SHAKEY’SPIZZA ASIA VENTURES, INC.... · 2019-10-30 · Pizza Hut 29.9% Papa John's 1.7% Others...
Transcript of SHAKEY’SPIZZA ASIA VENTURES, INC.... · 2019-10-30 · Pizza Hut 29.9% Papa John's 1.7% Others...
Company Overview
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SNAPSHOT
• Shakey’s Pizza Asia Ventures, Inc. is the Philippines’ #1 full-service pizza chain with over60% market share in that category. It is also the single-largest brand of full-service casualdining chain restaurants in the Philippines.*
• A strong and well-established brand thanks to a differentiated menu, iconic and well-lovedproducts, a distinct store environment, and highly guest-centric service.
• Apart from the Philippines, also owns the Shakey’s trademark in perpetuity for the MiddleEast, Asia (excluding Japan and Malaysia), China, Australia, and New Zealand. It does not payany royalties and is instead able to collect from local and international franchisees.
• The Company listed on the Philippine Stock Exchange in 2016 under the trading symbolPIZZA. It currently has a market capitalization of c.USD0.4 billion.
• Store Network: 200+ stores across the Philippines – a mix of company-owned andfranchised. Different store formats including those located in malls and those that are free-standing.
• Key Management: Vicente L. Gregorio - President & CEO, Manuel T. del Barrio - VicePresident & CFO, Jorge Q. Concepcion - Shakey’s Philippines General Manager, AloisBrielbeck - In-House Commissary General Manager
*Source: Euromonitor, 2018
Revenues (In USD Mill)
90 100 115 134 145 167
2014 2015 2016* 2017 2018 2019F**
8 913 15 16 18
2014 2015 2016* 2017 2018 2019F***Based on recurring figures
**Consensus of active brokers
Net Income (In USD Mill)
Century Pacific Group53%
GIC Private Equity18%
Public29%
Dine-In58%
Delivery & Others42%
Company-Owned
56%Franchised
44% Metro Manila43%
Luzon(ex-MM)
43%
Visayas10%
Mindanao4%
FULL-YEAR FINANCIALS
2018 SYSTEM-WIDE SALES & STORE NETWORK BREAKDOWN OWNERSHIP STRUCTURE
The Overall ScenarioWell-positioned to take advantage of the growing foodservice industry
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9.03 9.52 10.05 10.77 11.52 12.1
2011 2012 2013 2014 2015 2016
4 F’s in the consumereconomy to benefit fromstrong economic growth
20% of a typical middle-income householdbudget goes to food consumed
outside home. This totals more than PHP500 billion annually, showing a strong propensity to spend.
Source: NSO, Nielsen, Euromonitor, BSP
FurnishingsFashion
FoodFun
Restaurantsand hotels
are growing household
consumption sectors
The consumer foodservice industry has been growing in recent years
In USD Billions
Full-service pizza chain restaurants show faster growth
than the whole full-service restaurant sector
13% vs 6%CAGR from 2013-2018
Shakey’s has 43 years of strongbrand legacy and counting
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First storein the
Philippines
1987The Prieto family became the
master franchisor in the PhilippinesAcquired Shakey’s
trademarkfor the
Philippinesin perpetuity
Acquired Shakey’strademark for Middle
East, Asia (ex Japan, Malaysia) including
China, Australia, and New Zealand in perpetuity
First Shakey’s Pizza Parlor opened in Sacramento, California
1999
228 stores by end 2018
2003Positioned asan Americanfast casualdining restaurantfor families
Century Pacific Group (CPGI)
and Arran (GIC) acquired control
*Source: Euromonitor, 2018
Summary of Investment Highlights
• Multiple sales channels and store formats; simple operations• Low upfront cost and strong cash generation lead to shorter store-level
payback periods compared to the industry
• Extensive track records in food and restaurant operations• Entry of Century Pacific Group as strong and committed shareholders
provides synergies with other food businesses
• Well-loved brand with more than 40 years of history in the Philippines• Iconic products served in a distinct store environment• No royalty payments, plus additional revenues from franchisings
• Superior profitability and margins versus peers• Gearing levels improve as debt remains stable while EBITDA and equity grow• Operating cash flows sufficient for CapEx and other investments
Market Leadership1
2 Brand Strength& Ownership
3 Scalable Business Model
4 Experienced Management
5 Industry-Leading Financials
• Dominates the full-service pizza chain market with 64%* market share• 22%* market share in the full-service (pizza and non-pizza) category - #1 in
that space as well
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Full-Service Chain
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#1 Full-Service Restaurant in the PhilippinesThe full-service pizza chain market is dominated by Shakey’s.
Max's13.5%
Pizza Hut10.4%
Kenny Rogers5.7%
Pancake House4.1%
TGI Fridays2.4%
Others41.6%
22.3% Latest Euromonitor report states that Shakey’sleads the Philippine chained full-service restaurant industry with 22.3% market share as of 2018.
