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It is a real pleasure to report on a year of transformational performance by your Company in what was a passive external environment for the food and service industry. Our success can be attributed largely to our relentless focus on executing the strategic blueprint we had outlined at the beginning of FY 2018. Profitable growth, which enhances our productivity and efficiency, is the foundation of our strategy and aligned to this solid approach, we strengthened the fundamentals of our business. Our priority to focus on the most important areas of our business - driving innovations and product quality, delivering better value for money products, seamless customer experience, leveraging technology and improved efficiencies across all parts of our operations - came together favourably to steer growth. We are delighted to share that we continue to make good progress on our stated objective of halving our losses for Dunkin’ Donuts.
FY 2018 will be etched as a seminal year in the Indian calendar with the implementation of the progressive legislation of Goods and Services Tax (GST), arguably the biggest tax reform since independence and awaited since more than a decade. We believe the 5% GST rate without input tax credit will be a significant growth driver for the organised restaurant industry, and we welcome the positive step taken by the government to make eating out and ordering food at home much more affordable for consumers.
Our turnaround and the strength of our business model are amply evident in our full-year results as compared to the previous year results. Operating revenue for FY 2018 stood at Rs.29,804 Million, up by 17.1%. Ongoing focus on operational excellence enabled us to achieve stellar margin expansion. EBITDA for the year stood at Rs.4,464 Million, up by 81%, while Profit after Tax stood at Rs.2,064 Million, growing by 206.9%.
Our conviction that our business is stronger than ever before, and is now primed for an even higher growth trajectory, is based on the robust sequential growth recorded by Domino’s Pizza India (DPI). Same-Restaurant Sales Growth (SSG) for DPI for FY 2018 stood at 13.9% with Q4FY2018 leading to a six-year high at 26.5%. SSG is a crucial metric of success in our industry, and our robust revival indicates that our Restaurants are attracting existing customers to come back more frequently and spend more, as well as encouraging new customers to experience our services.
Steered by our robust financial results and the continued confidence in the long-term future of our business, the Board recommended issue of bonus shares to the holders of equity shares of the Company in the proportion of 1 (One) equity share of Rs.10/- each fully paid up for every 1 (One) equity share of Rs.10/- each fully paid up. Further, Board is delighted to recommend a dividend of Rs.5/- per equity share of Rs.10/- each for the financial year ended March 31, 2018 subject to the approval of the shareholders in the ensuing Annual General Meeting of the Company. The above referred dividend is recommended on the basis of the existing paid-up share capital of the Company (pre bonus share capital). Upon approval of issuance of bonus shares, the dividend payout (post bonus issue) will work out to Rs.2.50/- per equity share of Rs.10/- each.
Our customers are at the heart of everything we do. An essential element of our growth strategy was delivering better value proposition to this most important audience. The launch of All New Domino’s’ - a comprehensive upgrade of our pizza quality - was among the most important development in this regard. The rollout of ‘Every Day Value’ for Domino’s Pizza, where customers are offered a standard affordable price every day was another significant step towards enhancing the customer experience. Dunkin’ Donuts, too, improved its value proposition with the launch of donuts at lower price points and quality coffee at reasonable prices. Migrating successfully to the new tax regime, we also passed on the GST benefits to our customers.
Our laser-sharp focus on cost rationalisation and productivity led us to assess, simplify and streamline our operations even further. Manpower optimisation, closing down of non-viable Restaurants and implementation of advanced technology in our business enabled us to realise significant financial benefits.
Investments in technology infrastructure continue to be central to our commitment to delivering seamless customer experience and robust growth. A Digital Team was created in the year to spearhead the digital thrust of the Company. By upgrading digital assets, driving data analytics, developing Restaurant technology and strengthening digital marketing, we will leverage the potential of digital technology to transform every dimension of our business.
Through the pursuit of greater customer-centricity and efficiency gains, we maintained our drive to improve our performance for the Sri Lanka operations of the Domino’s Pizza brand. In a significant step in the Company’s journey for international expansion, we entered into a joint venture with Golden Harvest QSR Ltd. to launch Domino’s Pizza in Bangladesh. As one of the fastest growing economies, Bangladesh offers huge potential for Domino’s Pizza. We are confident that our domain expertise of over two decades combined with local insights from our joint venture partner will enable us to capitalise on the attractive business opportunity.
Our outstanding performance would not have been possible without the hard work and dedication of all of our employees, and the Board would like to express its sincere thanks for their considerable efforts. We continue to embed leading HR practices to nurture and empower our people. The concept of JFL University was launched in the year to support Learning & Development initiatives for our employees.
Continuing to act on multiple fronts of innovation and product quality, value-for-money, customer experience and technology, we remain focussed to deliver sustained and profitable growth. We look to the future with confidence as we believe we have the right strategy and fundamentals in place.
Thank you for your investment and trust in our Company.
With warm regards,
Shyam S. Bhartia Hari S. Bhartia
Chairman & Director Co-Chairman & Director