Sphera Franchise Group Company presentation May 2018 1 Disclaimer - - PowerPoint PPT Presentation

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Company presentation – May 2018

Sphera Franchise Group

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Disclaimer

This presentation is not, and nothing in it should be construed as, an offer, invitation or recommendation in respect of shares issued by Sphera Franchise Group SA ("Sphera"), or an offer, invitation or recommendation to sell, or a solicitation of an offer to buy shares in Sphera. Neither this presentation nor anything in it shall form the basis of any contract or commitment. This presentation is not intended to be relied upon as advice or recommendation to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investors should consider this presentation in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. Sphera has prepared this presentation based on information available to it, including in-formation derived from public sources that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness

• r reliability of the information, opinions or conclusions ex-pressed herein.

This presentation should not be considered a comprehensive representation of Sphera's business, financial performance or results. This presentation may contain forward-looking statements. These statements reflect Sphera’s current knowledge and its expectations and projections about future events and may be identified by the context of such statements or words such as “anticipate,” “believe”, “estimate”, “expect”, “intend”, “plan”, “project”, “target”, “may”, “will”, “would”, “could” or “should” or similar terminology. Sphera undertakes no obligation to update or revise these forward–looking statements to reflect events or circumstances that arise after the date made

• r to reflect the occurrence of unanticipated events. Inevitably, some assumptions may not materialize, and un-anticipated events and circumstances

may affect the ultimate financial results. Projections are inherently subject to substantial and numerous uncertainties and to a wide variety of significant business, economic and competitive risks. Therefore, the final results achieved may vary significantly from the forecasts, and the variations may be material.

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Sphera Franchise Group At a Glance

13.6%

Normalized EBITDA growth(2)

1st Full Service Restaurant Operator 120 Restaurants(1)

Track Record of Rapid and Profitable Growth

RON 32.6m

Net profit

• 39% yoy

14.7%

LfL(3) restaurant sales growth

14.1%

Increase in no.

• f restaurants

2017 pro forma results 3-year CAGR RON 619m

Restaurant sales +20.3% yoy

24.0%

Restaurant sales growth

RON 69.3m

Normalized EBITDA(2)

• 5.8% yoy

11.2%

Normalized EBITDA margin(2)

24 Years of Operation

Source: Pro-forma IFRS financial information Notes: (1) As of 15-May-2018 ; (2) After excluding certain one-off expenses related to the reorganization of Sphera and the IPO process; (3) LfL performance for the reporting year is calculated by taking into account all the restaurants that have been in uninterrupted operation from the beginning of the preceding year to the end of the reporting year

2nd Quick Service Restaurants Operator

Leading Food Service Operator in Romania

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51 15 12

Number of Locations (split per brand / restaurant format)2

Sphera at a glance

❑ Sphera is one of the leading food operators in Romania(1), operating also through its subsidiaries in Moldova and in Italy ❑ Sphera was incorporated in May 2017 to consolidate all brands operated by the Group, namely KFC, Pizza Hut Dine-In and Pizza Hut Delivery under one company ❑ In 2017, Sphera secured the franchise for operation of Taco Bell restaurants in Romania (two stores opened by 1-Dec-2017) ❑ In 2017, Sphera opened its first two KFC restaurants in Italy and is set to become the largest KFC operator in Italy ❑ KFC Romania, KFC Italy, Pizza Hut, Pizza Hut Delivery Romania and Taco Bell Romania operate under the Yum International Franchise Agreement

Introduction to Sphera Franchise Group Geographical Footprint

Notes: (1) first in FSR and second in QSR, in terms of sales, (2) As of 15-May-2018

Bucharest

4 2 114

29 11 15 KFC PH Pizza Hut Delivery

Source: Company Inforrmation

Food Court In Line Drive-through

19 3

KFC restaurants PH and PH Delivery restaurants Taco Bell restaurants

2 Taco Bell

2 8 10

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❑ holds the franchise rights to operate KFC- branded restaurants in Moldova ❑ holds the franchise rights to operate KFC- branded restaurants in certain regions of Italy ❑ holds the franchise rights to operate Taco Bell-branded restaurants in Romania ❑ holds the franchise rights to operate Pizza Hut-branded restaurants in Romania (Pizza Hut Dine-In and Pizza Hut Delivery) ❑ holds sub-franchise rights ❑ holds the franchise rights to operate KFC- branded restaurants in Romania

Sphera at a glance

US Food Network S.A. American Restaurant System S.A. California Fresh Flavors S.R.L. US Food Network S.R.L.

• Italy

US Food Network S.R.L. - Moldova

99.9% 99.9% 99.9% 100% 80%

Corporate structure

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Key Investment Highlights

1 2 3 4 5 6 7 8

Logo/Text

Leading food service group operating a portfolio of internationally recognized brands

Operational

excellence proven by

consistent top ranked among YUM franchisees in Europe

Significant further growth potential in Romania and massive white space

• pportunity in Italy

Enhanced marketing capabilities investing directly into notable successful marketing campaigns Solid macroeconomic environment in Romania and favorable trends in the restaurant sector Proven network roll-

• ut capabilities with

long track record of successful growth Highly profitable business model with strong cash generation and 100% dividend payout ratio Scalable platform with fully fledged process in place allowing efficient roll-out

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Leading Foodservice Group in Romania

#2 #1 #2

QSR

player on the QSR segment (18% market share) and #1 on the chicken segment #2 player on the overall chained foodservice market (15% market share)

✓

• c. 80% spontaneous brand awareness among

Romanian customers (YE 2017)

✓

customer base consists mainly of young and middle aged people (78%), mostly educated (at least 35% high school), with an average household income

✓

72 restaurants in Romania as of 15 May 2018 player on the FSR segment (nearly 3% market share) #3 player on the overall chained foodservice market (7% market share)

✓

49% spontaneous brand awareness among Romanian customers

✓

customer base consists mainly of young and middle aged people (78%), mostly educated (at least 41% high school & 32% university), with a focus on families with an average to medium-high household income

✓

22 restaurants as of 15 May 2018 player on the Home delivery segment (nearly 21% market share)

✓

Order accessibility: classic call center lines, dedicated website platform, mobile application

✓

18 restaurants as of 15 May 2018

✓

As of June 2017: 28% electronic

• rders

Source: Company information; Euromonitor, Consumer Foodservice in Romania, May 2017; Deloitte Analysis

✓

First Taco Bell was opened on 12-Oct-2017 in Bucharest

✓

Second opened on 30- Nov-2017, also in Bucharest

Sphera in the Romanian Foodservice Market

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15% 86% Chained Independent 38% 31% 14% 12% 3% Full-Service Restaurants/FSR Cafes/bars Street stalls/Kiosks Fast Food/QSR Self-Service Cafeterias 100% Home Delivery/Takeaway

Leading Foodservice Group in Romania

Market Structure and Competitive Overview

Chained players generated only 15% of sales (2016 data)

RON 17.8 bn 778 mn transactions

Source: Euromonitor, Consumer Foodservice in Romania, May 2017 Source: Euromonitor, Consumer Foodservice in Romania, May 2017

KFC still no. 2 but growing faster (2016 data)

# Brand Product offering 2016 Mk share ‘13-’16 var. +pp. 1 Burgers, Chicken, Salads, Desserts 29.2% +0.2% 2 Chicken, Burgers, Salads, Desserts 18.0% +3.3% 3 Sandwiches/tortillas, Salads 3.2% +1.3% 4 Salads 2.9% +2.0% 5 Bakery products, Sandwiches, Deserts 2.3%

• 0.7%

Top 5 55.6%

Source: Euromonitor, Consumer Foodservice in Romania, May 2017

# Brand Product offering 2016 Mk share ‘13-’16 var. +pp. 1 Pizza, Pasta, Burgers 2.8% +0.7% 2 Pizza, Pasta, traditional Italian food 0.6% 0.0% 3 Traditional Serbian food 0.5% +0.1% 4 Romanian cuisine, Grill 0.5% 0.0% 5 Grill, Romanian and Moldavian cuisine 0.4% +0.4% Top 5 4.8%

FSR: Sphera no. 1 and increasing distance vs no. 2 (2016 data)

