Restaurant Brands Asia Ltd

The Financial Year 2022-23 has been a phenomenal year marked by a strong recovery in the food services industry and a surge in the number of people dining out. This came on the back of the resilience shown by the Indian economy, even amidst rising inflation and slowdown across most global markets. It helped us stand-out and deliver a well-rounded performance.

Importantly, we maintained focus on fortifying our core business and made strategic investments in new brands and increasing guest consumption frequency. These efforts come in the wake of the improved growth prospects in the industry, and put us on track to become a leading QSR player both in India and Indonesia.

Our domestic operations comprise the businesses of Burger King? and an in-restaurant BKCafe?, both of which are resonating well with consumers and gaining ground. We responded to the demand by ramping up new restaurant launches.

A net of 76 Burger King? restaurants were added during FY 2022-23, and as on March 31, 2023, 391 restaurants are operational. Our efforts around building value leadership, with Stunner campaign featuring Hrithik Roshan and launch of Tasty Meals starting at Rs. 99, gained immense popularity and contributed to increased dine- ins. We are inspired by the immense brand value that Burger King? has garnered in the Indian market. Our winning menu is greatly appreciated by the Indian consumers. We have been successful in creating a youthful brand with unique marketing initiatives to become a part of millennials' topical conversation and in a language they like. This has struck a chord with them, as they look to associate with us. One such example is the hacking Hrithik Roshan campaign which went viral, and earned us the International CLIO Award. We continue with our expansion focus with another 15 restaurants under construction and 38 in the pipeline.

BK Cafe? expansion was more pronounced with 240 additions during the year, bringing the total count to 275 as on March 31, 2023- It has opened opportunities for incremental guest frequency and daypart order. Our efforts to build breakfast daypart has been highly appreciated by guests, as evident in rising footfalls in the morning. A lot of emphasis was on brand building through social media and collaboration with influencers. Although new, this business is already contributing to the incremental Average Daily Sales [ADS] of over Rs. 7,000 with high margins.

Our performance in FY 2022-23 reflected the success of expansion initiatives and the surge in the demand. We registered a healthy 52.56% growth in revenue from operations to Rs. 14,397 million. Improved operating leverage supported by scale and optimisation in supply chain, logistics and human resource resulted in gross margin expansion by 60 basis points to 66.37%. The Company level EBITDA was Rs. 1,654 million, higher by 83.37% year-on-year.

Happy to note that on side the substantial new restaurant openings the ADS grew by 18% to Rs. 1.18 Lakh, and the same restaurant sales grew by 23.1%. This demonstrates the strong pull of our brand.

Our own BK Mobile App revenue surged 327% supported by a 107% growth in installations to 6.2 million users. We are continuing investments in the App to further build the business along with aggregate partners.

Our menu architecture with a laddered approach, is designed to cater a wide range of price points with utmost focus on quality and taste suited to local preferences. This gives us an edge in the QSR space. The year saw us strengthen the value for money proposition that resonates with our target millennial audience. In continuation to our Stunner Menu with products priced at Rs. 50 and Rs. 70, we introduced unbeatable 3-in-1 meals comprising of Burger, Fries and Pepsi starting at an affordable price point of Rs.99-

On the premium side, four unique limited time Whoppers were launched including the Boss Whopper, which is the biggest Whopper having nine layers between the buns. Our Whopper portfolio also won the Nielsen BASES Menu Innovation Award 2022. A special

chicken menu was introduced for the South Indian market comprising chicken burgers [fried and grilled) and wings [boneless, fried and grilled).

BK Cafe? introduced winter specials of Cinnamon-flavoured drinks and Masala Chai.

As part of our journey to becoming a leading QSR company in Indonesia, we successfully launched Popeyes? Louisiana Chicken with record breaking day one transactions and a year of concerted efforts towards financial break-even on the Burger King? business.

