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Westlife Development Ltd.Hardcastle Restaurants Pvt. Ltd.
Corporate Presentation
May, 2019
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 1
This presentation contains forward-looking statements that represent our beliefs, projections and predictions about future
events or our future performance. Forward-looking statements can be identified by terminology such as “may,” “will,”
“would,” “could,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” or the
negative of these terms or other similar expressions or phrases. These forward-looking statements are necessarily subjective
and involve known and unknown risks, uncertainties and other important factors that could cause our actual results,
performance or achievements or industry results to differ materially from any future results, performance or achievement
described in or implied by such statements. The forward-looking statements contained herein include statements about the
business prospects of Westlife Development Ltd. (‘Westlife Development’), its ability to attract customers, its affordable
platform, its expectation for revenue generation and its outlook. These statements are subject to the general risks inherent in
Westlife Development’s business. These expectations may or may not be realised. Some of these expectations may be
based upon assumptions or judgements that prove to be incorrect. In addition, Westlife Development’s business and
operations involve numerous risks and uncertainties, many of which are beyond the control of Westlife Development, which
could result in Westlife Development’s expectations not being realised or otherwise materially affect the financial condition,
results of operations and cash flows of Westlife Development. Additional information relating to the uncertainties affecting
Westlife Development’s business is contained in its filings with various regulators and the Bombay Stock Exchange (BSE).
The forward-looking statements are made only as of the date hereof, and Westlife Development does not undertake any
obligation to (and expressly disclaims any obligation to update any forward-looking statements to reflect events or
circumstances after the date such statements were made, or to reflect the occurrence of unanticipated events.
Westlife Development Ltd.
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 2
McDonald’s Leads Globally
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 3
Forbes 2018 Brand Ranking - World’s 11th most valuable brand
# 1. Apple
# 2. Google
# 3. Microsoft
# 4. Facebook
# 5. Amazon
# 6. Coca-Cola
# 7. Samsung
# 8. Disney
# 9. Toyota
# 10. AT&T
# 11. McDonald’s
# 12. GE
# 13. Mercedes-
Benz
# 14. Intel
# 15. Louis Vuitton
Recognised in India as well
Great Place to Work® Award - 2018
Among Top 10 companies to work for in
Retail Industry – 2018
(4th year in a row)
Fulcrum Gold Award - 2018
Best Consumer Products
and Retail sector campaign
for ‘Flavours without
Borders’ campaign
Go Forth & Multiply Award 2017
Best GTM concepts for
new restaurant opening and EOTF
Fortune India ‘Next 500’- 2016
Giants of Tomorrow*Note: PCI is People Capital Index
Won the PCI* Award, 2019
for being among the Best
50 PCI Companies
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 4
WFF - A nascent but rapidly growing category
IEO USD 131 bn
QSR USD 21.6 bn
IFF USD 19.8 bn
WFF USD 1.8 bn
Estimated growth rates
over 2017-22
13.4%
8.8%
9.2%
8.9%
IEO Monthly
Frequency
Source: Brand Track, Mumbai and Internal McDonald’s sources
15 Year
CAGR 9.7%
15 Year
CAGR 4.7%
Source: Euromonitor
IEO: Informal Eating Out; IFF: Indian Fast Food; WFF: Western Fast Food
3
108.6
18
12.1
20
Mumbai Benchmark Asian City
2003
2013
2018
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 5
Modern and contemporary store
designs enhancing customer
experience
Wide range of menu
offering, servicing all
day and providing value
for money
Robust Supply Chain;
Integrated
Farm to Fork model
Good Food Story-
Continuous improvement
to provide wholesome and
nutritious food
190 McCafé's and216 McDelivery(as of Mar, 2019)
One of the fastest grow-
ing players in India’s
Quick Service Restaurant
(QSR) sector
WDL through its
subsidiary HRPL operates
McDonald’s; 62%
promoter holding
296* restaurants
across 41 cities
(as of Mar, 2019)
About Westlife Development Limited
Note: WDL: Westlife Development Ltd; HRPL: Hardcastle
Restaurants Private Ltd.
