Domino's Pizza Group Plc · LSE:DOM
Domino's Pizza — FY2021 Earnings Presentation
40 slides from Domino's Pizza's earnings presentation, Mar 8, 2022
Slide 1: Full Year Results 2021
& Dominos we cor THs FULL YEAR RESULTS 2021 DOMINO'S PIZZA GROUP PLC 52 WEEKS ENDED 26 DECEMBER 2021 8 MARCH 2022
Slide 2: Agenda
S AGENDA Overview — Dominic Paul, CEO 2. Financial performance — David Surdeau, Interim CFO 3. Strategic & operational update - Dominic Paul, CEO 4. Q&A
Slide 3: A Transformational Year
A TRANSFORMATIONAL YEAR Robust trading, excellent strategic progress & returns to shareholders 31 91.2% STRATEGIC PROGRESS New store openings Digital sales Delivered by transformed executive team... New Supply chain centre Completed exit from international markets Classifica LL YE Ton: ARE ESULTS 20
Slide 4: Agenda
S AGENDA 1. Overview Financial performance — David Surdeau, Interim CFO 3. Strategic & operational update 4. Q&A
Slide 5: Sales Performance
SALES PERFORMANCE Continued underlying system sales growth £m FY 21 FY20 %change UK system sales 1,426.3 1,280.7 1.4% + LFL sales growth across UK & Ireland of 10.9% excluding splits Ireland system sales 72.8 67.7 7.5% - Adjusting for VAT, LFL sales grew 5.5% vs. Total system sales 1,499.1 1,348.4 1
Slide 6: LFL sales growth and order count growth
25.0% 20.0% 20.0% 18.5% 15.0% 13.5% 10.9% 8.8% 9.5% 10.0% 6.4% 6.4% 5.7% 5.5% 5.5% 4.9% 3.7% 5.0% 0.0% (5.0%) (2.3%) (5.2%) (10.0%) LFL exc Splits Sales Growth LFL exc Splits Sales Growth (excl VAT) Total Order Count Growth Classification: Internal
Slide 7: Income Statement
INCOME STATEMENT Strong trading delivering underlying earnings growth Underlying, £m FY 21 FY 20 UK & Ireland EBITDA 131.4 120.8 Depreciation & Amortisation (16.5) (16.5) UK & Ireland EBIT 114.9 104.3 German Associate EBIT 5.0 4.7 Finance costs (6.0) (7.8) Profit before tax 113.9 101.2 Taxation (20.
Slide 8: Covid-19 Related Costs & VAT Benefit
COVID-19 RELATED COSTS & VAT BENEFIT Included within underlying items Em FY 21 FY 20 Supply chain operations 22 AB” gay Meuated costs significantly rediiced Franchisee support - 3.7 - Expected to be materially lower in Charges to supply chain EBITDA 2.2 8.3 FY22 Other 0.2 0.7 * UK VAT rate reduction
Slide 9: Analysis of UK & Ireland EBITDA
ANALYSIS OF UK & IRELAND EBITDA Strong performance &m FY 21 FY 20 Key impacts on EBITDA are: Supply chain centre EBITDA 105.2 99.3 + Supply chain EBITDA includes £2.2m of Covid-19 related Netroyalties = A200 878 Costs Net overheads, property &incentives (34.0) _ (319) __ + Increase in net royalties
Slide 10: Franchisee Trading
FRANCHISEE TRADING Healthy profits for the system FY 21* FY 20* Storelevel Average EBITDA £287k £229k EBITDA margin RB 20% ms Average EBITDA ae EBITDA margin 20% 17% * UK only Source: Extracted from submissions from franchisees Not subject to audit by DPG or externally Classiffcatl MA VEAR RESULTS 2
Slide 11: Non-Underlying & Discontinued Operations
NON-UNDERLYING & DISCONTINUED OPERATIONS Materially reduced charges £m FY 21 FY 20 Discontinued International tradingperformance == International exit now complete Iceland 0.7 0.6 + Trading losses materially reduced Norway G8) FromEIO.ImIn FY20 to £1.5min FY2I Switzerland 0.1 (1.5) * Total loss on d
Slide 12: Free Cash Flow
FREE CASH FLOW Strong generation of free cash flow from the business &m FY 21 FY 20 , Continuing operations EBITDA 136.4 125.5 . thovenr oe cash flow of 104.6m eno Discontinued operations EBITDA (0.7) (4.2) . . oe Remove contribution from timing inflow of £11m investments 8-D 10.8) IFRS 16 - net lea
Slide 13: Capital Allocation Framework
CAPITAL ALLOCATION FRAMEWORK Further investment in the core business, increased dividend and buyback PRIORITIES FOR CAPITAL PHILOSOPHY OUTCOMES FOR FY21 Invest in the business to drive Returns-based approach to ) Capital investment of £14.3m long-term organic growth investment in core business to su
