Westlife Foodworld (505533) Q4 12/13 earnings summary

Executive summary

• FY13 restaurant sales rose 25% to ₹6,810m; comparable sales grew 6.2% despite a challenging economy and cost inflation.

• Expanded to 161 restaurants across 16 cities and seven states after 32 openings, the highest annual opening count to date.

• Growth priorities centered on broader accessibility, menu optimization and a modernized customer experience.

Financial highlights

• Consolidated revenue from operations was ₹6,842.65m vs ₹5,479.02m; EBITDA was ₹652.63m vs ₹686.29m.

• Consolidated profit before tax was ₹333.38m vs ₹426.24m; net profit after minority interest was ₹212.63m vs ₹313.95m; EPS ₹11.62 vs ₹17.17.

• Restaurant operations revenue reached ₹6,810m vs ₹5,445m; EBITDA was ₹627m vs ₹672m and PAT ₹308m vs ₹425m.

• Restaurant costs rose with inflation and expansion: raw materials ₹3,083m vs ₹2,437m; occupancy and other operating expenses ₹2,213m vs ₹1,616m.

• Standalone profit after tax was ₹23.78m vs a loss of ₹9.94m; EPS ₹1.29 vs a loss of ₹0.54.

Outlook and guidance

• Management expected a challenging market through FY14, while targeting market-share gains and sustainable, profitable long-term growth.

• FY14 priorities: open stores, extend operating hours, improve value platforms and service speed, grow breakfast and menu variety, and continue restaurant reimaging.

• India disposable income was projected to grow at 10% CAGR; management expected food-service growth to benefit from rising eating-out trends and competition.

• Capital allocation to prioritize customer experience, sales and market share, focusing on markets with acceptable returns or long-term growth potential.