The 3 Ways BreadTalk Group Limited Makes Its Money

BreadTalk Group Limited (SGX: 5DA) is a food & beverage company that runs a number of popular F&B establishments, such as BreadTalk, Toastbox, and Din Tai Fung.

Investors who are interested in the company would need to understand how exactly it makes its money.

BreadTalk has three business segments, namely, Bakery, Food Atrium, and Restaurant. Here’s a chart showing the revenue contributions from each segment in 2016:

Source: BreadTalk 2016 annual report

The Bakery segment was the biggest revenue contributor to BreadTalk in 2016, accounting for 50% of the total revenue. This segment, which houses brands such as BreadTalk and Toastbox, is where BreadTalk manufactures and retails bakery and confectionery products. The company also earns franchise fees from this segment.

The Food Atrium atrium segment contributed 26% of BreadTalk’s revenue in 2016, making it the second largest segment. This is where BreadTalk runs food courts and food and drinks outlets. Investors in Singapore may be familiar with the Food Republic brand of food courts that are found in malls here. Food Republic is also found in a number of other Asian countries such as China, Malaysia, Thailand, and more.

The Restaurant segment accounted for the rest of BreadTalk’s revenue in 2016 (24%). The segment houses brands such as Din Tai Fung and Ramen Play. Most of its restaurants are based in Singapore.

In all, we can see that BreadTalk is more than just what its name may suggest. Its food empire clearly extends beyond bakery products. As of 31 March 2017, the company has a total of 855 bakery outlets, 57 food atriums, and 32 restaurants.

By understanding BreadTalk’s different sources of income, investors will be able to have better insight on the company’s future profitability.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.