the kfc index - frontera.net · kfc index | june 2016| sagaci research | confidential page 5 d in...

June 2016

The KFC IndexMeasuring PPP in Africa

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KFC Index | June 2016| Sagaci Research | Confidential

Copyright and disclaimer

© 2016 Sagaci Research Ltd. All rights reserved.

All information, analysis, forecasts and data provided by Sagaci Research Ltd is for the exclusive use of subscribing persons or organizations(including those using the service on a trial basis). All such content is copyrighted in the name of Sagaci Research, and as such no part of thiscontent may be reproduced, repackaged, copied or redistributed without the express consent of Sagaci Research Ltd.

All content, including forecasts, analysis and opinion, has been based on information and sources believed to be accurate and reliable at the timeof publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Sagaci Researchaccepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the publication. Allinformation is provided without warranty, and Sagaci Research makes no representation of warranty of any kind as to the accuracy orcompleteness of any information hereto contained.

Sagaci Research is in no way affiliated with KFC or its products. Any product names, logos, brands, and other trademarks or images featured orreferred to within the Sagaci Research PPP Index report are the property of their respective trademark holders. KFC does not sponsor or endorseSagaci Research, or any of its reports.

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Agenda

Index results

Appendix

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KFC Index shows Angolan Kwanza and Moroccan Dirham only overvalued; South African Rand and the Lesotho Loti most undervalued

-100 -20-80-90 100907060302010 50-30-40-50-60-70 -10 0 8040

-49%

Mauritius

Lesotho

-18%

-55%

-55%

-43%

%

-39%

South Africa

-29%

-30%

Ghana

Nigeria

Mozambique

Botswana

Namibia

Zambia

Swaziland

Egypt

Malawi

-27%

-52%

-38%

-26%

6%

-17%

0%

-1%

USA

Angola

Uganda

-18%

Kenya

Tanzania

28%

Morocco

12%Zimbabwe

Source: Oanda, Sagaci Research analysis

The KFC Index, against USD, June 2016

Overvalued currencies

Undervalued currencies

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In Angola, KFC 15 pc. bucket costs USD 31.9 based on official FX rate, while the same product costs USD 11.3 in South Africa

11.311.311.912.714.2

15.4

17.917.517.7

21.221.3

23.7

20.520.7

24.725.026.4

31.9

23.0

USA

An

gola

Mo

rocc

o

Ken

ya

Mal

awi

Egyp

t

Gh

ana

Nig

eria

1

Nam

ibia

1

Tan

zan

ia

Uga

nd

a

Mo

zam

biq

ue1

Mau

riti

us1

Bo

tsw

ana

Zam

bia

Leso

tho

Sou

th A

fric

a

Swaz

ilan

d

Zim

bab

we

Avg. price of 15 pc. chicken bucket in USD, June 16

Note: Price conversions are based on June 24th FX rate to USD; 1. Prices are for 21 pc. Bucket (LFL comparison used)Source: Sagaci Research analysis, Oanda.com

Overvalued currencies Undervalued currencies

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Slight changes in KFC Index between Q1 and Q2; Nigerian Naira moving from overvaluation by 8% to undervaluation by -27%

Source: Oanda, Sagaci Research analysis

The KFC Index, against USD, Q1 vs. Q2 2016

N.a.

N.a.

N.a.

Country KFC Index Q1 KFC Index Q2

Angola 72% 28%

Morocco 30% 6%

Zimbabwe 12% 12%

USA 0% 0%

Kenya 1% -1%

Uganda -17% -17%

Tanzania -13% -18%

Mauritius -27% -18%

Namibia -32% -26%

Nigeria 8% -27%

Ghana -15% -29%

Malawi -25% -30%

Mozambique 4% -38%

Egypt -34% -39%

Botswana -29% -43%

Swaziland N.a. -49%

Zambia N.a. -52%

Lesotho N.a. -55%



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Few countries KFC prices have changed between Q1 and Q2; Angola’s prices increase by 25%, no changed in Nigeria or Ghana

Q1 vs. Q2 KFC prices for selected countries- In LCU -

6,930

Angola

5,550

+25%

Q2 Price

Q1 Price

Mozambique

1,1201,030

+9%

4,000

Nigeria

4,000

0%

60 60

Ghana

0%

Only countries with price changes

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Real FX vs. KFC Index implied FX rate

Real vs. Implied FX rate- Real FX based on May 15th FX rate to USD -

* Zimbabwe uses USD currency nationwide after Zimbabwe Dollar became obsoleteSource: Sagaci Research analysis

CountryOfficial FX LCU/USD

24 June 2016Implied FX LCU/USD

June 2016Parallel FX LCU/USD

June 2016

Angola 165.9 211.68 580.0

Morocco 9.8 10.36 9.9

Zimbabwe* 1 1 -

Kenya 101.2 100.04 -

Uganda 3,382.3 2,801.12 -

Tanzania 2,195.9 1,800.72 -

Mauritius 35.5 28.94 -

Namibia 15.0 11.04 -

Nigeria 283.4 206.97 347.5

Ghana 3.9 2.80 -

Malawi 684.2 480.19 711.8

Mozambique 62.6 38.63 -

Egypt 8.9 5.46 11.0

Botswana 10.9 6.20 -

Swaziland 15.0 7.60 -

Zambia 10.9 5.20 -

Lesotho 15.0 6.80 -

South Africa 15.0 6.80 -



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-30

-39

-27

6

28

-33

-50

-40

5

-64

-70 -60 -50 -40 -30 -20 -10 0 10 20 30

%

Malawi

Morocco

Egypt

Angola

Nigeria

Black market for USD thriving in many African counties, implying a different consumer purchase power

