Domino's Pizza Enterprises Limited · ASX:DMP
Domino's Pizza Enterprises — H1 2009 Earnings Presentation
30 slides from Domino's Pizza Enterprises's earnings presentation, Feb 18, 2009
Slide 1: Half Year Results 2009
Half Year Results 2009 Australia New Zealand France Belgium Netherlands
Slide 2: Agenda
Agenda For personal use only 1. Highlights 2. Results Detail 3. Online & IT Initiatives 4. New Product Launch 5. Outlook & Conclusion 2
Slide 3: 1. Highlights
For personal use only 1. Highlights 3
Slide 4: Result Highlights
Result Highlights For personal use only • Strong Network Sales growth +14.5% over H108 • Solid Group SSS growth +4.2% over H108; ANZ 2.2% and Europe 8.8% • Core earnings up 14.8% on H108 (NPBT excluding Corporate Development) • NPAT up 2.8% over H108 to $6.3m • Earnings on target to meet Market Guid
Slide 5: Result Highlights: Group Network Sales up 14.5%
Result Highlights For personal use only • Group Network Sales up 14.5% • Company Revenue decrease reflects conversion of Corporate stores to Franchise (100% of Corporate store revenue is included but only royalty income for Franchise stores) • Core profits and margins improved in line with the trans
Slide 6: ANZ Highlights
ANZ Highlights For personal use only • Despite the recession New Zealand was strongest performer in the ANZ group for SSS • Online ordering now over 19% of sales in Australia • Australia online sales increased by 290% on H108 • Continuing to grow Domino’s 2Go in stadiums 6
Slide 7: Europe Highlights
Europe Highlights For personal use only • Good organic growth of +11 stores • SSS strong at +8.8% • Netherlands is now averaging 24% of its orders online and growing • Europe became cash generating in Qtr2 of H109 7
Slide 8: 2. Results Detail
For personal use only 2. 8 Results Detail
Slide 9: Network Store & Sales Growth
Network Store & Sales Growth For personal use only • Good store growth with additional Network Sales 15 stores opened in H109 700 591.2 600 • Europe has opened an additional 5 518.9 H2 stores since December 2008 500 H2 106.0 80.7 H2 198.2 • Network Sales include the benefit of H2 400 359.4 187.2 A$m
Slide 10: Network Store & Sales Growth
Network Store & Sales Growth For personal use only • Additional 15 new H1 07 H2 07 F/Y 07 H1 08 H2 08 F/Y 08 H1 09 stores (including 2 Network Sales ($ mil) 251.0 267.9 518.9 287.0 304.2 591.2 328.6 Stadium stores) Number of Aus/NZ stores Franchised stores 313 343 343 365 402 402 406 Corporate store
Slide 11: Revenue & EBITDA
Revenue & EBITDA For personal use only H1 07 H1 08 H1 09 +/(-) H1 08 • ANZ Revenue and $ mil $ mil $ mil % REVENUE EBITDA decrease with restructuring Total Australia/NZ 96.7 85.8 71.7 -16.4% of Corporate stores Europe 21.4 30.0 41.7 39.0% to Franchise Total Revenue 118.1 115.8 113.4 -2.1% EBITDA • A
Slide 12: Corporate
Corporate 2008/09 For personal use only • EBITDA margins ahead of H208; 7.6% versus 5.8% up $0.9m Going Forward • Corporate expected to reduce in the quantum of dollars as Franchise increases in line with sell down of stores • Still expect some volatility of earnings due to continued restructure and
Slide 13: Franchise
Franchise For personal use only 2008/09 • Significant ANZ Margin improvement as a historical comparison - record 43.9%, benefitting from Corporate store sell down • Europe Margins reduced as a result of stepped royalty increase • Margins in Europe structurally lower than ANZ due to in-sourced distri
Slide 14: Corporate Development & Unallocated
Corporate Development & Unallocated For personal use only Corporate Development • EBITDA loss reflects losses on recent sales of Corporate stores Other / Unallocated (G&A) • Trending lower with the reduction of Corporate stores H1 07 H1 08 H1 09 +/(-) H1 08 $ mil $ mil $ mil % EBITDA Corporate Devel
Slide 15: Profit & Loss
Profit & Loss For personal use only • Financing costs down 32.4% to $0.9m as a result of debt reduction • Tax result for H109 is 28.6% compared to FY08 30.5%, FY07 26.1% • Interest cover improved to 10.8 times • Earnings per share (basic) 9.4 cents, slightly down due to increase in issued capital re
Slide 16: Cash Flow
