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Jubilant FoodWorks Tejas Jadhav Aditya Shetti Follow me on Twitter @adit7777

Jubilant FoodWorks

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Jubilant FoodWorks includes Domino's Pizzaand Dunkin' Donuts. This presentation includes Retail Management, SWOT analysis, Financials and Stock Performance till 8th September 2014.

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Page 1: Jubilant FoodWorks

Jubilant FoodWorksTejas JadhavAditya Shetti Follow me on Twitter @adit7777

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Company BackgroundThe company was incorporated on 26 March 1995 as

Domino's Pizza India Private Ltd and began operations in 1996. It changed its name to Jubilant FoodWorks Ltd in 2009. Jubilant FoodWorks got listed on the Indian bourses in February 2010. The company opened India's first Domino's Pizza outlet in New Delhi in 1996.

On 24 February 2011, Jubilant FoodWorks Ltd signed a master franchise agreement with American coffee house chain Dunkin' Donuts to operate the brand in India. The stores are wholly owned by Jubilant FoodWorks, who pay a royalty fee to Dunkin' Donuts. 

On 19 March 2014, the 700th Dominos Pizza outlet was opened.

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Company Fact Sheet Domino's Pizza operates 749 stores in 152 cities

as of May 2014. Jubilant FoodWorks operates 34 Dunkin' Donuts

outlets in 10 cities as of August 2014. Present in 11 cities across Delhi, NCR, Chandigarh,

Punjab, Uttarakhand, Haryana and Maharashtra Growth in Domino’s Pizza network Presence of Domino’s Pizza network in new cities

Vellore (Tamil Nadu), Nanital (Uttranchal), Karad (Maharashtra), Durg (Chhatisgarh), Katra (Jammu & Kashmir), Davangere (Karnataka), Manesar (Haryana) and Rajnandgaon (Chhatisgarh).

The Company is the market leader in the organized pizza market with a 67% market share in India.

Total number of employees as on 30 June 2014 stood at 25,780.

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Ajay Kaul Ajay Kaul has been the CEO of Jubilant FoodWorks Ltd

since February 7, 2005. Mr. Kaul has over 20 years experience in industries such as financial services, airlines, express distribution and logistics and food retail.

Prior to joining Jubilant FoodWorks Ltd, he worked in Indonesia as the Country Head of TNT Express Division. He worked with Modiluft and American Express TRS.

He has been a Whole Time Director of Jubilant Foodworks Limited since March 14, 2005. He holds a Bachelor’s degree in Technology from Indian Institute of Technology, Delhi and an MBA from XLRI, Jamshedpur.

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Management _ Key MembersName DesignationsAjay Kaul Wholetime Director & CEOArun Seth Independent DirectorDev Amritesh COO & PresidentHari S Bhartia Co-Chairman & DirectorMona Aggarwal Co. Secretary & Compl. OfficerMona Aggarwal SecretaryPhiroz Vandrevala Independent DirectorRamni Nirula Independent DirectorRavi S Gupta CFO & PresidentShyam S Bhartia CEOShyam S Bhartia Chairman & DirectorTarun Bhasin COO & PresidentVishal Marwaha Independent Director

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SWOT AnalysisStrength Huge popular brand name and high brand

loyaltyHigh number of productsHygienic food and quick service Leader in online & mobile ordering.Strong brand equity supported by heavy

advertising & marketing campaigns.Weakness  High fat and high calorie food not good for

health conscious peopleHigh staff turnover due to lack of training and

development.

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SWOT AnalysisOpportunity Improve efficiency and home delivery service Introduction of new flavor additives and pizza toppings

that are region specific can be a good stride for Domino’s.

The distribution network should be further strengthened so as to ensure market penetration in the existing markets at maximum optimum levels.

Threats  Intensive competition from a fragmented number of

small competitors Changing consumer habits towards healthier food

choices.

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FinancialsRatio 2013 – 14 2012 - 13

Gross Profit Margin 10.35 13.47

Current Ratio 0.64 0.68

Quick Ratio 0.59 .057

ROCE 36.57 45.27

Operating Margin 14.79 17.36

Inventory Turnover Ratio

53.16 60.04

Earning Per Share 19.22 20.70

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Sourcing StrategyStrategy for procurement

The company decided to outsource the raw materials to overcome the problem being faced in case of Domino’s.

Motive was to find the best quality product at the lowest cost possible, based on agricultural map of India.

Examples:o Wheat from Jalandhar (Punjab)o Spices from South Indiao Cheese from Karnal (Haryana)o Tomatoes from Bhubaneshwar ( Orissa) , etc.Raw materials like wheat brought in from Jalandhar and

sent to commissaries via refrigerated trucksTomatoes, Capsicums and Onions purchased locally

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Sourcing StrategyFinding regions with certain crops as their

specialtySpecialty crop regions were identified throughout the

country.The task of processing was allocated to commissary in

that region.For instance, the commissary for the eastern region in Kolkata was responsible for buying tomatoes (sourced from Bhubaneswar), processing them and then sending them to all the other commissaries. Similarly, the northern commissary had to deliver pizza bases.

