Westlife Development Ltd. · CHHATTISGARH - 2 MAHARASHTRA - 127 TELANGANA - 25 KARNATAKA - 57 GOA -...
Transcript of Westlife Development Ltd. · CHHATTISGARH - 2 MAHARASHTRA - 127 TELANGANA - 25 KARNATAKA - 57 GOA -...
Westlife Development | 2019 | Confidential | February 01, 2019 | 1 www.westlife.co.in
Westlife Development Ltd.Hardcastle Restaurants Pvt. Ltd.
Corporate PresentationMarch, 2019
Westlife Development | 2019 | Confidential | February 01, 2019 | 2 www.westlife.co.in
Disclaimer
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 realized. Some of these expectations
may be based upon assumptions or judgments 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 realized 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 | 2019 | Confidential | February 01, 2019 | 3 www.westlife.co.in
McDonald’s leads globally
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
Westlife Development | 2019 | Confidential | February 01, 2019 | 4 www.westlife.co.in
Recognised in India as well
Great Place to Work® Award
- Among Top 10 company to
work for in Retail Industry –
2018 (4th year in a row)
Fortune India ‘Next 500’
– Giants of Tomorrow
Fulcrum Gold Award - Best
Consumer Products and
Retail sector campaign for
‘Flavours without Borders’
campaign
Go forth & Multiple Award
2017 – Best GTM concepts for
new restaurant opening and
EOTF
*Note: PCI is People Capital Index
Westlife Development | 2019 | Confidential | February 01, 2019 | 5 www.westlife.co.in
WFF – A nascent but rapidly growing category
QSR
USD 21.6 bn
IFF
USD 19.8 bn
WFF
USD 1.8 bn
IEO
USD 131 bn8.9%
9.2%
8.8%
13.4%
3
108.6
18
12.1
20
Mumbai Benchmark Asian City
IEO Monthly Frequency
2003 2013 2018
Source: Brand Track, Mumbai and Internal McDonald’s sources
Source: Euromonitor
IEO : Informal Eating Out; IFF: Indian Fast Food;
WFF: Western Fast Food
Estimated Growth
rates over 2017-22
15 year
CAGR 9.7%
15 year
CAGR 4.7%
Westlife Development | 2019 | Confidential | February 01, 2019 | 6 www.westlife.co.in
About Westlife Development Limited
One of the fastest
growing players in
India’s quick service
restaurant (QSR) sector
292* restaurants
across 40 cities
(as of Dec 2018)
Modern &
contemporary store
designs enhancing
Customer Experience
WDL through its
subsidiary HRPL
operates McDonald’s;
62% promoter holding
Robust Supply Chain;
Integrated Farm to
Fork Model
Wide range of menu
offering, servicing all
day and providing value
for money
182 McCafé's and
210 McDelivery
(as of Dec 2018)
Good Food Story –
Continuous improvement
to provide wholesome &
nutritious food
Note: WDL: Westlife Development Ltd; HRPL: Hardcastle Restaurants Private Ltd.
* System-wide HRPL stores
Westlife Development | 2019 | Confidential | February 01, 2019 | 7 www.westlife.co.in
Evolution of WDL and Key Milestones
FY95 – FY97
1995 - Started as a
Joint Venture
Oct 1996 - 1st store in
Mumbai
FY01 – FY03
Dec 2001 - Drive-Thru
started at Mumbai
(Kalamboli)
FY04 – FY06
Mar 2004 - MDS
started in Mumbai
Oct 2004 – Entered
south market
FY07 – FY09
Sep 2007 - 50th HRPL
Store in Mumbai
FY10 – FY12
May 2010 - Ownership status
changed to DL*
Oct 2010 - 100th HRPL store
in Bengaluru
FY13 – FY15
Oct 2013 - McCafe started in
Mumbai
Jun 2014 - 200th HRPL store in
Mumbai
FY16 – FY18
Sept 2015 - 50th McCafe
Mar 2016 - 250th HRPL store in
Mumbai
Dec 2016 - 100th McCafe
Mar 2018 - 150th McCafeNote: *DL – Development License
Stores are system-wide HRPL stores
STORE ADDITIONS
PRODUCT PLATFORMS & INNOVATIVE PRODUCT ADDITIONS
Chicken
McNuggets
2010
McFlurry
2011
McEgg
2012
Spice Fest
2012
McSpicy
2011
McAloo
Tikki
2004Breakfast
2010Masala Grill
2013
Veg Pops
2013
Royale
2014
CWT
2014
CPP
2015
Indi
McSpicy
2015
Maharaja Mac
2016/17
Good Food
Journey;
Rice Bowls 2018
Westlife Development | 2019 | Confidential | February 01, 2019 | 8 www.westlife.co.in
Strategic Levers
Our
RestaurantOur
BrandOur
People
Running great
restaurants
Right location and
Right Economies
Modern and
Contemporary designs
Food – Menu
and Value
Brand Extensions
Trust and
Permissibility
Talent
Management
High Performance
Culture
Financial Discipline
