Domino's Pizza Enterprises Limited · ASX:DMP
Domino's Pizza Enterprises — FY2010 Earnings Presentation
34 slides from Domino's Pizza Enterprises's earnings presentation, Aug 18, 2010
Slide 1: Full Year Results to 4 Jul 2010
For personal use only Full Year Results to 4 Jul 2010
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 Melanie Gigon President France 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 16.0% to $17.8m, rolling previous 2 years of 30% growth pa; NPAT CAGR FY07-10 is 25.1% FY 08 FY 09 FY 10 +/(-) FY 09 $ mil $ mil $ mil % • Network sales growth up 5.6% in ANZ and up 14.3% in DMP Europe (constant Network Sales 591.2 676.4 694.3 2.7% c
Slide 6: Australia/NZ Highlights
Australia/NZ Highlights For personal use only • SSS growth in Australia/NZ +3.23%, rolling over record year in FY09 following new menu launch • Successful launch of the new Domino’s iPhone App in November 09 exceeded all expectations, over $2m sales in first 12 weeks • Strong lunch sales since the l
Slide 7: DMP Europe Highlights
DMP Europe Highlights For personal use only • Core operating profits up 43.7% (like for like vs FY09 – royalty equalised) • Addition of 41 new stores in FY10 including the acquisition of Pizza Company in Belgium • New Dutch commissary opened in December 09 • Total network sales up 14.3% (constant cu
Slide 8: FY10 Guidance Update
FY10 Guidance Update For personal use only Measure as at Feb 2010 Actual Achieved New Store Openings 50 + 54 In the region of NPAT Growth 15% 16.0% Estimated Tax Rate 26% 24.9% Negligible by Net Debt June 2010 ($2.3m) Net Capex $15-20m $11.0m • Guidance has been achieved despite significant currency
Slide 9: 2. Results Detail
For personal use only 2. Results Detail
Slide 10: Network Sales Growth
Network Sales Growth For personal use only Network Sales $m 694.3 676.4 Total Sales Same Store Sales H2 591.2 H2 122.2 134.0 Australia/NZ 5.6% 3.2% 518.9 H2 106.0 H2 80.7 H2 H2 218.6 213.8 Europe (€) 14.3% 1.8% H2 359.4 198.2 H2 306.1 187.2 H1 252.9 H2 H1 123.7 182.8 H1 117.8 212.5 H2 157.5 H1 85.1
Slide 11: Network Store Count
Network Store Count For personal use only FY08 FY 09 FY 10 Australia/NZ stores Network Sales ($ mil) 400.1 424.6 448.4 • Addition of 54 stores to the system during Franchised stores 402 410 421 Corporate stores 107 106 101 the year consisting of 41 in DMP Europe Aus/NZ Network Stores 509 516 522 and
Slide 12: Revenue & EBITDA
Revenue & EBITDA For personal use only FY 08 FY 09 FY 10 +/(-) FY 09 $ mil $ mil $ mil % • A stronger AUD has resulted in lower REVENUE reported revenue for DMP Europe (effect: Australia/NZ 160.7 148.8 150.8 1.3% approx $14.7m). Constant currency growth Europe 68.9 90.2 85.3 (5.4%) is 10.0% Total Re
Slide 13: DMP Europe Royalty Changes
DMP Europe Royalty Changes For personal use only Impact of Royalties paid to US on EBITDA (€'000s) • FY10 sees the royalty paid to the US reach its cap of 3.0%, increasing from 1.8% in FY09 (66% royalty increase) 7,000 • The increase in royalty paid to the US and negative FX impacts 6,000 has result
Slide 14: Profit & Loss
Profit & Loss For personal use only FY 08 FY 09 FY 10 +/(-) FY 09 $ mil $ mil $ mil % • Depreciation & Amortisation up 24.1% as Revenue 229.6 239.0 236.1 (1.2%) a result of IT and European investments EBITDA 25.3 28.3 32.5 15.1% Depreciation & Amortisation (6.2) (6.4) (8.0) 24.1% • Interest costs do
Slide 15: Non-core movements in NPAT
Non-core movements in NPAT For personal use only 0.2 0.1 0.2 1.0 0.2 17.8 17.5 FY10 NPAT before Net Gain on Europe non- NZD FX EUR FX Tax Rate FY10 NPAT Non-core Disposal recurring Costs movements • DPE made non-core gains of approx $0.3m during FY10 at an NPAT level • Gains on disposal of PP&E of $
Slide 16: Earnings per Share
Earnings per Share For personal use only EPS Growth (cps) 26.2 22.6 • EPS CAGR of 21.0% since FY07 18.4 H2 • FY10 onwards, EPS is no longer 13.4 14.8 H2 diluted by Dividend Reinvestment Plan H2 13.2 8.8 (DRP) H2 9.1 H1 H1 H1 12.8 H1 9.6 9.4 5.7 FY07 FY08 FY09 FY10 16 Domino’s Pizza Enterprises Limit
Slide 17: Cash Flow
Cash Flow For personal use only FY 09 FY10 $ mil $ mil • Group continues to deliver both EBIT 21.8 24.5 profit growth and free cash flow Depreciation & Amortisation 6.4 8.0 Change in Working Capital (1.7) 0.3 • Additional capex due to Dutch Net Interest Paid (1.6) (0.8) Income Taxes Paid (2.1) (3.7)
Slide 18: Capital Employed
Capital Employed For personal use only FY 09 FY 10 +/(-) FY 09 $ mil $ mil $ mil • PP&E increased following store purchases and build Cash 17.4 16.2 (1.2) of new European Working Capital 0.9 (0.0) (0.9) commissary Property, Plant & Equipment 30.5 30.8 0.3 Intangible Assets 48.2 52.3 4.1 • Intangible