Pizza Hut29.9%
Papa John's1.7%
Others4.2%
64.2%
Full-Service Pizza Chain2018 data shows that Shakey’sdominates the full-service pizza chain market by sales since 2011 until present.
Source: Euromonitor
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Strong and Well-Established BrandShakey’s offers a differentiated menu with iconic and well-loved products.
Differentiated menu with iconic products and offerings for all
PizzaWorld-famous thin crust and hand-tossed pizzas with many different choices
Chicken and MojosSignature dish - fried chicken paired with Shakey’s famous mojos*
*Thinly-sliced potatoes coated with Shakey’s breading and fried to a golden brown perfection
PastaHearty pasta with a wide range of sauces and toppings paired with garlic bread
StartersRanging from fries, mojos, squid rings, chips, and chicken
SoupHome-style soups loaded with flavor and goodness
SaladExtensive choice of salad for health-conscious customers
DessertsWide range of after-meal desserts
Bundled offerings catering to families and groups bring up average checks
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Strong and Well-Established BrandShakey’s offers a beautiful and distinct store environment to every customerand has full control and ownership of its brand.
Though originally from the U.S., PIZZA has owned the Shakey’s brand for the Philippines
since 1999.
With its over 40 year history in the Philippines, Shakey’s is one of the most recognizable brands in the local food service industry.
Source: Asia’s Top 1000 Brands Survey by Campaign Asia, in partnership with Nielsen
Brand ownership means:
• No royalty payments, leading to shorter payback period and sustainably higher margins versus peers
• Revenue from licensing fees and royalties from franchisees
• Freedom to execute and react faster to market changes• Opportunity for expansion into international markets
2018 PhilippineTop 100 Restaurant Brands:
1 2 3
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Proven and Scalable Business ModelMultiple sales channels and store formats provide convenience and accessibility toShakey’s customers and allow for market and expansion flexibility.
Dine-In• Most popular sales channel due to
unique family and friends experience• Aim to “WOW” the guest
Delivery• Delivery available nationwide• Single delivery hotline number
(#77-777) can be used
Carryout• Convenient and fast method of sales
Functions• Free-standing stores have function
rooms for events such as parties and company gatherings
Online Sales• Active online and mobile presence
with own website and mobile app• http://www.shakeyspizza.ph
SuperCard• A very popular paid loyalty card• PHP499 annual fee
Mall Stores120 – 250 sqm
50%
Free-Standing Stores300 – 400 sqm
45%
Others120 – 180 sqm
5%
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Proven and Scalable Business ModelShakey’s is a well-established brand, while operating on an asset-light model.
Brand Positioning
Short Payback Period
Asset-Light Approach
Vertical Integration
• Benefitting from key consumer trends – eating out more and upgrading from fast food to casual dining
• Firmly positioned in the fast casual segment (A, B, and upper C market) that delivers high margins, good volumes, and scale
• Own commissary for proprietary raw materials protects key supply chain and maintains
consistency and control over quality
• Economies of scale and purchasing synergy
• Long-term leases for store locations at attractive rentals• Presence of standalone stores (i.e. those
outside malls) lead to low rent-to-sales ratio
• Business model and strong discipline leads to typical payback period of 3-4 years
• Low upfront cost and strong cash generation per store
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Experienced Management TeamVISION: to be the PREFERRED and DOMINANT family casual dining restaurant
Vicente GregorioPresident & Chief Executive Officer• Over 30 years of successful experience in the food business• Started career in the first ever Shakey’s branch in the Philippines• Key driver of Shakey’s brand strategy, organization culture, core values, and mission since 2003• Proven management and leadership track record in foodservice retail set-up, expansion, and turnaround management
Manuel Del BarrioVice President & Chief Finance Officer • Previously Assistant Vice President for
Finance of Century Pacific Food, Inc. (CNPF) and The Pacific Meat Company, Inc.
• Worked in accounting positions at several leading companies
Jorge ConcepcionShakey’s Philippines General Manager• Over 30 years of experience in consumer-
related business• Significant experience in the U.S.
