hardcastle restaurants pvt. ltd. - westlife

Westlife Development Ltd.Hardcastle Restaurants Pvt. Ltd.

Corporate Presentation

May, 2019

www.westlife.co.inWestlife Development | 2019 | Confidential | May, 2019 | 1

http://www.westlife.co.in/

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.



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


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



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



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



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



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



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



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

$



Broadening Accessibility of Brand McDonald's

OUR RESTAURANT



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



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.



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



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



Our Restaurant Designs

Modern and contemporary store designs

EoTF design enhancing customer experience



Grow Baseline Sales

OUR BRAND



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



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



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



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




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




• 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



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



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



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}



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



High Performance Culture

OUR PEOPLE



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



Grow Market Share and Margin

FINANCIAL DISCIPLINE



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



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



Trend in Gross Margins

56.9%

58.4%

60.0%60.7%

62.6%

63.9%




Trend in ROM & Op. EBITDA

Restaurant Operating Margins (ROM)

Operating EBITDA Margins

12.6%

8.7%

11.9% 11.0%13.1%

14.6%


7.3%

2.7%

5.9% 5.3%

7.5%9.1%




Trend in PAT & Cash Profits

(Rs. in mn)

488

273

438

560

889

1,258


10

-291

-206

-121

129

403


Profit After Tax (PAT) Cash Profits



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



THANK YOUIR Contact

For additional information:

Devanshi Dhruva

Investor Relations

(+91 22) 4913 5306

[email protected]

www.westlife.co.in


mailto:[email protected]



hardcastle restaurants pvt. ltd. - westlife

Documents