Domino's Pizza Group Plc · LSE:DOM
Domino's Pizza — H1 2024 Earnings Presentation
44 slides from Domino's Pizza's earnings presentation, Aug 6, 2024
Slide 1: Half Year Results 2024
Y Dominos WE GOT THIS HALF YEAR RESULTS 2024 DOMINO’S PIZZA GROUP PLC 26 WEEKS ENDED 30 JUNE 2024 6 AUGUST 2024
Slide 2: Agenda
YS AGENDA Overview — Andrew Rennie, CEO 2. Financial performance — Edward Jamieson, CFO 3. Strategic & operational update - Andrew Rennie, CEO 4. Q&A
Slide 3: Positive trading momentum in H2, new £20m share buyback
POSITIVE TRADING MOMENTUM IN H2, NEW £20M SHARE BUYBACK Focused on driving growth through core UK & Ireland business Improved trading momentum driven by strategic initiatives Continued EBITDA and EPS growth; confidence in H2 performance Franchisee profitability up despite large minimum wage increase
Slide 4: Agenda
YS AGENDA 1. Overview — Andrew Rennie, CEO Financial performance - Edward Jamieson, CFO 3. Strategic & operational update - Andrew Rennie, CEO 4. Q&A
Slide 5: H1 Financial Highlights
H1 24 FINANCIAL HIGHLIGHTS Growth in EPS and increased shareholder returns TOTAL ORDERS LFLSALES? | DPGREVENUE — MMMUNDERLYING® EBITDA 35.1m (0.5)%34 £326.8m £69.0m (0.9%! (1.8)%3 +0.4%3 | FREE CASHFLOW [im UNDERLYING‘ EPS INTERIM DPS NEW BUYBACK £30.5m 9.8p 3.5p £20m (45.7) %3 +3.2%3 46.1%? Percent
Slide 6: LFL ex splits sales growth and total order count growth
0.6% -0.1% -0.5% -0.5% -0.5% -0.8% LFL ex splits sales growth % Total order count growth %
Slide 7: Recent Trading
RECENT TRADING Improved momentum and confidence in H2 Delivery orders returned to growth in @2 Confidence in H2 * FY23 LFL comps 10.7% gem fo ——tz i i — | May 2024 June 2024 -0.4% | @123 @223. | =@323 a423 | TB Year-on-year weekly order delivery order growth, on a comparable basis H H * Good trading
Slide 8: Sales Performance
SALES PERFORMANCE Stable EBITDA margin &m H124 H123 % change UK system sales 728.7 725.0 0.5% * System sales up 0.2% vs. H123 Ireland syst I 39.0 41.4 5.8)% : retand system sales (6.8) * Supply chain revenue down 7.7%, Total system sales Set 766.4 0.2% reflecting pass-through of lower food Supply ch
Slide 9: Analysis of EBITDA
ANALYSIS OF EBITDA Continued growth in Underlying EBITDA &m H124 H123. %change Supply chain centre EBITDA 64.6 66.7 (3.1)% * Supply chain EBITDA down 3.1%, Net royalties 21.5 21.4 0.5% primarily driven by pass through of Net overheads, property & incentives (20.3) (19.3) 5.2% lower food costs UK cor
Slide 10: Group EBITDA Movement
GROUP EBITDA MOVEMENT Progress against prior year &m 68.7 Dr (2.3) H123 Sale of underlying freehold EBITDA property prior year 10 HALF YEAR RESULTS 2024 66.4 H123 underlying EBITDA excluding freehold property sale (1.3) Underlying trading +3.9% 1.3 Technology platform costs 2.1 69.0 Le Profit H124 c
Slide 11: Income Statement
INCOME STATEMENT Underlying earnings per share growth Underlying, £m H124 H123 Group EBITDA 69.0 68.7 Depreciation & Amortisation (8.9) (10.2) Net finance costs (8.8) (7.6) Profit before tax 51.3 50.9 Taxation (12.6) (11.3) Profit after tax 38.7 39.6 Non-underlying items! 3.6 40.6 Statutory profit a
Slide 12: Free Cash Flow
FREE CASH FLOW Working capital outflows drives decrease in H1 free cash flow £m H124 H123 Group EBITDA 69.0 68.7 * Working capital outflow expected to mostly reverse in Remove contribution from H2 24 investments (1.2) (1.7) - H124 movement predominantly relates to IFRS 16 - net lease payments (3.3)
Slide 13: Capital Allocation Framework
CAPITAL ALLOCATION FRAMEWORK Continued investment in core business, additional growth opportunities, increased dividend and new £20m share buyback PRIORITIES FOR CAPITAL PHILOSOPHY OUTCOMES FOR H124 Invest in the business to drive y Returns-based approach to ) Capital investment of £7.1m to long-ter
Slide 14: London Corporate Store Disposal
