Domino's Pizza Group Plc · LSE:DOM

Domino's Pizza — Domino's Pizza UK & IRL — FY2004 Earnings Presentation

26 slides from Domino's Pizza's earnings presentation, February 2005

1. Slide 1: Preliminary Results for the 53 weeks ended 2 January 2005

   Domino’s Pizza UK & IRL plc Preliminary Results for the 53 weeks ended 2 January 2005

2. Slide 2: Presenters: Chief Executive and Finance Director

   Domino’s Pizza UK & Irl plc Stephen Hemsley, Chief Executive Lee Ginsberg, Finance Director 1

3. Slide 3: Financial Highlights

   Domino’s Pizza UK & Irl plc Financial Highlights • PBT of £8.8m, an increase of 34.9% (2003: £6.5m) • Earnings per share: - Basic up 46.7% to 13.23 pence (2003: 9.02 pence) - Diluted up 51.0% to 12.67 pence (2003: 8.39 pence) • Total dividends up 50.0% to 5.25 pence for the year (2003: 3.50 pence) •

4. Slide 4: Financial Highlights contd.

   Domino’s Pizza UK & Irl plc Financial Highlights contd. • Like-for-like sales up 6.6% (2003: 7.4%) • Store count now up to 357 (2003: 318 stores) • Net interest covered 33.7 times (2003: 29.3 times) • Strong cash generation with cash on hand of £4.8m (2003: £3.7m) • Share buy-back commenced during y

5. Slide 5: Profit and Loss

   Financial Performance Profit and Loss 53 weeks to 52 weeks to % 2 Jan 2005 28 Dec 2003 Increase £’000 £’000 System sales 174,292 142,265 22.5 Statutory sales 74,215 61,557 20.6 Operating profit * 9,138 6,498 40.6 (Loss)/profit on FA & exceptionals (47) 243 Profit before interest and tax 9,091 6,741

6. Slide 6: System Sales

   Financial Performance System Sales 200 180 174.3 160 142.3 140 118.9 120 £m +23% 98.4 100 76.1 +20% 80 60 +21% 40 +29% 20 +20% 0 2000 2001 2002 2003 2004 COMPOUND ANNUAL GROWTH IN SALES OF 23% 5

7. Slide 7: Store Openings

   Financial Performance Store Openings 60 50 40 Openings 50 30 (1)* 20 34 40 (2)* (1)* 24 10 22 (0)* (2)* 0 2000 2001 2002 2003 2004 * Negative = Store closures 6

8. Slide 8: Store Count

   Financial Performance Store Count 350 300 250 Number of stores 200 318 357 150 269 100 237 215 50 0 2000 2001 2002 2003 2004 7

9. Slide 9: Mature Store Sales

   Financial Performance Mature Store Sales Period Period Period Period Period Period Period Period Period Period Period Period 1 2 3 4 5 6 7 8 9 10 11 12 2000 2001 2002 2003 2004 8

10. Slide 10: Like-for-like Sales Growth

    Financial Performance Like-for-like Sales Growth 25 300 250 20 LFL store population 200 15 % Growth 21.4% 150 10 100 5 11.2% 7.4% 50 4.8% 6.6% 0 0 2000 2001 2002 2003 2004 LFL store population Solid growth from a larger group of stores 9

11. Slide 11: Balance Sheet

    Financial Performance Balance Sheet At 2 Jan 2005 At 28 Dec 2003 £’000 £’000 Fixed Assets: Fixed assets 16,498 14,062 At 02 Jan 05 At 28 Dec 03 £’000 £’000 Current assets 20,980 17,797 ¾ Intangible 1,520 1,430 ¾ Tangible 14,595 12,293 Creditors due within (15,121) (13,380) ¾ Investment 383 339 in JV

12. Slide 12: Analysis of Shareholder Funds

    Financial Performance Analysis of Shareholder Funds At At 2 Jan 2005 28 Dec 2003 £’000 £’000 At beginning of year 10,680 11,701 Share issues 1,071 1,009 Share buyback (1,610) 0 EBT shares (1,200) (5,160) Profit for year 6,731 4,559 LTIP charge 332 328 Dividends (2,688) (1,757) 13,316 10,680 Minoriti

13. Slide 13: Analysis of Borrowings

    Financial Performance Analysis of Borrowings At At 2 Jan 2005 28 Dec 2003 £’000 £’000 Cash at bank 4,824 3,721 DP Capital (2,640) (2,739) EBT loans (6,360) (5,160) Other (42) (65) Net debt (4,218) (4,243) Shareholders funds 13,398 10,730 Gearing % 31.5% 40.9% Interest cover 33.7 times 29.3 times 12

