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Jubilant Foodworks Ltd.

BSE: 533155 Sector: Agri and agri inputs
NSE: JUBLFOOD ISIN Code: INE797F01020
BSE 00:00 | 08 Dec 536.95 -1.65
(-0.31%)
OPEN

539.95

HIGH

542.10

LOW

532.95

NSE 00:00 | 08 Dec 536.85 -1.85
(-0.34%)
OPEN

538.70

HIGH

541.95

LOW

532.95

OPEN 539.95
PREVIOUS CLOSE 538.60
VOLUME 42218
52-Week high 805.47
52-Week low 451.60
P/E 71.78
Mkt Cap.(Rs cr) 35,431
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 539.95
CLOSE 538.60
VOLUME 42218
52-Week high 805.47
52-Week low 451.60
P/E 71.78
Mkt Cap.(Rs cr) 35,431
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Jubilant Foodworks Ltd. (JUBLFOOD) - Chairman Speech

Company chairman speech

More than two years have passed since the onset of the Covid-19pandemic but the uncertainties are galore. Despite the growing pace of vaccinationsuccessive waves of new virulent infections continue to ripple worldwide. The supplybottlenecks and soaring food and energy costs further exacerbated by rising geopoliticaltensions have paved the way to persistent inflationary impulses world-over including ourkey markets.

Undoubtedly Covid has upended the world as we knew it. Decades ofbehaviour change have compressed into a few months. This led to an outpouring ofinnovation particularly in the Foodservice industry as people businesses andinstitutions found new and creative ways of dealing with the challenges.

Foodservices Industry Landscape

According to Euromonitor the Indian Foodservices market in 2021 valuedat $44 bn rebounded sharply from the low of $32 bn encountered in 2020. However itremains below the pre-pandemic level of $58 bn registered in 2019.

At Jubilant FoodWorks while navigating swiftly through the thenprevalent short-term issues the emphasis was placed on setting the business on asustainable profitable growth trajectory with our ‘Eyes on Tomorrow?.

This was achieved while factoring in the four long-term imperativesaccelerated by the pandemic in our strategic decision-making process.

? We see an increase in the pace of penetration growth. During thepandemic the preference to stay indoors eventually accelerated the consumer shift towardsonline food ordering. It has helped make non-home food much more acceptable outsidespecial occasions especially in the smaller towns.

? While Dine-In and On-Premise consumption will return fully we expectthe Delivery and Takeaway channel adoption to remain elevated.

? Technology and Digital will touch all parts of the business - bothcustomer-facing and back-end - and will become an increasingly important source ofcompetitive advantage. Consumers will be category-agnostic when it comes to expectationsof service.

? Within our category there will be an accelerated structural shift infavour of the organised sector and within that the big established credible brands willbe preferred. Consumers we know are increasingly choosing the reassurance and safety oftrusted brands.

The one concurrent theme across all these structural trends in theFoodservice industry is that your Company will be at the forefront of leading thesechanges.

Performance FY22

We are enthused to share that we have set an all-time revenueprofitability and network expansion record in FY22.

Revenue from Operations of Rs. 43311 million increased by 32.5%. Thesurge was driven by Domino?s like-for-like growth of 26.4%. EBITDA of Rs. 11046million increased by 44.1%. EBITDA margin at record 25.5% increased by 205 bps. Profitafter Tax of Rs. 4375 million increased by 87.2%. PAT margin of 10.1% increased by 295bps.

Our track record of generating strong free cash flow continued in theyear. The Board of Directors of the Company has recommended a dividend of Rs. 1.2 perequity share of the face value of Rs. 2 each amounting to Rs. 791.8 million subject toshareholders? approval at the Annual General Meeting.

In addition to the remarkable financial and operational progressregistered in our business we have made significant strides in investing in avenues thatwill become additional growth drivers for the Company and create substantial value for allour stakeholders. All this was done by following the blueprint of our five-pillaredstrategy.

Our five pillared strategy

The first of these is Dominant Dominos.

In Domino?s we have a very powerful brand. During the year wecrossed the milestone of opening our 1500th store. You will be happy to notethat India became the first market for Domino?s outside the USA to achieve this feat.

Achievement of this magnitude requires perseverance and dedication andwe would like to put on record our sincere appreciation for all our stakeholders who havehelped us achieve this unique feat.

We are also happy to share that we have received the prestigious GoldFranny Award for the fourth consecutive year. This prestigious recognition of your Companyby Domino?s Pizza Inc. is a testament to our exceptional operational performancestore growth and organisational dedication.

We added record 230 new stores and entered 48 new cities in FY22.Increasing our reach is helping us reduce our average delivery time. Now more than 70% ofour delivery orders are being delivered under 20 minutes. It?s no surprise that ourcustomer satisfaction scores as a result grew to highest-ever levels and are nowbest-in-class in the industry.

