Domino's Pizza Enterprises Limited · ASX:DMP
Domino's Pizza Enterprises — FY2006 Earnings Presentation
22 slides from Domino's Pizza Enterprises's earnings presentation, Aug 21, 2006
Slide 1: Domino's Pizza Australia New Zealand Limited Full Year Results 2006
DOMINO’S PIZZA AUSTRALIA NEW ZEALAND LIMITED FULL YEAR RESULTS 2006 21 August 2006
Slide 2: Agenda
AGENDA 1. Executive Summary 2. Network Store & Sales Growth 3. