Domino's Pizza Enterprises Limited · ASX:DMP
Domino's Pizza Enterprises — H1 FY2011 Earnings Presentation
32 slides from Domino's Pizza Enterprises's earnings presentation, Feb 16, 2011
Slide 1: Half Year Results to 2 January 2011
For personal use only Half Year Results to 2 January 2011
Slide 2: Executive Team
Executive Team For personal use only Don Meij Chief Executive Officer/ Managing Director Andrew Rennie Chief Operating Officer ANZ Richard Coney Group Chief Financial Officer 2 Domino’s Pizza Enterprises Limited
Slide 3: Agenda
Agenda For personal use only 1. Highlights 2. Results Detail 3. Achievements & Innovation 4. Outlook 3 Domino’s Pizza Enterprises Limited
Slide 4: 1. Highlights
For personal use only 1. HIGHLIGHTS
Slide 5: Result Highlights
Result Highlights For personal use only • NPAT up 16.9% to $10.2m; NPAT H1 CAGR FY07-10 is 30.7% H1 09 H1 10 H1 11 +/(-) H1 10 $ mil $ mil $ mil % • Strong SSS across the system; ANZ +10.9% and Europe +4.7% Network Sales 328.6 353.5 364.5 3.1% • EBITDA growth of 18.5% to $18.8m Same Store Sales % 4.
Slide 6: Australia/NZ Highlights
Australia/NZ Highlights For personal use only • SSS growth in Australia/NZ +10.9%, with Australia achieving its strongest SSS in the last 8 years • Customer counts are following the same growth trends as sales • Strong focus on quality, value and choice • Very successful marketing support for new pr
Slide 7: DMP Europe Highlights
DMP Europe Highlights For personal use only • Core operating profits up 52.3% (like for like vs H1 10 excluding non-recurring items) • Total network sales up 18.8% (constant currency & time frame) on H1 10 • SSS continue to be strong, exceeding H2 10 +3.68% to finish the half year +4.73% • Addition
Slide 8: 2. Results Detail
For personal use only 2. RESULTS DETAIL
Slide 9: Network Sales Growth
Network Sales Growth Network Sales $m For personal use only 694.3 676.4 Total Sales Same Store Sales H2 591.2 H2 122.2 134.0 Australia/NZ 7.0% 10.9% 518.9 H2 106.0 H2 80.7 H2 H2 218.6 213.8 H2 Europe (€) 14.4% 4.7% 359.4 364.5 198.2 H2 306.1 187.2 H1 H1 118.6 252.9 H2 H1 123.7 182.8 H1 117.8 212.5 H
Slide 10: Network Sales by Segment
Network Sales by Segment For personal use only Australia/NZ H1 Network Sales A$ European H1 Network Sales € €84.6m $248.6m €71.3m €65.0m $223.0m $211.6m €52.5m $201.5m €38.8m $186.0m 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 • Sales have grown 11.5% on a normalised basis • Sales have grown 1
Slide 11: Same Store Sales by Segment
Same Store Sales by Segment For personal use only ANZ SSS Growth European SSS Growth 10.9% 8.8% 7.2% 4.7% 3.7% 4.6% 1.1% 2.2% 1.8% (0.7%) H1 09 H2 09 H1 10 H2 10 H1 11 H1 09 H2 09 H1 10 H2 10 H1 11 • Exceptional SSS growth observed this half and • SSS continue to improve, going from +3.68% in the tr
Slide 12: Network Store Count
Network Store Count For personal use only H1 10 H2 10 H1 11 Australia/NZ stores Network Sales ($ mil) 229.8 218.6 245.9 Franchised stores 419 421 439 • Store count of 843 as at 2 Jan 2011 Corporate stores 99 101 96 Aus/NZ Network Stores 518 522 535 • Addition of 23 stores to the system during Stadiu
Slide 13: Geographic Summary
Geographic Summary For personal use only H1 09 H1 10 H1 11 +/(-) H1 10 $ mil $ mil $ mil % REVENUE • ANZ EBITDA up 24.5% due to improved Australia/NZ 71.7 78.0 80.0 2.5% core operations and marketing activities Europe 41.7 41.4 40.9 (1.2%) • A stronger AUD has resulted in lower Total Revenue 113.4 1
Slide 14: DMP Europe Profitability
DMP Europe Profitability For personal use only Restated with add back Reported AUD Local Currency € of non-recurring items H1 10 H1 11 +/(-) H1 10 H1 10 H1 11 +/(-) H1 10 H1 11 +/(-) H1 10 $ mil $ mil % € mil € mil % € mil % Network Sales 123.7 118.6 (4.1%) 74.0 84.6 14.4% 84.6 14.4% Revenue 41.4 40
Slide 15: Profit & Loss
Profit & Loss For personal use only H1 09 H1 10 H1 11 +/(-) H1 10 $ mil $ mil $ mil % • EBITDA & NPAT in line with full year Revenue 113.4 119.4 120.9 1.2% guidance EBITDA 12.8 15.9 18.8 18.5% Depreciation & Amortisation (3.1) (3.8) (4.1) 8.4% • Depreciation & Amortisation up 8.4% EBIT 9.7 12.1 14.7
Slide 16: Non-core movements in NPAT
Non-core movements in NPAT For personal use only $0.4m $0.7m $0.1m $0.5m $11.1m $10.2m H1 11 NPAT before Net Gain on Disposal Europe non-recurring FX Impact Tax Rate H1 11 NPAT Non-core movements Costs • DPE made an NPAT of approx $11.1m before non-core losses of approx $0.9m during H1 11 • Gains on
Slide 17: Earnings per Share
Earnings per Share For personal use only EPS Growth (cps) 26.2 • EPS H1 CAGR of 27.2% since 22.6 FY07 H2 18.4 13.4 14.8 H2 14.9 • In line with Management H2 13.2 8.8 expectations underlying EPS H2 9.1 H1 growth in the 2nd half is expected H1 14.9 H1 H1 12.8 to remain strong H1 9.6 9.4 5.7 FY07 FY08