As stated earlier we see a clear line of sight to getting to 3000stores in the country in the medium term and we will attempt to achieve this milestoneexpeditiously. This will be through entering new towns and going deeper into existingcities by successfully executing our fortressing strategy.

Our second strategic pillar is Innovation and Value Focus.

It needs to be recognised that the Indian Foodservice market remainsvery shallow and narrow given its size and potential. The unorganised segment comprisingstreet stalls and eateries constitutes roughly 66% of the overall market by value.Therefore our constant endeavour is to improve our value-for-money quotient continuously.

Through improvement in process efficiencies and other cost improvementmeasures we can offer high-quality meals at an affordable price and even maintain thosevalue price points on a like-to-like product basis. A case in point is the price of ourEvery Day Value Offering. It has remained at the same attractive price since itsintroduction in FY18.

New menu offerings have also aimed to deliver consumers more of whatthey love. Working in this direction we introduced an overloaded pizza range to fortifycheese and chicken credentials. We also launched a platform extension for the two mostpopular categories on our sides - Garlic Bread and Lava cake.

Our next strategic pillar is Grow International.

Both our international markets - Sri Lanka and Bangladesh - performedwell despite the challenging operating conditions.

Despite high inflation Sri Lanka?s business delivered its highestever system sales growth of 80.9%. The pace of store expansion was accelerated with theopening of 9 new stores taking the total tally to 35 stores. Focussed efforts throughadequate digital ordering interventions resulted in the highest ever online orderingcontribution to delivery sales of 60.4%.

The performance of Domino?s Pizza in Bangladesh was encouraging.Despite being a dine-in-centric business over the last two years efforts centred aroundgrowing the delivery business. The system sales growth of 50.0% was on the back ofdelivery growth of 65.9%. Four new store openings increased the store count to nine inBangladesh.

We have prioritised investment in this important growth-market by fullyacquiring the Bangladesh subsidiary. This will help us rapidly realise the vast potentialof QSR in the currently underpenetrated market.

Our fourth strategic pillar is Building Digital and Data Strengths.

The mobile ordering contribution to online order sales for us jumpedfrom 38% at the end of FY16 to 97% by FY22. There are two elements contributing to thisjump shift. Firstly the consumers by themselves are embracing mobile commerce at a rapidpace. Secondly we are working in the background to make the switch to our assetssmoother personalised and more intuitive. Domino?s app continues to be thehighest-rated app in India within Foodservice on both Playstore and Appstore. This is atestament to constant improvements in our digital assets to delight our consumers in theirdigital ordering journey. It is also heartening to note that a dominant share of orderscomes through our owned assets.

We also recognise that digital and data strengths need to permeate theentire breadth of the organisation to allow us to be agile and genuinely customer-centric.As a result we continue to make requisite investments including moving to the Cloudarchitecture building a Data Lake creating dedicated Product Engineering and Data teamsand upgrading our backend platforms.

Our fifth strategic pillar is Building New Brand Portfolio.

We firmly believe that the Foodservice category has entered an excitingperiod of sustained growth and market making. We will see a significant increase in theformation of big brands across multiple cuisines and various categories.

In the journey of supporting the growth of Domino?s we haveinvested in key shared competencies and curated organisation-wide learnings which lendsupport to the entire portfolio of brands. These shared competencies are resilient androbust pan-India supply chain digital and data capabilities business developmentcapabilities and other support functions.

This year we introduced the iconic brand Popeyes to the chicken-lovingIndian consumers with the launch of flagship restaurants in Bengaluru. Chicken is one ofIndia?s largest and fastest-growing categories and is expected to proliferate inyears to come. Popeyes addition strategically complements our portfolio. We are confidentthat it will help us build another profitable sizeable scalable business. In the mediumterm we see a potential of opening around 250-300 Popeyes stores.

New Leadership

We have entered the new fiscal year with strong growth momentum. Thefive strategic pillars will continue to guide us in the years ahead and have a positiveand demonstrable impact on performance.

In our eventful journey our former CEO & WTD Mr. Pratik R. Potahas played a critical role and has been instrumental in laying a strong foundation for theCompany to progress towards a vision of becoming a multibrand multi-country food-techpowerhouse. On behalf of the board and all our employees we wish him success in his newendeavours.

Effective September 5 2022 Mr. Sameer Khetarpal will spearhead theorganisation as CEO & MD. The Board is confident that Mr. Khetarpal?s strengthsin building digital-first businesses in related spaces will provide the necessaryleadership to our firm. Throughout his career he has been driven by a passion for servingcustomers and building businesses by leveraging technology. We look forward to welcominghim on board and wish him luck as he takes the Company to new heights of success.

It is said that "Without trust you have nothing. With it you cando great things." Your Company has been fostering a culture of trust whiletransferring it to its consumers through quality hygienic and delicious food offerings.

With every step we take through your trust and support our eyes willcontinue to be on building a brighter and more sustainable tomorrow.

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