Domino's Pizza Enterprises Limited · ASX:DMP
Domino's Pizza Enterprises — H1 2015 Earnings Presentation
42 slides from Domino's Pizza Enterprises's earnings presentation, Feb 11, 2016
Slide 1: Half Year Results through to 28 December 2014
LTS THROUGH TO 28 DECEMBER 2014 DOMINO'S PIZZAENTERPRISES AUSTRALIA NEW ZEALAND JAPAN FRANCE THE NETHERLANDS BELGIUM
Slide 2: Don Meij, Andrew Rennie, Richard Coney
DON MEIJ Group CEO/Managing Director ANDREW RENNIE RICHARD CONEY CEO Europe Group Chief Financial Officer
Slide 3: Section 1: The Highlights
SECTION1 THE " HIGH IGHTS |
Slide 4: Result Highlights
RESULT HIGHLIGHTS 4 ANZ Network Sales ($) SSS +10.6% Europe Network Sales (€) SSS +7.5% Japan Network Sales (¥) SSS +1.2% EBITDA (1) +41.2% (2) NPAT +44.2% EPS (1) +37.0% Dividend (cps) +39.0% Free Cash Flow ($m) $15.6m (1) Return on Capital Employed 19.4% Return on Equity (1) 20.9% (1) Comparison t
Slide 5: Network Sales
Total Sales Same Store Sales NETWORK SALES 5 Australia/NZ +15.8% +10.6% H1 $m 715.4 H1 Europe (€) +14.1% +7.5% 169.5 576.2 H1 101.5 Japan (¥) (1) +74.3% +1.2% H1 411.8 190.9 401.1 H1 364.5 168.2 353.5 H1 H1 • ANZ SSS sales growth largely attributed to the success of the $4.95 132.8 H1 H1 127.7 Cheap
Slide 6: Network Store Count
NETWORK STORE COUNT 6 H1 13 H1 14 H1 15 Australia/NZ stores Franchised stores 479 530 579 Corporate stores 91 80 67 • New record first half store openings of 92 across Aus/NZ Network Stores 570 610 646 the Group Stadium outlets incl in above 29 29 17 Net Stores added in period 11 25 34 • We are on t
Slide 7: Section 2: Financials
oe SECTION 2 FINANCIALS
Slide 8: Profit & Loss
PROFIT & LOSS 8 H1 13 H1 14 H1 15 +/(-) H1 14 Statutory Underlying Statutory Underlying $ mil $ mil $ mil % Revenue 140.8 265.4 343.6 29.5% • Revenue up 29.5%, or $78.2m, to $343.6m EBITDA 26.5 42.5 60.0 41.2% Depreciation & Amortisation (6.0) (9.7) (13.1) 34.3% • Strong operating performance in all
Slide 9: Geographic Summary
GEOGRAPHIC SUMMARY 9 H1 13 H1 14 H1 15 +/(-) H1 14 Statutory Underlying Statutory Underlying $ mil $ mil $ mil % • ANZ delivered very strong earnings growth REVENUE predominantly due to double digit SSS and record store Australia/NZ 87.3 97.7 102.2 4.7% openings Europe 53.5 69.8 87.0 24.6% Japan - 9
Slide 10: Earnings Per Share
EARNINGS PER SHARE 10 50.5 • EPS 33.8c, up 57.9% on H1 14 (1) 39.1 37.2 H2 29.1 • Underlying EPS up 37.0% on H1 30.0 H2 H2 14 (2) 25.0 19.2 19.8 21.6 H2 17.6 H2 15.7 14.1 H2 12.8 H1 • H1 EPS CAGR of 25.6% since 33.8 H2 8.4 12.6 H1 H1 listing H2 H1 8.7 H1 19.9 21.4 H1 17.4 H1 H1 14.2 H1 12.2 9.2 9.0
Slide 11: Cash Flow
CASH FLOW 11 H1 14 H1 15 $ mil $ mil Net Profit After Tax before Minority Interest 18.6 31.1 Profit on Sale non-current assets (2.0) (1.9) Depreciation & Amortisation 9.7 13.1 • Strong operating cash flow of $56.5m, being Change in Working Capital 2.7 5.9 generated by all regions Movement in current
Slide 12: Balance Sheet
BALANCE SHEET 12 FY 14 H1 15 +/(-) FY 14 $ mil $ mil $ mil Cash & equivalents 42.3 42.5 0.2 Trade & Other Receivables 36.6 46.7 10.1 Other Current Assets 24.3 31.9 7.6 • Trade and other receivables increased in Current Assets 103.1 121.1 17.9 line with store growth Property, plant & equipment 93.3 1
Slide 13: Key Financial Ratios
KEY FINANCIAL RATIOS 13 H1 14 FY14 H1 15 Underlying Underlying Statutory • Net debt in line with FY14 position Net Debt to Equity 40.5% 30.0% 28.7% • Increased EBIT also leading to substantial improvement in interest coverage Net Debt $104.0m $77.6m $78.6m • Return on Equity & Return on Capital are
Slide 14: Section 3: Australia/New Zealand
SECTION 3
Slide 15: Australia/New Zealand Highlights
15 AUSTRALIA/NEW ZEALAND HIGHLIGHTS • Substantial sales growth generated from our $4.95 Cheaper Everyday campaign and the launch of Pizza Mogul • Strong store openings in H1 – our best first half since 2005 • New stores trading ahead of expectations • New Zealand stores outperforming the Group for t