Training &
Development
Westlife Development | 2019 | Confidential | February 01, 2019 | 9 www.westlife.co.in
• Menu innovation and launched strong product platforms
• Integrated “farm to fork” supply chain
• Economies of scale, high food safety standards and product
consistency
• Continuously work with farmers on an extensive agronomy program
• Delivering wholesome and nutritious food options – The Good Food
Story
• 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
• 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 lac hours in training programs at restaurant level
and has various structured training programs for senior management
Solid Foundation – A Competitive
Advantage
Westlife Development | 2019 | Confidential | February 01, 2019 | 10 www.westlife.co.in
Vision 2022
BROADENING ACCESSIBILITY
OF BRAND MCDONALD’S
•400 – 500 restaurants
Presence in 45+ cities
• Investment of Rs 5+
bn
GROW BASELINE SALES
•Mid to high single digit SSSG%
•McCafé : 75 to 300-350
•McDelivery: 124 to 300-325
•80-100 EoTF restaurants
•Leverage other brand extensions
and menu in future
•Sales growth to Rs. 20 –
25 Bn
•Take EBITDA margin to
low to mid teens
•Restaurant level cash on
cash returns >20%
GROW MARKET SHARE
& MARGIN
Westlife Development | 2019 | Confidential | February 01, 2019 | 11 www.westlife.co.in
Broadening Accessibility Of Brand
McDonald's
OUR RESTAURANT
Westlife Development | 2019 | Confidential | February 01, 2019 | 12 www.westlife.co.in
Our Footprint
GUJARAT - 40
CHHATTISGARH - 2
MAHARASHTRA - 127
TELANGANA - 25
KARNATAKA - 57
GOA - 2
ANDHRA PRADESH - 4
PUDUCHERRY - 1
KERALA - 8
TAMIL NADU - 21
MADHYA PRADESH - 5
Total Restaurants – 292*
Presence in 40 cities
(as of Dec 2018)
14%
43%
1%
20%
2%
7%
0%1% 9%
1% 2%
Gujarat Maharashtra GoaKarnataka Kerala Tamil NaduPuducherry Andhra Pradesh TelanganaChattisgarh Madhya Pradesh
Note: India Map not to scaleNote: * System-wide HRPL stores
Westlife Development | 2019 | Confidential | February 01, 2019 | 13 www.westlife.co.in
Store Additions
FY12 FY13 FY14 FY15 FY16 FY17 FY18 9MFY19
129
161
184209
236258
277
292*
Over 3x stores in last ~9 years
FY11FY10
10787
* System-wide HRPL stores
Westlife Development | 2019 | Confidential | February 01, 2019 | 14 www.westlife.co.in
Achievements under ROP 2.0Initiatives under ROP 2.0
Restaurant Design
• New External Façade
• Pre-fabrication of parts of
the building structure
Equipment Options
• Localization of seating and
kitchen equipment, yet
providing an upgraded look
Operating Costs
• Use of energy saving
equipment
• Redesign of HVAC basis heat
map
• Improved labour productivity
Results of ROP 2.0 significantly
outperformed our targets
1x 0.8x 0.7x
24 months
12-18 months
~12 months
Negative
margins
Break
even
Positive
margins
and cash
flow
Avg
Development
Cost1
Cash
Breakeven1
ROM %1
2012 -14ROP 2.0
Target
ROP 2.0
Actual
Cash on Cash ROI1 to 10%+ in Year 1
Note: 1. Can vary basis restaurant type, region and presence of brand extensions
Westlife Development | 2019 | Confidential | February 01, 2019 | 15 www.westlife.co.in
New Business Unit Economics (ROP 2.0)
Average
Investment of
~INR 25 mn
Stores typically need 2-3
years to establish,
depending upon the brand
awareness in the city
Year 1: Positive
contribution to ROM%
Year 3: Sales: INR 40-
45 mn; Cash ROI:
20%+
Westlife Development | 2019 | Confidential | February 01, 2019 | 16 www.westlife.co.in
EOTF Design Enhancing Customer Experience
Our Restaurant Designs
Modern and contemporary store designs
Westlife Development | 2019 | Confidential | February 01, 2019 | 17 www.westlife.co.in
Grow Baseline Sales
OUR BRAND
Westlife Development | 2019 | Confidential | February 01, 2019 | 18 www.westlife.co.in
Chicken
Burger
Pizza
Beverages
Desserts
Delivery
Breakfast
Indian fast food
Others
Servicing multiple segments – A competitive
advantage
1 – Fortune India 2011
* Graphs not to scale, for representational purpose only
McDonald’s globally has the highest average unit
volume of $2.4 million1
McDonald’s India has wide exposure to the different
segments in QSR