# Brand Product offering 2016 Mk share ‘13-’16 var. +pp. 1 Pizza 22.3% +3.4% 2 Pizza 20.6% +2.1% 3 Pizza 13.6% +7.2% 4 Pizza 10.5%

• 0.9%

5 Chinese Food 2.8%

• 0.7%

Top 5 69.8%

Delivery: Sphera no. 2 (2016 data)

Source: Euromonitor, Consumer Foodservice in Romania, May 2017

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2.2% 3.0% 3.3% 3.7% 7.7%

• 20%
• 15%
• 10%
• 5%

0% 5% 10% 15% 1,000 3,000 5,000 7,000 9,000 2011 2012 2013 2014 2015 2016 2022f Value Sales (RON bn) % yoy growth

Supportive Macro and Sector Environment in Romania

Enjoying the Highest GDP Growth in EU28 Strong Private Consumption Growth (yoy %) QSR Sector Development 2011 – 2022f FSR Sector Development 2011 – 2022f

Source: European Commission – European Economic Forecast – Spring 2017, Eurostat Newsrelease 7 September 2017, INNSSE

#1 yoy real GDP growth in the EU Q2 2018 yoy vs. 4.2% 2.4% #1

0.3% 3.5% 3.1% 3.9% 4.8% 7.0% 4.5%

• 0.1%

0.2% 1.6% 2.2% 2.0% 2.4% 2.3%

• 2.0%
• 1.0%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 2008-12 2013 2014 2015 2016 2017 2018e Romania Bulgaria Hungary Czech Republic Poland Slovakia EU28 0.7% 4.7% 6.0% 7.4% 6.9% 4.7%

• 0.1%

1.2% 2.1% 2.3% 1.7% 1.6%

• 4.0%
• 2.0%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 2013 2014 2015 2016e 2017f 2018f Romania Bulgaria Hungary Czech Rep. Poland Slovakia EU Source: European Commission – European Economic Forecast – Spring 2017, Eurostat

#1 yoy private consumption expenditure in the EU

3.4% 4.5% 8.0% 7.2% 5.0% 0% 2% 4% 6% 8% 10% 12% 14% 1,000 2,000 3,000 4,000 2011 2012 2013 2014 2015 2016 2022f Value Sales (RON bn) % yoy growth

Source: Euromonitor, Consumer Foodservice in Romania, May 2017; forecasts according to Deloitte Analysis

1.7 2.2

Source: Euromonitor, Consumer Foodservice in Romania, May 2017; forecasts according to Deloitte Analysis

5.5 6.7 9.0

5,504 restaurants dominated by independents – 95% 1,816 restaurants, with chains accounting for 38%

3.3

CAGR (%) CAGR (%)

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12.6% 19.0% 17.0% 12.5% 4.0% 10.0% 13.0% 3.1% 0.0% 5.0% 10.0% 15.0% 20.0% 2014 2015 2016 2017 KFC Pizza Hut 262 330 413 503 63 76 97 112 3 100 200 300 400 500 600 700 2014 2015 2016 2017 KFC Pizza Hut Taco Bell (RONm)

Successful Track Record of Growth

Sustained Growth Across All Brands Coupled with Strong and Resilient LfL Growth

KFC remaining the key contributor at ca. 81% of revenues

Source: Company information, Consolidated Pro Forma Financial Statements.

CAGR 2014-2017 24.0%

Note: (1) Includes KFC restaurants in Romania, Moldova and Italy. (2) As of October 12 , 2017

1 1 1 1 2 3 5 7 11 18 23 32 37 40 43 49 52 53 59 65 72 78 1 1 1 1 3 3 3 3 3 3 4 4 5 11 13 13 13 13 15 14 14 18 21 22 22 1 3 4 7 8 10 9 9 9 12 17 18 2 2 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 15-May-18

KFC Pizza Hut Dine-In Pizza Hut Delivery Taco Bell

Long Track Record of Successful Network Development

First KFC in Romania First KFC

• utside

Bucharest First Drive Thru KFC (Sibiu) First Pizza Hut Delivery in Romania First Pizza Hut outside Bucharest First Pizza Hut Delivery

• utside

Bucharest First Pizza Hut in Romania First KFC in Rep. Moldova

1 1 1 2 4 4 4 5 6 8 11 15 23 35 48 54 60 64 74 75 76 86 98 113

(1)

Initial Phase Acceleration Phase Transformation Phase Development Phases

Sphera holding company created First KFC in Italy First Taco Bell in Romania

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82.4% 80.2% 82.1% 84.1% 0.0% 50.0% 100.0% 324.9 405.8 514.5 618.8 0.0 100.0 200.0 300.0 400.0 500.0 600.0 700.0 2014 2015 2016 2017

Highly Profitable Business Model

Sales Restaurant Opex Structure

(RONm)

Change ‘17 vs ‘14 1.6%

(% of sales)

Source: Company information, Consolidated Pro Forma Financial Statements Note: (1) After excluding certain one-off expenses related to the reorganization of Sphera and the IPO process;

(0.1)% 3.6% (0.7)% 0.0% 0.1% (0.4)% (0.8)%

47.3 67.9 73.5 69.3 14.5% 16.7% 14.3% 11.2% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 0.0 20.0 40.0 60.0 80.0 100.0 120.0 2014 2015 2016 2017

Normalized EBITDA(1)

(RONm) Margin (%)

28.9 47.3 51.6 32.6 8.9% 11.7% 10.0% 5.3% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 2014 2015 2016 2017

Net profit

(RONm) Margin (%) CAGR 2014 – 2016 3.3%

35.5% 35.2% 35.6% 35.4% 16.1% 16.0% 17.9% 19.7% 8.1% 7.2% 6.9% 7.4% 5.9% 5.9% 5.9% 5.9% 5.2% 5.2% 5.2% 5.3% 8.3% 8.1% 8.2% 7.9% 3.3% 2.6% 2.4% 2.5% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 2014 2015 2016 2017 Food and material expenses Payroll and employee benefits Rent Royalties Advertising Other operating expenses, net Depreciation and amortisation

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Identify locations around

Residential areas Traffic

Scalable Platform Allowing Efficient Roll-out

New Restaurant Opening Process Restaurant / Unit Selection Criteria

Market Analysis Identify Best Locations Traffic & Market Research Project Management Architects & Designers Contractors & Vendors

Generators

(leisure – e.g. shopping centres, cinemas or retail – e.g. DIY, hypermarkets, furniture stores etc) Construction Grand Opening

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Operational Excellence as Top Ranked YUM Operator

Constant top ranker in YUM’s European Franchisee Business Units (EFBU) tables

✓ First place in CEE Guest Experience Survey (GES), Leader out of 17 KFC markets ✓ 4 restaurants in Top 10 GES – Overall Satisfaction, out of a total of 472 restaurants

#1

2016 2015 2014 2013 2012

✓ Transition to GES; third place in CEE out of 15 KFC Markets ✓ 51 restaurants in Target – Overall Satisfaction ✓ First place in EFBU out of 11 KFC Markets ✓ 10 restaurants with maximum score ✓ First place in EFBU out of 12 KFC Markets ✓ 7 restaurants with maximum score ✓ First place in EFBU for our KFC Moldova restaurant ✓ Third place in EFBU out of 16 KFC Markets & 379 restaurants ✓ 4 restaurants with maximum score

…due to excellent

• perational

results enabling a successful growth strategy!