Blackmarket FX implied index

Official FX implied index

Malawi

711.8

480.2

684.2

8.9

5.5

11.0

Egypt

580.0

211.7165.9

Angola

207.0

Nigeria

347.5

283.4

Real FX Blackmarket FXKFC Index implied FX

Adjusted KFC Index against USD based on black market FX, June 2016

Official FX vs. Black market FX vs. Implied FX- In LCU -

Source: Sagaci Research analysis

Nigerian Naira, Angolan

Kwanza and Egyptian Pound

value depreciates drastically in black market,

making currency

effectively undervalued

Nigerian Naira, Angolan

Kwanza and Egyptian Pound

value depreciates drastically in black market,

making currency

effectively undervalued

9.8 9.9

Morocco

10.4

Back up

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African currencies, FX rates and changes between Q1 and Q2

Country Currency NameFX LCU/USD

Q1 2016FX LCU/USD

Q2 2016Percent change

Q1-Q2 2016

Nigeria NGN Nigeria Naira 199.1 283.4 42.3%

Mozambique MZN Mozambican Metical 48.4 62.6 29.3%

Egypt EGP Egyptian Pound 7.8 8.9 13.2%

Morocco MAD Moroccan Dirham 9.7 9.8 0.7%

Tanzania TZS Tanzanian Shilling 2,191.0 2,195.9 0.2%

Ghana GHS Ghanaian Cedi 4.0 3.9 -0.1%

Mauritius MUR Mauritian Rupee 35.6 35.5 -0.4%

Kenya KES Kenyan Shilling 102.0 101.2 -0.8%

Uganda UGX Uganda Shilling 3,429.2 3,382.3 -1.4%

Zambia ZMW Zambian Kwacha 11.1 10.9 -1.5%

Botswana BWP Botswanan Pula 11.3 10.9 -3.3%

Angola AOA Angolan Kwanza 157.9 165.9 -4.8%

Namibia NAD Namibian Dollar 15.8 15.0 -5.1%

South Africa ZAR South African Rand 15.8 15.0 -5.1%

Malawi MWK Malawian Kwacha 730.1 684.2 -6.3%

Lesotho LSL Lesotho Loti 16.6 15.0 -9.6%

Swaziland SZL Swaziland Lilangeni 16.6 15.0 -9.6%

African currencies and FX rates

Source: Oanda, Sagaci Research analysisCurrency depreciation Currency appreciation

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Swaziland

Appendix 1: MethodologyKFC Index objectives and coverage

Sagaci Research’s KFC Index is built to analyze the Purchasing Power Parity among African countries, so as to discover the real power of consumers to buy goods & services

• Analysis enables a further understanding of real currency value and consumer buying power

• First publication to cover African countries,leveraging the presence of KFC in Africa

KFC is the only international fast food chain to be present in 18 African countries

• Study covers all 18 African countries in addition to the USA, France, Spain and the UK

Data availability and coverage in Africa

Egypt

Morocco

NigeriaGhana

Angola

Kenya

Uganda

Tanzania

Mozambique

Zambia

South Africa

Lesotho

Namibia

Botswana

Malawi

Zimbabwe Mauritius

No KFC

KFC available & coveredSource: Yum!, KFC

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Background: KFC presence in Africa

Country Entry year Franchisee Number of outlets

South Africa 1971 KFC South Africa 828 outlets

Egypt 1973 Americana Group 145 outlets

Nigeria 2009 Devyani International Nigeria Limited 27 outlets

Namibia 2012 KFC South Africa 16 outlets

Mauritius 1983 Food & Allied Group 14 outlets

Morocco 2001 Americana Group 13 outlets

Botswana 1992 Venture Partners Botswana 12 outlets

Mozambique 2007 Grupo Ibersol 10 outlets

Ghana 2011 Kuku Foods East Africa 9 outlets

Kenya 2011 Mohinani Group 9 outlets

Swaziland 1993 KFC South Africa 7 outlets

Angola 2012 Grupo Ibersol 6 outlets

Uganda 2013 Kuku Foods East Africa 6 outlets

Lesotho 2012 KFC South Africa 5 outlets

Tanzania 2013 Takura Investments and Kelvin James 5 outlets

Zambia 2011 KFC South Africa 3 outlets

Zimbabwe 2013 KFC South Africa 3 outlets

Malawi 2012 Afribrand Limited 1 outlet

Source: Yum!, KFC

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The Original Chicken bucket is selected to create index, data is collected first hand in each country

Original 15 pc. bucket

Pricing data collected first hand from local stores during 1st and 2nd weeks of June 2016

Conversion using June 24th FX rate1, and black market FX reported in different markets

Note: 1. Oanda used for official FX rates; Study based on 21 pc. bucket for Mauritius, Mozambique, Namibia and Nigeria (LFL comparison used)

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Our contact details

Julien Garcier

Managing Director

+33 6 25 05 06 07

+254 716 313 442

[email protected]

João Terlica

Managing Director

+34 625 088 888

[email protected]

www.sagaciresearch.com

mailto:[email protected]


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Contacts

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