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Devyani International Limited Q1 FY25 Earnings Conference Call Summary
Key Executives • Non-Executive Chairman: Ravi Jaipuria • CFO: Manish Dawar
Store Expansion • 54 new stores added, total now 1,836. • Strategy focuses on underdeveloped markets and enhancing customer experience. • Targeting 2,000 stores by fiscal year-end.
Financial Performance • Operating revenue: Rs. 1,222 crore (44.3% YoY increase). • Indian operations: 11.7% quarter-on-quarter growth. • Gross margins: Flat at 69.2%. • Consolidated operating EBITDA: Rs. 141 crore (47% growth). • Nigerian operations faced a loss of Rs. 22.5 crore due to currency depreciation.
Brand Performance • KFC India: 21 new stores, 12.3% revenue growth. • Pizza Hut and Costa Coffee also expanded store counts. • International segment (including Thailand): Rs. 390 crore in revenue.
Consumer Behavior and Market Trends • No significant changes in consumer behavior noted. • KFC's revenue from aggregator platforms remains stable. • Opportunities identified for dine-in service improvements.
Product Innovation and Marketing • Ongoing efforts to attract younger audiences. • New product launches and marketing campaigns introduced. • Pizza Hut's revival linked to new products and marketing efforts.
Future Outlook • Optimism about growth in the QSR industry, especially in India. • Anticipation of improved consumer sentiment during the festive season. • Cautious approach to new store openings until brand stabilization.
Currency and Financial Reporting • Forex losses treatment discussed; Nigeria records all in P&L. • Continuous depreciation of the Nigerian Naira leads to losses.
Additional Insights • Positive same-store sales growth in Thailand, specifics not disclosed. • Increased marketing spend for Pizza Hut to stabilize post-COVID. • Guidance for over 100 new KFC locations and 50-60 Costa Coffee stores for the year.
Devyani International Limited Q4 & FY’24 Earnings Conference Call Summary
Key Executives and Overview • Date of Call: May 14, 2024 • Participants: Non-Executive Chairman Ravi Jaipuria, CFO Manish Dawar • Focus: Financial performance for Q4 and fiscal year 2023-24
Strategic Expansion • New Stores: 256 new stores opened, including 47 in Q4 • Acquisition: 283 KFC stores in Thailand, enhancing international presence • Growth Strategy: Emphasis on food courts in response to travel and tourism growth • Partnership: Collaboration with PVR INOX for food courts in shopping malls
Financial Highlights • Total Store Count: 1,782 stores post-acquisition • Operating Revenue: INR 3,556 crore for FY’24 (19% YoY increase) • Q4 Revenue: INR 1,047 crore (38.7% increase) • Gross Margins: Improved to 70.3% for the year; Q4 margins affected by forex loss • Brand Contribution: Decreased to 15.5% due to lower average daily sales and currency challenges • Total Debt: INR 910 crore with a gearing ratio below 1
Brand Performance • KFC: 106 new stores, Q4 revenue of INR 494 crore • Pizza Hut: 61 new stores, slight revenue increase • Costa Coffee: Expanded to 179 stores with strong revenue growth
Market Outlook • QSR Market: Optimism for growth post-elections; focus on food courts • Consumer Preferences: Adapting to evolving trends in travel and shopping
Q&A Highlights • KFC Thailand: Majority of international contributions; lower margins but higher volume • PVR Partnership: DIL manages food courts; PVR handles mall developer relationships • Management Stability: Reassurance on management structure despite recent exits • Pizza Hut Strategy: Investment in premium products to restore brand image
Competitive Landscape • Market Dynamics: Increased competition; many new outlets may not indicate genuine growth • Coffee Consumption: Growing coffee culture benefiting Costa Coffee • Thailand Business: Stable brand contribution margin; cautious expansion for Pizza Hut
Real Estate and Sales Performance • Location Strategy: Opportunities in suburban and smaller towns • Sales Trends: Gradual improvement in consumer sentiment; challenges in average daily sales • Cost Management: Pizza Hut's margins better than peers; focus on marketing and menu development