This strategy reduced the issue of duplication as well as perishability.

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Sourcing StrategyStrategy for Vendors

Initially, many ingredients used to be imported by the company.

Nowadays, the whole process of procurement is localised. The vendors are regularly visited by company executives

to supervise the functioning between the two sides. Once a quarter, there are random unannounced audits and

vendors keep complying to be on the supply map. Cheese, poultry, lamb, pepperoni, sauces, canned veggies

and condiments, dips and a bevy of choices move from vendor factories to the four Domino's factories or commissaries in Noida, Mumbai, Kolkata and Bangalore.

The processing of raw materials is done at respective commissaries.

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Supply Chain ManagementTransportation of Materials

The pizza dough and other items prepared in commissaries are sent to the retail outlets again in refrigerated trucks.

Each truck is enabled with GPS trackers, which enables the area logistics managers to access the temperature status in any of these vehicles.

Tracking is essential since offloading ingredients from the frozen trucks needs to be done in 30 minutes flat as after that, the temperature rises to 5 degree Celsius.

Lowering of cost was expected with third party transportation.

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LogisticsSuppliers

( Toppings and Seasonings)

Wheat Dough Refrigerated truck

Commissary

Retail outlet

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Business ModelDelivery in 30 minutes

Domino's introduced an integrated home delivery system from a network of company outlets within 30 minutes of the order.

If the time taken to deliver the pizza is more than 30 minutes, the pie comes free if it costs under Rs 300. And in case it costs more than that amount, the company subtracts Rs 300 from the bill.

Implementation of Delivery in 30 minutesOrder to Oven 4 minutesBaking time in Oven 6 minutesCutting, Packing and Pick up 5 minutesDelivery Time 8 minutesBuffer (Traffic or Rain) 7 minutesTotal 30 minutes

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Domino’s Pizza New restaurants openings City/Town coverageIntroduced new sides such as Lebanese roles, calzone

wraps, fresh pan pizza and spicy baked chickenIntroducing 10 new lip smacking pizzas The new refreshed menu includes 10 new pizzas with a

variety of new offerings in both the vegetarian and non-vegetarian segments.

South India Pizzas A deliciously cheesy pizza with a new super spicy Andhra

chilli chicken topping made from favourite southern recipes. The innovative toppings are aligned to tastes and preferences

of South India and help cater to region specific preferences.

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Domino’s PizzaLaunch of Domino’s Pizza Junior

JoyBoxJunior JoyBox is a complete kid’s meal

and consists of a cheesy pizza slice, two yummy breadsticks with oregano seasoning, a delicious rainbow sprinkled custard dessert, a fruit based beverage and a toy.

This enhances the company’s efforts to tap a new segment and the potential to drive frequency of consumption

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Business ModelOnline Ordering (OLO) Average OLO contribution to delivery sales in

Q4FY14 was around 18% Mobile Ordering sales contribution to overall OLO

was around 15.5% during the quarter ~1.6 mn downloads of mobile ordering app

across various smart phones.

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Dunkin’ DonutsNew LaunchesWicked Wraps and Not So Wicked Wraps - The

range consists of both Veg and Non Veg options. While the Wicked Wraps are extremely high on the spice quotient, the Not So Wicked wraps, as the name suggests, is milder on the spice quotient

Iced TeasThe Tough Guy Brute Burger New range of Dunkaccino Dunkin Donuts extended the range of

Dunkaccino with new flavors - Mocha Chip and Jamaican Rum & Almonds Dunkaccino

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Company StrategyNetwork Expansion & Expand Audience base Pursue growth through restaurant additions in

new and existing cities backed by upgraded/expanded commissary network.

Sustain efforts to launch new restaurants in current geographies as well as tap new cities.

Target for launch of new Domino’s Pizza restaurants at 150 in FY15.

Corresponding target for Dunkin’ Donuts at 25 new restaurants.

Dunkin’ Donuts to roll out across other parts of the country.

Enhance brand development initiatives Laser sharp focus on creating higher levels of

customer satisfaction via innovative offerings for both Domino’s Pizza & Dunkin’ Donuts.

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Company StrategyBrand and Menu developmentProduct innovation and focused consumer

targeting in Domino’s Pizza & Dunkin’ Donuts to drive sales volume.

Concerted efforts to build on Dunkin’ Donuts new positioning- “Get your Mojo back”.

New range of iced teas and wraps.

“We look forward to building on our long-term strategy to enhance operations, expand the foot-print and extend our brands to drive our success.” – Ajay Kaul

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Stock Price and its performance in the market1337.25 points as of 8th

September 2014.

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