* System-wide HRPL stores
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 6
Evolution of WDL and Key Milestones
Spice Fest
2012
Note: *DL – Development License
Stores are system-wide HRPL stores
PRODUCT PLATFORMS and INNOVATIVE PRODUCT ADDITIONS
McAloo
TikkiTM
2004
Chicken
McNuggetsTM
2010
McFlurryTM
2011
McEggTM
2012
Veg Pops
2013
Chicken Wings
2014
Indi McSpicyTM
2015
Good Food
Journey; Rice
Bowls 2018Breakfast
2010
McSpicyTM
2011
Masala Grill
2013
Royale
2014
Chicken Pops
2015
Maharaja MacTM
2016/17
STORE ADDITIONS
FY95 – FY97
1995 - Started as a Joint
Venture Oct, 1996 - 1st store
in Mumbai
FY04 – FY06
Mar, 2004 - MDS started in
Mumbai Oct, 2004 - Entered
south market
FY10 – FY12
May, 2010 - Ownership
status changed to DL*
Oct, 2010 - 100th HRPL
store in Bengaluru
FY16 – FY19
Sept, 2015 - 50th McCafe
Mar, 2016 - 250th HRPL store in
Mumbai Dec, 2016 - 100th
McCafe
Mar, 2018 - 150th McCafe
Jan, 2019 – Launched
McDonald’s App
FY01 – FY03
Dec, 2001 - Drive-thru
started at Mumbai
(Kalamboli)
FY07 – FY09
Sept, 2007 - 50th HRPL
store in Mumbai
FY13 – FY15
Oct, 2013 - McCafe started in
Mumbai Jun, 2014 - 200th
HRPL store in Mumbai
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 7
Training and
Development
Talent
Management
High Performance
Culture
Trust and
Permissibility
Food – Menu
and Value
Brand Extensions
Modern and
Contemporary Designs
Running Great
Restaurants
Strategic Levers
Financial Discipline
Our Restaurant Our Brand Our People
Right Location and
Right Economies
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 8
Solid Foundation - A Competitive Advantage
• Stores with contemporary design and the EoTF stores - ROP 2.0 platform model
• Diverse portfolio of restaurants (Malls, Food Courts, DT, High Street & Transit Points) built through intelligent market planning and penetration
• Long-term deals (normally 20 years vs industry average of 9-12 years)
• Strong unit economics - cash on cash ROI of 20% + in 24 - 30 months
• Menu innovation and launched strong product platforms
• Integrated “Farm to Fork” supplychain
• Economies ofscale, high food safety standards and product consistency
• Continuously working with farmers on an extensive agronomy program
• Delivering wholesome and nutritious food options - The Good Food Story
• One of the most experienced management team in QSR industry with deep knowledge of the business
• Strong people development and management processes in place
• Strong knowledge transfer from McDonald’s Corp.
• Company incurs ~1.25 lakh hours in training programs at restaurant level and has various structured training programs for senior management
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 9
GROW MARKET SHARE
AND MARGINGROW BASELINE SALES
BROADENING
ACCESSIBILITY OF BRAND
McDONALD’S
• Sales growth to Rs. 20 - 25 bn
• Take EBITDA margin from low
to mid teens
• Restaurant level cash on cash
returns >20%
• Mid to high single digit SSSG%
• McCafe: 75 to 300-350
• McDelivery: 124 to 300-325
• 80-100 EoTF restaurants
• Leverage other brand
extensions and menu in future
• 400-500 restaurants
Presence in 45+cities
• Investment of Rs. 5+bn
Vision 2022
$
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 10
Broadening Accessibility of Brand McDonald's
OUR RESTAURANT
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 11
MADHYA PRADESH 5
GUJARAT 40
CHHATTISGARH 2
MAHARASHTRA 129
TELANGANA 28
KARNATAKA 55
GOA 2
ANDHRA PRADESH 5
PUDUCHERRY 1
KERALA 8
TAMIL NADU 21
Our Footprint
Total restaurants – 296*
Presence in 41 cities
(as of Mar, 2019)
Note: * System-wide HRPL stores. India map not to scale.