BurgersOver 10 products with manyburgers that record annual sales of Rs 1+ billion
Wraps5 wraps
SidesStrong sides offering
Desserts$130 million category
BreakfastOnly organized WFF player in this space$2+ billion market
BeveragesWFF player with the widest variety in this space$4+ billion market
Menu : Strategic lever for driving AUV
Westlife Development | 2019 | Confidential | February 01, 2019 | 19 www.westlife.co.in
* 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 marketsegmentexposure
Delivery market New marketsegmentexposure
Coffee andSpecialty
beverages
Total marketsegmentexposure
Total market segment exposure for McDonald’s*
Brand extensions increase addressable
market and add more occasions
In-store for celebrations,
bonding and hanging out
McDelivery, Drive Thru and
breakfast for convenience
McCafé for experience
and indulgence
As we add brand extensions to
each restaurant, the results are
greater as a whole than the
individual parts resulting in
1+1+1=5
Westlife Development | 2019 | Confidential | February 01, 2019 | 20 www.westlife.co.in
Some of the initiatives and menu additions in TTM
Growing baseline sales by various
initiatives and menu additions
What’s Your Spice Fest Introduced Whole
Wheat Buns
National Basketball
Association Partnership
Egg Festival -
McBreakfast
Introduced Rice Bowls
Introduced Fruit SplashIntroduced McSaver Combos
Westlife Development | 2019 | Confidential | February 01, 2019 | 21 www.westlife.co.in
Growing baseline sales through brand
extensions
Organized café market is expected to be USD 2.25
bn by 2020 from USD 1 bn in 2014
McCafé brings premium coffee to India – 100%
Arabica and hand crafted 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 it’s opportunity beyond the QSR industry
Serves ~45 hot & cold beverages – cappuccinos,
smoothies, share shakes, frappes, iced teas & more
Overall the Company has 182 McCafes as of Dec
2018
McCafé goal is to become the café destination built around the premium coffee
platform at affordable price having unique relevant offering options of food
Westlife Development | 2019 | Confidential | February 01, 2019 | 22 www.westlife.co.in
Growing baseline sales through brand
extensions
Online food delivery business is USD 1.6Bn in
FY2019-20 and is likely to double to USD 3.2Bn in
FY20-211
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:
– Operations (Out time and delivery time is lot lower
than most other QSR),
– Variety of food and beverages (most of the QSR
don’t have full-fledged beverage and Breakfast play),
– Strong reach and penetration,
– Food offers
IF YOU CAN'T COME TO McDONALD'S, McDONALD'S WILL COME TO YOU
Source: 1) 2018, Redseer Consulting Research
Westlife Development | 2019 | Confidential | February 01, 2019 | 23 www.westlife.co.in
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
Westlife Development | 2019 | Confidential | February 01, 2019 | 24 www.westlife.co.in
Improving sales through technology
Launched Global McDonald’s App in India – feel a part of the crowd
Brings customers to unique offers that are customized just for them. Based on their past
orders, it puts together all their favorites 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 & customer is updated
Westlife Development | 2019 | Confidential | February 01, 2019 | 25 www.westlife.co.in
Building trust and permissibility
Soft serve is 100%
milk
96% fat free
McAloo tikki is a
balanced mealMcVeggie has
25% more dietary
fibres
No artificial colour,
preservatives or
flavours in our patties
40% less oil in our
mayo; Up to 11%
less calories in our
burgers
Up to 20% less
sodium in our
products
Whole wheat buns
with sesame lining
…By constantly improving our food
Most Breakfast
patties are grilled
or steamed
Westlife Development | 2019 | Confidential | February 01, 2019 | 26 www.westlife.co.in
Only country to have
SEPARATE Vegetarian and
Non Vegetarian Kitchens
Local tastes like “Aloo Tikki” & “Rice meal” in a uniquely McDonald’s form
Adapting
popular forms
like PUFF
Cultural Sensitivity & Menu Localization
Westlife Development | 2019 | Confidential | February 01, 2019 | 27 www.westlife.co.in
