Domino's Pizza Group Plc · LSE:DOM
Domino's Pizza — H1 2022 Earnings Presentation
37 slides from Domino's Pizza's earnings presentation, Aug 2, 2022
Slide 1: First Half Results 2022
& Dominos we cor THs FIRST HALF RESULTS 2022 DOMINO'S PIZZA GROUP PLC 26 WEEKS ENDED 26 JUNE 2022 2 AUGUST 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: H1 Highlights
H1 HIGHLIGHTS Continued strategic progress and shareholder returns DIGITAL PROGRESS +2% Active customers 90%+ _ Digital sales Proposition resonating with customers... +4ppts Value for money score UK takeaway *6Obps market share 1. Like-for-like system sales growth excluding splits and VAT 3 HALF YEA
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 like-for-like sales growth &m A122 H121 _% change « As expected, system sales declined 5.6% due to UK system sales 6741 716.5 (5.9)% the change in the VAT rate Ireland system sales 36.4 35.8 1.8% + Adjusting for VAT, system sales grew 3.4% Total system sales 71
Slide 6: Like-for-like sales growth and order count
8.0% 6.0% 4.0% 5.5% 2.0% 3.9% 0.9% 2.4% 2.1% 0.0% (2.0%) (2.4%) (1.3%) (4.0%) (6.4%) (6.0%) (8.0%) (10.4%) (10.0%) (12.0%) LFL exc Splits Sales Growth LFL exc Splits Sales Growth (exc VAT) Total Order Count Growth
Slide 7: Analysis of Underlying EBITDA
ANALYSIS OF UNDERLYING EBITDA SCC EBITDA lower, primarily due to timing of cost pass through &m H122 H121 . * Supply chain EBITDA includes cost inflation, Supply chain centre EBITDA 50.4 52.6 particularly across labour alongside increased Net royalties ccna OG ZU support to franchisees Net overheads
Slide 8: Analysis of Underlying EBITDA
ANALYSIS OF UNDERLYING EBITDA Decline due to franchisee investment and timing lag of cost pass through &m 71.7m | * EBITDA performance (2.3)m | driven by investment — 0.1m 63.5m associated with the (1.2)m (1.1)m franchisee resolution and timing lag of passing through inflation * We began passing on
Slide 9: Income Statement
INCOME STATEMENT Robust profitability Underlying, £m H122 H121 ; UK&ireland EBITDA = GL 69.5 * Covies 19 related costs of £0.2m offset by Depreciation & Amortisation (8.7) (7.8) UK & Ireland EBIT 53.0 61.7 * Underlying PBT down by £9.9m German Associate EBIT 18 2.2 + Underlying basic EPS of 9.5p, do
Slide 10: Franchisee Trading
FRANCHISEE TRADING Reduced profitability primarily driven by change in VAT rate H122* H1 21* Store level * Franchisees and their teams have continued Ne to operate effectively in challenging Average EBITDA £94k £154k market conditions EBITDA margin = SZ 25% + As previously highlighted the lower VAT
Slide 11: Free Cash Flow
FREE CASH FLOW Lower EBITDA and working capital outflow reduce free cash flow &m H122 H121 Continuing operations EBITDA 63.5 71.7 Discontinued operationsEBITDA == 062. Remove contribution from investments BD 78) IFRS 16 - net lease payments (3.8) (5.0) Working capital a ee eth rn EE Dividendsreceive
Slide 12: Capital Allocation Framework
CAPITAL ALLOCATION FRAMEWORK Further investment in the core business, increased dividend and buyback PRIORITIES FOR CAPITAL PHILOSOPHY OUTCOMES FOR H122 Invest in the business to drive Returns-based approach to ) Capital investment of £7.5m long-term organic growth investment in core business to sup
Slide 13: Net Debt Bridge
NET DEBT BRIDGE Increase in net debt driven by shareholder returns £m Net Debt / Underlying EBITDA 1.95x at H1 22 Within target range of 1.5x - 2.5x (199.7) 7.5) | 2) . 04 Opening net FCF Funding Daytona Disposals& Capex debt (pre- German MAF forex capex) Associate repayments 13 HALF YEAR RESULTS 20
Slide 14: Current Trading & Guidance
CURRENT TRADING & GUIDANCE Current trading + In the first half of the year, we increased our market share, order count was positive, collections grew past 2019 levels and we attracted more customers despite challenging market conditions + As we move into the second half of the year, we expect to con
Slide 15: Agenda
S AGENDA 1. Overview 2. Financial performance Strategic & operational update - Dominic Paul, CEO 4. Q&A
Slide 16: Sustainable Growth and Returns
SUSTAINABLE GROWTH AND RETURNS Strong business model well placed to succeed in all conditions Domino's World class Brand, with #1 pizza market share in the UK We have scale. Weh Id-cl . € nave worlerclass Our vertically franchisees, now We have great product. Whconthwad Large customer base. A A inte
Slide 17: Larger Share of UK Takeaway Market
LARGER SHARE OF UK TAKEAWAY MARKET Gains in both the UK Takeaway and Pizza market Domino’s UK Takeaway Market Share Domino’s UK Pizza Market Share m Independent and Full Service (Pizza) = Competitor #2 6.6% = Competitor #1 =Domino's 6.0% 14% fulfilled by 12% fulfilled by aggregators aggregators 42%
Slide 18: Working with our world-class franchisees
WORKING WITH OUR WORLD-CLASS FRANCHISEES Tangible progress since Resolution announced * Alignment behind national price offer, launched 6** January * Q2 bundled deal promotion, clear alignment on H2 plans + Acceleration of new store openings * 17 opened vs. 14 in same period last year + Embraced inn