2%
14% 1%
44%9%
19%
1%
2%0%
3%
7%
Madhya Pradesh Gujarat Chhattisgarh
Maharashtra Telangana Karnataka
Goa Andhra Pradesh Puducherry
Kerala Tamil Nadu
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 12
Store Additions
Over 3x stores in last ~9 years
FY-10 FY-11 FY-12 FY-13 FY-14 FY-15 FY-16 FY-17 FY-18 FY-19
87 107 129 161 184 209 236 258 277 296*
* System-wide HRPL stores.
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 13
Achievements under ROP 2.0
Initiatives under ROP 2.0 Results of ROP 2.0 significantly
outperformed our targets
Equipment Options
• Localisation of seating and kitchen equipment, yet providing an upgradedlook
Operating Costs• Use of energy saving equipments• Redesign of HVAC basis heat map• Improved labour productivity
Break
even
Avg.
Development
Cost1
2013-14ROP 2.0
Target
ROP 2.0Actual
1x
24Months
Negative margins
Positivemargins
and cash flow
12-18Months
~12Months
0.8x 0.7x
Cash
Break-even1
ROM %1
Note: 1. Can vary basis restaurant type, region and presence of brand extensions.
Cash on Cash ROI1 to 10%+ in Year 1
Restaurant Design
• New external Façade
• Pre-fabrication of parts of the building structure
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 14
New Business Unit Economics (ROP 2.0)
Stores typically need 2-3
years to establish,
depending upon the brand
awareness in the city
Year 3:
Sales: Rs. 40-45 mn;
Cash ROI 20%+
Year 1: Positive
contribution
to ROM%
Average Investment
of ~ Rs. 25 mn
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 15
Our Restaurant Designs
Modern and contemporary store designs
EoTF design enhancing customer experience
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 16
Grow Baseline Sales
OUR BRAND
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 17
Servicing multiple segments –A competitive advantage
Menu: Strategic lever for driving AUV
BurgersOver 10 products with many burgers that record annual salesof Rs. 1+bn
Wraps
5 wraps
SidesStrong sides offering
Desserts$130 mn category
BreakfastOnly organised WFF player in this space $2+ bn market
BeveragesWFF player with the widest variety in this space$4+ bn market1 – Fortune India 2011
* Graphs not to scale, for representational purpose only
McDonald’s globally has the highest
average unit volume of $2.4 mn1
McDonald’s India has wide exposure
to the different segments in QSR
Chicken
Burger
Pizza
Beverages
Desserts
Delivery
Breakfast
Indian fast food
Others
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 18
Brand extensions increase addressable market and add more occasions
Total market segment
exposure for McDonald’s* In-store for celebrations,
bonding and hanging out
McDelivery, Drive-thru and
breakfast for convenience
McCafé for experience and
indulgence
* Source: Euromonitor International - QSR Food Service Market, HRPL proprietary third party market segmentation study
Past market segment - Chicken, burger, pizza, other cuisine fast food + ice cream parlours
As we add brand extensions to eachrestaurant, the results are greater as a
whole than the individual parts resulting in
1+1+1=5
$1.3b
$0.45b
$0.6b
$1.75b
$2.35b
Past marketsegmentexposure
Deliverymarket
New marketsegmentexposure
Coffee andSpecialtybeverages
Total marketsegmentexposure
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 19
Growing baseline sales by various initiatives and menu additions
Some of the initiatives and menu additions in TTM
Introduced Rice Bowls
Introduced McSaver Combos
new new
What’s Your Spice Fest
Introduced Fruit SplashNational Basketball
Association Partnership
Introduced Whole Wheat Buns Egg Festival - McBreakfast
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 20
Growing baseline sales through brand extensions
McCafe’s goal is to become a cafe destination built around premium coffee at affordable prices
while also offering unique relevant food options
• Organised cafe market is expected to be $2.25 bn by 2020 from USD 1 bn in 2014
• McCafe brings premium coffee to India - 100% Arabica and handcrafted Barista
coffee
• With McCafe, HRPL gets an opportunity to serve customers at all hours and not
just during peak lunch and dinner time
• Enter the coffee and specialty beverages arena to broaden its opportunity beyond
the QSR industry
• Serves ~45 hot & cold beverages - cappuccinos, smoothies, share shakes,
frappes, iced teas & more
• Overall the Company has 190 McCafes as of Mar 2019
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 21
Growing baseline sales through brand extensions
If you can't come to McDonald's, McDonald's will come to you
• Online food delivery business is $ 1.6 bn in FY2019-20 and is likely to double to
$ 3.2 bn in FY20-21
• Customer convenience is the core of all our operations, so it’s a way of extending ease
and convenience by delivering food at customers’ doorsteps
• McDelivery services are available through our own channels as well as third party
aggregators.
