Dp Poland Plc · LSE:DPP
Dp Poland — H1 2023 Earnings Presentation
25 slides from Dp Poland's earnings presentation, September 2023
Slide 1: DP Poland PLC Investor Presentation H1 2023 Results
DP POLAND PLC Investor Presentation H1 2023 Results SEPTEMBER 2023
Slide 2: Legal Disclaimer
Legal Disclaimer This trading update presentation (the “Presentation”) has been prepared by DP Poland PLC (the “Company”) in respect of its group (the “Group”) and contains inside information as stipulated under the UK version of the Market Abuse Regulation (EU No. 596/2014) as it forms part of UK l
Slide 3: A Solid Foundation for Growth
A SOLID FOUNDATION FOR GROWTH 12 MONTHS INTO THE TURNAROUND • Refreshed Board & management team with prior global Domino’s experience • Store portfolio optimisation – low trade stores in poor locations closed DELIVERED IN • Capital investment in existing stores – maximise productivity last 12 MONTHS
Slide 4: H1 2023 Financial Results
H1 2023 FINANCIAL results Improvements Evident in the numbers • Revenue growth driven by increased order GROUP REVENUE AWOC (POLAND) counts – high quality growth and Croatia takeover • Average Weekly Order Count (AWOC) up 14% YoY with a strongly improving trend though the period • LFL System sales a
Slide 5: Revenue Growth Supported by Increased Order Counts
REVENUE GROWTH SUPPORTED BY INCREASED ORDER COUNTS ORDER COUNT GROWTH DRIVING IMPROVED UNIT COSTS Group Income Statement Unaudited Unaudited Currency: GBPm 2022 H1 2023 H1 % change 1. Strong revenue growth (+26.5%) • 11.3% LFL growth in Polish order count - high volume System Sales 17.1 21.4 25.2% m
Slide 6: The Building Blocks for Success
THE BUILDING BLOCKS FOR SUCCESS EXECUTING OUR STRATEGY FOR GROWTH ORGANIC GROWTH CUSTOMER Retention IMPROVED PROFITABILITY Converting corporate stores to A strong customer value Increased AWOC and lower unit franchises will provide proposition improves customer costs support enhanced store medium te
Slide 7: 12 Months of Adopting a High-Volume Mentality
12 MONTHS OF ADOPTING A HIGH-VOLUME MENTALITY VOLUME IS THE KEY TO PROFITABILITY Average Delivery Time (in minutes) AVG WEEKLY ORDER COUNT 40 800 35 700 30 600 25 500 20 400 JUL 21 OCT 21 JAN 22 APR 22 JUL 22 OCT 22 JAN 23 APR 23 JUL 23 APR 22 APR 23 OCT 21 JUL 22 OCT 22 JUL 21 JAN 22 JAN 23 JUL 23
Slide 8: Improved Customer Satisfaction
IMPROVED CUSTOMER SATISFACTION HIGHER CUSTOMER RETENTION MOBILE APP NET PROMOTER SCORE CONSUMER BASE INSTALLATIONS 60% 64% +163% 40 33 25 20 36% 40% JUN 22 JUN 23 JUN 22 JUN 23 JUN 22 JUN 23 NEW RETURNING NEW RETURNING • Focus on increasing mobile app • Focus on improved delivery • Order counts 14%
Slide 9: Higher Volumes Driving Improved Profitability
Higher volumes driving improved profitability HIGHER AWOC DRIVEN BY IMPROVEMENTS ACROSS ALL STORES • 37% of stores now above 750 AWOC • Good quality growth – more stores doing high volume supported by fewer stores doing low volume • Growing percentage of profitable stores • Structurally flawed store
Slide 10: Dominant Player in Warsaw
Dominant player in Warsaw HIGHLIGHTS THE BENEFITS TO THE BRAND OF STORE DENSITY IN AN AREA • Warsaw AWOC now exceeds 750 • 22% increase in AWOC YoY • 86% of stores in Warsaw are profitable or breakeven • Significant improve in EBITDA YoY, up 5% pts 10 INVESTOR PRESENTATION - SEPTEMBER 2023
Slide 11: Store Economics Consistently Improving
STORE ECONOMICS consistently IMPROVING PROFITABILE Stores ARE THE KEY TO SUCESSFUL FRANCHISING 0,2 5% 0,1 0,1 0,0 0% -0,1 -5% -0,1 -0,2 -0,2 -0,3 -10% JAN 22 FEB 22 JUN 22 OCT 22 JAN 23 FEB 23 JUN 23 MAR 22 APR 22 MAY 22 JUL 22 SEP 22 MAR 23 APR 23 MAY 23 JUL 23 NOV 22 AUG 22 DEC 22 AUG 23 EBITDA (G
Slide 12: Market Opportunity
MARKET OPPORTUNITY Replicating the success of domino’s in other markets No. Stores AWOC • Currently 25 stores • Poland has the potential to support 900 with AWOC above 250 500+ stores 689 900 orders 114 • Medium term target • AWOC expected to to grow to 250 grow 28% • As stores grow faster, they wil