LONDON CORPORATE STORE DISPOSAL Consistent with strategy to recycle capital * Disposal of London corporate stores now complete * 30'stores sold to 5 different franchisee groups for a total consideration of £35.1m * 14stores sold by 30 June 2024 with £17.3m received in H1 24 * Remaining 16 stores sol
Slide 15: Net Debt Bridge
NET DEBT BRIDGE Leverage in range following investment in growth opportunities Net Debt / Underlying EBITDA 2.16x at 30 June 2024 &m 285.4 — * Issuance of new 232.8 maz 7 59 £100m 5.97% USPP — Fa 06 1751 487 notes to 2034 L | + Supports reduced utilisation of RCF, which has a higher interest rate, a
Slide 16: Investing to Drive Sustainable Growth
INVESTING TO DRIVE SUSTAINABLE GROWTH No change to FY24 capex guidance of c.£20m *« Automation projects * Digital acceleration Operations technology Continued capacity * Ecommerce projects development in Ireland Support office & Dominos: wwe cor THIS HALF YEAR RESULTS 2024 weooe
Slide 17: Outlook & Guidance
OUTLOOK & GUIDANCE Outlook + Whilst we anticipated some food cost deflation in FY24, we are now planning to pass on a greater level in H2 to our franchise partners as we continue to deliver value offers for customers, underpin the strength of the system and drive long-term growth. We expect our rece
Slide 18: Agenda
YS AGENDA 1. Overview — Andrew Rennie, CEO 2. Financial performance — Edward Jamieson, CFO Strategic & operational update - Andrew Rennie, CEO 4. Q&A
Slide 19: Acceleration of Strategy
ACCELERATION OF STRATEGY Strategic initiatives gaining traction and driving momentum FRANCHISEE AVERAGE EBITDA DELIVERY TIME LAL SLan als £81k 24.1 minutes 81.9% +6.6%! >1 minute better? +1.3ppt! APP ORDERS AS A 3 OF NEW STORE Aneto ONLINE ORDERS OPENINGS 9.5m 77.6% +17%! +2.4ppts? s 9, 1. H124vs.H1
Slide 20: Long-Term Sustainable Growth
LONG-TERM SUSTAINABLE GROWTH Clear medium and long-term targets UK & Ireland stores Total system sales (£m) 2,000 | 2,500+ 1,600+ 2,000-+ 1,319 1,572 1,184 | ! H ' [ : : } : : 2019 2023 2028 2033 2019 2023 2028 2033 A clear plan to deliver meaningful earnings and cashflow growth over the medium to l
Slide 21: Competitive Position
COMPETITIVE POSITION Strengthening position in branded pizza Coes) 1,288 1,340 / T L ; ; Domino's Pizza Group Branded pizza competitor 1 Branded pizza competitor 2 mJun-23 = Jun-24 $ Domino's: wwe cor THIS 21 HALF YEAR RESULTS 2024 Source: Company data, publicly available information we GOT
Slide 22: Driving Long Term Growth in Core Business
DRIVING LONG TERM GROWTH IN CORE BUSINESS Number one priority is to continue investing in and growing in the UK & Ireland Franchisee profitability Value for money Convenience & Domino's: INOS” HIS HALF YEAR RESULTS 2024 We GOT THIS
Slide 23: Franchisee EBITDA and margin growth in H1
23 Franchisee EBITDA and margin growth in H1 24 NRE \ TIMES Hustle | LATES ees MOTIVATED Rem & ENERGISED a TEAM 7 £81k £76k £70k H119 H123 H124
Slide 24: Value for Money
VALUE FOR MONEY Customer service continues to improve Q2 average delivery time - 24 minutes Q2 - c.82% of pizzas delivered on time 27.0 ——— nos mir ills Q122 Q222 Q322 Q422 Q123 Q223 Q323 Q423 Q124 Q224 Q122 Q222 Q3 22 Q422 Q123 Q223 Q323 Q423 Q124 Q224 ~ ~ ~ = — — 24 HALF YEARRESULTS 2024
Slide 25: Value for Money
VALUE FOR MONEY Best value for money scores since 2020 lle Nes & Domino's: nos” . IS HALF YEAR RESULTS 2024 we Got THIS
Slide 26: Value for Money
VALUE FOR MONEY Outstanding product and continued innovation HALF YEAR RESULTS 2024
Slide 27: Digital Acceleration
DIGITAL ACCELERATION Continued growth in app customers H1 24 progress 9.5m Continued to accelerate and push national "app only" deals and vouchers Further investment into app marketing campaigns and app store optimisation 5.3m Continued user experience enhancements such as 2021 2022 2023 H124 sos ae
Slide 28: Digital Acceleration
DIGITAL ACCELERATION Exciting new phase of loyalty trial Only available on the app c.630k customers 6 month test period seeueToUMIMED AL GROUP gts 4k sae 4 LAST ORDER Potential 2025 launch Be : HALF YEAR RESULTS 2024 S7hT4D wt BEEN PICKED LOYAL RY OUR NEW TY PROGRAMME ‘AND IT COULDN'T BE SIMPLER. a