Digital and tech initiatives aid in driving robust growth of ~4.3x in sales over
last 4 years
• Our competitive advantage:
o Operations (Out time and delivery time is lot lower than most other QSR),
o Variety of food and beverages (most of the QSR don’t have full-fledged beverage and breakfast play),
o Strong reach and penetration
o Food offers
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 22
Growing baseline sales through brand extensions
• Breakfast category was launched in 2010. McBreakfast, the first ever branded breakfast category in India was
introduced in 2017 McBreakfast offerings aims at providing wholesome nutritious breakfast rich in protein
• Primary purpose is to add convenience to the fast paced lives of our customers
• New breakfast menu is a good blend between the classic Continental and Indian offerings - Veg & Egg Muffins,
Masala Dosa Brioche, Scrambled Eggs, Hot Cake and Waffles
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 23
Brings customers to unique offers that are customised just for them. Based on their past orders, it puts together all their favourites in different combos at unbelievable prices.
Custom-made for Customer
Convenient store locator to find the nearest McDonald’s around.
Store Locator
McDelivery is also integrated with the McDonald’s Global App for customer convenience.
Integrated App
Customer gets exclusive deals on food they love, both in-store deals and deals on McDelivery. Also, makes it easy to redeem and enjoy great offers from mobile device anytime and anywhere.
Provides convenience and customer is updated
Improving sales through technology
Launched Global McDonald’s App in India - feel a part of the crowd
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 24
Building trust and permissibilit
…By constantly improving our food
Up to 20% less sodium in our products
Most breakfast patties are grilled or
steamed
McAloo TikkiTM is abalanced meal
40% less oil in our mayo; Up to 11% lesscalories in our burgers
McVeggieTM has 25% more dietary
fibres
No artificial colour, preservatives or flavours in
our patties
Whole Wheat Buns with sesame lining
Soft serve is 100%milk 96% fat free
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 25
Cultural Sensitivity & Menu Localisation
Only country to have
SEPARATE Vegetarian and
Non Vegetarian Kitchens
Adapting popular forms
like PUFF{Local tastes like “Aloo Tikki” & “Rice Meal” in a uniquely McDonald’s form}
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 26
Farm to Fork Supply Chain Model
– A Competitive Advantage
Return logistics
(for plastic crates)
Tier 2 Supplier Tier 1 Supplier Distribution & Logistics Service Provider Restaurant
Grower /Processor
Processing unit
• Lettuce growers• Potato growers• Poultry• Coating systems
• Noida• Mumbai• Kolkata• Bengaluru
Strong long-term relationships with most of our suppliers / vendors
Dedicated fleet of refrigerated trucks
Dedicated fleet of multi-temp and single temptrucks
InboundTransportation
DistributionCentre
OutboundTransportation
Radhakrishna Foodland is sole service provider
296* restaurants across 41 cities
*System-wide HRPL stores
Differentiating Factors
• Temperature controlled movement and storage - utmost care taken of perishability and shelf life of each product• Major supply points network optimised - either close to source of raw material or close to market - reduction in food miles• Significant economies to the system - A result of the partnering and long-term approach with suppliers• Over 95% local sourcing