Conclusion • Future Initiatives: Emphasis on cost efficiency and top-line growth to restore margins • Investor Engagement: Invitation for further inquiries from investors
Devyani International Limited Q3 FY24 Earnings Conference Call Summary
Key Highlights • Date of Call: February 2, 2024 • Executives Present: Chairman Ravi Jaipuria, CFO Manish Dawar
Financial Performance • Q3 Revenue: Rs. 843 crore (6.6% YoY increase) • Nine-Month Revenue: Rs. 2,509 crore (11.9% YoY increase) • Store Openings: • 94 new stores in Q3 • Total of 1,452 stores in India • Total of 1,735 stores after acquisition in Thailand
Acquisition Details • Acquisition: Restaurants Development Co. Ltd. in Thailand (283 KFC stores) • Future Plans: • Aim for 250-275 new outlets in FY24 • Target of 2,000 stores by end of 2024
Market Challenges • Consumer Sentiment: Subdued due to macroeconomic factors • Geopolitical Impacts: Affecting KFC and Pizza Hut performance • Nigerian Market: Currency devaluation impacting revenue and margins
Brand Performance • KFC: • 14.1% revenue growth • Challenges with Average Daily Sales (ADS) • Pizza Hut: Decline in average daily sales and revenue • Costa Coffee: Strong year-on-year growth
Strategic Focus • Thailand Growth Potential: Optimism for expansion due to high out-of-home food consumption • India Priority: Continued focus on growth in the Indian market despite international acquisitions
Financial Management • Corporate Costs: Increased to Rs. 50 crore due to Nigerian currency issues • Funding for Thailand Acquisition: Combination of company investments and local debt restructuring
Q&A Highlights • KFC Challenges: Acknowledgment of macroeconomic pressures affecting sales • Future Acquisitions: Current focus on integrating Thailand operations rather than pursuing new acquisitions • Pizza Hut Strategy: Emphasis on innovation and value to regain market competitiveness • Vaango Brand: Viewed as a long-term investment with cautious development
Store Opening Targets for FY25 • Plans for 250-300 new stores: • KFC: 120-130 • Pizza Hut: 70-80 • Costa Coffee: 50-60
Conclusion • Overall Outlook: Despite challenges, the company remains optimistic about recovery and growth opportunities in both domestic and international markets.
Announcement Details • Date of Call: November 7, 2023 • Financial Results: Q2 and H1 FY24 unaudited results released • Total Outlets: 1,358 across over 240 cities in India
Financial Performance • Q2 Revenue: INR 819 crore (9.6% YoY growth) • H1 Revenue: INR 1,666 crore (14.7% YoY growth) • Challenges: Currency devaluation in Nigeria affecting local spending • Future Outlook: Optimism for consumer spending recovery in India
Expansion Plans • New Outlets: 115 opened in H1; target of 250-275 for the fiscal year • Long-term Goal: 2,000 stores by 2026
Brand Performance • KFC: Revenue growth of 14.9% • Pizza Hut: Flat revenue; facing competition and consumer preference shifts • Costa Coffee: Significant year-on-year growth but challenges due to rapid expansion
Joint Venture Insights • New JV: Related to food courts at modernized railway stations • Expected Revenue: Align with or exceed current food court performance due to high foot traffic
Consumer Behavior and Market Trends • Mixed Signals: Strong sales on specific days, cautious overall consumer spending • Pricing Strategy: No recent changes; focus on menu improvements for Pizza Hut
Operational Challenges • Employee Costs: Rising due to expansions and wage inflation • Delivery Efficiency: Implementing Dragontail kitchen solution
Future Strategies • Costa Coffee: Premium pricing at airports and malls; no price increases yet • Store Expansion: KFC to see aggressive growth; Pizza Hut adjusting guidance
Collaboration with Yum! Brands • Ongoing Discussions: Potential support for franchisees regarding royalties • Profitability: Stable for older stores; new store performance affecting overall margins
Conclusion • Management expressed confidence in recovery and growth potential in the Indian market, thanking participants for their inquiries.
