Our performance underscores our commitment to drive growth, enhance
operational efficiency, focus on profitability and deliver value to all our stakeholders.
Dear Shareholders,
I am pleased to share with you the progress and achievements of
Restaurant Brands Asia Limited (RBAL) for the financial year 2023-24. Our performance
underscores our commitment to drive growth, enhance operational efficiency, focus on
profitability and deliver value to all our stakeholders. We have demonstrated our inherent
strength by growing our business in the backdrop of a slowdown in consumer spending and a
challenging macroeconomic environment. As we have remained steadfast in our commitment to
strengthen our foundation, we remain strongly committed on our path to create value in
coming years.
Before I share more on the results of the past year, I am grateful to
each and every one of the 13,000+ employees across 630 restaurants in India and
Indonesia.Eachoneofthemhaveshown unwavering commitment to providing nothing but the best
experience and food to our guests in every restaurant. Our leadership team is focused on
our shared goals with a spirit of Hunger, Humility and Hardwork. Our operations in India
consists of the business of BURGER KING? and an in-restaurant BK Caf?, with presence
all across India. We have the exclusive master franchisee rights for the entire country
and are proud to share that we are now present in 107 cities across the country. During
the financial year, we opened a net of 64 restaurants, bringingthetotalnumberofoperational
restaurants to 455. BK Caf? launched in FY 22 has led to incremental sales and gross
margins. Last financial year we added 76 Cafes, taking the total number up to 351. This
expansion demonstrates our confidence in the Indian market and our ambitious plans to
further strengthen our presence within the country. We will continue our disciplined store
expansion as we see tremendous opportunities for growth across all regions. Our revenue
from operations for FY 24 was at C17,601 million against C14,397 million in
FY 23, growing by 22.3% year-on-year. Our same-store sales growth (SSSG) for the full year
has been 2.9%, driven by increased footfalls. Notably, SSSG was positive in every quarter
of the financial year, which was a result of our business strategy focussed on value
leadership. Our Gross Margins expanded from 66.4% in FY 23 to 67.0% in FY 24. The upshot
of increasing sales and gross margins was that we saw our highest ever company EBITDA (Pre
Ind AS 116) of C753 million in FY 24; an increase of 109% increase year on year.
Innovations and New Platforms
Ever since our inception, with the biggest taste test ever conducted
Burger King has always been at the forefront on Taste. We continue to build our menu and
promotions with a firm conviction and consumer validation that BK menu tastes better!
Last financial year, we focused on our signature product, the WHOPPER?
which is a one of a kind offering in the QSR category. A new campaign, ‘Swaad Aisa,
India Jaisa!' was inspired by the culinary and cultural nuance of India. The campaign
focussed in the Taste of our WHOPPER? being in line with the what our guests in India
expect from their favourite food. The campaign was executed in three different languages
to create a deeper cultural connection with our consumers. We continued to innovate and
improvedourPremiumwrapsportfolio, enhanced our chicken offerings and expanded our BK
Caf?, menu. We launched chicken nuggets, which is a very popular snack amongst the
youth, with a unique crunchy texture and flavourprofile.WealsoimprovedtheBK chicken burger
with 50% more chicken to make the product even more value for money. We also added Premium
Wraps to our king's collection range to offer consumers our
winning taste of the soft Paneer and Fiery Chicken in another format. On the caf? menu we
added softer, fluffier muffins and Iced Coffee beverages. These consumer insights driven
innovations support our endeavours to build the most loved brand in the QSR category.
Value Leadership
We consistently endeavour to offer our guests, best value for their
money. Whether it was the 2 for 50 campaign launched in 2017, or the Stunner Menu or more
recently the 99 Tasty Meals proposition. In April 2023, we launched ‘Tasty Meals at C99'
which is a combination of a burger, fries and a drinks at only C99. This program
has given us significant improvement in our Dine in traffic. We have continued on our
value strategy and the recently launched‘2for79'offering,anattractive
proposition to maintain our "value" leadership and drive incremental
transactions.
