Domino's Pizza Enterprises Limited · ASX:DMP
Domino's Pizza Enterprises — FY2011 Earnings Presentation
37 slides from Domino's Pizza Enterprises's earnings presentation, Aug 10, 2011
Slide 1: Full Year Results to 3 July 2011
For personal use only Full Year Results to 3 July 2011
Slide 2: Executive Team
Executive Team For personal use only Don Meij Chief Executive Officer/ Managing Director Andrew Rennie Chief Operating Officer ANZ Richard Coney Group Chief Financial Officer 2 Domino’s Pizza Enterprises Limited
Slide 3: Agenda
Agenda For personal use only 1. Highlights 2. Results Detail 3. Achievements & Innovation 4. Outlook 3 Domino’s Pizza Enterprises Limited
Slide 4: 1. Highlights
For personal use only 1. HIGHLIGHTS
Slide 5: Result Highlights
Result Highlights For personal use only ANZ Network Sales ($) SSS +13.2% Europe Network Sales (€) SSS +5.9% EBITDA +20.2% EPS +19.5% Dividend (cps) +23.0% Free Cash Flow ($m) $24.5m Return on Capital Employed 26.8% Return on Equity 20.4% 5 Domino’s Pizza Enterprises Limited
Slide 6: Group Highlights
Group Highlights For personal use only • NPAT up 20.3% to $21.4m; NPAT CAGR FY07-11 is 23.9%. Achieved despite higher tax and currency FY 09 FY 10 FY 11 +/(-) FY 10 movements $ mil $ mil $ mil • Strong SSS across the system; ANZ Network Sales 676.4 694.3 746.4 7.5% +13.2% and Europe +5.9% Same Store
Slide 7: Australia/NZ Highlights
Australia/NZ Highlights For personal use only • SSS growth in Australia/NZ +13.2%, with Australia achieving its strongest SSS in over a decade • Customer counts are following the same growth trends as sales • Improved ingredients and better quality producing healthier menu items • The growth in our
Slide 8: DMP Europe Highlights
DMP Europe Highlights For personal use only • Core operating profits up 50.3% (like for like vs FY10 excluding non-recurring items) • Total network sales up 14.9% on FY 10, with all 12 months showing positive growth (local currency & despite rolling a 53 week prior year) • SSS growth continues to ga
Slide 9: FY11 Guidance Assessment
FY11 Guidance Assessment For personal use only Measure as at Feb 2011 Actual Achieved New Store Openings towards 60 53 EBITDA Growth 15-20% 20.2% NPAT Growth in the region of 15% 20.3% Estimated Tax Rate 29% 27.7% Net Capex $8-12m $11.6m • Most measures ahead of H1 11 guidance • A number of stores h
Slide 10: 2. Results Detail
For personal use only 2. RESULTS DETAIL
Slide 11: Network Sales Growth
Network Sales Growth For personal use only Network Sales $m 746.4 Total Sales Same Store Sales 694.3 676.4 H2 128.9 Australia/NZ 11.3% 13.2% H2 591.2 H2 122.2 134.0 518.9 H2 106.0 H2 H2 H2 253.0 80.7 Europe (€) 14.9% 5.9% H2 218.6 213.8 359.4 H2 198.2 H2 306.1 187.2 H1 H1 118.6 252.9 H2 H1 123.7 212
Slide 12: Network Sales by Segment – H2
Network Sales by Segment – H2 For personal use only Australia/NZ H2 Network Sales A$ European H2 Network Sales € €94.8m $256.9m €82.2m €71.6m $220.8m €64.1m $215.6m €48.9m $199.1m $186.4m 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 • Sales have grown 16.4% over H2 10 on a • Sales have grown 15
Slide 13: Same Store Sales by Segment
Same Store Sales by Segment For personal use only ANZ SSS Growth European SSS Growth 15.1% 8.8% 10.9% 6.8% 4.7% 7.2% 3.7% 4.6% 1.1% 2.2% 1.8% (0.7%) H1 09 H2 09 H1 10 H2 10 H1 11 H2 11 H1 09 H2 09 H1 10 H2 10 H1 11 H2 11 • As highlighted in H1 11 results, the • SSS continue to improve, going from ex
Slide 14: Network Store Count
Network Store Count For personal use only FY 09 FY 10 FY 11 Australia/NZ stores Network Sales ($ mil) 424.6 448.4 498.9 • Addition of 53 new stores to the network Franchised stores 410 421 454 during the year. Australia/NZ added 28 Corporate stores 106 101 96 Aus/NZ Network Stores 516 522 550 while