KFC: most loved QSR brand in Romania (1)

significantly closed the gap on McDonalds over last five years: closest penetration levels to McDonalds in the region &

• ne of few markets in CEE successfully opening restaurants in

cities <100k inhabitants # of total restaurants at year end in Romania 63 68 57 67 52 67 51 65 vs. 48 64  ➔    developed successful model for PH Dine-In and Pizza Hut Delivery enabling expansion

• utside

capital city; resumed expansion (for PH in 2015 and for Pizza Hut Delivery in 2016) +20 in 5Y +7 in 5Y

Note: (1) Sphera market surveys, Brand Image Tracker (YUM)

2017

68 71 

✓ Third place in CEE Guest Experience Survey (GES) out

• f 16 KFC markets

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Enhanced Marketing Capabilities

Key Objectives

▪ Enhancement of marketing expenditure across all brands results in increased brand awareness and customer loyalty ▪ Working with award-winning partners for both advertising and public relations ▪ Increased technology and digital focus across all brands with online ordering topping 25% of Pizza Hut Delivery sales, significantly above competition ▪ Optimised channel-mix and focus on the right mix

• f objectives delivers business results

Marketing Strategy Highlights

Source: Company information and Deloitte Analysis

Contractual

• bligation YUM to

invest at least 5% of sales in marketing

Increase customer’s awareness of the Company’s brands and loyalty to its product offering Attract new customers in markets where Sphera is present Encourage existing customers to visit Sphera’s restaurants more frequently

➢ Advertising produced in Romania with local consumer insights to drive core messages ➢ KFC now has 48 weeks a year on TV, with PH also on TV with 5 campaigns on average each year

✓ KFC - the most loved brand in the sector ahead of McDonald’s (one of the few countries globally achieving this position) ✓ Pizza Hut benefits from the highest awareness among key chains

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Significant Further Growth Opportunities

Note: Size of segments do not constitute indication to their contribution to the overall growth.

Text

Long-term growth strategy based on four key pillars

Maintain Strong LFL Sales Growth Continue Organic Network Roll-out Develop a Significant KFC Business in Italy Expand Brand Portfolio – Taco Bell

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Significant Further Growth Opportunities

Key drivers:

➢ Macroeconomic backdrop to remain highly supportive ➢ Continue to deliver strong marketing ➢ Product innovation ➢ Price campaigns

❑ LfL performance for the reporting year is calculated by taking into account all the restaurants that have been in uninterrupted operation from the beginning of the preceding year to the end of the reporting year

Maintain strong like-for-like growth on a supportive macroeconomic environment

12.6% 19.0% 17.0% 12.5% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 2014 2015 2016 2017 4.0% 10.0% 13.0% 3.1% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 2014 2015 2016 2017

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2017 2018 2019 2020 2021 2022 Total KFC Romania Commitment 4 6 7 8 9 9 43 Target 7 7 7 10 10 10 51 Pizza Hut: Commitment 6 7 7 8 8 8 44 Delivery Target 5 5 5 6 6 6 33 Dine in Target 1 2 2 2 2 2 11

Significant Further Growth Opportunities

❑

Estimated market potential of ca. 30 restaurants

❑

Expand Pizza Hut Dine networks

• utside

Bucharest targeting major cities with a population

• f below 200k

❑

Test latest YUM latest design and décor elements in refurbishment

• f

Flagship restaurant in Bucharest (Sep 2017)

❑

Aim to cascade key elements to all new or refurbished restaurants

KFC Network

❑ Continue development of KFC network to capture

market estimated potential of ca. 110 restaurants

• ver the next 5 years

❑ Future development with focus on Drive Thru (“DT”)

format in both Bucharest and outside the capital city

❑ Viability

• f

DT format proven by McDonalds expansion

❑ Smaller Drive Thru restaurant format in order to

enter smaller cities

❑

Estimated market potential of ca. 40 restaurants

❑

Aggressive growth planned by targeting cities with population of below 150k

❑

Additional growth boost via sub-franchised locations – with focus on smaller cities

Pizza Hut Dine-In Pizza Hut Delivery

Network roll-out plans (number of restaurants)

Continue organic network roll-out in Romania via distinct directions to capture still existing market development potential

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1) Identify and develop restaurant locations within the areas

• f operation that Sphera’s has already secured by the end
• f 2022

2) Develop a sizeable KFC network in North East Italy and Piemonte, and also secure further geographic

• pportunities in the North of the country as they come

available 3) Build a diversified portfolio of restaurants, including initially Food Courts, but further on Drive Thrus, as well as Flag Ship / In Line restaurants, when the opportunity arises 4) Hire and retain a dedicated management team headquartered in Milan to drive business and network expansion in the country

Significant Further Growth Opportunities

Opportunity for Italian Market ❑ 3rd largest national economy in the Eurozone and the world’s 8th largest economy ❑ Top tourist destination in Europe and the world: 51 m. tourists/year, ranking 5th in the

world in terms of tourist incomings per year and 7th in terms of value (tourism receipts)

❑ Northern

part

• f

the country is most developed (highly industrialized, lower unemployment rate and higher per capita income)

❑ Foodservice industry dominated by independent operators, but during the economic

crisis, the number of independent food service operators declined, while chain restaurants increased their revenues

❑ Franchise chains benefits from brand awareness, marketing, activities and technical

and management support

❑ Growth in QSR is a feature of eating out market representing an opportunity for a brand like

KFC to gain market share from full service restaurants

❑ Italians are changing their food consumption behavior, with food habits switching from

“traditional home country” leading to market opportunities for KFC and QSR players

❑ Proof of concept, American branded chains have strongly penetrated the Italian market

(e.g. McDonalds with over 550 restaurants, and Burger King with over 140 restaurants)

Sphera’s Strategy for Italy Network Roll-out Plans (number of restaurants) 2017 2018 2019 2020 2021 2022 Total

KFC North East Italy and Piemonte Commitment 3 6 8 7 7 1 32 Target 3 6 8 8 7 2 34

Develop a significant KFC business in Italy to become the largest KFC operator in the country

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55 43 35 32 26 25 22 13 8

• 4
• 3
• 3
• 4
• 6
• 9
• 9
• 17
• 16
• 20
• 3

14 31 48 65 Romanian Italian Greek French Turkish Mexican American Chinese Lebanese I would definetly try it I would definetly not try it

Attitude to a new QSR chain by type of cuisine, Nov 2015, %, N=1,500

Good Perception of Mexican Food by the Romania consumer Taco Bell

❑ Develop Taco Bell as the contemporary, dynamic Californian brand,

• pening 14 restaurants in the initial 3 and thereafter growing the brand

steadily across the country ❑ Focus initial development in Bucharest and the more affluent cities over 200k population ❑ Planned restaurants will be located at malls, other types of restaurants (In Line, drive through) will be considered in the future

Developing Taco Bell

Significant Further Growth Opportunities

2017 2018 2019 2020 2021 2022 Total Commitment 2 3 5

• 10

Target 2 3 5 2 2

• 14

Network Roll-out Plan (number of restaurants)

❑ Romanians are in general willing to try Mexican food and would like to see more variety in foodservice offering – e.g. more than American High market potential as QSR brand with scalability Taco Bell most profitable QSR brand in the US Spicy food meets Romanian taste preferences Restaurant profile / customer profile similar to KFC

Brand focuses on young consumers / social media

Expand brand portfolio through the launch of Taco Bell in Romania

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Significant Further Growth Opportunities

KFC Romania Commitment 4 6 7 8 9 9 43 Target 7 7 7 10 10 10 51 Pizza Hut: Commitment 6 7 7 8 8 8 44 Delivery Target 5 5 5 6 6 6 33 Dine in Target 1 2 2 2 2 2 11 Taco Bell Romania Commitment 2 3 5

• 10

Target 2 3 5 2 2

• 14

KFC Italy (North-East & Piemonte) Commitment 3 6 8 7 7 1 32 Target 3 6 8 8 7 2 34

Restaurants roll-out plan by brands

TOTAL OPENINGS Commitment 15 22 27 23 24 18 129 Target 18 23 27 28 27 20 143

2017 2018 2019 2020 2021 2022 Total

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Significant Further Growth Opportunities Total Restaurants at year-end

53 60 65 72 79 86 96 106 116 3 9 17 25 32 34 23 27 33 39 46 53 61 69 77 2 5 10 12 14 14 50 100 150 200 250 2014 2015 2016 2017 2018 2019 2020 2021 2022

KFC KFC Italy Pizza Hut Taco Bell

Notes: (1) Includes KFC Romania and KFC Moldova

(1)

