Domino's Pizza Enterprises Limited · ASX:DMP
Domino's Pizza Enterprises — Investor Day (April 2024)
94 slides from Domino's Pizza Enterprises's investor day presentation, Apr 12, 2024
Slide 1: DMP Strategy Day
Domino’s Pizza Enterprises Limited 1/485 Kingsford Smith Drive Hamilton, QLD, Australia 4007 ACN: 010 489 326 www.dominos.com.au 12 April, 2024 DMP Strategy Day Domino’s Pizza Enterprises Ltd will be providing an update on the Company’s strategy this morning, in Brisbane. Management will host presen
Slide 2: 12th April, 2024
For personal use only 12th April, 2024
Slide 3: Don Meij, Group CEO & Managing Director
For personal use only Don Meij Group CEO & Managing Director ANZ CEO
Slide 4: Presenters and Q&A
PRESENTERS AND Q&A a> Cc [o) oO op) =) Cc [o) y D . ‘ | 2 ' o MICHAEL JOHN DAVID MARTIN o GILLESPIE HARNEY KLAGES STEENKS
Slide 5: Delivery growth over past years
4 For personal use only growth over totals over growth over past 5 years past 5 years past 5 years Source: Company data. Includes all markets operating during this period. Delivery growth as measured by delivery order counts.
Slide 6: Future of our industry
5 Future of our industry: For personal use only
Slide 7: Global online food delivery growth
6 For personal use only Global food retail including food delivery Global online food delivery Growing at MEAL delivery is currently in 2024 annually of this market with room to grow share Reference: Statista, Online Food Delivery Worldwide
Slide 8: Coverage in Germany and France
For personal use only IN SOME OF OUR BIGGEST OPPORTUNITY MARKETS GERMANY AND FRANCE WE CURRENTLY COVER JUST 0% OF THE COUNTRY
Slide 9: Total QSR market size and DMP market share
8 Total Market Size of QSR (billion AUD) 2023 For personal use only 200 B 6% 184.2 B 180 B 5.20% 5% 160 B 140 B 4% 120 B 3.53% 100 B 96.1 B 3.44% 3% DMP Market share 80 B 58.7 B 2% 60 B 1.82% 40 B 0.69% 23.2 B 1% 20 B 0.42% 12.1 B 0.89% 5.8 B 6.8 B 0.0K 0% Japan Germany France Australia Netherlands
Slide 10: Dominant in pizza in ANZ, small part of QSR
DOMINO’S ~ IS DOMINANT IN ra PIZZA IN ANZ BUT A SMALL ° PART OF o QSR IN ANZ > AND EVEN SMALLER © IN TOTAL QSR o} IN A GROWING GLOBAL Y MARKET o lok 5 LL gy g
Slide 11: Dominant sustainable delivery QSR by 2030
For personal use only WE ARE THE DOMINANT SUSTAINABLE DELIVERY QSR ua 2QO30
Slide 12: Three key areas: Food, Brand, People
11 Three key areas we are focused on For personal use only FOOD BRAND PEOPLE BRAND PEOPLE and how these all build the foundations for our future growth.
Slide 13: Mission: Inspired products and services
12 Mission For personal use only Inspired Products & Services CUSTOMER DOMINO’S DELIVERED DELIVERED Designed for Delivery (PICK-UP) (PREMIUM) Value = (Product + Service + Image) / Price That are high quality and delivered quickly for an affordable price PRODUCT QUALITY: 4.5 DELIVERY: 18 MINS. NET PR
Slide 14: We are in the business of
For personal use only We are in the business of
Slide 15: The Food Triangle
For personal use only THE FOOD TRIANGLE SUSTAINABILITY THE DOMINO'S X-FACTOR THE PIZZA-NESS 14 Y
Slide 16: My Domino's Box, chips/chicken box, rice bowl and pastas
15 For personal use only My Domino’s Box Chips/Chicken box Pizza rice bowl and pastas (with local variations)
Slide 17: Dominant sustainable delivery QSR in every market by 2030
16 For personal use only The dominant sustainable delivery QSR in every market by 2030 CUSTOMER DOMINO’S DELIVERED DELIVERED (PICK-UP) (PREMIUM)
Slide 18: Product quality, delivery time, NPS
17 For personal use only Product quality Delivery time NPS
Slide 19: Local product innovations: France, AU/NZ, Japan
18 For personal use only Kebab pizza in FRANCE Meltzz in AU/NZ Volcano Pizzas in JAPAN
Slide 20: Linking together food, people and brand
19 For personal use only Linking together food, people and brand
Slide 21: Why fortressing is essential
20 For personal use only Fortressing is It’s essential And it’s essential essential to deliver to maximise the to build a profitable, a hot, freshly benefits of our brand sustainable franchise prepared meal, safely and investments partner network. and quickly, at an in marketing affordable price. an
Slide 22: When people look at us they forget we are in the food business
