Domino's Pizza Enterprises Limited · ASX:DMP
Domino's Pizza Enterprises — FY2008 Earnings Presentation
29 slides from Domino's Pizza Enterprises's earnings presentation, Aug 20, 2008
Slide 1: Full Year Results to 29 June 2008
For personal use only Domino’s Pizza Enterprises Limited Full Year Results to 29 June 2008
Slide 2: Executive Team
For personal use only EXECUTIVE TEAM Don Meij Chief Executive Officer/ Managing Director Andrew Rennie Chief Executive Officer France/Belgium Richard Coney Group Chief Financial Officer 2
Slide 3: Agenda
AGENDA For personal use only 1. Highlights 2. Results Detail 3. European Review 4. Outlook & Conclusion 3
Slide 4: Highlights
For personal use only HIGHLIGHTS 4
Slide 5: Result Highlights
RESULT HIGHLIGHTS For personal use only • NPAT up 30% to $11.8m (post $0.4m non- recurring costs) F/Y 06 F/Y 07 F/Y 08 +/(-) FY 07 • Strong Network Sales growth +13.9% over $ mil $ mil $ mil % FY07 Network Sales 359.4 518.9 591.2 13.9% • Solid Group SSS growth +6.8% over FY07 Same Store Sales % 4.3%
Slide 6: ANZ Highlights
ANZ HIGHLIGHTS For personal use only • New Zealand strongest performer in the ANZ group for SSS • Successful launch of Big Taste Range with 7 Meats Pizza a strong success • Online ordering now over 12% of sales in Australia • Launched new telephone number 1300 DOMINOS • Started growing Domino’s 2Go
Slide 7: Europe Highlights
For personal use only EUROPE HIGHLIGHTS • Strong organic growth of stores • SSS strong at +13.36% • Netherlands is now averaging 19.2% of its orders online and growing • Successful launch of TV advertising and 4 digit telephone number in France • Food cost running at historical lows; recently seen r
Slide 8: Results Detail
For personal use only RESULTS DETAIL 8
Slide 9: Network Store & Sales Growth
For personal use only NETWORK STORE & SALES GROWTH 600 Network Sales 518.9 Network Store Count 700 500 H2 80.7 Actual Actual 400 359.4 591.2 at June 2007 at June 2008 600 300 306.1 $M 287.0 H2 252.9 187.2 H1 518.9 Australia 402 433 212.5 H2 H1 85.1 200 174.7 H2 182.8 65.1 H1 H2 140.6 157.5 H1 H1 500
Slide 10: Network Store & Sales Growth
NETWORK STORE & SALES GROWTH For personal use only F/Y 06 F/Y 07 F/Y 08 Network Sales ($ mil) 359.4 518.9 591.2 • Additional 78 new stores Number of Aus/NZ stores (including 5 Stadium Franchised stores 301 343 402 Corporate stores 137 124 107 stores) Aus/NZ network stores 438 467 509 Corporate store
Slide 11: Revenue and EBITDA
REVENUE AND EBITDA For personal use only • ANZ Revenue and EBITDA reflect the movement of Corporate stores into Franchise stores (Profits +6% on FY07 at NPBT level) • Europe achieved strong EBITDA and Revenue growth F/Y 06 F/Y 07 F/Y 08 +/(-) F/Y 07 REVENUE $ mil $ mil $ mil % Total Australia/NZ 172
Slide 12: Corporate
CORPORATE For personal use only 2007/08 • EBITDA margins in line with expectations, affected by restructuring and reduction in Corporate store numbers Going Forward • Corporate expected to reduce in the quantum of dollars as Franchise increases in line with sell down of stores F/Y 06 F/Y 07 F/Y 08 +
Slide 13: Franchise
FRANCHISE For personal use only 2007/08 • Significant Margin improvement when Distribution Revenue is removed as a historical comparison - record 43.7% (benefiting from reduced store construction) Going Forward • Benefiting from the sale of Corporate stores moving into this area • Return on Capital
Slide 14: Corporate Development & Unallocated
For personal use only CORPORATE DEVELOPMENT & UNALLOCATED Corporate Development • As forecast, Corporate Development profit lower • Closure and write-off of a test mall concept – impact A$0.3m Other / Unallocated (G&A) • Trending lower with the reduction of Corporate stores F/Y 06 F/Y 07 F/Y 08 +/(-
Slide 15: Profit & Loss
PROFIT & LOSS For personal use only • Financing costs down 27.4% to A$2.1m as a result of debt reduction • Tax result for FY08 is 30.5% compared to FY07 26.1%, FY06 24.1% • Earnings per share (basic) 18.4 cents +24.3% • Interest cover improved to 9.0 times F/Y 06 F/Y 07 F/Y 08 +/(-) F/Y 07 $ mil $ m