Slide 19: Key Financial Ratios
Key Financial Ratios For personal use only FY 09 FY 10 Net Debt & Interest Cover Net Debt to 3.8% (2.3%) Equity $25.7m 30.8x Return on 16.2% 17.8% Equity $15.9m Return on 14.1x Capital 18.4% 20.9% Employed 9.0x $3.6m NB. Negative Net Debt equates to Cash Positive position 5.3x • DPE now has surplus
Slide 20: 3. Achievements & Innovation
For personal use only 3. Achievements & Innovation
Slide 21: Back to the Future
Back to the Future For personal use only Reinvention of a Classic • May 2010 saw the upgrade of the Traditional range headlined by the Supreme. Included in our new recipes are products such as our new zestier tomato sauce, rasher bacon and 100% Aussie beef • Our customers agreed with the changes to
Slide 22: Online Dominance
Online Dominance For personal use only • The Domino’s iPhone App was launched in November 09, exceeding all expectations with over $2m in sales in its first 12 weeks • Since launching, the App has quickly become a mainstream platform for our Australian customers to order their favourite pizza, with
Slide 23: Product Innovation
Product Innovation For personal use only Oven Baked Sandwiches • Launched the new lunchtime Oven Baked Sandwiches in December 09 • Product range includes Chicken Delight, Sweet Chilli Chicken, Meatball, Italian, and Beef & Rasher Bacon • After extensive research and learnings from the US implementat
Slide 24: European Expansion
European Expansion For personal use only New Commissary in The Netherlands • Opened new 2,500 sq m commissary in Gorinchem, The Netherlands in December 2009 • Capital investment of approx €2m • Pan European office is included in the facility as well as Pizza Luv Lab and Pizza Training College • The
Slide 25: 4. Outlook
For personal use only 4. Outlook
Slide 26: New President for Domino's France
New President for Domino’s France For personal use only • FY11 sees the appointment of a new President in the France business, Melanie Gigon • Melanie has been with Domino’s France for 10 years as Marketing Directrice, since its infancy of just 26 stores • She was responsible for the brand relaunch
Slide 27: Modified Management Structure in ANZ
Modified Management Structure in ANZ For personal use only • The return of Andrew Rennie from France sees him take up the newly created role of Chief Operating Officer for Australia/NZ • Andrew’s role will be to oversee all the growth and drive divisions, including Corporate & Franchise Operations,
Slide 28: Looking Forward - ANZ
Looking Forward - ANZ For personal use only • As highlighted in the results of the last 2 years, management still believes there is significant growth potential in the Australian and New Zealand markets • Growth will come from: • Rolling out 70+ new stores over the next 3 years, with an emphasis on
Slide 29: DMP Europe – the Growth Opportunity
DMP Europe – the Growth Opportunity For personal use only Our European operations provide an opportunity for continued substantial growth: • Western Europe is the largest market for pizza consumption (US$65bn) • Highly fragmented market with only 7% of pizza sales in France from chain stores • The F
Slide 30: Looking Forward – DMP Europe
Looking Forward – DMP Europe For personal use only • Accelerated growth plan to commence in FY11 with the objective of opening 35-45 new stores per year • Expanded Development team to ensure we maintain the momentum from significant new franchisee interest • Corporate stores will grow to 25 over the
Slide 31: FY11 – Trading Update
FY11 – Trading Update For personal use only • Australian sales have been very strong over the last 3 months following the relaunch of the Traditional range lead by the Supreme • Sales and customer counts growing in excess of 15% in some weeks • ANZ SSS (May-Jul 2010) are up 6.6% • DMP Europe SSS (Ma
Slide 32: FY11 Guidance
FY11 Guidance For personal use only Measure FY10 Actual FY 11 Guidance New Store Openings 54 50-60 EBITDA Growth 15.1% 15-20% NPAT Growth 16.0% 10-15% Estimated Tax Rate 24.9% 30% Net Capex $11.0m $8-12m 32 Domino’s Pizza Enterprises Limited
Slide 33: Conclusion
Conclusion For personal use only • ANZ has been able to continue to illustrate it is far from mature with SSS and profit growth • Strong store growth in our European operations has delivered solid underlying profit growth • Solid group results and operating cash flow have provided the ability for a
Slide 34: 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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