Will not leave the company high & dry: Jubilant's Chief

In an interview to CNBC-TV18, Ajay Kaul, CEO of Jubilant Foodworks spoke about the results and his outlook for the company."I don't want to leave the company high and dry. I am here for the next four-five months still and everything will be fine by the time I am leaving", he said.Below is the verbatim transcript of Ajay Kaul's interview to Latha Venkatesh, Sonia Shenoy and Anuj Singhal on CNBC-TV18.Sonia: The comment that you made in the conference call yesterday about the same-store-sales-growth (SSSG) of 4.3 percent being only cosmetic in nature. That has raised a lot of questions about what the growth could be or whether there could be any growth at all in the second half of the year, what can we expect from Jubilant Foodworks?A: We never give future guidance numbers qualitatively if I have to make a few statements, I think we are not seeing any statistically significant shifts in consumer sentiments. So it will be more of the same.Without quoting numbers, whatever you have seen in the last five-six quarters except for the aberration, which was probably the last quarter, you would probably end up seeing similar numbers.Having said that, I also said in yesterday's conference call, that we are fairly optimistic. Two and a half to three years now, it beats any logic, it beats any astute analysis when you go across the world -- we have done enough study internally on this, America, UK, Australia, Germany and so on and so forth. It doesn’t seem to say that this can go on endlessly. While we have also tried to internally see, are there any structural issues which we are probably not able to fathom out and the answer to that is a resounding no.So the point is all the good things which the government has done in the last two and a half years finally will bear fruition and we will start seeing that translating into money in people's hands, the Seventh Pay Commission fallout, which should be very positive and also often talked about the monsoon which has not a direct but an indirect impact even on categories like ours because we are today present in 250 cities in India. We believe a mixture of all this is going to clearly bring in better performance on SSSG numbers in the next few quarters without quoting which quarter, what exactly will be the number and so on. So there is optimism but yes, we are not sticking our neck out and throwing a number.Anuj: This is one question that I have been wanting to ask you for last three months. We spoke in the last quarterly numbers, you look like you have a long-term plan for the company, 8-10 years plan and then of course we had the news of your departure. What exactly happened between you and the Bhartia family?A: How the market behaved is market's issue and sometimes irrational reasons. As far as my relationship with Bhartia family is concerned, certainly it is as good as it can ever be. I can say this shouting from the rooftop and I want to clear any perception or misperception that may probably exist. We are absolutely good in our relationship.I have been talking to the board and both Shyam and Hari for the last several months that having been in this position for more than 10 years now -- because the discussion started a few months back -- I cannot see myself doing the same thing for the next 4-7 years. My younger daughter just finished her Class 12, so I am at a stage where I need to take some important decisions in my life. Go around and see how many companies have had CEOs at the same position for the last 10-12 years. There are not very many such cases. I still love the company, I still love the brands, they have a bright future, even while as I leave, I am trying to put in place a jubilant 3.0 which is what should Jubilant do in the next 10 years such as the love I have for the company and the brand.The idea being that one as the board embarks on the journey of finding the able successor, somebody who is even better than me, whether it is internal as well as external. My job is, still March 31 I will handhold, mentor, induct so that as I leave the company, which along with my team I have created over the last so many years -- I don’t want to leave it high and dry and that is why it was done most amicably. I am here for the next four-five months still and everything will be fine by the time I am leaving.Hopefully in the meantime, my optimism which I was sharing a little while back, we will also start translating into some better SSSG numbers and so on. So there is not a better high note than anybody can aspire to leave any organisation.Latha: When you look back at this 10-year career, what do you think you should not have done? Therefore, would it be something like in your 3.0 for Jubilant, would it be that lesser role for Dunkin?A: While this call is centred more around how Jubilant Foodworks is going to do now and in future and these questions are coming more at a personal level but I have not refrained from not answering your questions. What could we have done better? I think at a very tactical level, we could have probably done some things right but I have been lucky that a lot of things that we did fell in place. Right place, right times sometimes.The team I have had and the team we have tried to create has been astounding and that has also been one of the key reasons for my success and I would also give lot of credit to Hari and Shyam for allowing me a reasonably free hand.Latha: What decisions should now be taken to cancel off some of the things you embarked on? Will you advice that Dunkin should be wound down or trimmed?A: Looking forward, we have already embarked on this journey. As far as Dunkin Donuts as a brand is concerned, we have been saying this now for the last six-nine months that we are clearly putting Dunkin on a path to profitability. If it means pruning down some stores and in the last six months we have shut nine stores. If it means cutting down on opening of stores from around 20-25, we are bringing it down to 15 but we want to make sure all stores, we open are profitable stores, all stores that we shut are clear bad cases which we don’t have any visibility of turning around.As far as Dunkin is concerned -- menu mix, product mix, pricing, people and culture, positioning and all that, we believe very strongly that we are on the right course. It is just that for the last two and half to three years, the whole industry has not been good.Look around, some of the most admired brand around the world -- without naming them -- which entered India 20 years back along with Domino's Pizza at that time, they have had 10-12 quarters of negative SSSG and these are global brands, these are brands which have been around, they know the terrain and everything else.Now Dunkin Donuts has also come at a time which was the toughest for the industry and as a result has had an impact on its performance. I wish if the SSSG for the industry were at 10-12-15 percent, Dunkin would be a different story together.So we believe that even in the tough time which is right now have a visibility on paths to profitability and hopefully in the next few years, it will become firstly profitable at the store level, which should happen not very far from today and then profitable at the brand level, which is at the business level.In the meantime, other decisions which we would take is to make sure that as the industry is coming out of the woods, we open only profitable Domino's stores, our current estimate or the guidance, which we have given is of around 130 stores but these are all stores, which should give us payback periods of not more than three years and that is why we have pruned it down from 150 to 130.Make sure that there is a judicious mix of populating existing cities and getting into new cities because both have a role to play in terms of how they reflect on SSSG, how we service those places and so on. But let me leave a message, we are creating this business, 10 years is of course far-fetched, three-five years, we are building one state-of-the-art factory in greater Noida, we are putting money behind the brand. This quarter for example almost 50 percent of our total delivery business is transacted through online. I don’t know if you are aware that we are the seventh most transacted e-commerce brand in India today. So our aspiration is to build the brand for future so the investments on technology, people, succession planning, it is a long answer.