August 1, 2021

Telepizza will invest 120 million in three years for its expansion after the alliance of Pizza Hut

Telepizza will invest 120 million in three years for its expansion after the alliance of Pizza Hut



Telepizza will invest 120 million euros in the next three years, 40 million euros per year, to boost its expansion after the strategic alliance with Pizza Hut.

As part of its expansion plan, the company aims for a total of 250 net openings in the 2019-2021 period and expects to reach an underlying gross operating profit (EBITDA) of close to 100 million euros in 2021.

As part of the agreement with Pizza Hut, as of December 30, 2018, Telepizza has added more than 950 stores to its network, going from managing about 1,600 stores at the end of 2017 to more than 2,550 at the end of last year.

In addition, it expects to double its sales from approximately 550 million euros to 1,100 million euros this year and expects to accelerate its growth until reaching an annual rate above the sector until 2021.

On the other hand, the company does not rule out the closure of stores in saturated areas in Spain, Portugal and Latin America following the strategic alliance with Pizza Hut, although it is committed to opening 1,300 new stores over a period of 10 years.

PUT UP TO PIZZA HUT A 3.5% OF TELEPIZZA'S SALES

On the other hand and within the framework of the agreement, the group will charge Pizza Hut franchisees a 'royalty', generally 6%, and will pay Pizza Hut another 3.5% on sales of the Pizza Hut chain within the territories included in the agreement.

Regarding the changes of suppliers, the company has recognized that the alliance with Pizza Hut "significantly changes" the supply dynamics of the group although it emphasizes that doubling the size will allow entering into new negotiations with suppliers to obtain better purchasing conditions.

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