“WHEN PEOPLE LOOK APDELI : THAT WE ARE IN THE FOQI = ~ q = | ) ay =e a | ad # 7 Wek WS ESS. van THEY SOMEHOW FORGET
Slide 23: Product quality and store profitability suffer beyond 10 minutes
PRODUCT QUALITY SUFFERS AT >10 MINUTES DELIVERY RUN TIME EQUALLY STORE PROFITABILITY SUFFERS AT >10 MINUTES RUN TIME
Slide 24: Fortressing flywheel: proximity to customers
23 Proximity to Customers – Fortressing – allows for quicker, more consistent delivery For personal use only brings us closer to experience Customers Improved customer experience – Profitable Lower run times Franchise reduce Cost of PARTNERS – Delivery continue to open Stores lower Cost of Delivery
Slide 25: Franchise partner model
24 For personal use only Entrepreneurs Capital light 90%+ internal Rely on strong Units per and partners in growth – a proven unit economics franchise partner/ our business difference including for sustainability average tenure managers to and growth franchise partners
Slide 26: Franchise partner exclusive territory rights
25 For personal use only They have the exclusive rights to open, or not open, a store in that territory, for a contracted period.
Slide 27: Cost increases passed on or reduce profitability
26 For personal use only we need to respond and either pass on that cost to the customer, or reduce profitability.
Slide 28: New store sales benefits
27 For personal use only The new store gets the most profitable delivery sales (because they’re closer) and builds new carry-out customers.
Slide 29: Product quality vs delivery time
28 For personal use only Product Quality vs Delivery Time 2% Product Quality 12% Product Quality change in 10 minutes change in 21 minutes 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Delivery time (minutes) * DPJ data - all stores, based on delivery time from customer order to arrival
Slide 30: Japan stores fortressed: product quality and NPS
29 For personal use only Product Quality for Stores Being Fortressed NPS for Stores Being Fortressed +5% +76% Before Fortressing After Fortressing Before Fortressing After Fortressing * 1-year pre- & post-performance of Domino’s Japan stores fortressed in December 2022
Slide 31: 30%+ reduction in delivery costs from shorter runtimes
30 For personal use only 30%+ reduction in delivery costs is achievable in all markets from shorter runtimes Average cost of delivery per country Australia Belgium France Japan Netherlands New Zealand <=10 Mins Runtime >10 Mins Runtime * Company data: cost of delivery = labour cost (delivery run tim
Slide 32: Improving sales and unit economics to lift franchise profitability
31 IMPROVING SALES AND UNIT ECONOMICS TO LIFT FRANCHISE PARTNER PROFITABILITY AND STORE PAYBACKS For personal use only HIGH PERFORMING EXTERNAL HEADWINDS REBUILDING • Positive execution of • Experiencing short-term • Applying proven proven strategies to build issues affecting sales approaches and ex
Slide 33: At the heart of our turnaround
32 At the heart of our turnaround For personal use only With a contribution margin of 30%+ We intend to take profitability our primary focus is growing volumes in every store from a global average of Increasing AWUS • Inspired new products • Growth in aggregators • Targeting carry-out with clear ent
Slide 34: FY24 target network savings
33 For personal use only FY24 TARGET NETWORK SAVINGS ~$50M (1) ~$21M GROSS SAVINGS ACHIEVED H1 Some savings delayed, largely due to timing of store closures in France Final restructure planned in this market to take place during Q4 24 1/3rd OF BENEFITS ARE BEING SHARED WITH FRANCHISE PARTNERS (2) 1)
Slide 35: Store expansion potential by region
34 For personal use only ASIA 2.0X CURRENT MARKET SIZE ANZ 1.3X CURRENT MARKET SIZE EUROPE 2.0X CURRENT MARKET SIZE GROUP 1.9X CURRENT MARKET SIZE STORE EXPANSION IS IMPORTANT TO THE GROWTH OF FRANCHISE PARTNERS AND DPE, BUT RELIES ON IMPROVED UNIT ECONOMICS WE ARE COMMITTED TO THE LONG-TERM POTENTI
Slide 36: Michael Gillespie, Chief Commercial Officer
For personal use only Michael Gillespie Chief Commercial Officer
Slide 37: Three key areas: Food, Brand, People
36 Three key areas we are focused on For personal use only FOOD BRAND PEOPLE BRAND PEOPLE and how these all build the foundations for our future growth.