Slide 15: Geographic Summary
Geographic Summary For personal use only FY 09 FY 10 FY 11 +/(-) FY 10 $ mil $ mil $ mil % REVENUE • ANZ EBITDA up 24.6% due to improved Australia/NZ 148.8 150.8 161.1 6.9% core operations, economies of scale and marketing activities Europe 90.2 85.3 85.5 0.3% Total Revenue 239.0 236.1 246.7 4.5% •
Slide 16: DMP Europe Profitability
DMP Europe Profitability For personal use only Restated with add back Reported AUD Local Currency € of non-recurring items FY 10 FY11 +/(-) FY 10 FY 10 FY11 +/(-) FY 10 FY11 +/(-) FY 10 $ mil $ mil % € mil € mil % € mil % Network Sales 245.9 247.5 0.7% 156.2 179.4 14.9% 179.4 14.9% Revenue 85.3 85.5
Slide 17: Profit & Loss
Profit & Loss For personal use only FY 09 FY 10 FY 11 +/(-) FY 10 $ mil $ mil $ mil % Revenue 239.0 236.1 246.7 4.5% • EBITDA & NPAT ahead of full year guidance EBITDA 28.3 32.5 39.1 20.2% Depreciation & Amortisation (6.4) (8.0) (8.7) 8.7% • Depreciation & Amortisation up 8.7% EBIT 21.8 24.5 30.4 24
Slide 18: Normalised NPAT vs FY10
Normalised NPAT vs FY10 $0.8m For personal use only $1.2m $0.3m $0.4m $24.2m $21.4m $17.8m FY10 Reported FY11 Reported 53 week trading Europe Non- FX Impact Tax Rate FY 11 NPAT NPAT NPAT period recurring Costs Normalised • Our NPAT result was impacted by a number of factors during the FY11 year in c
Slide 19: Earnings per Share
Earnings per Share For personal use only EPS (cps) 31.3 • EPS CAGR of 20.6% since FY07 26.2 22.6 H2 16.4 • In line with Management 18.4 H2 13.4 expectations, EPS growth in the 14.8 H2 H2 13.2 2nd half remained strong 8.8 H2 9.1 H1 H1 H1 H1 14.9 12.8 H1 9.6 9.4 5.7 FY07 FY08 FY09 FY10 FY11 19 Domino’
Slide 20: Cash Flow
Cash Flow For personal use only FY10 FY11 $ mil $ mil • Working Capital improvement, EBIT 24.5 30.4 predominantly due to beneficial Depreciation & Amortisation 8.0 8.7 timing of expenditure and payments Change in Working Capital 0.3 5.2 Net Interest Paid (0.8) (0.7) • Operating cash flow +51.7% Inco
Slide 21: Balance Sheet
Balance Sheet FY 10 FY 11 +/(-) FY 10 For personal use only $ mil $ mil $ mil Cash 16.2 28.1 11.8 Trade & Other Receivables 21.7 18.6 (3.1) Other Current Assets 11.0 10.7 (0.3) Current Assets 49.0 57.4 8.4 • Cash and cash equivalents Property, plant & equipment 30.8 34.4 3.6 +72.9% to $28.1m Goodwil
Slide 22: Key Financial Ratios
Key Financial Ratios For personal use only Net Debt & Interest Cover FY10 FY11 $25.7m 41.4x Net Debt to Equity (2.3%) (12.0%) 30.8x $15.9m 14.1x Return on Equity 17.8% 20.4% 9.0x $3.6m 5.3x ($2.3m) Return on Capital 20.9% 26.8% Employed ($12.5m) NB. Negative Net Debt equates to Cash Positive positio
Slide 23: 3. Achievements & Innovation
For personal use only 3. ACHIEVEMENTS & INNOVATION
Slide 24: Product Innovation
Product Innovation For personal use only • Continued focus on improving the quality of our ingredients – our products now contain 100% Aussie ground beef, champagne ham, larger prawns, and rasher bacon • Better Meatlovers recipe received the highest taste score during sensory testing, scoring higher
Slide 25: Digital Competitive Advantage
Digital Competitive Advantage For personal use only • Continued strong growth with online & mobile orders and sales, currently over 40% in Australia ($152m in FY11, +44% on FY10) • More advanced online ordering system was launched late 2010 • Domino’s is fast becoming one of Australia’s top e- comme
Slide 26: Healthier Products
