Chairmen’s Message

Left to Right:
Mr. Shyam S. Bhartia - Chairman & Director
Mr. Hari S. Bhartia - Co-Chairman & Director

Leading with Confidence & Conviction

Dear Stakeholders,

The year had been witness to headwinds in the form of pronounced inflationary costs on one hand and challenging external demand environment on the other. The situation was made worse by the COVID-19 pandemic during the final quarter.

In the face of all these challenges, the disciplined execution of our five-pillared strategy enabled us to deliver a strong performance for FY 2020. We reported a double-digit growth and strong EBITDA, which stood at 22.6% of revenues. We also crossed a new milestone by opening 123 restaurants during the year, our highest in the last three years. We are focused on improving customer experience through continuous innovation, brand building activities, new restaurant design, and more. We have strategically grown our presence by having more split stores and enhancing our digital assets.

Impact of COVID-19

The global pandemic has brought upon the world an unprecedented crisis that has overwhelmed the healthcare infrastructure and brought businesses and economies to a standstill. The Indian economy has suffered a huge impact, but our fundamentals remain sound. Moreover, the government has announced a relief package aimed at helping small and medium enterprises, which will go a long way in helping the economy to recover. Thus, we are confident of a rebound in economic growth in the medium to long term.

While governments, health agencies and other frontline workers are engaged in helping our societies deal with the crisis, we as a Group are committed to providing support to the best possible extent. At JFL, we have prioritised the health and safety of our employees and our customers. We are witnessing a new normal emerge, where customers prefer to order from trusted brands and delivery is the key mode of accessing services.

As a food company driven by expertise in delivery, we have mounted a rapid response in view of the changes in the market scenario due to COVID-19. We were the first in the industry to introduce effective safety and sanitisation protocols specific to the virus. We have been resilient and have taken some transformational steps. Acting with due foresight, we put in place Zero Contact Delivery systems across all our 1,335 restaurants in the country, even before the lockdown began on March 25. This feature has been introduced as an additional precautionary measure to ensure the safety of both customers and the delivery staff. We extended these protocols later to cover our Zero Contact Takeaway and Zero Contact Dine-In.

We have worked assiduously to provide a seamless customer experience, thereby ensuring business continuity. We focused on reopening stores and keeping commissaries operational. Our technology strength has led us to stay ahead in the online delivery segment. We also continued to gain market share on the aggregator’s platform and revisited cost structures and identified opportunities to improve efficiencies.

We have undertaken focused initiatives to communicate more proactively with our customers on a regular basis to understand their requirements. We have increased our digital marketing initiatives and continued our media engagements. We revised our offerings based on our core strengths for customer delight. 

As deliveries opened up following the completion of the first phase of total lockdown in mid-April, we partnered with FMCG majors to deliver essential items. We conceptualised and rolled out Domino’s Essentials like atta, dal, rice, milk, sugar, buns, etc., which were made available on our Domino’s Pizza app, delivered safely and hygienically by our Safe Delivery Experts (riders). The crisis brought us the opportunity to do more and better for our customers.

As the situation continues to ease, we expect to recover growth over the near term, given the massive opportunity in the overall QSR space. Specifically, for us, the outlook remains positive due to the fact that our brands enjoy a strong reputation for quality, hygiene and value. During the crisis, when customers looked for assurances of health and safety, they naturally chose us. This has helped strengthen our consumer connect even further.

Brief Review of Our Performance

Our operating revenue for the year stood at  38,858 million, up by 10.1% over FY 2019. Our EBITDA stood at  8,771 million. We have focused on realising greater productivity throughout the year to help offset the impact our margins have suffered as a result of inflation in dairy prices and the year-end COVID-19 crisis.

Our Like-for-Like (LFL) sales growth stood at 4.5% and Same Store Growth (SSG) at 3.2%. Overall, 130 restaurants were opened. Among these, 123 were Domino’s Pizza, 4 were Dunkin’ Donuts and 3 were Hong’s Kitchen restaurants. We also launched a brand new campaign ‘Dil, Dosti, Domino’s’, crafted to acknowledge the change in lifestyle of the new-age Indian consumer. It celebrates the role of friendship as the only one truly essential element of our relationships. It struck a chord with our audiences instantly across various platforms.

We continued to leverage our digital strengths to drive greater customer-centricity. During the year, online ordering (OLO) increased to  86% of delivery sales against 70% in FY 2019, driven by continuous improvisations in the Domino’s app. Our app is further optimised to make it leaner and more user-friendly with a built-in e-wallet and tie-ups with all the major payment gateways. We also launched ‘World Pizza League’, ‘Indian Masala Pizza’ and value-added beverages for our consumers. 

Our fast-casual Chinese cuisine brand Hong’s Kitchen continues to grow. We opened three restaurants during the year and we plan to do more. For Dunkin’ Donuts, we are using a calibrated pilot for a new format of the restaurants and are now studying opportunities to scale. Domino's Pizza Bangladesh continued to perform well, and we opened our third restaurant there.

Commitment to Good Governance

We are strongly committed to increasing transparency and disclosures to strengthen the stakeholder trust in our brand. We are focused on growing as an industry leader that is responsible, environmentally conscious and ethically strong. Good governance is also at the core of our business and a key role of our Board is to ensure that strong foundations are in place to support responsible business practices across our operations.

Enabling and Supporting Our People

Our people are our true strength in every way. Our top priority is to enable and empower them. We support our employees by creating a healthy and conducive work environment, within workplaces that are safe and hygienic. We encourage innovation, diversity, learning and development, and above all, a problem-solving mindset when it comes to fulfilling customer expectations.

The well-being of our people is always our utmost priority. We took several initiatives for the safety and awareness of our employees during the COVID-19 outbreak. We imparted regular information on safety protocols at restaurants, our initiatives around hygiene and social distancing and adherence of policies and government updates. The team has consistently risen to the challenge and ensured continued operating success.

Joining the Fight against COVID-19

We have contributed  50 million in April 2020 to the Honourable Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund). Our teams are working tirelessly to reach out to all the frontline COVID-19 warriors such as healthcare workers and policemen on duty. As a responsible organisation, and as a member of the society, we thank them for their selfless service and we will continue to stand by the nation in various capacities in this hour of need.

The Future is Here

We have always focused on growing the right way to build a resilient institution. Zero Contact Delivery, Zero Contact Dine-in and Zero Contact Takeaway will gain prime focus in the post COVID era to stay relevant to customers. As consumers become more discerning about hygiene, they will move from the unorganised to the organised sector. Our strong balance sheet, towering strengths in delivery, continued investments in technology and strong brands, all contribute to a distinct advantage. We are confident that  we will not only weather the storm but also emerge stronger from it .

We are inspired by the way our people have responded to the disruption caused by the COVID-19 outbreak and we would like to convey our heartfelt gratitude to everyone at JFL for their drive, dedication and perseverance. Our agility is a mark of our organisation's strength, strategic acumen and robust systems and processes. Our learnings during this period will help us improve our operational performance.

We also take this opportunity to thank our associates and the communities in which we live and work, for supporting us through our journey. We also extend our gratitude to our shareholders for their continued trust and confidence.

Let us all contribute to help our nation rise above this crisis. It may take some time but we believe it is possible.

Together, let us stay resilient and hopeful.

With warm regards,

Shyam S. Bhartia

Chairman & Director
May 20, 2020

Hari S. Bhartia

Co-Chairman & Director