Digital Transformation and Customer Engagement
King'sJourney(DigitalTransformation) rollout is a path to provide
uniform customer experience at all "customer touchpoints". The King's
Journey rollout, which includes self-ordering kiosks, BK app-based ordering for dine in
and QR code based ordering with table service, has been well received by our customers.
Currently, more than 200 restaurants offer a 100% digital ordering experience.
Self-ordering kiosks offer several merits like,
Our focus is on value for money, relevant innovation, guest experience
and operational efficiency.
Operational Efficiency, Order accuracy, Customization basis guest
preference and an overall enhanced Customer Experience.
Challenges in Indonesia
Geopolitical issues overseas have impacted global QSR chains in
Indonesia. This adversely impacted our Indonesia business, both BURGER KING? and
POPEYES?, in the second half of the year. We undertook several measures to mitigate the
impact of these unforeseen challenges. As a first step, we made a decisive pivot to push
delivery sales. We halted all new restaurant growth and in fact closed down 26 Burger King
restaurants and consolidated the base to 150 operational BK restaurants. We significantly
reduced corporate overheads. While we focus on efficiencies in the business model, we
continue to focus on sales growth through relevant innovations.
In Indonesia, we have identified a strong market for fried chicken. We
improved the taste and quality of our classic crispy chicken and also launched two new
variants of spicy option. With this, BK Indonesia has the widest range of fried chicken
offering amongst all QSRs. We also focussed on increasing the uptake of our burgers with
value driven promotions and taste innovations. We have made an effort to sustain dine in
sales, supported by a very targeted marketing campaign.
For Popeyes Indonesia, we opened 15 new restaurants this year, bringing
our total to 25. Our strategy focuses on delivering improved guest experience and great
quality products. We also offer 100% table service in all POPEYES? stores. We continue to
build brand awareness through digital assets, local store marketing and adding unique
product offerings. Going forward, we aim to improve the digital-first experience and have
launched the POPEYES? app to drive better brand engagement.
Creating a Culture of Learning and Growing
We at Burger King believe that we are
responsibleforbuildingentrepreneurial spirit and not just employment. We nurture and hone
internal talent to take up higher role through behavioural interventions at various levels
in the organisation. Our flagship programme ‘Queens at BK' has been instrumental
in mentoring and shaping young women employees at our restaurants to become future
leaders. Today we have nearly 10% restaurants being successfully lead by female managers
as strong business leaders.
Building a Responsible Brand
As part of our responsibility towards our food, planet and people, our
food is free of synthetic colours and artificial flavours. We have introduced reusable
glasses in Dine in as well as Delivery to phase out single use plastic application in our
restaurants and reduce overall usage of paper. Our waste cooking oil value chain ensures
proper disposal for bio-diesel production. Additionally, we prioritise responsible
sourcing for all our ingredients, adhering to Indian and
internationallyacceptedstandards.Our long term projects include providing better nutrition
by reducing sodium, fats and sugar from across our menu items.
Looking Ahead
Our guidance for FY24 was to open 450 restaurants and we exceeded this
target by reaching 455, as of March 31st. We plan to reach a restaurant count of 510 by
March 31, 2025. In addition, we aim to continue on our path to strengthen the business
model and target a 2% GP improvement by FY27 through various measures. We continue to
strive to achieve operating cash break even in the Indonesia business, as we navigate
geopolitical challenges.
Last year presented numerous challenges, but our focus on value for
money, relevant innovation, guest experience and operational efficiency have enabled us to
navigate headwinds successfully. In closing, I would like to express my heartfelt
gratitude to our dedicated team, loyal consumers and all our stakeholders. Your trust and
commitment are the foundation of our success. As we move forward, we remain focused on
delivering exceptional value and strengthening our position in the QSR industry. Thank you
for your continued support.
Thank you for your continued support. |
Warm regards, |
Rajeev Varman |
Whole-time Director and Group Chief |
Executive Officer |