Healthier Products For personal use only • We are committed to providing healthier product choices for our customers • Over the past 2 years we have reduced sodium levels in over 54% of our pizza ingredients and more than 48% of our ingredients have had a reduction in saturated fat • Biggest achieve
Slide 27: Store Innovation
Store Innovation For personal use only • We have embarked on a $24m store refurbishment program across Australia and New Zealand which includes Corporate and Franchised stores • Selected stores also feature seating areas and the makeline in full customer view • Electric scooters are being rolled out
Slide 28: Continued European Growth
Continued European Growth For personal use only • A number of key learnings in Australia are being translated into Europe • There has been a strong focus on product and value • Mardi Fou (Crazy Tuesday) has been supported by consistent radio and print media • Several stores have been redesigned with
Slide 29: Domino's Disaster Relief
Domino’s Disaster Relief For personal use only • In response to the recent natural disasters in both Australia and New Zealand, DPE and our franchisees have made significant contributions to those affected by these events • Over $120,000 was raised during a Doughraiser on Australia Day supporting fl
Slide 30: Outlook
For personal use only OUTLOOK
Slide 31: Looking Forward – Australia/NZ
Looking Forward – Australia/NZ For personal use only • Unprecedented levels of investment in our digital platforms – we expect digital to become 60% of our business in the next 2 ½ years • We aim to improve our customer service even further over the next year by significantly reducing our average sa
Slide 32: Looking Forward – DMP Europe
Looking Forward – DMP Europe • SSS are increasing on the momentum created by increased marketing and new product development For personal use only • Relocating the Paris commissary in 2013, with plans already underway to develop this • Expect to open in excess of 40 new stores in FY12 including 17 c
Slide 33: FY12 Guidance
FY12 Guidance For personal use only Measure FY11 Actual FY 12 Guidance New Store Openings 53 60-70 EBITDA Growth 20.2% 15-20% in the region of NPAT Growth 20.3% 15% Estimated Tax Rate 27.7% 29% Net Capex $11.6m $14-18m 33 Domino’s Pizza Enterprises Limited
Slide 34: Future Outlook – 2,000 Stores
Future Outlook – 2,000 Stores For personal use only Australia/NZ DMP Europe 80% of Sales 750 Stores 1,250 Stores are Digital incl 60 2Go outlets (15 year target) (6 year target) (6 year target) • Further review of our market penetration in ANZ has resulted in a lift in our expectations of store coun
Slide 35: Trading Update
Trading Update For personal use only • SSS continue to be strong as we start FY12 • ANZ SSS growth is up 13.7% in the first 4 weeks of the year, rolling 5.3% in the same period last year • Europe SSS growth is up 13.1% in the first 4 weeks of the year, rolling 2.4% in the same period last year • Des
Slide 36: Conclusion
Conclusion For personal use only • ANZ continues to demonstrate substantial SSS and profit growth as well as an upgraded store count potential to 750 • SSS are performing well across both Australia/NZ and Europe, with Australia in particular experiencing its strongest SSS in over a decade • Final di
Slide 37: Disclaimer
Disclaimer For personal use only • Domino’s Pizza Enterprises Limited (Domino’s) advises that the information in this presentation contains forward looking statements which may be subject to significant uncertainties outside of Domino’s control. • While due care has been taken in preparing these sta
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