Slide 38: Growing the Domino's brand in all markets
37 For personal use only Growing the Domino's Brand in all markets through inspired products and service Leveraging our Marketing Products that Playing to win inside Technology Inspire aggregators And leveraging it to win in all channels
Slide 39: Dominant sustainable delivery QSR by 2030
For personal use only The dominant sustainable delivery QSR in every market by 2030 CUSTOMER DOMINO’S DELIVERED DELIVERED (PICK-UP) (PREMIUM)
Slide 40: Brand
For personal use only BRAND PEOPLE 39
Slide 41: Always-on Market Mix Modelling
40 Best-in-class capabilities for understanding media effectiveness & optimising investment decisions For personal use only through an always-on approach to Market Mix Modelling (MMM). • An advanced methodology for measuring media contribution to sales & ROI – seeing outcomes for all media investmen
Slide 42: Brand
For personal use only BRAND PEOPLE 41
Slide 43: Marketing reach figures
For personal use only 15.1mill 17.4mill 42
Slide 44: AU, JP, NL marketing
For personal use only AU JP NL 43
Slide 45: Dominant sustainable delivery QSR by 2030
For personal use only WE ARE THE DOMINANT SUSTAINABLE DELIVERY QSR ua 2QO30
Slide 46: Dominant player inside the aggregators
45 For personal use only TO BE THE DOMINANT, SUSTAINABLE DELIVERY QSR, WE HAVE TO BE THE DOMINANT PLAYER INSIDE THE AGGREGATORS. BUILD PROMOTE INVEST IN FOR FLAWLESS FOR CONVERSION OPERATIONS BRAND PEOPLE
Slide 47: Maximising visibility
46 MAXIMISING VISIBILITY For personal use only BRAND PEOPLE
Slide 48: Brand
For personal use only BRAND PEOPLE 47
Slide 49: Brand
For personal use only BRAND PEOPLE 48
Slide 50: Applying learnings to Malaysia and Taiwan
49 For personal use only Taking these learnings and now applying to Malaysia and Taiwan markets. *First 3 Months of '23 vs '24
Slide 51: David Klages, Chief People and Culture Officer
For personal use only David Klages Chief People and Culture Officer
Slide 52: Three key areas: Food, Brand, People
51 Three key areas we are focused on For personal use only FOOD BRAND PEOPLE BRAND PEOPLE and how these all build the foundations for our future growth.
Slide 53: People - 2030
For personal use only PEOPLE - 2030 52
Slide 54: Store manager competency and tenure as predictor of success
a o Ville #7] PREDICTOR Ol SUETESS OF A DOMING'S SVORE US Thi IMPETENCY & TENURE OF IF ORE MANAGER DOMINO’S PIZZA INC. For personal use only
Slide 55: For personal use only
For personal use only 54
Slide 56: Overcoming people challenges
a 4 OVERCOMING PEOPLE CHALLENGES MANAGER BURNOUT & PEOPLE GETTING CHURN | (i 30 DAY! | (i ec OR ea peiva arenas BEFORE} = Ln aut allt STORE arene [== Paco fememeneen | Winiten «=| virnreny _ARUEHISEH ud FRANCHISEES 55 personal use only LOW VOLUME aE 2 PIPE
Slide 57: DPE 2030 Mission
For personal use only DPE 2030 MISSION WE ARE THE DOMINANT, SUSTAINABLE DELIVERY QSR IN EVERY MARKET BY 2030 SUPERCHARGE GLOBAL DELIVERY ORDER COUNT * SUPERCHARGE ORGANIC STORES F GROWTH FRANCHISE MANAGERS PARTNERS 56
Slide 58: Store steps scoring and capability
pee ee morrow | iz | 2 { o { o { o { 33 | sex | 2nzen [2zeomin| 425 | a i a De] | ae sas tr Y) =) © & SIS: STORE TOTAL STEPS (TOTAL NUMBER OF STEPS FROM ALL STORE STAFF) TOP STORES WITH HIGH STS SCORES ARE MORE STABLE, g CAS : CREW AVERAGE STEPS (NUMBER OF STEPS COMPLETED BY INDIVIDUAL STAFF) BECAUS
Slide 59: Foundations: competency framework and learning plans
FOUNDATIONS _ OPTIMAL TEAM CONSTITUTION LEADERSHIP "3 COMPETENCY awe FRAMEWORK ROLE-BASED TECHNICAL COMPETENCY FRAMEWORK CERTIFICATION COURSE MODULE LEARNING PLANS For personal use only g
Slide 60: Learning plans and certification
For personal use only ) LEARNING PLANS GURATIE Bi Course =Certi Certification (Map point) I = Certificate Certification Course (Map point) [Bl = eLearning Module L Wa AS7 59
Slide 61: Data driven people performance