Slide 18: Cash Flow
Cash Flow For personal use only H1 10 H1 11 $ mil $ mil EBIT 12.1 14.7 • Operating cash flow +25.3% Depreciation & Amortisation 3.8 4.1 Change in Working Capital 0.3 1.4 Net Interest Paid (0.4) (0.4) • Net capex in line with Income Taxes Paid (2.1) (3.4) expectations ($5.8m) Other (1.4) (1.0) Operat
Slide 19: Capital Employed
Capital Employed For personal use only FY 10 H1 11 +/(-) FY 10 $ mil $ mil $ mil • Cash and cash equivalents Cash and cash equivalents 16.2 19.8 3.6 +22.0% Working Capital (0.0) (2.4) (2.4) Property, Plant & Equipment 30.8 32.4 1.6 • Working Capital Intangible Assets 52.4 53.2 0.9 Deferred Tax Asset
Slide 20: Key Financial Ratios
Key Financial Ratios For personal use only H1 10 H1 11 Net Debt & Interest Cover Net Debt to Equity 3.0% (4.9%) $25.7m 40.0x 30.8x Return on Equity 17.4% 20.4% $15.9m 14.1x 9.0x Return on Capital 20.2% 24.7% 5.3x Employed $3.6m NB. Negative Net Debt equates to Cash Positive position ($2.3m) ($4.9m)
Slide 21: 3. Achievements & Innovation
For personal use only 3. ACHIEVEMENTS & INNOVATION
Slide 22: Product Innovation
Product Innovation For personal use only • Square Puff Pizza continued the momentum created by the relaunch of the Supreme, which included the new Double Beef & Bacon pizza • Rajetarian – following the success of the Undercover Boss television show, the pizza inspired by our very own Rajg was releas
Slide 23: Online Enhancement
Online Enhancement For personal use only • Continued strong growth with online and mobile orders and sales • More advanced online ordering system was launched late 2010 • We have increased our social media activity • Continued development of our mobile platforms including the NZ iPhone App, which ha
Slide 24: Continued European Growth
Continued European Growth For personal use only • A number of key learnings in Australia are being translated into Europe • There has been a strong focus on product and value • Corporate stores have been leading the way in The Netherlands with SSS growth of +15.6% • New product development – began w
Slide 25: Domino's Disaster Relief
Domino’s Disaster Relief For personal use only • In response to the recent natural disasters all over the country, DPE and our franchisees have made significant contributions to those affected by these events • Over $120,000 was raised during our recent Doughraiser on Australia Day supporting flood
Slide 26: Outlook
For personal use only OUTLOOK
Slide 27: Looking Forward – Australia/NZ
Looking Forward – Australia/NZ • Very well developed product rollout plan for 2011, including the For personal use only Better Meatlovers which features rasher bacon, 100% Aussie ground beef and champagne ham • Commodity prices are in our favour at this point until approx Aug/Sep due to strong Aussi
Slide 28: Looking Forward – DMP Europe
Looking Forward – DMP Europe For personal use only • SSS have lifted in Europe applying many of the same programs as ANZ. SSS for the last 3 months are +7.6% • Management are feeling confident about the product pipeline for the 2nd half of the year • Relocating the Paris commissary in 2012, with pla
Slide 29: Capital Management
Capital Management For personal use only • DPE has de-geared significantly since 2007 and at end H1 11 has negative Net Debt of $4.9m (cash positive) • As a result, a decision has been made to increase the dividend payout ratio from 55% to 70% • In addition, given the quality and consistency of our
Slide 30: FY11 Trading & Guidance Update
FY11 Trading & Guidance Update For personal use only FY11 Guidance as Current FY11 Measure at August 2010 Guidance New Store Openings 50-60 towards 60 EBITDA Growth 15-20% 15-20% in the region of NPAT Growth 10-15% 15% Estimated Tax Rate 30% 29% Net Capex $8-12m $8-12m Trading Update • SSS continue
Slide 31: Conclusion
Conclusion For personal use only • ANZ continues to illustrate it is far from mature with significant SSS, profit and store growth • SSS are performing well across both Australia/NZ and Europe, with Australia in particular experiencing its strongest SSS in the last 8 years • Free cash flow +98.6% on
Slide 32: Disclaimer
Disclaimer For personal use only • Domino’s Pizza Enterprises Limited (Domino’s) advises that the information in this presentation contains forward looking statements which may be subject to significant uncertainties outside of Domino’s control. • While due care has been taken in preparing these sta
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