SHAKEY’S PIZZA ASIA VENTURES, INC. PIZZA CORPORATE PRESENTATION AUGUST 2019
Company Overview SNAPSHOT FULL-YEAR FINANCIALS Shakey’s Pizza Asia Ventures, Inc. is the Philippines’ #1 full-service pizza chain with over • Revenues (In USD Mill) 60% market share in that category. It is also the single-largest brand of full-service casual 162 144 dining chain restaurants in the Philippines.* 133 114 100 89 A strong and well-established brand thanks to a differentiated menu, iconic and well-loved • products, a distinct store environment, and highly guest-centric service. Apart from the Philippines, also owns the Shakey’s trademark in perpetuity for the Middle • East, Asia (excluding Japan and Malaysia), China, Australia, and New Zealand. It does not pay 2014 2015 2016* 2017 2018 2019F** any royalties and is instead able to collect from local and international franchisees. Net Income (In USD Mill) The Company listed on the Philippine Stock Exchange in 2016 under the trading symbol • PIZZA. It currently has a market capitalization of c.USD0.4 billion. 16 18 14 13 Store Network: 200+ stores across the Philippines – a mix of company-owned and • 9 8 franchised. 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 - Vice • 2014 2015 2016* 2017 2018 2019F** President & CFO, Jorge Q. Concepcion - Shakey’s Philippines General Manager, Alois *Based on recurring figures Brielbeck - In-House Commissary General Manager **Consensus of active brokers *Source: Euromonitor, 2018 OWNERSHIP STRUCTURE 2018 SYSTEM-WIDE SALES & STORE NETWORK BREAKDOWN Mindanao Public 4% Visayas Company- 29% 10% Owned Franchised Delivery & 56% Metro Century 44% Others Manila Pacific 42% GIC 43% Group Dine-In Luzon Private 53% 58% (ex-MM) Equity 43% 18% 2
The Overall Scenario Well-positioned to take advantage of the growing foodservice industry 4 F’s in the consumer economy to benefit from strong economic growth Restaurants and hotels are growing household Fashion Furnishings 20% consumption of a typical middle-income household sectors budget goes to food consumed outside home . This totals more than PHP500 billion annually, showing a strong propensity to spend. Fun Food Full-service pizza chain restaurants show faster growth The consumer than the whole full-service 12.1 11.5 10.8 10.1 9.5 9.0 foodservice industry restaurant sector has been growing in 13% vs 6% recent years 2011 2012 2013 2014 2015 2016 CAGR from 2013-2018 In USD Billions 3 Source: NSO, Nielsen, Euromonitor, BSP
Shakey’s has 43 years of strong brand legacy and counting 2003 Positioned as an American 2014 fast casual dining 1999 Acquired Shakey’s trademark for restaurant for families Acquired Shakey’s Middle East, Asia (ex Japan, Malaysia) trademark for the including China, Australia, and New Philippines in perpetuity Zealand in perpetuity 1987 2016 The Prieto family became Century Pacific Group the master franchisor in (CPGI) and Arran (GIC) the Philippines acquired control 1975 2018 First store in the 228 stores by end 2018 Philippines 1954 2019 First Shakey’s Pizza Acquired Peri-Peri Parlor opened in Charcoal Chicken Sacramento, and Sauce Bar California 4
INVESTMENT HIGLIGHTS
Investment Highlights Dominates the full-service pizza chain market with 64%* market share • Market 22%* market share in the full-service (pizza and non-pizza) category - #1 in that • Leadership space as well Well-loved brand with more than 40 years of history in the Philippines • Brand Strength Iconic products served in a distinct store environment • & Ownership No royalty payments, plus additional revenues from franchisings • Multiple sales channels and store formats; simple operations • Scalable Low upfront cost and strong cash generation lead to shorter store-level payback • Business Model periods compared to the industry Extensive track records in food and restaurant operations • Experienced Entry of Century Pacific Group as strong and committed shareholders provides • Management synergies with other food businesses Superior profitability and margins versus peers • Industry-Leading Gearing levels improve as debt remains stable while EBITDA and equity grow • Financials Operating cash flows sufficient for CapEx and other investments • 6 *Source: Euromonitor, 2018