76 87 98 116 139 166 194 221 241 113

2017 Results

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Sphera – 2017 key events

▪ Strong sales & operational performance ▪ Double-digit same-store sales growth for the full-year ▪ Q4 same-store sales performance eased on cannibalisation impact, with some softening in customer spend facing leaping inflation ▪ Total net store openings: 15 (3 below plan on permitting delays; 2 have already been opened, third to open during Mar-2018) ▪ 9 stores opened in Q4-2017 (5x KFC, 2x Pizza Hut, 2x Taco Bell) ▪ Network size: 113 @ YE 2017, 115 @ 26-Feb-2018 ▪ 2018 network target: +23 (excluding the 3 included in the 2017 plan) to 139 ▪ KFC and Pizza Hut continue to lead top of mind awareness in Romania ▪ Strong Taco Bell sales performance for both stores ▪ Both KFC Italy stores generated operating profits in December, on combined sales better than expected ▪ Preliminary results Consolidated Pro forma Change in pro forma margin ▪ Sales +37.3% +20.3% ▪ Restaurant profit +18.3% +7.0% (2.0)pp ▪ Normalised EBITDA* (2.9)% (5.8)% (3.1)pp ▪ EBITDA (21.0)% (25.1)% (5.4)pp ▪ Net Profit (35.5)% (38.9)% (5.1)pp * Normalised EBITDA was adjusted for one-off expenses totaling RON 14.2m (revised upward from RON 11.8m as initially communicated, following reclassification of certain items from recurring G&A)

Sales performance by brands

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Brand performance: KFC Romania Sales growth analysis

Same-store performance All-store performance ▪ All-store sales growth of 17.7% Y/Y supported mainly by same-store performance (11.9% contribution); ▪ The 11 net openings contributed 5.8% to the Y/Y growth, with all but one in cities with existing KFC stores; ▪ same-store sales growth of 12.5% Y/Y on the back

• f continued strong performance from the Drive-

Thru format, as well as a better performance of the restaurants located outside Bucharest; ▪ Q4 performance slightly affected by increased cannibalization, as all new stores opened in cities with existing KFC presence (Bucharest, Arad, Oradea, Ramnicu Valcea); ▪ Average ticket was up 6% in 2017 and 4.5% in Q4, with transactions advancing 6.3% in 2017 and 5.2% in Q4;

26.4% 17.7% 18.0% 20.6% 18.8% 14.0% 0% 5% 10% 15% 20% 25% 30% 2016 2017 Q1 Q2 Q3 Q4

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Brand performance: Pizza Hut Sales growth analysis

Same-store performance All-store performance ▪ All-store sales growth of 15.5% Y/Y, with a relatively uniform performance across quarters, of which 13.4pp was the contribution of the net 12 stores opened starting Jan-2016 (+44% network growth) ▪ Same-store sales growth of 3.1% Y/Y, which is deemed to be a significant performance given the magnitude of the brand growth over the past two years (with 8 of the 12 net openings taking place in cities with existing Pizza Hut stores); ▪ We expect same-store growth to be in slight negative territory at least for the next couple of quarters as we plan further roll-outs in some of the existing cities; ▪ Average ticket up 8% in 2017 and 7% in Q4, with transactions falling 4.4% in 2017 and 6.0% in Q4;

13.0% 3.1% 1.4% 5.6% 5.4% 0.6% 0% 2% 4% 6% 8% 10% 12% 14% 2016 2017 Q1 Q2 Q3 Q4

Development

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Development Restaurant openings in 2017

Openings Total stores BoY New store locations

8 5 2 65 12 21

▪ Romania: Bucharest (1x DT, 1x IL), Oradea (1x DT, 1x FC), Arad (1x FC), Valcea (1x FC) ▪ Italy: 2x FC ▪ Closed stores: Romania (Oradea: 1x FC) ▪ Bucharest (4x IL), Ploiesti (1x IL) ▪ Bucharest (2x FC) Legend: FC – foodcourt; IL – inline (street); DT – Drive-Thru

• 1

Plan Total stores EoY

10* 1 72 17 2 22 15 98 18 113

▪ Galati (1x FC)

2 1 5

* The three restaurants planned for 2017 opened in Jan-2018 (Botosani - DT), Feb-2018 (Bucharest – DT) and Mar-2018 (Italy - FC).

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30

31

Marketing / CSR

33

Marketing

Note: size of campaigns’ pictures are not an indication of exact duration of the respective campaign

Continuous activities to promote our brands

January February March April May June July August September October November December

34

Marketing Q4-2017 highlights

▪ Christmas campaign focused on buckets with the aim to drive top line in Q4 whilst building on the freshness pillar and enjoyed higher sales mix Y/Y ▪ launched digital menu boards in the first two stores with the aim to continue roll-out throughout 2018. ▪ new brand website was launched, which has resulted in increased traffic and longer interaction with the site. ▪ Extended the delivery test in Bucharest after encouraging start. ▪ Continued to be recognized for outstanding digital marketing performance with numerous awards at FIBRA, including most creative client. ▪ launched Pepperoni Stuffed Crust pizza, which enjoyed notable sales mix throughout the campaign ▪ The new enhanced dine-in menu was extended to additional stores and offers customers wider variety and higher product quality ▪ Access to the Delivery channel through digital platform is increasing, with 31% of all orders coming through the digital, of which 9% through the Pizza Hut app ▪ Strong communication campaign (with a total budget of c. RON 1m) through all relevant channels (guerilla marketing activities, digital & social media, special brand and product videos, dedicated launch website, engagement of local communities, OOH (Bucharest, Vienna, Prague and Budapest), special signage inside and around the store’s location, VIP Party and Special Launch ceremony)

35

‘Hospice, House of Hope’ “SOS Children’s Villages Bucharest” ‘Physics (taught) differently’ (with CEAE) ‘I want to go to high-school’ (with World Vision Romania)

Corporate Social Responsibility Ongoing CSR campaigns & programs

EUR 140k raised in 2017, to finance school for 200 children

36

Corporate Social Responsibility Replate Waste (partnership with Shutterstock US)

We take all the food that’s left on the plates when people leave our restaurant and, with the help of a food stylist and photographer, we create new, stunning plates. Then, we take photos, we upload them on Shutterstock and sell them. All the money that we raise will be donated to the Hospice House

• f Hope.

Financials

38

Sphera – Financial reports in brief Consolidation perimeter

2016 2017 2018

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

Sphera - Consolidated financials

KFC Romania KFC Moldova Pizza Hut KFC Italy Taco Bell

Sphera - Pro forma information (P&L only)

KFC Romania KFC Moldova Pizza Hut KFC Italy Taco Bell

Pro forma financials

40

Financial performance: Pro-forma Statement of comprehensive income

▪ Pro forma sales up 20.3% Y/Y on strong performance from KFC Romania/Moldova and Pizza Hut and increasing contributions from the new businesses (KFC Italy and Taco Bell); ▪ Restaurant operating profit up 7.0% Y/Y, with margin down 2pp, especially on salary costs and impact from new openings and new areas of business; ▪ G&A expenses up 88.5%, or 3.5pp up in sales, driven by increased head-office payroll expenses (on both higher headcount and selected salary adjustments) and to one-off expenses (RON 14.2m, or 2.3% of sales); ▪ EBITDA fell 25.1% Y/Y and EBITDA margin contracted 5.4pp, of which 3.5pp due to higher G&A and 1.9pp due to higher restaurant expenses; ▪ Normalized EBITDA (excluding one-offs) fell 5.8% Y/Y and normalized EBITDA fell 3.1pp; ▪ Net profit was 38.9% lower Y/Y and net profit margin fell by 5.1pp compared to the 5.5pp drop in operating profit margin, on lower income tax expense (-38.4%, or 0.6pp of sales) Y/Y% % of Sales Data in RON'000 2017 2016 2017/2016 2017 2016 Δ% Restaurant sales 618,804 514,475 20.3% Restaurant expenses 520,031 422,204 23.2% 84.0% 82.1% 2.0% Food and material 219,232 183,409 19.5% 35.4% 35.6%

• 0.2%

Payroll and employee benefits 121,623 91,960 32.3% 19.7% 17.9% 1.8% Rent 45,512 35,525 28.1% 7.4% 6.9% 0.4% Royalties 36,567 30,356 20.5% 5.9% 5.9% 0.0% Advertising 32,727 26,521 23.4% 5.3% 5.2% 0.1% Other operating expenses, net 48,720 41,972 16.1% 7.9% 8.2%

• 0.3%

Depreciation and amortization 15,650 12,461 25.6% 2.5% 2.4% 0.1% Restaurant operating profit 98,773 92,271 7.0% 16.0% 17.9%

