Westlife Development Limited May 2016

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Highest Annual Sales Per Store

Fortune India 2011

McDonald’s leads globally

3

Interbrand 2015 World’s 9th most valuable brand

Most Admired Company – Fortune 2014

16th Rank on Brand Equity’s MOST EXCITING BRANDS 2014

The Economic Times is an English-language Indian daily newspaper

published by the Bennett, Coleman & Co. Ltd. first published in 1961.

It is the world's second-most widely read English-language business

newspaper, after the Wall Street Journal

Brand Equity is a weekly color supplement that appears every

Wednesday, which covers marketing, advertising, media and market

research.

Number 1 in the QSR Category

recognized in India as well

4

Great Place to Work®

Award – Best company to

work for in Retail Industry -

2016

Make in India Award –

Excellence award in the

QSR category for 2015

HRPL BACKGROUND :

•Started as a Joint Venture in 1995 •Ownership status changed to DL* in May 2010 •DL develops sites at their own cost and pays

a royalty

MFA# KEY HIGHLIGHTS : •Right to own and operate McDonald’s

restaurants in Western and Southern India until 2030

• HRPL pays royalty and fees to McDonald’s

Corporation

First Restaurant in

Mumbai, 1996

HARDCASTLE RESTAURANTS

PVT. LTD.

(HRPL )

West and South

CONNAUGHT PLAZA

RESTAURANTS PVT. LTD.

(CPRL)

North and East

*DL: Development Licensee A Development Licensee, in the context of McDonald’s, means an entity which is granted franchise rights, by McDonald’s Corporation or its affiliates, to own and operate McDonald’s restaurants, to adopt and use the McDonald’s system to develop and run McDonald’s restaurants in a given area, and to advertise and use the McDonald’s brand name and trademarks for products sold at such restaurants. •Map of India is indicative # MFA : Master Franchise Agreement

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ownership structure

Westlife Development Ltd

(BSE : 505533)

100% Hardcastle

Restaurants Pvt. Ltd.

FII and Public

38%

Promoter Group

62%

Shareholding Pattern*

*As at Mar 31, 2016

6

building the eco system 1995-2012

1995-2012

Glocal 1995-96

Building the

FOUNDATION 1997-2003

GROWING the Category

2003-2012

7

building the eco system

glocal: cultural sensitivity

Only country to have

SEPARATE Vegetarian and

Non Vegetarian Kitchens

8

building the eco system

glocal: menu localization

Local tastes like “Aloo Tikki” in a uniquely McDonald’s form

Adapting popular

forms like the

PUFF

McAloo Tikki

Chicken McGrill

Pizza McPuff

9

building the eco system

glocal: building a local supply chain

Developed a

cold chain

Global suppliers with

local production

Creating direct linkage

to the farms

10

Over 95% localization

building the eco system

glocal: developing sustainable unit economics

• Local supply chain for equipment

• Right Sizing Restaurants • Optimizing Kitchen Capacity

• Over 95% of produce locally sourced • Tax Rationalization • Increased supplier capacity through

3rd party business

2003

1996

2003

-X%

2240 basis points improvement 1x

0.4x

Average Development Cost Restaurant Operating Margins

19

96

* Graphs not to scale, for representational purpose only

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creating the category Quick Service Restaurants (QSR)

12

creating the category

nascent category in 2003

Eating out was an

occasion

Of the 100 eating

occasions in a month,

people were eating

out only 3 times*

‘Housewives’

Our Number 1 competitor

* Source: Brand Track, Mumbai

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creating the category

driving up the average unit volume

CONVENIENCE For servicing all

occasions

VALUE For driving new

users and

frequency

MENU To provide

modern choices

for all day parts

14

creating the category

value: building block approach

Everyday

Affordability Filling

Affordable

Meals Place

to

refuel

2004 2009 2012

15

creating the category

through new stores and brand extensions

McDelivery Breakfast Kiosk

For all OCCASIONS that

the customer eats out

And for all

DAY PARTS

Across CUSTOMER segments

18

55

130

1996-2003 2004-2008 2009-2012

Store Count

16

creating the category

menu: modern choices with taste that consumers like

Chicken

McNuggets

2010

McFlurry

2011

McEgg

2012 Spice Fest

2012

McSpicy

2011

McAloo Tikki

2004

Breakfast

2009

17

Saucy Wraps

2014

creating the category

we drove the growth in the category

3

7.8

2003 2012

IEO Monthly Frequency, MUMBAI

1x

1.74 x

2003 2012

HRPL Average Volume Growth

Per Annum

(INR Mio)