Cash Flow Aust/NZ H1 2008 Europe Group Aust/NZ H1 2009 Europe Group For personal use only $'000 $'000 $'000 $'000 $'000 $'000 Cash flows from operating activities • Cash from Receipts from customers 95,640 32,015 127,655 76,012 49,035 125,047 Operations up Payments to suppliers and employees Interes
Slide 17: Balance Sheet
H2 2008 H1 2009 +/(-) H2 2008 Balance Sheet $ mil $ mil $ mil Current assets Cash assets 12.6 12.7 0.0 Trade & other receivables 24.7 26.1 1.4 Other financial assets 0.6 0.0 (0.6) Inventories 3.5 4.5 0.9 • Increase in Other Financial For personal use only Current tax asset 0.0 0.0 0.0 Other 6.1 6.3
Slide 18: 3. Online & IT Initiatives
For personal use only 3. Online & IT Initiatives 18
Slide 19: Online Marketing - Last Months
Online Marketing - Last 6 Months For personal use only • Launched new websites in Australia and New Zealand which offer – greater integration of online ordering than the previous website – the ability to better integrate promotions within the website • Most visited website in the “Food and Beverage
Slide 20: Online Marketing - Future
Online Marketing - Future For personal use only • Involvement with other digital platforms like an online ordering system on TiVo and iPhone – coming in 2009 • Mobile ordering - increasing the number of ways people can order Domino’s - allowing customers to have full control over their order anywher
Slide 21: Online Ordering – E-Store Benefits: It's WIN–WIN
Online Ordering – E-Store Benefits: It’s WIN–WIN For personal use only Customer - Better Value, Freedom, Choice, Entertainment, Better Service • Everyday better value online than over the phone, with all coupons eligible online • Customer has the freedom to select their order at their own pace; appr
Slide 22: Online Ordering – E-Store Benefits (Cont'd)
Online Ordering – E-Store Benefits (Cont’d): Domino’s – More cost effective, better margin, For personal use only creates more loyalty • Customers spend more online as they love choice and tend to order more items • Labour costs reduce once online volume material, as customer takes their own order •
Slide 23: eRecruitment Website
eRecruitment Website For personal use only • Increase Dominos presence as First Employer of Choice through interactive informative online recruitment site • AUS launch 16 February; NZ launch 16 March • Full stand-alone website/s with interactive quality content regarding roles and working for Domino
Slide 24: 4. New Product Launch
For personal use only 4. New Product Launch 24
Slide 25: Our Exciting ANZ New Menu
Our Exciting ANZ New Menu For personal use only Pasta • Launched 3 new fresh made-to-order high quality pastas served in a unique puff pastry bowl • We believe we have the highest quality, best value product out of the major chains with fresh ingredients like baby spinach and grape tomatoes • Pasta
Slide 26: Our Exciting ANZ New Menu
Our Exciting ANZ New Menu For personal use only Increased Menu • Aiming to appeal to a wider audience. As consumers ‘shift to thrift’, Domino’s have affordable quality meal replacements and treats • Investing savings from lower commodity costs back into quality; better toppings, improved packaging a
Slide 27: 5. Outlook & Conclusion
For personal use only 5. Outlook & Conclusion 27
Slide 28: Looking Forward - ANZ
Looking Forward - ANZ For personal use only • Strong momentum in sales with SSS growth of 5.2% in January 09 • Despite economic downturn, customers still appearing to be active in our space • Lower interest rates will improve the profitability of our Franchisees • Melbourne showing some positive SSS
Slide 29: Looking Forward - Europe
Looking Forward - Europe For personal use only • Commodity prices in Europe dropping significantly (especially cheese). Good for Franchisees • New Commissary will be completed in The Netherlands in December 09 or February 10 • We are benefitting from positive FX with Europe • France has started roll
Slide 30: Conclusion
Conclusion For personal use only • Confident in achieving Market Guidance results for FY09 NPAT growth of 10-15% • Sales tracking strongly in January • Expect to maintain momentum in strong SSS growth in ANZ and Europe • Online sales percentage growth across all countries • Stores numbers continue t
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