Tier 1 Supplier
Processing unit
Strong Long term
relationships with
most of our suppliers
/ vendors
Grower / Processor
• Lettuce growers
• Potato growers
• Poultry
• Coating systems
Tier 2 Supplier
InboundTransportation
OutboundTransportation
Distribution Center
• Noida
• Mumbai
• Calcutta
• Bangalore
Dedicated
fleet of multi-
temp and
single temp
trucks
Dedicated
fleet of
refrigerated
trucks
Radhakrishna Foodland is sole service provider
292
restaurants
across
40 cities
Return logistics(for plastic crates)
Farm to Fork Supply Chain Model
– A Competitive Advantage
RestaurantDistribution & Logistics Service Provider
Differentiating Factors
Temperature controlled movement and storage - utmost care taken of perishability & shelf life of each product
Major supply points network optimized – 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
Westlife Development | 2019 | Confidential | February 01, 2019 | 28 www.westlife.co.in
High Performance Culture
OUR PEOPLE
Westlife Development | 2019 | Confidential | February 01, 2019 | 29 www.westlife.co.in
Talent Management & High Performance Culture
High potential assessment – program to identify and train future leaders of the
organization
Building a succession & 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
Training & Development
Total employee count – Over 9000
Our People – Our Employees
Company incurs ~1.25 lac 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
Westlife Development | 2019 | Confidential | February 01, 2019 | 30 www.westlife.co.in
Grow Market Share & Margins
FINANCIAL DISCIPLINE
Westlife Development | 2019 | Confidential | February 01, 2019 | 31 www.westlife.co.in
1.7
%
3.1
%
8.4
%
3.4
% 6.5
%
5.1
%
1.0
%
8.7
%
8.4
%
20
.7% 2
5.1
%
24
.1%
25.7
%
14
.5%
Q2
FY
16
Q3 F
Y16
Q4 F
Y16
Q1
FY
17
Q2 F
Y17
Q3 F
Y17
Q4
FY
17
Q1 F
Y18
Q2 F
Y18
Q3
FY
18
Q4 F
Y18
Q1 F
Y19
Q2
FY
19
Q3 F
Y19
Healthy SSSG for 14 consecutive quarters by
focusing on delivering great customer
experience, menu innovation and growth
across Delivery, McCafe and Breakfast
Strong SSSG momentum leading to
strengthening of baseline
Sustained momentum in same store sales
resulted in higher average sales per
restaurant (AUV) & operational profitability
100
.0
100
.0
100
.0
100
.0
95.1
101
.7
103
.1
108
.4
98.3
108
.3
108
.4
109
.5
106
.9
117
.4
130.8
136
.9
13
2.6
147
.6
149.8
Q1 Q2 Q3 Q4
FY15* FY16 FY17 FY18 FY19
NOTE: *FY15 SSG normalized to base of 100
Westlife Development | 2019 | Confidential | February 01, 2019 | 32 www.westlife.co.in
Trend in Sales & SSG
7,403 7,643
8,334
9,308
11,349 10,624
-6.4%-5.9%
1.8%4.0%
15.8%
21.1%
-10%
-5%
0%
5%
10%
15%
20%
25%
-
2,000
4,000
6,000
8,000
10,000
12,000
FY14 FY15 FY16 FY17 FY18 9MFY19
(Rs. In mn)
Westlife Development | 2019 | Confidential | February 01, 2019 | 33 www.westlife.co.in
Trend in Gross Margins
56.9%
58.4%
60.0%60.7%
62.6%
63.9%
FY14 FY15 FY16 FY17 FY18 9MFY19
Westlife Development | 2019 | Confidential | February 01, 2019 | 34 www.westlife.co.in
Trend in ROM & Op. EBITDA
12.6%
8.7%
11.9%11.0%
13.1%
14.9%
FY14 FY15 FY16 FY17 FY18 9MFY19
Restaurant Operating Margins (ROM)
7.3%
2.7%
5.9% 5.3%
7.5%
9.4%
FY14 FY15 FY16 FY17 FY18 9MFY19
Operating EBITDA Margins
Westlife Development | 2019 | Confidential | February 01, 2019 | 35 www.westlife.co.in
Trend in PAT & Cash Profits
10
-291
-206
-121
129
332
FY14 FY15 FY16 FY17 FY18 9MFY19
Profit After Tax (PAT)
488
273
438
560
889
961
FY14 FY15 FY16 FY17 FY18 9MFY19
Cash Profits
(Rs. In mn)
Westlife Development | 2019 | Confidential | February 01, 2019 | 36 www.westlife.co.in
Shareholding Pattern of WDL
Westlife Development Ltd
(BSE : 505533)
100% Hardcastle Restaurants Pvt.
Ltd.
FII and Public38%Promoter
Group62%
Shareholding Pattern*
*Shareholding Pattern as on Dec 31, 2018
Major Public Institutional Shareholders
• Arisaig India Fund Limited
• SBI Mutual Fund
• Bay Capital Investments
• Tree Line Investment Management
Strong Promoter Commitment
Westlife Development | 2019 | Confidential | February 01, 2019 | 37 www.westlife.co.in
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