* Source: Brand Track, Mumbai

IEO : Informal eating Out

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grow and dominate 2013 onwards

19

changing profile of category

QSR moved

from being an

occasion to a

destination to

refuel

As a Fad As a

status symbol

As a

necessity

2003 2009 2014

20

IEO

$ 112 Bn

QSR

$ 18 Bn

IFF

$ 16.7 Bn

WFF

$ 1.3 Bn

8%

7%

7%

12%

Estimated Growth in 2016

grow and dominate

IEO is growing, will continue to grow in the future as well

3

10 8.6

18

Mumbai Benchmark Asian

City

IEO Monthly Frequency

2003 2013

Source: Euromonitor IEO : Informal Eating Out; IFF: Indian Fast Food; WFF: Western Fast Food

Source: Brand Track, Mumbai

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60% of the population below

the age of 30

Western fast food driven by

Teens and YANKS

Macro factors will drive further growth

1x

1y 1z

1.7x

1.8y 2.8z

IEO IFF WFF

2008 2013

Source: Euromonitor Graph not to scale, for representation purpose only

22 22

*YANKS – Young Adults No Kids

levers for growth over the next 5 years

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levers for growth

1. Broadening Accessibility

3. Margin

Expansion

2. Growing Baseline

Sales

4. Growth through people

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broadening accessibility

Grow store

footprint

Unit

Economics

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High Streets

broadening accessibility

grow responsibly

BUILD REAL ESTATE

COMPETITIVE ADVANTAGE

• Balance between quality

real estate and pace

• Portfolio Approach

• Long Term Deals

Includes 2 Franchisee stores As of March 2016

Malls GROW RESPONSIBLY

• Getting the business

model and profit formula

right before scaling

• Keep evolving with

changing cost realities

7

YEA

RS

7 Y

EA

RS

6 Y

EA

RS

18 STORES

69 STORES

149 STORES

1997 - 2003 2004-2010 2011-2016

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broadening accessibility

building unit economics

Average investment of INR 23-25 Mio

Stores typically need 2-3 years to establish,

depending upon the brand awareness in the city

Year 3:

Sales: INR 40-50 Mio

Cash ROI: 20%+

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Developed new Restaurant Operating

Platform (ROP) 2.0

Average Development Cost*

Encouraging early results delivered by ROP 2.0

20

12

-14

Restaurant Operating Margins*

20

16

RO

P 2

.0

300 – 350 bps improvement for

new restaurants

2012

-14

20

16

R

OP

2.0

1x

0.8x

Cash breakeven* 2

01

2-1

4

20

16

R

OP

2.0

24

months 12-18

months

* Can vary basis restaurant type, region and presence of brand extensions

** Graphs not to scale, for representational purpose only

Cash on cash ROI* to 20%+ in 24 – 30 months

1/3 of Key,

Core and Non Core Cities Un-

penetrated

Balance

Potential of

600+ stores

Basis Global Index of an Asian city

1.32 restaurants per 100,000 people

190 Cities untapped in our region, since

current presence in 30 cities

broadening accessibility

improve brand access

Tamil Nadu 13 Restaurants

Chhattisgarh 1 Restaurant

Madhya Pradesh

3 Restaurants

Kerala 7 Restaurants

Gujarat 29

Restaurants

Telangana 21 Restaurants

Karnataka 52 Restaurants

Maharashtra 110 Restaurants

Significant potential in existing towns

and cities

Most cities and towns significantly

under penetrated

Indicates the number of stores in each state as

of Mar 2016 30

7 Y

EA

RS

7 Y

EA

RS

6 Y

EA

RS

1997 - 2003 2004-2010 2011-2016

NEX

T 6

-7

YEA

RS

214 – 264 Stores

149 STORES

69 STORES

18 STORES

2016 Onwards

450 - 500 restaurants by 2022

31

Years denote fiscal years

growing base line

Value

Menu

Brand

Extensions

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Making the brand ACCESSIBLE in NEW MARKETS