14. Slide 14: Net Cash Inflow From Operating Activities

    Financial Performance Net Cash Inflow From Operating Activities 53 weeks ended 52 weeks ended 2 Jan 2005 28 Dec 2003 £’000 £’000 Operating profit 9,033 5,866 Depreciation 1,386 1,210 Amortisation 133 180 LTIP charge 333 328 Increase in stocks (857) (433) Increase in debtors (1,505) (707) Increase in

15. Slide 15: Cash Flow Statement

    Financial Performance Cash Flow Statement 53 weeks ended 52 weeks ended 2 Jan 2005 28 Dec 2003 £’000 £’000 Net cash inflow from operating activities 9,943 8,010 Servicing of finance + returns on investment (215) (110) Taxation paid (2,021) (1,407) Capital expenditure + financial investment (3,428) 1

16. Slide 16: Basic Earnings Per Share Growth

    Domino’s Pizza UK & Irl plc Basic Earnings Per Share Growth 14.00 Compound Annual Growth 12.00 of 50% 10.00 13.23 8.00 Pence 6.00 9.02 4.00 5.60 2.00 4.00 2.61 0.00 2000 2001 2002 2003 2004 Basic EPS Linear (Basic EPS) 15

17. Slide 17: Dividends Per Share Growth

    Domino’s Pizza UK & Irl plc Dividends Per Share Growth 6.00 Compound Annual Growth 5.00 of 60% 4.00 Pence 5.25 3.00 2.00 3.50 2.00 1.00 1.33 0.80 0.00 2000 2001 2002 2003 2004 Dividends per Share 17 Linear (Dividends per Share)

18. Slide 18: The Market

    Domino’s Pizza UK & Irl plc The Market * • Home delivery food market in UK estimated at £1.2 billion • Growth of 62% from 1999-2004 • Pizza currently 43% of market • Domino’s deliver 1 in 10 home delivered meals • Time poor consumers • Technological advances facilitate ease of ordering • Market high

19. Slide 19: Key Growth Drivers

    Domino’s Pizza UK & Irl plc Key Growth Drivers • Significant increase in at-home eating predicted • Greater in-home entertainment options - homes are leisure destinations in their own right • Wider access to interactive technologies - advantageous for home-delivered food companies • Increased develo

20. Slide 20: The Competition

    Domino’s Pizza UK & Irl plc The Competition • Strengthened market leadership 2004 Stores Openings Sales - Domino’s 357 40 £174m - Pizza Hut * 202 32 £ 95m - Perfect Pizza * 120 (20) £ 24m - Papa Johns * 80 7 £ 20m • Highest sales per store in industry * Estimates 19

21. Slide 21: Building the Brand

    Domino’s Pizza UK & Irl plc Building the Brand • FOUR KEY INITIATIVES: • TV • Simpsons on Sky One • Celebrity-led advertising campaign success • Leslie Nielsen • Direct marketing • Driving frequency and promotions • New pizza menu development • Double Decadence • Delight cheese • Technological advan

22. Slide 22: Double Decadence – The Product

    Domino’s Pizza UK & Irl plc Double Decadence – The Product Customer’s choice of Domino’s Pizza topping Domino’s “Thin & Crispy” dough base Indulgent, creamy cheese and herb sauce Domino’s “Thin & Crispy” dough base 22

23. Slide 23: E-Commerce Growth

    Domino’s Pizza UK & Irl plc E-Commerce Growth • Sales of £8.3m in 2004 • Growth of 41% over 2003 • 5.2% of total system sales • Record sales of £1.2m in last 6 weeks of year • Growth of 62% over 2003 • 5.9% of total system sales • Over 7% of all UK delivery sales • New Sky interactive platform launc

24. Slide 24: Management Team and Board

    Domino’s Pizza UK & Irl plc Management Team and Board • Strengthening of Board • Appointment of Lee Ginsberg as Finance Director • John Hodson, Non-Executive Director • Board now comprises: • Chairman • Three Executive Directors • Three Non-Executive Directors • Management Team Focus • Operations Di

25. Slide 25: Continuing Strategy

    Domino’s Pizza UK & Irl plc Continuing Strategy • Maintain robust new store openings • Target of 50 per annum • Drive like-for-like sales growth • New menu development • Continuation of superior standards and service • Drive operational leverage • Infrastructure in place • Control costs • Maintain c

26. Slide 26: Trading & Prospects

    Domino’s Pizza UK & Irl plc Trading & Prospects • Store openings on track • Like-for-like sales up 6.6% (2003: 4.3%) for the first six weeks of 2005 • Overheads and cash flow under control LOOKING FORWARD TO 2005 WITH CONFIDENCE 26

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