Slide 19: Stronger Together
STRONGER TOGETHER First rally since 2018 - over 1,400 franchisee staff and DPG colleagues j = at |: : ® Dominos ee THIS HALF YEAR RESULTS 2022 WE GOT THIS
Slide 20: 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 Turbo-charge delivers like our collection Domino's business Amplify our product quality & value Uphold our industry-leading excellence asa scale economics franchi
Slide 21: Nobody Delivers Like Domino's
<<” NOBODY DELIVERS LIKE DOMINO’S HALF YEAR RESULTS 2022 Domino’s is a leading QSR delivery brand Delivery market is in growth We can leverage our vertical integration to strengthen our position Start work on new eCommerce platform GPS: next generation Step change CRM personalisation Personalisation
Slide 22: Turbocharge Our Collection Business
LOVEAT FIRST RTE * - © }” TURBOCHARGE OUR COLLECTION BUSINESS YOU CLICK HALF YEAR RESULTS 2022 Collection market is Grow collection sizeable and growing faster than delivery, exceed 2019 levels Q2 was 102% of 2019 collection order count levels Underpenetrated in collection, Increase Value opportunit
Slide 23: Amplify Our Product Quality and Value
© <<” AMPLIFY OUR PRODUCT QUALITY AND VALUE HALF YEAR RESULTS 2022 Customers love our products We will drive product innovation to stay ahead of competitors Improve value for money perception through national campaigns Further menu innovation to attract new customers and drive frequency Innovation a
Slide 24: Uphold Our Industry-Leading Scale Economics
}” UPHOLD OUR INDUSTRY-LEADING SCALE ECONOMICS HALF YEAR RESULTS 2022 Consistently strong system performance relative to peers Continue to invest to optimise efficiency Further enable the success of our franchisees Maintain world-class operational performance Capacity development in Ireland, evaluat
Slide 25: Model Excellence as a Franchisor
>” MODEL EXCELLENCE AS A FRANCHISOR HALF YEAR RESULTS 2022 Continue to bolster our internal capabilities Accelerate growth through our franchisees Seek to broaden our franchisee base Atleast 45 new stores New store design roll-out Helping franchisees grow throughFranchisee Performance Management fra
Slide 26: Summary
SUMMARY Strong market share gains and good strategic progress in the first half Value message increasingly important and will be amplified as we increase our marketing ahead of key events in H2 We remain focused on accelerating the sustainable growth of the system, delivering an improved second half
Slide 27: Q&A
Q&A WE GOT THIS
Slide 28: Appendix
Appendix WE GOT THIS
Slide 29: UK & Ireland Unit Metrics - H1 2022
UK & IRELAND UNIT METRICS - H1 2022 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 (3.6)% 3.2% (8.0)% 3.5% (2.2)% 17.5m 5.5% Q2 (11.49% (3.39% (6.5)% 3.9% (5.6)% 16.9m (1.3)% HY (7
Slide 30: UK & Ireland LFL Sales Growth - H1 2022
UK & IRELAND LFL SALES GROWTH - H1 2022 ai Q2 HY LFL sales growth 2022 2022 2022 Excluding splits UK (2.6)% — (11.0)% (6.8)% Ireland 7.3% 2.7% 5.0% UK & Ireland combined (2.4)% (10.4)% (6.4)% Including splits UK (3.8)% (11.99% = (7.9) % Ireland 5.6% 1.1% 3.3% UK & Ireland combined (3.6)% (11.4)% (7.
Slide 31: Covid-19 Related Costs & VAT Benefit
COVID-19 RELATED COSTS & VAT BENEFIT Included within underlying items &m H122 H121 . . * Covid safe operating practices continued in Supply chainoperations = «2 09 at Costing £0.2m Franchisee support ~ = 03 + VAT rate reduction of 12.5% continued until Charges to supply chain EBITDA 0.2 1.2 1st Apri
Slide 32: Store Numbers
STORE NUMBERS &m 2022 2021 UK 1,182 1,158 ME csomnnnnnnnnnnnnnnnnncnnne mannan ROl 56 54 UK & ROI total 1,238 1,212 ontinued Internat Switzerland patel ieee or ea Iceland = - Sweden a cd Dominos: ———7Hh6 HIS 32 HALF YEAR RESULTS 2022 We GOT THIS
Slide 33: Group Balance Sheet
GROUP BALANCE SHEET 26 June 26 Dec &m 2022 2021 Intangible assets 34. 5 321 Property, plant and equipment “90. 4 “90. 3 Investments, associates and joint ventures 66.7 _ 64.8 . Market Access Le — mae a3) Right-of-use assets 20.9 19.4 Ci Gan a) a 8 — ee Working capital cecennnnstnnan an 628A QTD Net
Slide 34: Successful Refinancing of Bank Facilities
SUCCESSFUL REFINANCING OF BANK FACILITIES Financing now in place until July 2027 ¢ The Group successfully refinanced the existing revolving credit facility in July 2022, and entered into a new unsecured multi-currency revolving credit facility of £200m, expiring in July 2027, together with the issua
Slide 35: Glossary
GLOSSARY Item Definition AWUS Average Weekly Unit Sales ASPA Average Sales Per Address eCommerce fund The fund used to recharge costs for the development and maintenance of our eCommerce platform with franchisees German associate Represents our 33% associate investment in the trading operations of D
Slide 36: 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 37: Forward-Looking Statements Caution
FORWARD-LOOKING STATEMENTS CAUTION These half year results, our 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 c