1 #1 Full-Service Restaurant in the Philippines The full-service pizza chain market is dominated by Shakey’s. FULL-SERVICE CHAIN FULL-SERVICE PIZZA CHAIN Others 4.2% Papa John's 1.7% 22.3% Others Pizza Hut 41.6% 29.9% 64.2% Max's 13.5% TGI Fridays Pizza Hut 2.4% 10.4% Pancake House Kenny Rogers 4.1% 5.7% 2018 data shows that Shakey’s Latest Euromonitor report states that Shakey’s leads the Philippine chained full- dominates the full-service service restaurant industry with 22.3% pizza chain market by sales market share as of 2018. since 2011 until present. 7 Source: Euromonitor
2 Strong and Well-Established Brand Shakey’s offers a differentiated menu with iconic and well-loved products. DIFFERENTIATED MENU WITH ICONIC PRODUCTS AND OFFERINGS FOR ALL Pizza Soup World-famous thin crust and hand-tossed Home-style soups loaded pizzas with many different choices with flavor and goodness Chicken and Mojos Salad Signature dish - fried chicken paired Extensive choice of salad for with Shakey’s famous mojos * health-conscious customers Pasta Desserts Hearty pasta with a wide range of sauces Wide range of after-meal and toppings paired with garlic bread desserts Starters Ranging from fries, mojos, squid rings, chips, and chicken BUNDLED OFFERINGS CATERING TO FAMILIES AND GROUPS BRING UP AVERAGE CHECKS * Thinly-sliced potatoes coated with Shakey’s breading 8 and fried to a golden brown perfection
2 Strong and Well-Established Brand Shakey’s offers a beautiful and distinct store environment to every customer and has full control and ownership of its brand. Though originally from the U.S., With its over 40 year history in the Philippines, PIZZA has owned the Shakey’s Shakey’s is one of the most recognizable brand for the Philippines since 1999. brands in the local food service industry. BRAND OWNERSHIP 2018 PHILIPPINE TOP 100 RESTAURANT BRANDS 1 3 No royalty payments, leading to 2 • 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 9 Source: Asia’s Top 1000 Brands Survey by Campaign Asia, in partnership with Nielsen
3 Proven and Scalable Business Model Multiple sales channels and store formats provide convenience and accessibility to Shakey’s customers and allow for market and expansion flexibility. Dine-In Functions • Free-standing stores have function • Most popular sales channel due to rooms for events such as parties and unique family and friends experience company gatherings • Aim to “WOW” the guest Online Sales Delivery • Active online and mobile presence • Delivery available nationwide with own website and mobile app • Single delivery hotline number • http://www.shakeyspizza.ph (#77-777) can be used SuperCard Carryout A very popular paid loyalty card • • Convenient and fast method of sales PHP499 annual fee • 45% 5% 50% Mall Stores Free-Standing Stores Others 120 – 250 sqm 300 – 400 sqm 120 – 180 sqm 10
3 Proven and Scalable Business Model Shakey’s is a well-established brand, while operating on an asset-light model. 4 1 2 3 Brand Vertical Asset-Light Short Payback Positioning Integration Approach Period Own commissary Long-term leases Business model and Firmly positioned for proprietary for store locations strong discipline leads in the fast casual raw materials at attractive to typical payback segment (A, B, protects key rentals period of 3-4 years and upper C supply chain and market) that maintains Presence of Low upfront cost and delivers high consistency and standalone stores strong cash generation margins, good control over (i.e. those outside per store volumes, and quality malls) lead to low scale rent-to-sales ratio Economies of scale and Benefitting from purchasing key consumer synergy trends – eating out more and upgrading from fast food to casual dining 11
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