Slide 16: Cash Flow
CASH FLOW For personal use only F/Y 2007 F/Y 2008 Aust/NZ Europe Group Aust/NZ Europe Group $'000 $'000 $'000 $'000 $'000 $'000 Cash flows from operating activities Receipts from customers 199,694 47,804 247,498 181,217 75,939 257,156 Payments to suppliers and employees (181,016) (51,291) (232,307)
Slide 17: Balance Sheet
F/Y 2007 F/Y 2008 +/(-) F/Y 2007 BALANCE SHEET $ mil $ mil $ mil For personal use only Current assets Cash assets 7.9 12.6 4.8 Trade & other receivables 23.1 24.7 1.6 • Increase in Other Financial Assets, Other financial assets 0.4 0.6 0.2 Inventories 5.0 3.5 (1.5) A$7.2m in Franchisee loans (ANZ $5
Slide 18: European Review
For personal use only EUROPEAN REVIEW 18
Slide 19: Europe
For personal use only EUROPE • Strong organic growth of stores • SSS strong at +13.36% • Netherlands is now averaging 19.2% of its orders online and growing • Food cost running at historical lows; recently seen reduction in major commodities of wheat and cheese • Second commissary now operating in V
Slide 20: Europe (Cont)
For personal use only EUROPE (Cont) • Successful launch of TV in France. Not only solid sales growth, but has also lifted the profile of Domino’s, increasing interest in areas like Franchising. Immediately became the third biggest fast food TV advertiser in France • Launched a 4 digit telephone numb
Slide 21: Snapshot of Store Margins in France
SNAPSHOT OF STORE MARGINS IN FRANCE For personal use only In an attempt to give some insight into the progress being made in Europe, we have decided to micro a number of areas of the French business for reference: • Labour has decreased 2 - 4% since our arrival 2006 2007 LABOUR 2008 42% 40% 38% 36%
Slide 22: Snapshot of France Store Health
SNAPSHOT OF FRANCE STORE HEALTH For personal use only • Food costs is 1% lower than 2006 2006 2007 2008 FOOD 34% 32% 30% 28% 26% 24% 22% 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 •Source – Weekly Point of Sale System data submitted by Franchisees 22
Slide 23: Like for Like Store AWUS
For personal use only LIKE FOR LIKE STORE AWUS (Average Weekly Unit Sales, store >1 year old, excludes new stores) 2005 20000 2006 2007 18000 2007 weeks1-52: 2006 weeks1-52: 2008 +15.1% +12.2% 16000 14000 12000 10000 8000 6000 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51
Slide 24: Outlook
For personal use only OUTLOOK 24
Slide 25: Looking Forward – ANZ
For personal use only LOOKING FORWARD – ANZ • Focusing further this year on core pizza as driver of product pipeline • Continued push for online sales as a key driver • Driving internal benefits of all stores being on one platform in PULSE • With access to drivers improving slightly, a lift in focus
Slide 26: Looking Forward – ANZ
LOOKING FORWARD – ANZ For personal use only Management aware of: • Still seeing challenges with wage inflation, at least in the first half • Global banking policies have changed; more restrictive lending policies from banks will put pressure on store growth targets • Melbourne market still immature
Slide 27: Looking Forward – Europe
For personal use only LOOKING FORWARD – EUROPE • Continued activity on TV in France and The Netherlands • Launching a new online site for internet ordering in all 3 countries • France will go to online ordering for the first time in this next 6 months • Planning underway for a new 250 store Dutch co
Slide 28: Looking Forward – Europe
LOOKING FORWARD – EUROPE For personal use only Management aware of: • Like ANZ, global banking policies have changed; more restrictive lending policies from banks will put pressure on store growth targets 28
Slide 29: Conclusion
For personal use only CONCLUSION • Strong SSS growth in ANZ and Europe in 2007-08, contributed to significantly improved earnings • Transition from 150 Corporate stores to approximately 80 Corporate stores in ANZ is translating to better returns as expected at a NPAT level • Despite higher tax payme
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