Slide 13: Summary
SUMMARY Becoming the dominant QSR in Poland and Croatia • Significant progress made over the last 12 months • Improvements to delivery times and product quality driving higher customer satisfaction • Higher Average Weekly Order count key to higher profitability • Improving store economics will kick
Slide 14: Appendix
APPENDIX 14 INVESTOR PRESENTATION - SEPTEMBER 2023
Slide 15: Our Vision
Our vision To emulate the success of Domino's Pizza franchises across the globe in Poland & Croatia, delivering best in class, value for our customers and attractive returns to our shareholders 15 INVESTOR PRESENTATION - SEPTEMBER 2023
Slide 16: Management Team & Board
MANAGEMENT team & BOARD STRENGTHENED BOARD WITH PRIOR DOMINO’S EXPERIENCE EXECUTIVE DIRECTORS NON-EXECUTIVE DIRECTORS Nils Gornall - CEO David Wild - Chairman Przemyslaw Glebocki - NED Appointed August 2022 Appointed January 2023 Appointed January 2021 • 28 years of operational experience at Domino’
Slide 17: Timeline Since Listing
TIMELINE SINCE LISTING ACQUISITION OF NEW CHAIR Dominium Appointed David Wild as Chairman, a 19 stores A Polish pizza restaurant group veteran of the opened competitor. The deal Domino’s business, By June 2014, DP doubles the number previously CEO of Poland has opened 19 of Domino’s stores in Domino
Slide 18: Our Core Market – Poland
Our core market – Poland ESTABLISHED BRAND WITH HUGE POTENTIAL TO SCALE • Large EU market with 38 million population, 19th globally in POLAND terms of GDP (PPP) POPULATION: 38 million CURRENT STORE COUNT: 113 stores • Above average GDP growth POTENTIAL STORE COUNT: 500+ • 63% GDP growth (in PPP) sin
Slide 19: 3rd Largest Pizza Chain in Poland, Planning to Be No.1
3rd largest pizza chain in Poland, planning to be no.1 380 counties in Poland, we operate in 47 currently 43 Differentiating factors: 32 Dominant in 26 22 15 Proximity to client in large cities, desirable locations Warsaw (customer satisfaction and labour cost) *by number of stores Domino's Pizza Hu
Slide 20: New Market - Croatia
NEW MARKET - CROATIA STRONG PROFITABILITY FROM THE OUTSET CROATIA POPULATION: 4 million • No chained Pizza restaurant on the market. Visible McDonalds CURRENT STORE COUNT: 4 stores (1 MORE & KFC opening 2023) • Above average GDP growth POTENTIAL STORE COUNT: 50+ • 32% GDP growth (in PPP) since 2011
Slide 21: Healthy Balance Sheet
HEALTHY BALANCE SHEET CASH BALANCE OF £2.7 MILLION Group Balance Sheet Unaudited Unaudited Currency: GBPm 30 June 2022 30 June 2023 % change 1. Non-current assets increased by 5.4% as of 30 Jun 2023 Non-current assets 1 31.2 32.9 5.4% compared to 30 Jun 2022 related to AAP (Croatia) Goodwill and int
Slide 22: Strong Economic Growth in Poland & Croatia
STRONG ECONOMIC GROTH IN POLAND & CROATIA TWO OF THE HIGHEST GROWTH MARKETS IN EUROPE 22 INVESTOR PRESENTATION - SEPTEMBER 2023
Slide 23: Rapid Growth in Disposable Incomes
RAPID GROWTH IN DISPOSIBLE INCOMES TRENDS ARE EXPECTED TO CONTINUE Source: Eurostat – The real gross disposable income of households per capita (index = 2008) Source: Eurostat – Real GDP per capita 23 INVESTOR PRESENTATION - SEPTEMBER 2023
Slide 24: Slowing Inflationary Pressures
SLOWING INFLATIONARY PRESSURES HEADWINDS SHOULD TURN TO TAILWINDS HICP in Poland (%) 20 15 10 5 0 kwi.22 wrz.22 lis.22 kwi.23 sty.22 lut.22 maj.22 maj.23 cze.22 paź.22 sty.23 lut.23 cze.23 mar.22 lip.22 sie.22 gru.22 mar.23 lip.23 12M Annualised Month on Month • Inflationary pressures began to abate
Slide 25: Polish Pizza Market Overview
Polish Pizza Market overview HEADWINDS SHOULD TURN TO TAILWINDS 2017-22 £ 1.3B CAGR 26% 24% 9.4% 2022 value Growth rate Share of qsr Share of of total of total restaurants limited Polish Pizza sector in total pizza service market at market restaurants RSP in total market • The Polish pizza market si