Domino's Pizza Enterprises Limited · ASX:DMP
Domino's Pizza Enterprises — H1 FY2008 Earnings Presentation
24 slides from Domino's Pizza Enterprises's earnings presentation, Feb 20, 2008
Slide 1: First Half Results to 30 December 2007
For personal use only Domino’s Pizza Enterprises Limited First Half Results to 30 December 2007
Slide 2: Executive Team
For personal use only EXECUTIVE TEAM Don Meij Chief Executive Officer/ Managing Director Andrew Rennie Chief Executive Officer France/Belgium Richard Coney Group Chief Financial Officer 2
Slide 3: Agenda
AGENDA For personal use only 1. Executive Summary 2. Network Store & Sales Growth 3. Revenue & EBITDA Results • Results Australia, New Zealand & Europe • Results Corporate • Results Franchise • Results Corporate Development & Unallocated 4. Financial Detail • Profit & Loss • Cash Flow • Balance Shee
Slide 4: Executive Summary
EXECUTIVE SUMMARY For personal use only • Strong Network Sales growth +14.3% over H107 • Solid Group SSS growth +7.6% over H107 • Slight reduction in revenue as a result of Corporate store sell down • Significant improvements in EBITDA of +35.5%, NPBT+ 80.7% and NPAT of +75.8% over H107 • Europe Ope
Slide 5: Executive Summary
Total Group-YTD SSS for First Half of Financial Year 7.64% EXECUTIVE SUMMARY 2007 For personal use only 2006 3.1% Significant Organic Store growth 2005 4.42% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% • Group +27 Stores • ANZ +6 Stores ANZ YTD SSS for First Half of Financial Year • Europe
Slide 6: Executive Summary
For personal use only EXECUTIVE SUMMARY ANZ Innovation to 30 December 2007 • Brand campaign Domino’s Effect had a positive impact • On-line ordering now in 97% of Australian stores • NZ now on-line in 87% of stores • Strong promotional success in ANZ • Pulse rollout project is complete for ANZ 6
Slide 7: Network Store & Sales Growth
For personal use only NETWORK STORE & SALES GROWTH 600 Network Sales 518.9 600 500 H2 Network Store Count 80.7 400 359.4 518.9 Actual Projection 306.1 $M 300 287.0 H2 at Dec 2007 to June 2008 500 252.9 187.2 H1 200 174.7 212.5 H2 H1 H2 182.8 65.1 85.1 H2 H1 80.7 Australia 407 140.6 157.5 H1 H1 201.9
Slide 8: Network Store & Sales Growth
NETWORK STORE & SALES GROWTH For personal use only H1 06 H2 06 F/Y 06 H1 07 H2 07 F/Y 07 H1 08 Network Sales ($ mil) 176.6 182.8 359.4 251.0 267.9 518.9 287.0 • Additional 27 new Number of Aus/NZ stores stores Franchised stores 289 301 301 313 343 343 365 Corporate stores 126 137 137 144 124 124 108
Slide 9: Revenue & EBITDA Results
REVENUE & EBITDA RESULTS For personal use only REVENUE EBITDA 24.7 22.0 230.1 H2 0.5 H2 28.3 17.8 172.9 13.0 13.4 H2 133.4 H2 H2 H1 12.5 83.7 115.8 11.3 11.9 1.4 109.7 H2 H1 H1 H1 H2 H1 H1 88.0 21.4 9.1 12.2 86.3 30.0 7.8 11.0 11.6 H2 H1 H1 70.4 H1 71.5 96.7 H1 86.6 8.7 85.8 H1 34.7 3.1 61.9 H1 (1.4
Slide 10: Results – Australia, New Zealand & Europe
RESULTS – AUSTRALIA, NEW ZEALAND & EUROPE For personal use only • Strong EBITDA growth in core earnings as highlighted in the next 3 slides • Sell down of Corporate stores improving EBITDA margins • Overhead reductions in ANZ • Europe achieved strong EBITDA growth, despite a step up in royalties and
Slide 11: Results - Corporate
RESULTS - CORPORATE For personal use only 2007/08 • EBITDA margins in line with expectations, affected by restructuring and reduction in Corporate store numbers Going Forward • This area expected to reduce in the quantum of dollars as Franchise increases in line with sell down of stores • Margin sti
Slide 12: Results - Franchise
RESULTS - FRANCHISE For personal use only 2007/08 • Significant Margin improvement when Distribution Revenue is removed as a historical comparison - record 43.9% (also benefiting from reduced store construction) Going Forward • Expecting the franchise segment to be the strongest growth segment of AN
Slide 13: Results – Corporate Development & Unallocated