• 2.0%

General and administration expenses, net 60,297 31,988 88.5% 9.7% 6.2% 3.5% Operating profit 38,476 60,283

• 36.2%

6.2% 11.7%

• 5.5%

Finance costs 2,354 929 153.4% 0.4% 0.2% 0.2% Finance income 220 113 94.7% 0.0% 0.0% 0.0% Profit before tax 36,342 59,467

• 38.9%

5.9% 11.6%

• 5.7%

Income tax expense 3,786 6,144

• 38.4%

0.6% 1.2%

• 0.6%

Profit for the year 32,556 53,323

• 38.9%

5.3% 10.4%

• 5.1%

EBITDA 55,065 73,502

• 25.1%

8.9% 14.3%

• 5.4%

Normalised EBITDA 69,268 73,502

• 5.8%

11.2% 14.3%

• 3.1%

41

20.3% 14.1% 0.2% 2.4% 2.9% 0.6% 0.1% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Sphera USFN (RO) USFN (MD) USFN (IT) ARS CFF Cons.Adj 20.3% 17.7% 13.3% 15.5% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Sphera USFN (RO) USFN (MD) USFN (IT) ARS CFF Cons.Adj

Financial performance: Pro-forma Breakdown of results by Group companies – year 2017

Y/Y Sales growth by companies Contribution to Sales growth by companies Contribution to normalized EBITDA by companies Data in RON'000 USFN (RO) ARS USFN (MD) USFN (IT) CFF SFG Cons.Adj ICO ellim. PPA Adj. SFG Cons. Restaurant sales 482,587 112,011 8,492 12,377 2,876 12,420 (11,958) (1) 618,804 Restaurant expenses 397,194 99,520 7,648 12,501 3,837 (909) (1) 241 520,031 Food and material 180,421 30,422 3,628 3,822 1,087 (146) (2) 219,232 Payroll and employee benefits 85,660 29,920 1,252 4,005 786 121,623 Rent 33,719 9,643 796 878 476 45,512 Royalties 28,754 6,514 506 736 57 36,567 Advertising 23,835 6,846 364 809 969 (75) (21) 32,727 Other operating expenses, net 34,068 12,433 831 1,734 320 (688) 22 48,720 Depreciation and amortization 10,737 3,742 271 517 142 241 15,650 Restaurant operating profit 85,393 12,491 844 (124) (961) 12,420 (11,049) (241) 98,773 General and administration expenses, net 32,612 12,576 241 1,601 791 23,525 (11,049) 60,297 Operating profit 52,781 (85) 603 (1,725) (1,752) (11,105) (241) 38,476 Finance costs 1,491 811 138 358 37 141 (622) 2,354 Finance income 14,634 7 15 30 (14,466) 220 Profit before tax 65,924 (889) 480 (2,083) (1,789) (11,216) (13,844) (241) 36,342 Income tax expense 4,375 1,346 82 (428) 11 (1,600) 3,786 Profit for the year 61,549 (2,235) 398 (1,655) (1,800) (9,616) (13,844) (241) 32,556 EBITDA 64,257 3,783 926 (1,208) (1,610) (11,083) 55,065 Normalised EBITDA 64,752 3,968 926 (1,208) (1,610) 2,439 69,268

42

Financial performance: Pro-forma Restaurant operating expenses

▪ Operational expenses increased 23.3% Y/Y to RON 520.0m in 2017, ▪ As percentage of sales, operational expenses increased by 1.9pp Y/Y to 84.0% in 2017, of which: ▪ By main areas of business: ▪ +1.7pp was the combined effect of the changes in the restaurant expenses of KFC Romania, Pizza Hut and KFC Moldova (+1.5pp from payroll cost); ▪ +0.6pp was the combined impact of our new KFC stores in Italy and Taco Bell stores (+0.3pp from payroll cost and +0.2pp from advertising); ▪ By expense category: ▪ +1.8pp from payroll cost ▪ +0.4pp from rent expenses (mostly related to new stores), ▪ (0.2)pp from cost of food and materials ▪ (0.3)pp from other operating expenses. ▪ In Q4-2017, cost of labour fell 1.6pp to 19.3% on stronger seasonal sales, cost of food advanced 1.2pp to 36.5% on higher acquisition prices for a number of products, while depreciation increased 0.6pp on higher number of store openings.

Change Percentage of sales Data in RON thousand 2017 2016 2017/2016 2017 2016 Restaurant expenses 520,031 422,204 23.2% 84.0% 82.1% Food and material 219,232 183,409 19.5% 35.4% 35.6% Payroll and employee benefits 121,623 91,960 32.3% 19.7% 17.9% Rent 45,512 35,525 28.1% 7.4% 6.9% Royalties 36,567 30,356 20.5% 5.9% 5.9% Advertising 32,727 26,521 23.4% 5.3% 5.2% Other operating expenses 48,720 41,972 16.1% 7.9% 8.2% Depreciation 15,650 12,461 25.6% 2.5% 2.4% Contribution to change in restaurant opex margin Contribution to change in restaurant profit

Guidance for 2018 ▪ While we expect the same-store restaurant operating margin to improve by up to 0.5pp in 2018 (0.5pp decrease in cost of sales, 0.5pp increase in cost of labour, 0.2pp decrease in rent, 0.3pp decrease in depreciation), we believe the all-store restaurant profitability will decrease by up to 1pp on the impact of the new stores (of which 0.8pp from increased depreciation expense).

43

Financial performance: Pro-forma G&A expenses

▪ General and administration expenses increased 88% Y/Y to RON 60.3 million in 2017 (9.7% of sales, up from 6.2% in 2016). ▪ The company’s G&A expense was mainly impacted by a series of incremental one-off costs and expenses, totaling RON 14.2m (revised upward from RON 11.8m as initially communicated, following further reclassification of management bonuses and professional legal and commercial services). These one-off costs most notably include the payment of a significant management bonus as well as expenses relating to legal, advisory, and audit fees relating to the corporate restructuring work that was undertaken during the year. ▪ We awarded RON 12.2m in extraordinary remuneration to the senior management, including the heads

• f all key functions of the business, in order to reward the significant growth and value creation that has

been achieved over the recent years, and incentivize key individuals towards what is committed and planned to be achieved as part of our 5-year plan. ▪ We incurred RON 2.0m in one-off third-party expenses, relating mainly to legal, advisory, and audit fees as part of our reorganization process and we treat these fees as non-recurring.

Change Percentage of sales Data in RON thousand 2017 2016 2017/2016 2017 2016 General and administration expenses (net), of which: 60,297 31,988 88.5% 9.7% 6.2% Payroll and employee benefits 34,695 13,564 155.8% Third-party services 13,605 10,197 33.4% Depreciation and amortization 939 758 23.9% Rent 2,344 1,736 35.0% Banking charges 1,921 1,525 26.0% Transport 2,599 1,314 97.8% Other expenses 4,194 2,894 44.9% Contribution to growth in G&A expense Breakdown of one-off costs

Total one-off costs, of which: 14,202 Management bonuses 12,154 Third-party 2,048 Legal services 681 Commercial due diligence 652 Audit services 534 Other 181 ▪ A second important component of growth in G&A were head-office salaries which, excluding the new businesses (KFC Italy and Taco Bell), increased by approximately RON 9.5m Y/Y. ▪

• c. RON 6.5m represent increased expenses with base salaries of the head-office staff, due to the significant increase in headcount and salary adjustments for a

number of key employees; ▪

• c. RON 3.0m represent increased expenses with the bonus accruals for the year 2017 that will be paid in 2018 to both the mana

gement team and head-office staff. ▪ A third distinct component was represented by the new businesses (KFC Italy and Taco Bell operations), which generated RON 2.4m in G&A expenses. Guidance for 2018 ▪ We expect normalized G&A to reach approximately 7.0% of sales in 2018, with a 0.5pp seasonal variation between quarters (20-25% increase in payroll, with 4% increase in existing salaries and 30-40 new hires, 10% decrease in third-party, 8% increase in other G&A positions)

