Shakey's Bounces Back To Profitability In 2021

Shakey’s Pizza Asia Ventures, Inc (PSE: PIZZA), the Philippines’ leading full-service restaurant chain, bounces back to profitability in 2021, posting higher systemwide sales and reversing its 2020 net loss.

Photo Insert: The company posted higher systemwide sales and reversed its 2020 net loss.

PIZZA reports 2021 systemwide sales of Php 7.01 billion, a growth of 6% versus the same period last year. Fourth-quarter systemwide sales stand at Php 2.17 billion, up 18% year-on-year, with same-store sales growth (SSSG) registering at 5%.

The Company saw a surge in dine-in as the holiday season kicked in amidst loosened quarantine restrictions in the fourth quarter. Earnings before interest, tax, depreciation, and amortization (EBITDA) land at Php 1.02 billion for the year, more than double that of 2020. EBITDA margins jumped to double-digit territory, improving from 8.8% to 18.6%.

All business units report a positive bottom line for 2021, resulting in an unaudited net income of Php 121 million for PIZZA, reversing the net loss of Php 254 million reported in 2020. Given the strong performance in the fourth quarter, 4Q 2021 net income amounts to Php 156 million.

Vic Gregorio, PIZZA’s President and Chief Executive Officer, said, “The fourth quarter was quite significant for us. Quarantine restrictions were easing. The season was festive, and more guests were choosing to eat out with their families and friends to enjoy the complete dine-in experience. We took advantage of that to create momentum and were rewarded with a strong performance, a testament to the continued loyalty of our guests in our brands.”

“Despite the crisis in 2020, we maintained our long-term view on sustainable growth. We made a bold decision to re-ignite our expansion plan, purposefully investing in our brands and our stores. We believe that these continuous investments amidst the pandemic will fuel our 2021 growth momentum toward a stronger 2022 reopening play,” Gregorio continued.

PIZZA grew its store network in 2021, reaching 316 with the addition of 37 outlets. With this expansion, the Company has more than doubled the number of its Peri-Peri outlets since the brand’s acquisition in June 2019. PIZZA has also built two stand-alone stores for its R&B milk tea franchise in Metro Manila. At the end of 2021, the Company also re-launched artisan pizza concept Project Pie, a build-your-own pizza restaurant originally introduced in 2013.

Gregorio also said that cutting-edge delivery service remains to be a key pillar enabling the company’s growth. The pandemic shifted consumer behavior, favoring off-premise channels.

“With the extensive investments in our digital infrastructure, we aim to exceed guest expectations and elevate the Shakey’s off-premise experience”, he stated.

Thus, during the second half of 2021, PIZZA launched its new and improved Shakey’s Super App and its game-changing ‘31-Minute Delivery: If It’s Late, It’s Free’ guarantee anywhere in Metro Manila. Moreover, the Company’s recent acquisition of Potato Corner is expected to further boost PIZZA’s reopening play in 2022.

PIZZA Chief Financial Officer Manny del Barrio sees 2022 systemwide sales and revenues return to pre-pandemic level, likely surpassing 2019 figures with the addition of Potato Corner.

“We are excited with what Potato Corner can bring to the Company, especially as the brand celebrates its 30th anniversary this year. Potato Corner fits perfectly with our vision to build and scale a portfolio of industry-leading WOW brands with strong brand equity and industry-leading margins,” said Del Barrio.

For 2022, PIZZA is budgeting more than Php 650 million in capital expenditures, bulk of which is allocated to the acceleration of its store network expansion. PIZZA is targeting to open at least 192 stores for the group, including 42 new stores for existing brands and 150 outlets for Potato Corner.

“With investments and acquisitions made even in the midst of the pandemic, barring any major disruptions, we see our 2023 bottom line exceeding pre-pandemic level,” del Barrio added.

Gregorio concluded, “The pandemic has brought a lot of challenges to our business, but we believe that crisis and opportunity are sides of the same coin. Over the past two years, we have learned many lessons that allowed us to remain resilient, and we do not want any of these to go to waste. To ensure our continued relevance and vitality, we need to think and act differently – to evolve and adapt as circumstances arise. In doing so, not only do we prepare ourselves for short-term headwinds, but we also position ourselves to bounce back and beyond pre-COVID levels, creating lasting value for our guests and producing strong returns in the medium-term and long-term.”

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