RESULTS – CORPORATE DEVELOPMENT & UNALLOCATED For personal use only Corporate Development • As forecast, Corporate Development profit lower • Includes closure and write-off of a test concept Domino’s 2 Go – impact A$0.3m Other / Unallocated (G&A) • Overhead office costs and revenue maintained H1 06
Slide 14: Profit & Loss
PROFIT & LOSS For personal use only • Financing costs down 9% to A$1.3m as a result of debt reduction • Tax result for H108 is 28.7% compared to H107 26.8% • Earnings per share (basic) 9.6 cents +68.4% • Interest cover improved to 7.5x H1 06 H2 06 F/Y 06 H1 07 H2 07 F/Y 07 H1 08 +/(-) H1 07 $ mil $
Slide 15: Cash Flow
CASH FLOW For personal use only H1 2007 H1 2008 Aust/NZ Europe Group Aust/NZ Europe Group $'000 $'000 $'000 $'000 $'000 $'000 Cash flows from operating activities Receipts from customers 106,814 22,082 128,896 95,640 32,015 127,655 • Cash from Operations Payments to suppliers and employees (100,239)
Slide 16: Balance Sheet
H2 2007 H1 2008 +/(-) H2 2007 BALANCE SHEET For personal use only $ mil $ mil $ mil Current assets Cash assets 7.9 8.1 0.2 Trade & other receivables 25.8 28.1 2.4 • Increase in trade and other Inventories 5.0 4.7 (0.3) receivables, A$1.6m in trade Other current assets 4.1 6.4 2.3 Assets classified a
Slide 17: Europe
For personal use only EUROPE • Record number of organic stores in the first half • SSS strong +15.03% due to colder than normal summer • No. 1 pizza delivery brand in France and the Netherlands • Netherlands is now averaging 18% of its delivery orders online and growing Award winning TVC • Commenced
Slide 18: Europe (Cont)
For personal use only EUROPE (Cont) • First steps to integrate back office processes of Europe business with major IT investments in new systems: – Role out of new Enterprise Resource Planning platform (Microsoft Navision) for all countries – Investments in new POS, already operating in more than 45
Slide 19: Looking Forward – ANZ
LOOKING FORWARD – ANZ For personal use only • Strong product pipeline with an increased focus back on pizza • Cash acceptance for online ordering rolling out and getting good traction. Aiming for double digit mix of sales from online ordering within 12 months. Ticket average still significantly high
Slide 20: Looking Forward – ANZ
LOOKING FORWARD – ANZ For personal use only Management aware of: • Commodity prices still rolling through and too early to indicate if all Managements initiatives have negated the cost increases • Labour market for delivery drivers still challenging, and so a stronger focus on carry-out to continue
Slide 21: Looking Forward – Europe
For personal use only LOOKING FORWARD – EUROPE • Very excited as the brand goes to TV in March 08 for the first time ever in France • Launch a new National four digit telephone number in France 3959 • Dutch TV presence expecting to continue to grow • Started planning for new 250 store Dutch commissa
Slide 22: Looking Forward – Europe
LOOKING FORWARD – EUROPE For personal use only EUROPE STORE GROWTH PLAN • Working closer with franchisees 500 ANZ Stores 473 490 to move operations to the next level to manage expected sales 450 life, ie. training, more Operational 440 400 Audits, etc 390 Number of Stores 350 • Expecting strong SSS
Slide 23: Update Guidance for Full Year 2008
UPDATE GUIDANCE FOR FULL YEAR 2008 For personal use only • Confirm Guidance at top end +30% on FY07 NPAT • Store growth +70 (more stores in Europe) • FY08 Net Debt levels further reduced to A$4m – A$8m 23
Slide 24: Conclusion
For personal use only CONCLUSION • Increased return on capital by converting Corporate stores to Franchise • DPE building a strong Balance Sheet for continued growth • ANZ on track for targeted +600 stores • Maintaining active management of commodity prices • Europe is ahead of expectations in profi
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