We began the journey of financial consolidation with laying a strong foundation by building a motivated and fully engaged team. Keeping customer to the core, we carried out a well planned and detailed activity of menu architecture of the product portfolio with tiered pricing. This exercise involved extensive research including identifying menu variety and taste gaps, experimentation, and consumer tasting. We now have a winner menu that; is uncluttered, is aligned to local tastes, has strong branded value layer to drive traffic, has wide chicken offering that leads on taste and value, allows establishing Burger leadership through Whopper & Gold collection and has dessert offerings to increase occasions.

At the restaurant level, the focus was on improving guest experience by uplifting the overall infrastructure and improving the operational efficiency.

An extensive training of our restaurant team members was carried out to enable them to serve the winning menu with best-in-class experience.

We also invested on the CRM side to increase the frequency of our loyal customer base.

The early results have been encouraging, and we are proud to have got things right on the customer experience side. The strategy for the coming years is to improve the overall financial performance of the restaurant portfolio which could also lead to rationalisation of restaurant portfolio.

Popeyes? starts a new growth chapter. Indonesia is one of the largest chicken consuming nations, with fried chicken and rice being a staple. We look forward to delighting the guests with the best-in-class taste, bold flavours and a range of chicken formats, featuring both the global favourites and new items customised for local tastes.

I would specially like to mention Popeyes? grand launch in December 2022, which went on to break the previous all time first-day sales records of Popeyes? globally. I congratulate the entire team in Indonesia for the fantastic job done in building the products and launching the brand.

We are excited about this venture. 10 restaurants are already operational and doing good business. We plan to open 300 restaurants in the initial phase of 10 years.

The developments in Indonesia are inspiring. Our teams continue their work towards getting the business cash break-even and scaling. We also focus on exploring opportunities for synergies between the two brands and both the geographies in terms of capex utilisation, procurements and complementing each other's growth.

Sustainability remains an important aspect in our business. This starts with serving high-quality and greattasting food. All our ingredients are sustainably sourced with complete farm traceability, including 100% antibiotic-residue-free chicken.

In our commitment to the planet, we have optimally designed restaurants to consume low electricity and gas, ensuring low carbon footprint. We have significantly reduced plastic consumption across packaging and items served to guests. This year, we successfully met our Extended Producer Responsibility (EPR) targets with the help of a third-party recycler.

We care about people, both internally and externally. We promote girl education through the Company's in-restaurant collection programme for Room to Read. On the employee front, we have implemented multiple practices, towards enhancing satisfaction and engagement levels, lowering attrition and supporting their growth and development. I am proud that ours is an organisation that scores high on diversity and inclusivity and hires specially-abled individuals in India and Indonesia. Ourworkforce comprises -30% women employees in India and -39% women employees in Indonesia. This year, we have also focussed on improving mental wellness and learning & development of employees.

RBA is a young brand, and in a short span we have established a firm foundation. Our core Burger King? India business surpassed the halfway mark of opening 700 restaurants, and is witnessing great response from guests for our quality menu and value for money proposition. Burger King? Indonesia completed all groundwork for revitalising the business, and is on track for revival. The newer brands BK Cafe? and Popeyes? have strengthened our business, and provide opportunities to enhance guest consumption frequency.

The ambition going ahead is to ensure focussed growth. We look to consolidate existing efforts and stride ahead with a disciplined expansion strategy. Increased investments in technology and people will prove crucial as we grow. Our digital transformation, including uniform customer experience across all channels and upgrading to future- ready technology infrastructure, enhances our agility and efficiency for improved performance. The efforts on the CRM side, has improved our understanding of guests and provides actionable for improving guest experiences and engagements. Margin expansion remains a priority. We see ncreased opportunities for operating leverage led by our cluster-based restaurant launch strategy, growing scale and scope for synergies between ndian and Indonesian businesses.

In conclusion, I express my gratitude to all our stakeholders who have been with us through these formative years. As we forge towards a long-term journey, we humbly seek your continued ongoing trust and support.

Yours Sincerely,

Whole-time Director and Group Chief Executive Officer.