Slide 14: Net Debt Bridge
NET DEBT BRIDGE Strong cash generation and shareholder returns €M 400 180 1718 1046 Net Debt / Underlying EBITDA 1.54x at year-end 160 140 120 100 80 60 40 20 Oo Opening net UK&IFCF Funding- Daytona International Forex Capex Dividends Acquisition Share Closing net debt (pre capex) German MAF disposa
Slide 15: We Will Continue to Invest in the Core Business
WE WILL CONTINUE TO INVEST IN THE CORE BUSINESS Capex this year to increase to c.£24m from £14.3m in FY 21 V EAT. MY. ae) 2 See ¢ New eCommerce * Capacity * Franchisee operations platform development in technology Enhancing digital Ireland and South- * GPS capabilities West, UK # Domino's:_ Is FULL
Slide 16: Current Trading & Guidance
CURRENT TRADING & GUIDANCE Current trading * Trading in the first quarter has started well aided by our first national price campaign for several years, made possible because of the resolution with our franchisees * Overall order count and customer acquisition continues to be positive, despite being
Slide 17: Agenda
S AGENDA 1. Overview 2. Financial performance Strategic & operational update - Dominic Paul, CEO 4. Q&A
Slide 18: Growth and Sustainable Returns
Classiffe: GROWTH AND SUSTAINABLE RETURNS Strong business model well placed to succeed in all conditions We have experienced franchisees. System now aligned We are digital. 91.2% sales through digital channels _fuuLyeangesuts 2m $ Dominos World class Brand, leading pizza Brand in the UK We have scal
Slide 19: Trading Environment
TRADING ENVIRONMENT Domino’s business model is resilient in an inflationary environment * Significant scale and buying power through our SCC * Continue to improve labour efficiency and optimise pricing ¢ Growth in collections improves labour efficiency * Strong value message ¢ Better store economics
Slide 20: Classification: Confidential
Classification: Confidential
Slide 21: Classification: Internal
• • • • • • • • 21 JUNE MAC Classification: Internal
Slide 22: Delivering a Better Future Through Food People Love
DELIVERING A BETTER FUTURE THROUGH FOOD PEOPLE LOVE ! BE THE FAVOURITE FOOD DELIVERY AND COLLECTION BRAND, WITH PIZZA AT OUR HEART Nobody delivers like Domino's Turbo-charge our collection OBJECTIVES F business Amplify our product quality & value Uphold our industry-leading scale economics © Model e
Slide 23: Classification: Internal
• • Classification: Internal
Slide 24: Turbocharge Our Collection Business
ULL YEAR RESULTS 2021 nal Collection market is sizeable and growing Underpenetrated in collection and not yet back to 2019 levels We can extend our reach to different occasions and customer segments }” TURBOCHARGE OUR COLLECTION BUSINESS Significant recovery in collections, exited the year at 87% of
Slide 25: Amplify Our Product Quality and Value
Customers love our products We will drive product innovation to stay ahead of competitors Improve value for money perception through national campaigns Integrated new media campaign under new marketing leadership Increase in unique customers to 13.7m Innovation under new leadership - first Festive p
Slide 26: Uphold Our Industry-Leading Scale Economics
}” UPHOLD OUR INDUSTRY-LEADING SCALE ECONOMICS Consistently strong 99.9% availability and Maintain world-class system performance 99.8% accuracy operational performance relative to peers Opened new Supply Capacity development in Continue to invest to Chain Centre in Ireland, evaluate Supply optimise
Slide 27: Model Excellence as a Franchisor
27 FULL YEAR RESULTS 2021 Classification: Internal Continue to bolster our internal capabilities Accelerate growth through our franchisees Seek to broaden our franchisee base >” MODEL EXCELLENCE AS A FRANCHISOR New store incentive plan introduced 31new stores, ahead of plan + Newstores trading ahead