44

Financial performance: Pro-forma Overall guidance for 2018

▪ Sales ▪ Same-store sales: +6-8% ▪ All-store sales: 20-25% ▪ Restaurant operating margin ▪ Same-store margin: +0.5pp to 18.5% ▪ All-store margin: -1.0pp to 15.0%, of which impact from Depreciation: -0.8pp (3.3% of sales) ▪ G&A expenses ▪ 7.0% of sales ▪ Normalized EBITDA margin ▪ 11.0-11.5%

Consolidated financials

46

Sphera – Consolidated financial performance Statement of comprehensive income

▪ Consolidated sales up 37.3% Y/Y on strong performance from KFC Romania (+17.7% Y/Y), while the consolidation of ARS (Pizza Hut restaurants), starting with June 2017, contributed 15.9pp in the consolidated sales growth rate; ▪ Restaurant operating profit up 18.3% Y/Y, with margin down 2.6pp, especially on salary costs and impact from new openings and new areas of business; ▪ G&A expenses up 143%, or 4.3pp up in sales, driven by increased head-office payroll expenses (on both higher headcount and selected salary adjustments) and to one-off expenses (RON 14.2m, or 2.5pp of sales); ▪ EBITDA fell 21.0% Y/Y and EBITDA margin contracted 6.6pp, of which 4.3pp due to higher G&A and 2.3pp due to higher restaurant expenses; ▪ Normalized EBITDA (excluding one-offs) increased 0.9% Y/Y and normalized EBITDA margin fell 4.1pp; ▪ Net profit was 35.5% lower Y/Y and net profit margin fell by 6.2pp compared to the 6.8pp drop in the operating profit margin, on lower income tax expense (-44.1%, or 0.8pp of sales) Y/Y% % of Sales Data in RON'000 2017 2016 2017/2016 2017 2016 Δ% Restaurant sales 573,175 417,535 37.3% Restaurant expenses 480,647 339,314 41.7% 83.9% 81.3% 2.6% Food and material 206,704 157,302 31.4% 36.1% 37.7%

• 1.6%

Payroll and employee benefits 109,858 69,577 57.9% 19.2% 16.7% 2.5% Rent 41,615 27,498 51.3% 7.3% 6.6% 0.7% Royalties 33,885 24,654 37.4% 5.9% 5.9% 0.0% Advertising 30,231 20,736 45.8% 5.3% 5.0% 0.3% Other operating expenses, net 44,412 30,313 46.5% 7.7% 7.3% 0.5% Depreciation and amortization 13,942 9,234 51.0% 2.4% 2.2% 0.2% Restaurant operating profit 92,528 78,221 18.3% 16.1% 18.7%

• 2.6%

General and administration expenses, net 55,925 22,975 143.4% 9.8% 5.5% 4.3% Operating profit 36,603 55,246

• 33.7%

6.4% 13.2%

• 6.8%

Finance costs 2,156 825 161.3% 0.4% 0.2% 0.2% Finance income 214 95 125.3% 0.0% 0.0% 0.0% Profit before tax 34,661 54,516

• 36.4%

6.0% 13.1%

• 7.0%

Income tax expense 3,233 5,783

• 44.1%

0.6% 1.4%

• 0.8%

Profit for the year 31,428 48,733

• 35.5%

5.5% 11.7%

• 6.2%

EBITDA 51,424 65,070

• 21.0%

9.0% 15.6%

• 6.6%

Normalised EBITDA 65,627 65,070 0.9% 11.4% 15.6%

• 4.1%

47

Sphera – Consolidated financial performance Statement of financial position

All data in RON'000 31-Dec-17 31-Dec-16 All data in RON'000 31-Dec-17 31-Dec-16 Assets Equity and liabilities Non-current assets 176,123 54,246 Total equity 104,544 58,253 Property, plant and equipment 105,220 47,551 Equity attributable to equity holders of the parent 104,525 58,292 Intangible assets 67,471 6,365 Issued capital 581,990 190 Deposits for rent guarantee 1,288 290 Share premium (520,578)

• Deferred tax assets

2,144 40 Other capital reserves

• 19

Retained earnings 43,191 58,124 Current assets 73,255 65,399 Foreign currency translation reserve (78) (41) Inventories 8,509 5,744 Non-controlling interests 19 (39) Trade and other receivables 8,418 8,780 Prepayments 3,673 1,907 Non-current liabilities 42,190 16,304 Cash and short-term deposits 52,655 48,968 Interest-bearing loans and borrowings 39,520 14,630 Trade and other payables 2,670 1,674 Assets held for sale 195

• Current liabilities

102,839 45,088 Total assets 249,573 119,645 Trade and other payables 77,647 37,292 Interest-bearing loans and borrowings 25,192 7,796 Total liabilities 145,029 61,392 Total equity and liabilities 249,573 119,645

Interim results: Jan-Mar 2018

49

Sphera – Q1-2018 key events

▪ Strong sales & operational performance ▪ All-store sales up 22.5% with same-store sales growth of 9.7% ▪ continued strong growth from KFC, increasing contributions from KFC Italy and Taco Bell ▪ Total store openings: 3 (3x KFC, all being part of 2017 development plan) ▪

• ther 4 stores opened so far in Q2-2018 (3x KFC,1x Pizza Hut Delivery)

▪ Network size: 116 @ 31-Mar-2018, 120 @ 15-May-2018 ▪ 2018 network target: +23 (excluding the 3 included in the 2017 plan) to 139 ▪ KFC Romania and Moldova in Yum’s top 4 CEE GES performance, with both stores in Italy leading the Italian performance chart ▪ KFC and Pizza Hut continue to lead top of mind awareness in Romania ▪ Taco Bell restaurant operating margin moving into positive territory at 4% ▪ KFC Italy restaurant operating margin improving to 3.5% ▪ Interim results* RONm Y/Y* Margin ▪ Sales 170.2 +22.5% ▪ Restaurant profit 26.1 +0.5% 15.3% ▪ EBITDA 18.8 (3.9)% 11.1% ▪ Net Profit 12.5 (13.7)% 7.4% *) Comparison between Q1-2018 consolidated results and Q1-2017 pro forma results.

Sales performance by brands

51

Brand performance: KFC Romania Sales growth analysis

Same-store performance All-store performance ▪ All-store sales growth of 19.6% Y/Y supported mainly by same-store performance (11.6pp contribution); ▪ The 8 net openings contributed 7.8pp to the Y/Y growth, with all but one in cities with existing KFC stores; ▪ same-store sales growth of 11.8% Y/Y on the back

• f continued strong performance from the Drive-

Thru format, as well as a better performance of the restaurants located outside Bucharest; ▪ Average ticket was up 8.2% and transactions were up 3.3% in Q1-2018 vs Q1-2017;

17.0% 12.5% 10.7% 15.6% 14.0% 9.9% 11.8% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 2016 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 26.4% 17.7% 18.0% 20.6% 18.8% 14.0% 19.6% 0% 5% 10% 15% 20% 25% 30% 2016 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

52

Brand performance: Pizza Hut Sales growth analysis

Same-store performance All-store performance ▪ All-store sales growth of 9.8% Y/Y, with a relatively uniform performance across quarters, of which 8.2pp was the contribution of the net 6 stores

• pened starting Jan-2016;

▪ Same-store sales growth of 1.6% Y/Y, still reflecting a certain cannibalization impact from the stores opened since Jan-2017 (with 4 of the 6 net

• penings taking place in cities with existing Pizza

Hut stores); ▪ Average ticket was up 7.6% and transactions were down 5.5% in Q1-2018 vs Q1-2017;

28.0% 15.5% 16.8% 16.6% 14.9% 14.1% 9.8% 0% 5% 10% 15% 20% 25% 30% 2016 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 13.0% 3.1% 1.4% 5.6% 5.4% 0.6% 1.6% 0% 2% 4% 6% 8% 10% 12% 14% 2016 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

Development

54

Development Restaurant openings in Q1-2018

Openings Total stores BoY New store locations

3*

▪ Romania: Bucharest (1x DT), Botosani (1x DT) ▪ Italy: 1x FC Legend: FC – foodcourt; IL – inline (street); DT – Drive-Thru

Plan Total stores EoP

13 75 17 2 22 3 23 116 3 2 5

* All three restaurants opened in Q1-2018 were part of 2017 development plan.