Company Performance • Date of Call: August 4, 2023 • Consolidated Revenues: Rs. 847 crore • New Store Openings: 47 new stores, total of 1,212 stores across brands (KFC, Pizza Hut, Costa Coffee) • Future Plans: Aim to open 275-300 stores in FY24; long-term goal of 2,000 stores by 2026 • Vaango Brand: Expected to reach Rs. 100 crore by fiscal year-end
Financial Highlights • Operating Revenue: Increased by 12% quarter-on-quarter • EBITDA: Rose to Rs. 173 crore with margins at 20.5% • Profit Before Tax: Reported at Rs. 13 crore, impacted by currency devaluation in Nigeria
Brand Performance • KFC: Revenue growth of 16.3% to Rs. 516 crore; improved gross margins at 69.7% • Pizza Hut: Revenue increased by 8% to Rs. 184 crore • Costa Coffee: Slight revenue drop due to lower average daily sales
Cost Management • Staff Costs: Increased due to salary increments and minimum wage hikes; expected to stabilize • Corporate Overheads: Rising mainly from employee costs
Market Strategy • Vaango's Performance: Positive feedback leading to shared performance metrics; focus on high footfall locations • KFC's New Offerings: Introduction of chicken roll range to boost daytime sales • Pizza Hut's Pricing Strategy: Adjustments made to improve margins without outright price increases
Competitive Landscape • Challenges: Increased competition and consumer downgrading during inflationary periods • Response to Competition: Introduction of value offerings to remain competitive
Future Outlook • Expansion Plans: Target of 275-300 new Pizza Hut stores and 121-125 KFC stores annually • Marketing Strategy: Typical spend of 6% of topline revenue on brand marketing
Conclusion • Overall Demand: Despite challenges, demand for pizza remains strong; confidence in recovery and growth trajectory for both KFC and Pizza Hut.
Financial Performance Overview • Q4 and FY23 Highlights: • Consolidated revenues reached nearly Rs. 3,000 crore. • Store count increased to 1,243 locations, with 305 new stores opened in FY23. • Operating revenue rose 44% year-on-year to Rs. 2,998 crore. • Operating EBITDA increased to Rs. 435 crore (14.5% margin). • Profit before tax nearly doubled to Rs. 242 crore.
Brand Performance • KFC: • Revenue grew 45% to Rs. 1,771 crore. • 543 KFC locations now operational. • Pizza Hut: • Revenue increased 32% to Rs. 700 crore. • Performance lagging behind KFC, attributed to price sensitivity. • Costa Coffee: • Expanded to 112 stores, crossing Rs. 100 crore in revenue.
Strategic Insights • Store Expansion: • Plans to add approximately 300 stores in FY24 (100 for KFC, 100 for Pizza Hut, 60-70 for Costa Coffee). • Notable shift towards non-metro locations, with 53% of core brand stores in smaller towns.
• Pricing Strategies: • KFC implemented a slight price increase of 3-3.5% in April. • Pizza Hut has not raised prices recently due to rising ingredient costs.
Market Outlook • Consumer Sentiment: • Optimism about stabilizing inflation and potential rebounds in consumer spending. • Recent improvements in consumer sentiment noted, influenced by seasonal factors.
• Competitive Landscape: • Competition remains stable, with new entrants in the market. • Increased competition could benefit overall consumption in the category.
Challenges and Considerations • Margin Management: • Concerns about the gap between same-store sales growth (SSSG) and average daily sales (ADS). • Factors affecting Pizza Hut's brand contribution margin include rising ingredient costs and new store openings.
• Inventory and Marketing: • Marketing expenditures have risen but are balanced against new product launches. • Inventory levels include necessary forward cover and physical inventory for operations.
Conclusion • The call concluded with a focus on cautious optimism regarding demand recovery and a commitment to long-term value creation for stakeholders. Further inquiries were invited from analysts.
Devyani International Limited Q3 Earnings Conference Call Summary
Financial Performance • Date of Call: February 9, 2023 • Revenue Growth: 27% year-on-year, reaching approximately Rs. 791 crore. • New Store Openings: 81 new stores added, totaling 1,177. • EBITDA: Rs. 174 crore with a margin of 22%. • Inflation Impact: Facing inflationary pressures but optimistic about stabilizing margins.
Brand Performance • KFC: • Same-store sales growth (SSSG): 3%. • Growth attributed to under-penetrated chicken market and expansion into non-metro areas. • Input prices stabilizing; margins around 67.6%. • Pizza Hut: • SSSG: Declined by 6%. • Challenges from increased competition and market saturation. • Introduction of Fun Flavor Pizzas attracted new customers but diluted margins. • Costa Coffee: • Strong SSSG driven by a balanced menu. • Focus on smaller store formats.
Future Plans • Store Openings: Plans to open 250-300 new stores in FY24, focusing on KFC. • Market Strategy: Entering 4-5 new cities quarterly; implementing cost control measures. • New Store Formats: 10% of new KFC stores to be flagship stores.
Market Trends and Consumer Behavior • Demand Trends: Shift from delivery to dine-in; both KFC and Pizza Hut receive equal focus. • Consumer Sentiment: Short-term challenges due to inflation, but optimistic about recovery.
Closing Remarks • Investor Relations: Encouraged further inquiries through the Investor Relations team. • Overall Outlook: Confidence in long-term growth despite short-term challenges.