Slide 28: Summary
SUMMARY Transformational year with robust trading, excellent strategic progress, significant returns to shareholders and resolution with Franchisees FY22 has started well. National price campaign has launched. Overall order count is positive Look forward to the future as we accelerate our growth for
Slide 29: Q&A
Q&A WE GOT THIS
Slide 30: Appendix
Appendix WE GOT THIS
Slide 31: UK & Ireland Unit Metrics - 2021
UK & IRELAND UNIT METRICS - 2021 LFL Inc Splits (YOY Growth) Total (All Stores) Items Per Orders Order Product Mix YOY Order UK & ROI Sales (Volume) (Volume) (Volume) Price Orders (m) Growth Total Qi 17.7% (5.99% 7.3% 2.1% 14.1% 16.6m (5.2)% Q2 19.2% 12.2% (7.99% 1.9% 13.0% 17.1m 13.5% Q3 8.3% 8.0%
Slide 32: UK & Ireland LFL Sales Growth - 2021
UK & IRELAND LFL SALES GROWTH - 2021 ai Q2 Q3 a4 FY LFL sales growth 2021 2021 2021 2021 2021 Excluding splits UK 18.8% 20.5% 8.9% (2.5)% 11.1% Ireland 8.2% 14.5% 1.8% 7.3% 10.3% UK & Ireland combined 18.5% 20.0% 8.8% (2.3)% 10.9% Including splits UK 17.9% 19.6% 8.4% (3.6)% 9.9% Ireland 8.2% 14.5% 1
Slide 33: UK & Ireland LFL Sales Growth - 2020
UK & IRELAND LFL SALES GROWTH - 2020 ai Q2 Q3 a4 FY LFL sales growth 2020 2020 2020 2020 2020 Excluding splits UK 4.0% 5.6% 18.3% 15.2% 10.9% Ireland (1.79% = (5.4)% 2.0% 0.2% (1.2)% UK & Ireland combined 3.5% 5.2% 17.5% 14.6% 10.3% Including splits UK 2.8% 4.7% 17.3% 14.6% 9.9% Ireland (3.3)% (6.6)
Slide 34: Store Numbers
STORE NUMBERS &m 27 Dec 2020 UK Franchise Corporate eee ROI AT 1,110 aT 54 UK & ROI total Discontinued Internat Switzerland Weel eee fall Sweden 1,201 Classifhall MA VEAR RESULTS 2021 cd Dominos: ie car Hs
Slide 35: Group Balance Sheet
GROUP BALANCE SHEET 26 Dec &m 2021 Intangible assets 321 Property, plant and equipment 90.3 Right-of-use assets _ A Trade and other receivables _ Inventory Market Access Fee. ttre fl Investments vreeneinsiielienires fll Cashand cash equivalents = . Deferred consideration cine Bocce Oh, Tax assets As
Slide 36: Group Balance Sheet (continued)
GROUP BALANCE SHEET (CONTINUED) 26 Dec 27 Dec &m 2021 2020 Lease liabilities (222.6) (226.5) Tradeandotherpayables = =» (96.3) (90.3). RCF (242.5) (243.6) Ts arr Provisions _ 6.3) (13.5) Liabilities held for sale - (23.5) Total liabilities (580.6) (601.0) Net liabilities (58.6) (8.8) Classiffzally H
Slide 37: Glossary
GLOSSARY Item Definition AWUS Average Weekly Unit Sales agp Average Sales Per Address EES eCommercefund _The fund used to recharge costs for the development and maintenance of our eCommerce platform with franchisees Germanassociate _ Represents our 33% associate investment in the trading operations
Slide 38: Alternative Performance Measures
ALTERNATIVE PERFORMANCE MEASURES Location in release of Item Definition reconciliation to GAAP measure OVERALL TERMINOLOGY — Non-underlyingitems ——«sHRemsthat are materialinsize, unusualorinfrequentinnature,andare disclosed separately as non-underlying items in the notes to the accounts. Group opera
Slide 39: Alternative Performance Measures
ALTERNATIVE PERFORMANCE MEASURES Item Definition Location in release of reconciliation to GAAP measure REVENUE MEASURES - System sales Like-for-like (LFL) sales growth excluding splits Like-for-like (LFL) sales growth including splits CASH FLOW MEASURES Net debt Free cash flow. System sales represen
Slide 40: Forward-Looking Statements Caution
FORWARD-LOOKING STATEMENTS CAUTION These full year results, our Annual Report and the Domino's Pizza website may contain certain "forward-looking statements" with respect to Domino's Pizza Group plc and the Group's financial condition, results of operations and business, and certain of Domino's Pizz