72 17 2 22 113

55

KFC Bucharest Sun Plaza (DT)

56

KFC Botosani (DT)

57

KFC Italy - Villesse

Brand news

59

Brand news Q1-2018 highlights

▪ KFC focused on communicating value for Q1, successfully re-launching Smart Menu (full meal for 12.9 RON) and Ceva (Something) (value bundle for 5 RON) and maintaining strong same-store sales growth; ▪ Continuous activities to build KFC as a digital brand by making the story more relevant for the millennials: they could apply to an online “smart job” platform in order to gain experience and win prizes; the digital activation had c. 29k online participants that generated over 120k sessions; ▪

• c. 4.5% price increase done in mid-February;

Delivery ▪ Delivery test expanded to four stores in Bucharest and two in Cluj, with very encouraging results;

Self-ordering kiosks ▪ Model and journey selected and customized for local market needs and specifications; ▪ Integrations with IT systems and bank’s POS solution finalized ▪ Pilot kiosks to be implemented in selected locations; ▪ Expected roll-out by year-end

60

Brand news Q1-2018 highlights

▪ Pizza Hut started the year by communicating abundant value through its Pizza Festival all-you-can- eat signature campaign; ▪ The new menu designed by a well-know chef was introduced in selected stores with the aim of covering all stores by end of Q2; ▪ Pizza Hut Delivery experienced positive same-store sales growth in Q1 after launching Mix for 2, an abundant value campaign; ▪ Overall online orders exceeding 30% of delivery sales; ▪

• c. 5% price increase done in mid-February;

▪ Taco Bell continued to use social media as its main brand awareness builder and launched a Monday offer to help value perception and boost sales; ▪ 2018 awards: ADC school of creativity - KFC client of the year; CSR awards - KFC & Pizza Hut for involvement in education; MomentUM media awards - Silver for KFC “Winter is not coming” campaign, best content creation

61

Marketing Q1-2018 campaigns

Financials

Pro forma financials

Note: Q1-2018 pro forma results are identical to consolidated results Q1-2017 pro forma results include ARS performance for the full period Q1-2017 consolidated results do not include ARS performance

64

Financial performance: Q1-2018 (Consolidated) vs Q1-2017 (Pro-forma) Statement of comprehensive income

▪ Pro forma sales up 22.5% Y/Y on strong performance from KFC Romania/Moldova and Pizza Hut and increasing contributions from the new businesses (KFC Italy and Taco Bell); ▪ Restaurant operating profit up 0.5% Y/Y, with margin down 3.4pp, especially on food and salary costs, as well as impact from new openings and new areas of business; ▪ G&A expenses up 16.7% Y/Y, but 0.3pp down to 7.3% of sales, driven mainly by head-office payroll expenses; ▪ EBITDA fell 3.9% Y/Y and EBITDA margin contracted 3.0pp to 11.1% of sales, virtually due to higher restaurant expenses; ▪ Net profit was 13.7% lower Y/Y and net profit margin fell by 3.0pp to 7.4% of sales.

Y/Y% % of Sales Data in RON'000 Mar-18 Mar-17 2018/2017 Mar-18 Mar-17 Δ% Restaurant sales 170,232 138,970 22.5% Restaurant expenses 144,119 112,988 27.6% 84.7% 81.3% 3.4% Food and material 61,909 49,138 26.0% 36.4% 35.4% 1.0% Payroll and employee benefits 33,010 25,964 27.1% 19.4% 18.7% 0.7% Rent 12,416 10,260 21.0% 7.3% 7.4%

• 0.1%

Royalties 9,918 8,288 19.7% 5.8% 6.0%

• 0.1%

Advertising 7,060 5,770 22.4% 4.1% 4.2% 0.0% Other operating expenses, net 14,938 10,126 47.5% 8.8% 7.3% 1.5% Depreciation and amortization 4,867 3,443 41.4% 2.9% 2.5% 0.4% Restaurant operating profit 26,113 25,983 0.5% 15.3% 18.7%

• 3.4%

General and administration expenses, net 12,350 10,586 16.7% 7.3% 7.6%

• 0.4%

Operating profit 13,764 15,397

• 10.6%

8.1% 11.1%

• 3.0%

Finance costs 487 278 75.3% 0.3% 0.2% 0.1% Finance income 183 131 39.4% 0.1% 0.1% 0.0% Profit before tax 13,459 15,250

• 11.7%

7.9% 11.0%

• 3.1%

Income tax expense 910 705 29.1% 0.5% 0.5% 0.0% Profit for the period 12,549 14,545

• 13.7%

7.4% 10.5%

• 3.1%

EBITDA 18,836 19,598

• 3.9%

11.1% 14.1%

• 3.0%

65

22.5% 15.5% 0.1% 2.9% 1.9% 1.8% 0.3% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Sphera USFN (RO) USFN (MD) USFN (IT) ARS CFF Cons.Adj 22.5% 19.6% 6.3% 9.8% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Sphera USFN (RO) USFN (MD) USFN (IT) ARS CFF Cons.Adj

Financial performance: Q1-2018 (Consolidated) vs Q1-2017 (Pro-forma) Breakdown of results by Group companies

Y/Y Sales growth by companies Contribution to Sales growth by companies Contribution to EBITDA by companies

Data in RON'000 USFN (RO) ARS USFN (MD) USFN (IT) CFF SFG Cons.Adj SFG Cons. Restaurant sales 131,007 29,962 2,188 4,123 2,544 5,949 (5,541) 170,232 Restaurant expenses 108,839 27,014 1,914 3,978 2,440 (67) 144,119 Food and material 50,363 8,452 954 1,215 975 (51) 61,909 Payroll and employee benefits 22,858 7,745 326 1,284 798 33,010 Rent 9,210 2,522 191 286 205 2 12,416 Royalties 7,821 1,670 130 246 51 9,918 Advertising 4,890 1,802 49 232 103 (15) 7,060 Other operating expenses, net 10,480 3,659 192 506 104 (3) 14,938 Depreciation and amortization 3,218 1,164 72 209 205 4,867 Restaurant operating profit 22,168 2,948 274 145 104 5,949 (5,474) 26,113 General and administration expenses, net 7,334 2,755 61 800 615 6,257 (5,474) 12,350 Operating profit 14,834 192 213 (656) (512) (308) 13,764 Finance costs 339 144 30 131 76 168 (401) 487 Finance income 455 46 5 78 (401) 183 Profit before tax 14,949 94 188 (787) (587) (398) 13,459 Income tax expense 732 347 19 (184) 28 (32) 910 Profit for the period 14,217 (252) 169 (603) (615) (367) 12,549 EBITDA 18,153 1,412 298 (447) (307) (273) 18,836

66

Financial performance: Q1-2018 (Consolidated) vs Q1-2017 (Pro-forma) Restaurant operating expenses and margin

▪ Operational expenses increased 27.6% Y/Y to RON 144.1m in Q1-2018, ▪ As percentage of sales, operational expenses increased by 3.4pp Y/Y to 84.7% in Q1-2018, of which: ▪ By main areas of business: ▪ +3.4pp was the combined effect of the changes in the restaurant expenses of KFC Romania and KFC Moldova (+1.6pp from cost of sales, +1.5pp from other operating expenses); ▪ +0.5pp was the impact from ARS operations ▪ (0.3)pp was the combined impact of our new KFC stores in Italy and Taco Bell stores; ▪ By expense category: ▪ +1.5pp from other operating expenses ▪ +1.0pp from cost of food and materials ▪ +0.7pp from payroll expenses ▪ Compared to Q4-2017, restaurant opex ratio fell 1.3pp, mainly attributed to lower advertising expenses; cost of food and cost of labor remained virtually unchanged, while other operating expenses increased by 1.1pp on expenses associated with the newer stores. Contribution to change in restaurant opex ratio Contribution to change in restaurant profit Y/Y% % of Sales Data in RON'000 Mar-18 Mar-17 2018/2017 Mar-18 Mar-17 Restaurant expenses 144,119 112,988 27.6% 84.7% 81.3% Food and material 61,909 49,138 26.0% 36.4% 35.4% Payroll and employee benefits 33,010 25,964 27.1% 19.4% 18.7% Rent 12,416 10,260 21.0% 7.3% 7.4% Royalties 9,918 8,288 19.7% 5.8% 6.0% Advertising 7,060 5,770 22.4% 4.1% 4.2% Other operating expenses, net 14,938 10,126 47.5% 8.8% 7.3% Depreciation and amortization 4,867 3,443 41.4% 2.9% 2.5% Restaurant operating profit 26,113 25,983 0.5% 15.3% 18.7%