DATA DRIVEN PEOPLE PERFORMANCE For personal use only ath To Excellence oO 14.05K oy Learners broges mK © 93% 8 sx» Haine! 95% Compa Profiles = Training Wee 96 % E_ 6 Mandatory Training Average Certs Training Progress © Diver Sefety @Mandatory Sete Delnery Retest 2023 ‘orertation Chechsis- Deer é Ovi
Slide 62: Manager to franchise partner pathway
P2E: MANAGER TO EFRANCHISE PARTIIER —— LEVEL 7 LEVEL 8 ANAGER IN TRAINING STORE MANAGER FRANCHISE PARTNER eMITCH PROGRAM | a CUSTOMER RELATIONS GROWING PEOPLE s— RECRUITMENT & TRAINING GROWING CUSTOMERS | _ DOMINO'S LEADERSHIP PROGRAM | hn COST CONTROL GROWING SALES LEADING SELF COMPLIANCE GROWING P
Slide 63: Franchise Academy
‘VER 70 NEW FRANCHISE PARTNERS PARTICIPATING IN PAST 24 MONTHS Purpose Gavin the next generation of Franchise Partners with ie knowledge, skills, tools and confidence to succeed (as best practice operators with Domino’s. a _ Over two jam-packed days, we hear from over 16 upport teams, from Payroll t
Slide 64: John Harney, Group Chief Partnerships Officer
For personal use only John Harney Group Chief Partnerships Officer
Slide 65: Dominant sustainable delivery QSR by 2030
For personal use only WE ARE THE DOMINANT SUSTAINABLE DELIVERY QSR ua 2QO30
Slide 66: Environment, Social, Governance (ESG)
65 For personal use only Environment, Social, Governance (ESG)
Slide 67: For personal use only
For personal use only
Slide 68: Commitment to making a difference
67 For personal use only Commitment from Board Our team members through to Management, and future team members to team members and expect to work for franchise partners a business committed to making a difference
Slide 69: Foundations and targets set: SBTi validation
68 For personal use only Foundations and Targets set Science Based Targets initiative (SBTi) validation 1st time in the QSR industry for a company to have its Committed to targets validated based on the latest scientific guidance on Forest, Land and Agriculture (FLAG). reduction in carbon intensity
Slide 70: Carbon footprint FY21-23
69 For personal use only These are ambitious goals in a FY23 footprint has grown +4.8% vs. FY22, correlated to business multinational, franchised business growth and mainly driven by store development and M&A in Asia Our emissions (FY23 – 1.5 million tonnes of CO2): DPE FY21-23 Corporate Carbon Foot
Slide 71: Double Materiality assessment
70 For personal use only Double Materiality assessment Completed to meet the reporting requirements of both EU and AU legislation Key focus in three key areas of the Group 1 2 33 • E-delivery in all our markets • Responsible sourcing policy • Footprint reduction of cheese per pizza • Low carbon ener
Slide 72: ESG resourcing and software
71 For personal use only Head of ESG – Software imminent appointment Traceability software “Impact Buying” Supported by three full time staff being rolled out as well as multiple team members from all of our markets ESG Reporting software being reviewed and will roll out in May ERP software being re
Slide 73: ESG priorities ahead
72 For personal use only Responsible AU and EU reporting Raise our game in Define and get Sourcing Policies requirements Modern Slavery accredited – reporting a green store design Implement female- Expand Back of House Expand low/zero centric leadership (BOH) Dough emission delivery pathways
Slide 74: For personal use only
For personal use only
Slide 75: Supply chain and delivery
74 For personal use only A delivery every markets Sourcing of food, warehouses beverages, and packaging stores & fresh vegetables
Slide 76: Efficient supply chain is good for business and the planet
75 For personal use only An efficient supply chain is good for our business, and the planet Back of House dough Centralising procurement A significant first step in reducing emissions Global synergies and best Dough is made in store every day practice applied to all markets • 73% of our stores are B
Slide 77: Martin Steenks, CEO Domino's Pizza Japan
For personal use only Martin Steenks CEO, Domino’s Pizza Japan
Slide 78: Japan leadership team