providing VALUE FOR MONEY, not a price point

Ad

din

g N

EW

USER

S t

o t

he

bra

nd

in

EX

ISTI

NG

ma

rke

ts

33

growing base line

new menu platforms

Platforms that leverage EXISTING

INVESTMENTS and capacity

Providing modern choices to

consumers of today

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growing base line

contemporary menu choices

Chicken McGrill McEgg Burger

Reduction in sodium content of French fries

and McNuggets

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Reduced fat sauces

growing base line

brand extensions

Brand extensions will continue to add to the baseline as our

offerings and reach grow

110-130 McCafé's by FY17E

24/7 McDelivery Service Breakfast Dessert Kiosks 36

Brand extensions add another touch point with

the consumer and a new occasion for customer to

walk-in

growing base line

brand extensions

Evolving customer interface and digital enablement

Strong operational processes and systems

FY14 FY15 FY16

McDelivery Sales

Role of Brand extensions – Increases

addressable base

* 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 parlors

$1.3b

1,723

$0.45b

$0.6b

$1.75b

$2.35b

Past market segment

exposure

Delivery market New market segment

exposure

Coffee and Specialty

beverages

Total market segment

exposure

Total market segment exposure for McDonald’s*

growing base line

re-imaging with brand extensions

Modernize the customer experience through restaurant re-imaging initiatives

Providing contemporary restaurant designs & relevant experience to our consumers

39

Base Line Value Menu Brand

Extensions

QSC Increased

Base Line

growing base line

through occasions, day parts and customer segments

Graph not to scale, for representation purpose only

40

margin expansion

41

margin expansion

operating leverage

Bulk of the cost incurred for operating In Store

Adding brand extensions helps grow sales, while optimizing assets

Diagram representative, not indicative of size of impact

In-store Business

McCafé

24 Hours

Breakfast McDelivery

Menu Management

Leverage cost

through scale

via effective

supply chain

management

margin expansion

levers

Building block on margin

All levers of the

business model

coming together

EBITDA Gross

Margin

Operating

Leverage

Royalty G&A EBITDA

Graph not to scale, for representation purpose only

43

people

44

people pipeline

Strong LEADERSHIP TEAM providing

strategic direction backed by an

experienced CROSS

FUNCTIONAL TEAM managing execution

Leadership team

committed to TALENT

MANAGEMENT,

investing over 20

days each year for

building pipeline

Investments in

LEARNING AND

DEVELOPMENT ,

especially in mid

management to

build skills for the

future

Engaging

7,000+ people

across 30

cities

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46

people

A deep

organization

Focused on Talent

Management

Vice Chairman

Legal & CS MD

Business Operations

Regional

Directors

Regional

Marketiing

Information

Technology

Business Excellence &

People Resources

People Resources &

Administration

Restaurant Solutions Group

New Product Development

Corporate Communications

Brand Extensions

Marketing & Menu

Management

Marketing

Menu Management

Finance & Accounts

Internal Audit

Investor Relations

Financial Planning

Accounting & Taxation

McOpCo Accounts

Supply Chain & QA

Supply Chain

Quality Assurance

Consumer & Business Insights

Development

450-500 stores by

2022

Growing baseline

Margin Expansion

People

in summary

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financial summary

48

store growth, sales and comparable sales trends

55 74 87 107 130 161 184 209

236

10 20 14 21 24

32 29 27 30

-100

-80

-60

-40

-20

0

20

40

0

50

100

150

200

250

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Total Stores New Stores

1,604 2,104 2,772 3,793

5,445

6,810 7,384

7,640 8,334

41%

31% 32% 37%

44%

25% 8% 3%

9%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Sales ( INR Mio) Sales Growth %

23% CAGR

49

19% 9% 12%

17% 22%

6%

-6% -6%

2%

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Comps%

margin trajectory

50

54.7% 56.0% 56.7% 57.1%

55.6% 56.0%

57.6% 58.4%

60.0%

52.0%

53.0%

54.0%

55.0%

56.0%

57.0%

58.0%

59.0%

60.0%

61.0%

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Gross Margin %

76 52 120 400

672 627 488

205

488

4.8% 2.5%

4.4%

10.5% 12.3%

9.2%

6.6%

2.7%

5.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

-

100

200

300

400

500

600

700

800

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

INR Mio

EBITDA EBITDA %

general & administration (G&A)

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

G&A 51

Outlook for FY17

Consumer sentiment expected to improve over next 6 months

Differentiated experience for our consumers through

Re-imaging

McCafé

Web & mobile platform driving significant growth for McDelivery

ROP 2.0 driving better RoI & efficient P&L on newer restaurants

52

established model for tapping into the potential

Real Estate

portfolio array

Provides competitive

differentiation

World’s

Largest QSR Brand

Brand connect with the target audience

Favorite Place and way

to eat

53

Indigenous Supply Chain for competitive

advantage

Farm to FORK

thank you

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