Slide 29: Our first female home grown hero
• • • • • • • • OUR FIRST FEMALE HOME GROWN HERO! • CONGRATULATIONS TO LUCY HARMAN
Slide 30: Convenience - Just Eat and Uber Eats
CONVENIENCE - JUST EAT AND UBER EATS Decision taken to roll out on Uber Eats permanently Fully rolled out in Q4 22 Continues to drive incremental customers and orders Just Eat’s performance geographically is complementary to Uber Eats HALF YEAR RESULTS 2024 Uber Eats Now permanent across UK & Irelan
Slide 31: Additional Growth Opportunities
ADDITIONAL GROWTH OPPORTUNITIES DPG is a highly cash generative business, with clear track record of investing in the core business and returning capital to shareholders We continue to assess additional second brand and international value enhancing opportunities to build a larger and more cash gene
Slide 32: Significant Progress in H1
HALF YEAR RESULTS 2024 SIGNIFICANT PROGRESS IN H1 Total consideration of €72m and debt repayment of €19m at attractive 8x EBITDA multiple Significant opportunity to accelerate growth and materially increase store count in an underpenetrated market - 85k people per store in Republic of Ireland, DPG a
Slide 33: Classification: Confidential
Classification: Confidential
Slide 34: Summary
SUMMARY Strategic execution driving improved trading momentum Continued progress to build a larger, more cash generative business Core UK & Ireland is the focus, will look at additional growth opportunities Well placed to deliver sustainable long-term growth and returns od Domino's: wwe cor THIS 34
Slide 35: Draft
\ BREWDOG Jomino's’ Domino's ™ FRESH DOUW: (‘ae See eed
Slide 36: Appendix
Appendix WE GOT THIS
Slide 37: Franchisee Trading
FRANCHISEE TRADING Adjusted for VAT H124 H123 H122 H121 H120 H119 Store level Average EBITDA £81k £76k £79k £89k £85k £70k EBITDA margin 14% 13% 14% 16% 16% 14% Unadjusted for VAT H124 H123 H122 H121 H120 H119 Store level Average EBITDA £81k £76k £95k £155k £85k £70k EBITDA margin 37 HALF YEAR RESUL
Slide 38: UK & Ireland LFL Sales Growth - H1
UK & IRELAND LFL SALES GROWTH - H1 24 Comparable basis LFL sales growth exc VAT Q124 Q2 24 H124 LFL sales growth exc VAT Q124 Q2 24 H124 Excluding splits Excluding splits UK (1.99% (0.6)% (1.2)% UK (0.4)% (0.2)% (0.3)% Ireland (3.3)% (1.8)% (2.6)% Ireland 0.3% (1.8)% (0.8)% UK & Ireland combined (2.
Slide 39: Store Numbers
STORE NUMBERS 30 June 26 June &m 2024 2023 UK 1,277 1,229 “Corporate voces an . oat a ROI 63 59 Franchise 40 59 Corporate 232 {e) UKBROMo BAO 288 1. 28UK corporate stores includes 16 London corporate stores which were sold in July 2024 and 12 Shorecal stores in Northern Ireland 2. 23 Republic of Ire
Slide 40: Group Balance Sheet
GROUP BALANCE SHEET £m Intangible assets Property, plant and e lequipment Right-of-use assets Lease receivables Trade and other “receivables — Inventory Investments Cash and cash equivalents tee li 59 es , Toes Deferred consideration ee. nn Tax assets Assets held forsale. Total Ascots nn — 5705. es
Slide 41: Group Balance Sheet (continued)
GROUP BALANCE SHEET (CONTINUED) 30 June 25 June &m 2024 2023 Lease liabilities 224.6 224.2 Trade and other payables cee ill es 8 8 «= Share buy back obligation = 11.9 taxiia a 8 86—-- ar provisions Mriteutieienieaienieiieisentetetnaeenee At 63 Liabilities held for sale 5.0 - Total liabilities 6658 5
Slide 42: Alternative Performance Measures
ALTERNATIVE PERFORMANCE MEASURES Item Definition Location in release of reconciliation to GAAP measure PROFIT MEASURES Underlying profit before taxation Underlying profit for the period Earnings before Interest and Tax (EBIT) Non-underlying items Underlying basic EPS 42 HALF YEAR RESULTS 2024 Group
Slide 43: 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 44: Forward-Looking Statements Caution
FORWARD-LOOKING STATEMENTS CAUTION These half 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