foodservice industry for about 10 years in numerous managerial positions
Alois BrielbeckIn-House Commissary General Manager• Over 30 years of experience in the foodservice
business• Moved to Asia in 1986, taking up positions in
pastry kitchens in Hong Kong and Tokyo• Moved to the Philippines in 2000 as Chief
Operating Officer for Culinary Systems Specialists Incorporated
• Appointed as Commissary General Manager in 2005
Joseph RemsaInternational Development Consultant• Previously President and CEO of Shakey’s U.S.A.• Leads the development and operations of the
Shakey’s brands in Asia, Middle East, Australia, and New Zealand
• Over 25 years of experience in leading operations and franchising in top-chained restaurants
Stock Highlights
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MARKET CAPITALIZATION
$0.3BDecember 2016
$0.4BMay 2019
PERFORMANCE SINCE IPO
₱11.26IPO Price
+14%15 May 2019
PIZZAPhilippine Consumer Average
PER (x) 21.4 28.6
EV / EBITDA (x) 9.51 12.3
ROE (%) 18.4 13.6
Operating Margin (%)* 16.5 9.9
Net Income Margin (%)* 11.1 7.1
Source: BPI Securities 2019 Estimates as of 16 May 2019*Bloomberg, trailing 12 months
STOCK PRICE PERFORMANCE (BLOOMBERG TICKER: PIZZA PM)
6.00
10.00
14.00
18.00
Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19
PHP/SHARE PHP12.84 as of 15 May 2019
Investor Relations Highlights
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DIVIDEND HISTORY
*Listing Date: 15 December 2016**As of 16 May 2019
Current Price PHP12.84
Initial Listing Price PHP11.26
Range since Listing Date* PHP9.80 - 17.48
No. of Outstanding Shares 1,531,321,053
Shareholding Structure CPGI: 53.0%Arran (GIC): 18.5%
Free Float 28.5% (includes Prieto family’s 4.7%)
3-Month Average Turnover PHP8.0 millionUSD0.2 million
Market Capitalization PHP19.7 billionUSD0.4 billion
Performance since Listing Date* +14%
YTD Relative to Index +6%
*Of previous year’s recurring net income
0.10 0.10
23% 20%
0%
15%
30%
0.00
0.15
0.30
2017 2018
Regular Cash
Payout Ratio*
Declaration Date
RecordDate
Payment Date
2017 May 8 June 6 June 30
2018 August 16 September 14 October 10
Philippines’ Best Small Cap Company
Finance Asia 2018
SHAREHOLDERS Source: Bloomberg, May 2019
Foreign Ownership Limit: 100%Free Float Level: 29%
GIC Private Equity18%
Prieto Family 5%
Norges Bank 3%
Matthews International Capital Management 1%
Others20% Century Pacific Group
Inc (CPGI) 53%• wholly owned by
the Philippines’ Po family
• majority shareholder of CNPF PM and ALCO PM
Investor Relations Highlights
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SELL-SIDE COVERAGE
Institution Analyst Latest Call
AB Capital Sec Edgar Lay HOLD
BDO Nomura Angelo Torres BUY
BPI Jefferies Javier Consunji BUY
Citi Patricia Tamase BUY
CLSA Joyce Ramos BUY
COL Financial Andy Dela Cruz HOLD
Credit Suisse Hazel Tanedo OUTPERFORM
Deutsche Bank Carissa Mangubat BUY
Macquarie Karisa Magpayo OUTPERFORM
Regina Capital Paola Lopez BUY
Unicapital Sec Wendy Estacio HOLD
PIZZA’s 2017 Glossy Annual Report can be found on the Company’scorporate website.
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Investors > Investor Presentations
https://spavi-noo-prod.s3.ap-southeast-1.amazonaws.com/s3fs-public/documents/investor_presentations/FINAL_ONLINE_PIZZA_2017_Glossy_Annual_Report.pdf
Our 2018 Glossy AnnualReport will be availableby June 20, 2019.
Investor Relations Highlights
Investor Conferences Earnings Release
dbAccessPhilippines Corporate Day (London)
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AUG MacquarieASEAN Conference (Singapore)
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SEP
*Schedule updated as of 16 May 2019
Annual Stockholders’ Meeting
20JUN
2Q19Earnings Release
7AUG
3Q19Earnings Release
12NOV
Investor Relations Highlights
SHAKEY’S PIZZA ASIA VENTURES, INC.
This document is highly confidential and being given solely for your information and for your use and may not be, or anyportion thereof, shared, copied, reproduced or redistributed to any other person in any manner.
The statements contained in this document speak only as of the date which they are made, and the Company expresslydisclaims any obligation or undertaking to supplement, amend or disseminate any updates or revisions to any statementscontained herein to reflect any change in events, conditions or circumstances on which any such statements are based. Bypreparing this presentation, none of the Company, its management, and their respective advisers undertakes anyobligation to provide the recipient with access to any additional information or to update this presentation or to correctany inaccuracies in any such information which may become apparent.
This presentation contains statements, including forward-looking statements, based on the currently held beliefs andassumptions of the management of the Company, which are expressed in good faith and, in their opinion, reasonable.Forward-looking statements in particular involve known and unknown risks, uncertainties and other factors, which maycause the actual results, financial condition, performance, or achievements of the Company or industry results, to differmaterially from the results, financial condition, performance or achievements expressed or implied by such forward-lookingstatements. Given these risks, uncertainties and other factors, recipients of this document are cautioned not to placeundue reliance on these forward-looking statements.
Any reference herein to "the Company" shall mean, collectively, Shakey’s Pizza Asia Ventures, Inc. and its subsidiaries.
Paranaque City, Philippines
+632 742 5397
www.shakeyspizza.ph
http://edge.pse.com.ph/companyInformation/form.do?cmpy_id=664