Slide 16: Australia/New Zealand Network Sales
16 AUSTRALIA/NEW ZEALAND NETWORK SALES • Network sales generated from the $4.95 Cheaper Everyday campaign in AU and Pizza Mogul have contributed to our best first half SSS in 4 years • Customer counts are also substantially higher • Sales momentum in NZ with our value offerings has continued, leadin
Slide 17: Australia/New Zealand Achievements
17 AUSTRALIA/NEW ZEALAND ACHIEVEMENTS • Success of cheaper everyday campaign – including the launch, range expansion and pizza tracker campaign phases • Bringing back square puff after 5,000 facebook fans voted for it – living and breathing our people powered pizza positioning • Mogul – hitting over
Slide 18: Australia/New Zealand Product Innovation
18 AUSTRALIA/NEW ZEALAND PRODUCT INNOVATION • In addition to our value drivers, we continue to innovate and create a range of new menu options • Added pulled pork to our Chef’s Best range of pizzas which includes Chilli Lime Pulled Pork and Hickory BBQ Pulled Pork • We reintroduced Puff Pizza, in re
Slide 19: Australia/New Zealand Looking Forward
19 AUSTRALIA/NEW ZEALAND LOOKING FORWARD • Significant technology rollout this half including GPS tracker • Quick Ordering launched 12th January with 5 easy clicks. Will reduce even further this month and become 4 clicks with tokenisation • New and improved online ordering experience to be rolled ou
Slide 20: Section 4: Europe
SECTION 4
Slide 21: Europe Highlights
21 EUROPE HIGHLIGHTS • Strong SSS despite rolling a VAT increase in France and a tough macro environment • We have opened 24 new stores in Europe (a record number for first half new store openings) • The DPE global online ordering system having a material impact on sales in The Netherlands. Pulse PO
Slide 22: Europe Network Sales
22 EUROPE NETWORK SALES • Strong SSS in both France and The Netherlands has seen us achieve our best first half in three years • The restructuring of the Marketing teams is delivering material results as well as the rollout of our global POS and online ordering platforms
Slide 23: Europe Achievements
23 EUROPE ACHIEVEMENTS • We have increased the Marketing team resources in both France and The Netherlands, including two new CMO’s having a positive fresh influence on the brand and sales • New marketing initiatives and branding providing us with good traction in France • We have employed a new pro
Slide 24: Europe Product Innovation
24 EUROPE PRODUCT INNOVATION • New product launches in France and Belgium included the Sweet Chevre (Goat’s Cheese & Honey) and the Magic Saumon (Salmon, Boursin creamy cheese and garlic) • We also introduced the Cheesy Crust in Belgium following the popularity it received in France and The Netherla
Slide 25: Europe Looking Forward
25 EUROPE LOOKING FORWARD • Pulse rolling out in France over the middle of the year – expect to see benefits in H1 16 • New commissary still on track to open in early 2016 which will yield substantial freight and productivity savings • Store rollout continuing to gain momentum in all regions • Start
Slide 26: Section 5: Japan
SECTION 5
Slide 27: Japan Highlights
27 JAPAN HIGHLIGHTS • Opened 34 new stores during the first half of the year, 18 corporate and 16 franchised • Record sales month of ¥4.4 billion in December • The Can Do! Partners franchising program continues to gain momentum, with 19 stores operating at the end of the first half • Opened stores i
Slide 28: Japan Network Sales
28 JAPAN NETWORK SALES Japan SSS Growth H1 15 H1 14 Growth 14.4% Full 6 months ¥16,428m ¥14,192m 15.8% 7.8% • SSS 1.2% in line with management expectations, having rolled introduction of TV advertising in prior periods • Double digit sales growth, despite economic 1.2% headwinds • Sales growth on a