77 For personal use only Martin Steenks Brett Moore Hiroshi Kakiuchi Shin Sasaki Eric Yutaka Tai Tony Sai Asako Takahashi AYUMI MATSUBARA CEO Japan COO Japan Corporate Ops Japan CDO Japan CFO Japan CIO Japan CPO Japan Head of communications, Japan 25 years in Domino’s Brett started as a 2018 marked
Slide 79: 1,015 total stores
For personal use only 1,015 TOTAL STORES 78
Slide 80: We are delivering: Agenda
WE ARE DELIVERING 79 For personal use only Agenda • Update on 2017 strategy (100% ownership) • Our future DPJ Investor Day – April 2019
Slide 81: Customer insights, menu and marketing
80 For personal use only • Building on customer insights, new menu offerings and new marketing • Targeting more occasions DPJ Investor Day – April 2019
Slide 82: Successful approaches from other markets applied
81 “Successful approaches from other markets are being applied – but more time is required”1 For personal use only Consistent Wider Inspired pricing with adoption of Winning new lower entry proven inside product point promotions Aggregators In FY24 we have seen encouraging signs from some of our new
Slide 83: Our strategy is delivering - Team
Our strategy is delivering - TEAM 82 NUMBER OF STORES PER FRANCHISEE For personal use only 35.5% 35.5% Capitalising on the real estate opportunity available for new store builds 13.7% Becoming an employer of choice for team members, including store managers 2 3-5 6 or more H121 H122 H123 H123 H124 E
Slide 84: Our strategy is delivering - Team
Our strategy is delivering - TEAM 83 For personal use only STRATEGIC REFRANCHISING FREIGHT HARMONISATION DOUGH PROJECTS (National pricing) (Back of House Dough)
Slide 85: Domino's market position by market
Our strategy is delivering - TEAM 84 Domino's Market Position by Market For personal use only Apr 19 May 22 Dec 23 WE NOT ONLY FORTRESSED EXISTING MARKETS, BUT EXPANDED TO NEW REGIONS OPENING STORES CLOSER TO OUR CUSTOMERS #1 Brand by Market Apr 19 May 22 Dec 23 People per store (137K1 → 122K) Domin
Slide 86: Franchise store percentage by prefecture
Our strategy is delivering - TEAM 85 FRANCHISE STORE % (As of December 2023) For personal use only 100% (6 prefs) 50-99% (31 prefs) 1-49% (5 prefs) 0% (5 prefs)
Slide 87: Major store count and Japan delivery pizza industry
86 Major 3 Store Count For personal use only 2013 2019 2023 1015 642 596 552 529 537 358 416 287 CY Changes of Store Count of Japan Delivery Pizza Industry 2,754 2,797 #1 DPE #2 in Market 2,460 2,624 Acquisition in Market 2,324 2,210 2,210 2,230 2,270 2,161 2,145 958 1015 882 287 742 354 432 472 503
Slide 88: Store presence by prefecture
87 For personal use only FY13 FY19 FY24 17 36 47 #1 market #1 market #1 market 0 8 27 Domino’s stores presence by prefecture
Slide 89: Market position, TV tiers and AWOC by prefecture
88 Then: Domino’s PosiTion by markeT (aPr-19) Now: TV Market Tiers (CY2023) Now: AWOC1 by PREFECTURES (CY2023) #1 (5 prefectures) Tier 1: TVC Area (16 prefectures) Tier 1 For personal use only Tier 2 #2 (15 prefectures) Tier 2: TVC Area (3 prefectures) Tier 3 #3 (9 prefectures) Tier 3: TVC Area (13
Slide 90: Opportunities
89 For personal use only Opportunities • Solo after-work dinners • Weekday solo lunches • Late lunch gatherings • Solo weekend dinners • Late afternoon meals with families and children • Child-friendly weekday family lunches
Slide 91: Inspired products on more occasions
90 INSPIRED PRODUCTS ON MORE OCCASIONS For personal use only Cheese Volcano Grab & Go carry-out (January) & & e.g. Quattro offerings My Domino’s Box Cheese Twist & (March) <Y1000 entry point (February)
Slide 92: Challenges and actions
91 CHALLENGES ACTIONS For personal use only • Rapid expansion during COVID has resulted in a • Working with franchise partners to accelerate larger weighting of immature stores store maturity and profitability • The breadth of our expansion resulted in some • Review and test prefectures with sub-opt
Slide 93: 1,015 to 2,000 stores (+97.0%)
92 For personal use only 1,015 2,000 (+97.0%)
Slide 94: Designed to deliver
For personal use only DESIGNED TO DELIVER.
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