Domino's Pizza Group plc · LSE:DOM
Domino's Pizza — Domino's Pizza UK & IRL — H1 2005 Earnings Presentation
26 slides from Domino's Pizza's earnings presentation, July 2005
Slide 1: Interim Results for the 26 weeks ended 3 July 2005
Domino’s Pizza UK & IRL plc Interim Results for the 26 weeks ended 3 July 2005
Slide 2: Presenters: Chief Executive and Finance Director
Domino’s Pizza UK & Irl plc Stephen Hemsley, Chief Executive Lee Ginsberg, Finance Director 1
Slide 3: Financial Highlights
Domino’s Pizza UK & Irl plc Financial Highlights • PBT pre-exceptionals increased 22.6% to £5.0m (2004: £4.1m) and post-exceptionals by 34.7% to £5.5m (2004: £4.1m) • Earnings per share: - Basic EPS up 38.1% to 7.97 pence (2004: 5.77 pence) - Diluted EPS up 42.7% to 7.82 pence (2004: 5.48 pence) • I
Slide 4: Financial Highlights contd.
Domino’s Pizza UK & Irl plc Financial Highlights contd. • E-commerce sales up 64.0% to £6.5m (2004: £4.0m) • A record 23 stores opened in the period (2004: 19 stores) resulting in a total of 380 stores at period end (2004: 337 stores) • Sale of 13 corporate stores for £4.0m, generating £0.8m profit
Slide 5: Profit and Loss
Financial Performance Profit and Loss 26 weeks to 26 weeks to % 53 weeks to 3 Jul 2005 27 Jun 2004 Increase 2 Jan 2005 £’000 £’000 £’000 System sales 97,090 81,504 19.1 174,292 Statutory sales 40,502 34,736 16.6 74,215 Operating profit pre-exceptionals 5,082 4,259 19.3 9,138 Exceptional LTIP amortis
Slide 6: Store Openings
Financial Performance Store Openings 60 50 50 40 40 34 Openings 29 30 21 16 20 10 21 19 23 18 0 2002 H1 2003 H1 2004 H1 2005 H1 RECORD OPENINGS IN FIRST HALF 5
Slide 7: Store Count
Financial Performance Store Count 400 350 300 380 Number of stores 250 337 200 318 150 269 100 237 50 0 2001 H1 2002 H1 2003 H1 2004 H1 2005 H1 MARKET POTENTIAL OF 800 – 1,000 DOMINO’S PIZZA STORES 6
Slide 8: Mature Store Sales up 8.4%
Financial Performance Mature Store Sales up 8.4% 2004 2005 1 2 3 4 5 6 7 8 9 10 11 12 7
Slide 9: Balance Sheet
Financial Performance Balance Sheet At At At 3 Jul 2005 27 Jun 2004 2 Jan 2005 £’000 £’000 £’000 Fixed assets 15,332 15,855 16,498 Current assets 24,386 18,866 20,980 Creditors due within one year (13,941) (14,353) (15,121) Net current assets 10,445 4,513 5,859 Creditors due after more than one (8,0
Slide 10: Analysis of Shareholder Funds
Financial Performance Analysis of Shareholder Funds At At At 3 Jul 2005 27 Jun 2004 2 Jan 2005 £’000 £’000 £’000 At beginning of year 13,316 10,680 10,680 Share issues 302 399 1,071 Share buyback (1,096) (200) (1,610) EBT shares - - (1,200) Profit for year 4,093 2,917 6,731 LTIP charge 479 - 332 Div
Slide 11: Analysis of Borrowings
Financial Performance Analysis of Borrowings At At At 3 Jul 2005 27 Jun 2004 2 Jan 2005 £’000 £’000 £’000 Cash at bank 8,480 2,914 4,824 DP Capital (2,617) (2,730) (2,640) EBT loans (6,360) (5,160) (6,360) Other (43) (72) (42) Net debt (540) (5,048) (4,218) Shareholders funds 17,094 12,706 13,398 Ge
Slide 12: Net Cash Inflow From Operating Activities
Financial Performance Net Cash Inflow From Operating Activities At At At 3 Jul 2005 27 Jun 2004 2 Jan 2005 £’000 £’000 £’000 Operating profit 4,769 4,207 9,033 Depreciation 752 644 1,386 Amortisation 76 71 133 LTIP charge 479 - 333 Decrease/(Increase) in stocks 304 (329) (857) (Increase) in debtors
Slide 13: Cash Flow Statement