Slide 29: Japan Achievements
29 JAPAN ACHIEVEMENTS • 34 new stores set a DPJ record for any half year period; 19 relocations was also a record • Highest pick up sales in DPJ history: 42% of network sales in the first half versus 31% last year • 147 stores set new monthly sales records in December; 201 stores set new weekly reco
Slide 30: Japan Product Innovation
30 JAPAN PRODUCT INNOVATION • We continued the journey of better ingredients and innovation with extensive research and sensory panels leading to product launches • New seafood pizza features larger, tastier shrimp, crab flakes and spinach • New chicken chunks, made of juicy thigh meat, complement o
Slide 31: Japan Looking Forward
31 JAPAN LOOKING FORWARD • Opening the 400th store prior to our 30th anniversary in September. Aim to finish the financial year above 380 stores • DPJ will gain the #1 position in the pizza delivery segment before the end of calendar year 2015 • New tiered pick up menu launched in January, with entr
Slide 32: Section 6: Digital Innovation
PIZZA TRACKER NOW WITH ANDROID WEAR” & CHROMECAST SUPPORT. & SECTION6 DIGITAL INNOVATION ‘App on a paired Android device. Pe Google pay as
Slide 33: Australia/New Zealand Digital
AUSTRALIA/NEW ZEALAND 33 • Strong Online and Mobile sales growth with order counts +22.3% on pcp • Launched a world first me-tailing initiative through the launch of the interactive Pizza Mogul website and App. • Attracted over 55,000 registered Pizza Moguls users to the platform • Maintained the #1
Slide 34: France Digital
34 EUROPE FRANCE • First France store converted to DPE’s global online ordering platform - the same platform which has driven strong digital growth in Australia, New Zealand & The Netherlands • Strong Online and Mobile sales growth with record results • Successful World Cup digital campaign, which u
Slide 35: The Netherlands & Belgium Digital
35 EUROPE THE NETHERLANDS & BELGIUM • Online sales in The Netherlands over 60% • All Belgium stores converted to DPE’s global online ordering platform and PULSE POS • Domino’s Pizza Chef launched in the Netherlands • SMS marketing launched in The Netherlands to complement current successful email ma
Slide 36: Japan Digital
JAPAN 36 • Launched a new HTML 5 ordering system and website • Smartphone only promotions along with Facebook have been used to stimulate and drive customers to using our online platforms • Special online promotional pricing to celebrate occasions such as our 350th store opening have also been used
Slide 37: Section 7: Future Outlook
SECTION7 FUTURE. quTLoOK
Slide 38: Guidance Update
GUIDANCE UPDATE 38 as at November 2014 FY15 Guidance SSS% 4-6% 6-8% New Store Openings 175-185 180-200 EBITDA Growth (1) in the region of 25% in the region of 30% NPAT Growth (1) in the region of 25% in the region of 32.5% Net Capex $60-70m $70-80m • The first half of the year has yielded better tha
Slide 39: Trading Update
TRADING UPDATE 39 Update through first 6 weeks of 2015 Australia/NZ Europe Japan SSS% 12.2% 11.5% 9.2% New Store Openings 2 5 6 • First half sales momentum has continued across the Group • Japan SSS strong during New Year period • New store openings continuing in Japan and Europe, while ANZ traditio
Slide 40: Section 8: Summary
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Slide 41: Conclusion
CONCLUSION 41 • First half results across the Group have been very pleasing, leading to substantial profit growth. This momentum has continued in the first 6 weeks of the second half and as a result we are upgrading our FY15 guidance. EBITDA guidance is lifted to be in the region of 30% and NPAT gui
Slide 42: Disclaimer & Important Information
DISCLAIMER & IMPORTANT INFORMATION 42 • 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. • Domino’s does not undertake any obligation to p
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