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 27
High Performance Culture
OUR PEOPLE
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 28
Our People - Our Employees
• High potential assessment - Program to identify and train future leaders of the organisation
• Building a succession and talent pipeline - Ensure readiness of our talent pool to source future positions which may emerge
• Management development program - Managers trained on skills like Behavioural Event Interviewing Skills, Situational
Leadership workshop among many others
• Total employee count - Over 9000
Talent Management and High Performance Culture
• Company incurs ~1.25 lakh training hours annually for restaurant level operations across different formats and work areas
• HRPL also conducts various management training programs and workshops enabling them to improve on required skills
and knowledge and be future managers
Training and Development
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 29
Grow Market Share and Margin
FINANCIAL DISCIPLINE
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 30
Strong SSSG momentum leading to
strengthening of baseline
Healthy SSSG for 15 consecutive quarters by
focusing on delivering great customer
experience, menu innovation and growth
across Delivery, McCafe and Breakfast
Sustained momentum in same store sales
resulted in higher average sales per
restaurant (AUV) and operational profitability
1.7
%
3.1
%
8.4
%
3.4
% 6.5
%
5.1
%
1.0
%
8.7
%
8.4
%
20
.7%
25
.1%
24
.1%
25
.7%
14
.5%
5.6
%
Q2
FY
16
Q3
FY
16
Q4
FY
16
Q1
FY
17
Q2
FY
17
Q3
FY
17
Q4
FY
17
Q1
FY
18
Q2
FY
18
Q3
FY
18
Q4
FY
18
Q1
FY
19
Q2
FY
19
Q3
FY
19
Q4
FY
19
10
0.0
10
0.0
10
0.0
10
0.0
95
.1
10
1.7
10
3.1
10
8.4
98
.3
10
8.3
10
8.4
10
9.5
10
6.9
11
7.4
13
0.8
13
6.9
13
2.6
14
7.6
14
9.8
14
4.6
Q1 Q2 Q3 Q4
FY15* FY16 FY17 FY18 FY19
NOTE: *FY15 SSG normalised to base of 100
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 31
Trend in Sales & SSG(Rs. in mn)
7,403 7,643 8,334
9,308
11,349
14,016
-6.4% -5.9%
1.8%
4.0%
15.8%17.0%
-10%
-5%
0%
5%
10%
15%
20%
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
FY14 FY15 FY16 FY17 FY18 FY19
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 32
Trend in Gross Margins
56.9%
58.4%
60.0%60.7%
62.6%
63.9%
FY14 FY15 FY16 FY17 FY18 FY19
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 33
Trend in ROM & Op. EBITDA
Restaurant Operating Margins (ROM)
Operating EBITDA Margins
12.6%
8.7%
11.9% 11.0%13.1%
14.6%
FY14 FY15 FY16 FY17 FY18 FY19
7.3%
2.7%
5.9% 5.3%
7.5%9.1%
FY14 FY15 FY16 FY17 FY18 FY19
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 34
Trend in PAT & Cash Profits
(Rs. in mn)
488
273
438
560
889
1,258
FY14 FY15 FY16 FY17 FY18 FY19
10
-291
-206
-121
129
403
FY14 FY15 FY16 FY17 FY18 FY19
Profit After Tax (PAT) Cash Profits
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 35
FII and Public38%Promoter
Group62%
Shareholding Pattern*
• Major Public Institutional Shareholders
• Arisaig India Fund Limited
• SBI Mutual Fund
• Bay Capital Investments
• Tree Line Investment Management
• Wellington Management Company
• ICICI Prudential Life Insurance Company
Shareholding Pattern of WDL
Strong Promoter Commitment
Westlife
Development Ltd.
(BSE: 505533)
Hardcastle
Restaurants
Pvt. Ltd.
100%
*Shareholding Pattern as on Mar 31, 2019
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 36
THANK YOUIR Contact
For additional information:
Devanshi Dhruva
Investor Relations
(+91 22) 4913 5306
www.westlife.co.in
www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 37