Sfinks Polska Reports 9.2% Revenue Growth in Q3 2024

Restaurants under the Sfinks Polska umbrella, especially those operating under the SPHINX brand, generated revenues of PLN 154.31 million in the first three quarters of 2024, which is an increase of 9.2% compared to the previous year. Revenue from sales within the Sfinks Group amounted to PLN 59.81 million at the end of September this year, as compared to PLN 75.71 million at the end of September 2023, resulting from the strategy of converting company-owned outlets into franchises. The consolidated operational profit increased after the third quarter of this year to PLN 6.15 million, compared to PLN 5.47 million a year before. The group also reported improved net results of PLN 1.54 million, reaching a deficit of PLN -0.97 million at the end of September 2024, compared to a deficit of PLN -2.5 million a year earlier.

“By the end of September, our brand restaurants had higher gastronomic sales than the previous year, and the level of growth during this period, including the third quarter alone, remains well above inflation. This was also another period of changes in the network structure, as successive restaurants were converted into a franchise model. As a result, at the end of September, 91% of restaurants operated as franchises, and 9% were company-owned. The Sfinks Group, in accordance with the plan outlined in the strategy, will focus on acting as a network operator, owner of gastronomic concepts and franchisor, and developing business in such a role,” said Sylwester Cacek, President of Sfinks Polska.

By the end of September 2024, Sfinks was operating only 9 of its own restaurants. This influenced a change in the consolidated sales of Sfinks Polska, as franchise fees were included in the group’s revenues instead of company-owned restaurant turnover. The group also recorded improving sales profitability indicators over the nine months of 2024 to 32.3% from 28.4% the previous year, and a higher EBIT of PLN 6.15 million (compared to PLN 5.47 million in the same period of the previous year). The net loss was significantly reduced to PLN -0.97 million after three quarters of this year compared to PLN -2.5 million the previous year. The same trends are evident when these categories are adjusted for the impact of IFRS 16. Meanwhile, EBITDA after three quarters this year was PLN 13.6 million compared to PLN 14.5 million for the first three quarters of 2023, but after adjusting this category for the accounting impact of IFRS 16, there is an improvement of PLN 0.53 million to PLN 3.73 million after three quarters of this year.

In the third quarter, Sfinks opened three new restaurants: SPHINX in Poznan, and The Burgers by SPHINX in Gorzow Wielkopolski and in Komorniki near Poznan. At the same time, it was preparing other openings within the SPHINX network, including in Opole and in Lubna near Warsaw – both of these locations started operating after the end of the third quarter. Apart from new openings, the loyalty program and the Aperitif mobile app, which continues to see an increase in registered users – 735 thousand by the end of the third quarter, also contributed to the increase in network sales.

In the third quarter, Sfinks also signed a master franchise agreement, under which the SPHINX network is to be developed in Egypt and Saudi Arabia. The two-stage, ten-year agreement stipulates that Sfinks’ Egyptian partner first opens its own SPHINX restaurants, with the next stage allowing for the granting of sub-franchises to third parties. It is also planned to launch several SPHINX restaurants as part of the first stage. The launch of each one must be preceded by Sfinks’ approval and a franchise agreement.

“Our Egyptian partner is committed to developing the network based on our franchise, and this long-term cooperation can look very promising. We expect that next year will be a period of tests of the first locations, which will allow us to better assess the potential of this cooperation,” explains Sylwester Cacek.

In its periodic report, Sfinks Polska also presents data adjusted for the impact of IFRS 16. In this view, consolidated sales revenues for the first three quarters of 2024 amounted to PLN 67.17 million (PLN 79.52 million after three quarters of 2023), operating profit amounted to PLN 1.58 million (PLN 1.15 million after three quarters of 2023), net result amounted to PLN -2.98 million (PLN -3.70 million after three quarters in 2023), and the gross profitability sales indicator was 27.4% (compared to 23.8 % after three quarters in 2023).