Sphera Franchise Group registers record sales in Q1 2022, up 31.8% compared to Q1 2021

Deniza Cristian 13/05/2022 | 13:47

Sphera Franchise Group (“Sphera”) recorded in Q1 2022 restaurant sales of RON 278.6 million, up 31.8% compared to Q1 2021. In terms of total revenues on the Romanian market, Sphera’s result grew 28% in Q1 2022, compared to Q1 2021, and 4.5% compared to Q4 2021.


Sales in Romania contributed with RON 241.6 million to total revenues, up 28% in Q1 2022 compared to the same period of last year, Italy with RON 33.5 million, up 70%, while the Republic of Moldova contributed with RON 3.4 million, up 23% compared to Q1 2021.

In terms of brand performance, KFC’s sales increased 29% in Q1 2022 compared to Q1 2021, up to RON 236.2 million. Pizza Hut grew 55% year-on-year, contributing with RON 28.4 million at the total sales. Taco Bell sales increased 48% year-on-year, to RON 14.1 million, with sales in March 2022 reaching historical hights.

“Q1 2022 was the second-best quarter for the Group in our history in terms of restaurant sales on the Romanian market, as the revenues increased 28% year-on-year and 4.5% quarter-on-quarter. We continue to invest in the development of our footprint as between March 31st, 2021, and March 31st, 2022, we opened 15 new restaurants – of which, 14 in Romania and one new restaurant in Italy.  Despite the challenging context, we see the improvement in the performance of all of our iconic brands. Over the years, we have proven that our business has been resilient even to the most unforeseen shocks and we are confident that although 2022 has already brought several challenges, particularly on the cost and supply-chain side, we will deliver solid performance to our stakeholders this year”, said Calin Ionescu, CEO at Sphera Franchise Group.

Total sales through the delivery service amounted RON 78.5 million, of which 12% were delivered using the Group’s’ own delivery services.

“In the last two years, in the context of the pandemic, growing the top line has been our main preoccupation. 2022 came with a different set of challenges, as due to the lingering war in Ukraine and the general inflationary environment, the pressure on the cost side has grown extremely fast, at a pace we have never seen before. Thus, Q1 2022 was really challenging as it still included, for the better part, pandemic restrictions, paired with increases across all cost categories, particularly on the payroll, food, chicken, and energy costs. Nonetheless, in this challenging environment we are pleased with the performance of the Group. The demand for our iconic brands continues to grow quarter on quarter as we increase our footprint in Romania and Italy, and we will continue to mitigate the costs in the coming months to improve the bottom-line performance”, said Valentin Budeș, CFO at Sphera Franchise Group.

Expenses grew faster than sales in the first quarter of this year, increasing 39% in Q1 2022 compared to Q1 2021, driven primarily by the pressure from raw material costs, which increased 40.7%, to RON 97.8 million. This evolution was driven by a significant hike in chicken meat prices, energy costs, as well as the general inflationary environment. Part of these costs were reflected in the increase of product prices from March 2022, however, lower than the total cost increase recorded in Q1 2022. Historically, the Group has always increased prices in stages, therefore given the current context, further price increases can be expected.

In the context of a scarce and more demanding labour market, during 2021, the Group focused on motivating and securing its employee base by implementing salary increases averaging 22% and approving a new bonus and benefits scheme, such as increasing the value of meal vouchers. At the end of the first quarter of 2022, the Group had a total of 4,784 employees in all three markets in which it operates.

In the difficult context, Sphera Franchise Group ended Q1 2022 with EBITDA of RON 3.8 million, down 70.5% as compared to Q1 2021, in line with management expectations from the beginning of this year.

In 2022, the Group plans to open 18 restaurants (9 KFC units in Romania, 2 KFC units in Italy, 4 Pizza Hut locations, both Fast Casual Delivery and Express restaurants, as well as 3 Taco Bell units in Romania).

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Deniza Cristian | 28/06/2024 | 12:25
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