches RON 97.2 Million
2024: A Cracking Year for Sphera Group - Soaring Sales, Sky-high Profits, and Impressive EBITDA
- Sphera Franchise Group (stock symbol SFG), Romania's top food service conglomerate, shattered records in 2024, raking in a whopping RON 1.5 billion in sales, a jaw-dropping 22% rise in net profit (RON 97.2 million), and a smashing EBITDA increase of 19.6% (RON 176.9 million).
KFC Romania, the Group's crown jewel, roared ahead in fiscal growth, contributing significantly to the overall surge in profitability and operational results. The expansion of KFC Romania's network, with the addition of 5 new units, fueled the overall performance and revenue growth. KFC Romania bagged an impressive net profit of over RON 100 million, up a staggering 15.5% compared to 2023, and a solid EBITDA margin of 13.3%.
Taco Bell, another crowd-pleaser, fortified its bottom line in 2024, posting a restaurant operating profit of RON 9.54 million, soaring 60%, and net profit multiplied by nearly six (496.3%) compared to the previous year. The brand's EBITDA margin remained rock-solid at 10.5%, underlining its operational efficiency and long-term potential. The surge in sales, particularly in Q3 and Q4, speaks volumes about the brand's growing popularity, especially amongst the younger generation.
KFC Italy continued its winning streak in 2024, registering its second consecutive year of profit, with sales of RON 191.7 million, up a healthy 4.3% compared to the previous year, a commendable feat in a mature market. Net profit reached RON 1.1 million.
KFC Moldova continued to deliver dazzling triple-digit performance in essential indicators, including sales (RON 23.7 million, up 15%), EBITDA (edged up RON 4.2 million, 13.6%), and net profit (RON 3.1 million, 11.7%). KFC Moldova maintains the Group's highest EBITDA margin, at a staggering 17.6%.
Pizza Hut, the Group's turnaround project, is starting to bear fruit, moving from an operating loss in 2023 to a noteworthy restaurant operating profit of nearly RON 1 million in 2024. Pizza Hut slashed its net loss by 30% compared to 2023, thanks to increased operational efficiency following the reorganization process.
Q4 - Record-Breaking Quarter
Q4 2024 was a game-changer for the company, with quarterly sales breaching the RON 400 million barrier for the second time in the Group's history (RON 405 million, a 2.7% increase over Q4 2023). A stable consumption environment and the impact of new units opened helped propel the company to these heights. All brands achieved sales gains in Q4 2024 compared to Q4 2023, with the exception of Pizza Hut, which witnessed a minor decline of 0.5%. KFC Moldova stood out, posting sales of RON 7.1 million, up a tremendous 25.9% in Q4 2024 compared to the same quarter in 2023.
"Our stellar performance in 2024 demonstrates our adaptability to external challenges such as industry wage adjustments, inflationary pressures, and voter uncertainty in Romania and the Republic of Moldova. We not only weathered these pressures but also recorded jaw-dropping sales, increased our profitability, and witnessed a significant improvement in operating margins. The accelerated growth of KFC Romania, Taco Bell's triumphant performance, and the promising evolution of Pizza Hut showcase our agility and consistent application of cost management measures. We're ready to take on the challenges of 2025 and make investors proud," said Călin Ionescu, CEO of Sphera Franchise Group.
Outpacing the BET Index
In 2024, Sphera Franchise Group shares appreciated by an eye-watering 56.8%, far outstripping the BET index's 8.78%. SFG's total return was 65%, a robust performance compared to the BET-TR index, which grew by a mere 16.15% in 2024.
Sphera Franchise Group shareholders pocketed dividends twice in 2024, on June 6th and November 7th, at RON 1.05 gross per share each. The total annual dividend yield, including June and November 2024 payments, reached an impressive 5.6%.
Note: For the sake of comprehensive financial analysis, the Group's management pays particular attention to financial results that exclude the impact of IFRS 16.
*This is a Press Release.
Insights:
- Diversification of the brand portfolio, with the addition of Cioccolatitaliani, has been a significant growth driver for Sphera Franchise Group.
- Strong financial performance, characterized by a substantial accrual ratio and efficient cash flow management, has contributed to the company's growth.
- A proactive approach to expansion and acquisition opportunities indicates Sphera's intention to leverage market opportunities and grow its business further.
- The relatively stable Romanian market, along with positive developments in the financial sector, provides a supportive environment for companies like Sphera.
- The impressive growth of Sphera Franchise Group (SFG) in 2024, as reflected in its stock price, was generated by a combination of factors, including effective business strategies and the financial performance of its diverse portfolio, which includes brands like KFC, Taco Bell, Pizza Hut, and Cioccolatitaliani.
- The effectiveness of Sphera Franchise Group's financial management was evident in its ability to generate significant profits, as demonstrated by the substantial increases in net profit, EBITDA, and sales across all its businesses.
- Investors in SFG's stocks have been rewarded handsomely, with the company's shares appreciating by 56.8% in 2024, outpacing the BET index, and dividends being paid twice during the year.
- The success of Sphera Franchise Group in 2024, despite challenging economic conditions, underlines its resilience and its potential for further growth, particularly through strategic acquisitions and expansion.