67

Financial performance: Q1-2018 (Consolidated) vs Q1-2017 (Pro-forma) G&A expenses

▪ General and administration expenses increased 16.7% Y/Y to RON 12.3 million in Q1-2018 (7.3% of sales, up from 7.6% in Q1-2017). ▪ The main contributor to the G&A growth was payroll (up 12.0% Y/Y), which accounted for 6.9pp of the total growth rate; Contribution to growth in G&A expense

Change Percentage of sales Data in RON thousand Mar-18 Mar-17 2018/2017 Mar-18 Mar-17 General and administration expenses (net), of which: 12,350 10,586 16.7% 7.3% 7.6% Payroll and employee benefits 6,828 6,098 12.0% Third-party services 2,405 2,191 9.8% Depreciation and amortization 205 334

• 38.6%

Rent 738 418 76.6% Banking charges 635 383 65.8% Transport 742 483 53.8% Other expenses 797 680 17.2%

Consolidated financials

69

Sphera – Consolidated financial performance Statement of comprehensive income

▪ Consolidated sales up 52.4% Y/Y on strong performance from KFC Romania (+19.6% Y/Y), while the consolidation of ARS (Pizza Hut restaurants), starting with June 2017, contributed 26.8pp in the consolidated sales growth rate; ▪ Restaurant operating profit up 20.0% Y/Y, with margin down 4.2pp, especially on salary costs and impact from new openings and new areas of business; ▪ G&A expenses up 69.9% Y/Y, up 0.7pp to 7.3% of sales, driven mainly by the consolidation of ARS and the KFC Italy and Taco Bell operations; ▪ EBITDA advanced 9.3% Y/Y and EBITDA margin contracted 4.3pp to 11.1%, mainly due to higher restaurant expenses; ▪ Net profit was 10.9% lower Y/Y and net profit margin fell by 5.2pp to 7.4%. Y/Y% % of Sales Data in RON'000 Mar-18 Mar-17 2018/2017 Mar-18 Mar-17 Δ% Restaurant sales 170,232 111,726 52.4% Restaurant expenses 144,119 89,963 60.2% 84.7% 80.5% 4.1% Food and material 61,909 41,566 48.9% 36.4% 37.2%

• 0.8%

Payroll and employee benefits 33,010 19,300 71.0% 19.4% 17.3% 2.1% Rent 12,416 8,071 53.8% 7.3% 7.2% 0.1% Royalties 9,918 6,687 48.3% 5.8% 6.0%

• 0.2%

Advertising 7,060 4,317 63.5% 4.1% 3.9% 0.3% Other operating expenses, net 14,938 7,587 96.9% 8.8% 6.8% 2.0% Depreciation and amortization 4,867 2,436 99.8% 2.9% 2.2% 0.7% Restaurant operating profit 26,113 21,763 20.0% 15.3% 19.5%

• 4.1%

General and administration expenses, net 12,350 7,270 69.9% 7.3% 6.5% 0.7% Operating profit 13,764 14,493

• 5.0%

8.1% 13.0%

• 4.9%

Finance costs 487 141 245.1% 0.3% 0.1% 0.2% Finance income 183 93 97.6% 0.1% 0.1% 0.0% Profit before tax 13,459 14,445

• 6.8%

7.9% 12.9%

• 5.0%

Income tax expense 910 355 156.8% 0.5% 0.3% 0.2% Profit for the period 12,549 14,090

• 10.9%

7.4% 12.6%

• 5.2%

EBITDA 18,836 17,230 9.3% 11.1% 15.4%

• 4.4%

70

Sphera – Consolidated financial performance Statement of financial position

Data in RON'000 31-Mar-18 31-Dec-17 Data in RON'000 31-Mar-18 31-Dec-17 Assets Equity and liabilities Non-current assets 180,192 176,123 Total equity 117,114 104,544 Property, plant and equipment 108,305 105,220 Equity attributable to equity holders of the parent 117,059 104,525 Intangible assets 67,938 67,471 Issued capital 581,990 581,990 Deposits for rent guarantee 1,606 1,288 Share premium (0) (520,578) Deferred tax assets 2,343 2,144 Other capital reserves 55,705

• Retained earnings

(520,578) 43,191 Current assets 66,310 73,291 Foreign currency translation reserve (59) (78) Inventories 8,185 8,509 Non-controlling interests 55 19 Trade and other receivables 9,779 8,454 Prepayments 3,757 3,673 Non-current liabilities 40,975 42,190 Cash and short-term deposits 44,588 52,655 Interest-bearing loans and borrowings 38,419 39,520 Trade and other payables 2,557 2,670 Assets held for sale 195 195 Current liabilities 88,607 102,874 Total assets 246,697 249,609 Trade and other payables 62,800 77,682 Interest-bearing loans and borrowings 25,808 25,192 Total liabilities 129,583 145,064 Total equity and liabilities 246,697 249,608

Pro forma financials – 2014-2017

72

Sphera – Consolidated financial performance Statement of financial position

Abolute data (RON'000) % of Sales Y/Y% change 2014 2015 2016 2017 2014 2015 2016 2017 2015 2016 2017 Restaurant sales 324,912 405,830 514,475 618,804 100.0% 100.0% 100.0% 100.0% 24.9% 26.8% 20.3% Restaurant expenses 267,699 325,134 422,204 520,031 82.4% 80.1% 82.1% 84.0% 21.5% 29.9% 23.2% Food and material expenses 115,286 142,859 183,409 219,232 35.5% 35.2% 35.6% 35.4% 23.9% 28.4% 19.5% Payroll and employee benefits 52,401 65,135 91,960 121,623 16.1% 16.0% 17.9% 19.7% 24.3% 41.2% 32.3% Rent 26,447 29,020 35,525 45,512 8.1% 7.2% 6.9% 7.4% 9.7% 22.4% 28.1% Royalties 19,103 23,830 30,356 36,567 5.9% 5.9% 5.9% 5.9% 24.7% 27.4% 20.5% Advertising 16,777 20,960 26,521 32,727 5.2% 5.2% 5.2% 5.3% 24.9% 26.5% 23.4% Other operating expenses, net 26,864 32,904 41,972 48,720 8.3% 8.1% 8.2% 7.9% 22.5% 27.6% 16.1% Depreciation and amortization 10,821 10,426 12,461 15,650 3.3% 2.6% 2.4% 2.5%

• 3.7%

19.5% 25.6% Restaurant operating profit 57,213 80,696 92,271 98,773 17.6% 19.9% 17.9% 16.0% 41.0% 14.3% 7.0% General and administration expenses, net 21,419 23,912 31,988 60,297 6.6% 5.9% 6.2% 9.7% 11.6% 33.8% 88.5% Operating profit 35,794 56,784 60,283 38,476 11.0% 14.0% 11.7% 6.2% 58.6% 6.2%

• 36.2%

Finance costs 1,287 1,013 929 2,354 0.4% 0.2% 0.2% 0.4%

• 21.3%
• 8.3%

153.4% Finance income 247 417 113 220 0.1% 0.1% 0.0% 0.0% 68.8%

• 72.9%

94.7% Profit before tax 34,754 56,188 59,467 36,342 10.7% 13.8% 11.6% 5.9% 61.7% 5.8%

• 38.9%

Income tax expense 5,195 8,421 6,144 3,786 1.6% 2.1% 1.2% 0.6% 62.1%

• 27.0%
• 38.4%

Profit for the period from continuing operations 29,559 47,767 53,323 32,556 9.1% 11.8% 10.4% 5.3% 61.6% 11.6%

• 38.9%

Loss after tax from discontinued operations (620) (476) (1,683)

• 0.2%
• 0.1%
• 0.3%

23.2%

• 253.6%

Profit for the period 28,930 47,291 51,640 32,556 8.9% 11.7% 10.0% 5.3% 63.5% 9.2%

• 37.0%