Financial Performance Cash Flow Statement At At At 3 Jul 2005 27 Jun 2004 2 Jan 2005 £’000 £’000 £’000 Net cash inflow from operating activities 4,005 3,392 9,943 Servicing of finance + returns on investment 66 (25) (215) Taxation paid (518) (1,028) (2,021) Capital expenditure + financial investment
Slide 14: Basic Earnings Per Share up 38.1% to 7.97p
Financial Performance Basic Earnings Per Share up 38.1% to 7.97p 9 8 7 6 7.97 Pence 5 4 5.77 3 2 3.70 1 2.34 0 2002 H1 2003 H1 2004 H1 2005 H1 13
Slide 15: Dividend per share up 40.9% to 3.10p
Financial Performance Dividend per share up 40.9% to 3.10p 3.5 3 2.5 Pence 2 3.10 1.5 2.20 1 1.32 0.5 0.78 0 2002 H1 2003 H1 2004 H1 2005 H1 INCREASING CASH RETURNED TO SHAREHOLDERS 14
Slide 16: Share price vs Sector
Domino’s Pizza UK & Irl plc Share price vs Sector DOMINO'S PIZ Z A UK & IRL 31 8 Relativ e to FTSE A LL-SHA RE (GBP) Relativ e to FTSE A ll Share Leis ure & Hotels 29 8 27 8 25 8 23 8 21 8 19 8 17 8 Jul Au g Se p Oct N ov D ec Jan Fe b Mar Ap r May Ju n 04 04 04 04 04 04 05 05 05 05 05 05 15
Slide 17: Building the Brand
Domino’s Pizza UK & Irl plc Building the Brand • FIRST HALF INITIATIVES: • TV • Simpsons on Sky One • New product launches • Direct marketing • Driving frequency and supporting new products • New pizza menu development • Thin Crust Pizza • Cheese Steak Melt • Beef on the Barbie • Technological advan
Slide 18: E-Commerce Growth
Domino’s Pizza UK & Irl plc E-Commerce Growth • Sales of £6.5m in 2005 • Growth of 64.0% over 2004 • 10.6% of all delivered pizza sales in the UK • Up from 7% a year ago • Sky + Ntl interactive platforms re-launched • First half of this year • Higher order value of e-commerce platforms • Circa 30% h
Slide 19: New Products Launched
Domino’s Pizza UK & Irl plc New Products Launched Cheese Steak Melt launched and proved very popular – representing up to 17 % of Beef on the Barbie recently launched sales 18
Slide 20: Building the Brand
Domino’s Pizza UK & Irl plc Building the Brand 19
Slide 21: Investment in Infrastructure
Domino’s Pizza UK & Irl plc Investment in Infrastructure • Three main areas of strengthening: • Regionalisation of operations • To better source and support growing franchise network • Correlation between better standards and higher store sales • Store opening + business development teams • Benefits
Slide 22: Continuing Strategy
Domino’s Pizza UK & Irl plc Continuing Strategy • Maintain robust new store openings • Well on track for 800 – 1,000 Domino’s Pizza stores in UK and Ireland • Drive like-for-like sales growth • New menu development • Continuation of superior standards and service • Drive operational leverage • Infra
Slide 23: Trading & Prospects
Domino’s Pizza UK & Irl plc Trading & Prospects • Store openings on track • Confident of achieving market forecast openings • Solid like-for-like sales expected • Challenging to match first half performance • Overheads under control as anticipated • Continuing strong cash generation POSITIVE OUTLOOK
Slide 24: 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
Slide 25: 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
Slide 26: The Competition
Domino’s Pizza UK & Irl plc The Competition • Strengthened market leadership Stores Sales - Domino’s 380 £174m - Pizza Hut * 220 £ 95m - Perfect Pizza * 120 £ 24m - Papa Johns * 80 £ 20m • Highest sales per store in industry * Domino’s Pizza estimates 26
Domino's Pizza UK & IRL — H1 2005 Earnings Presentation on 6ix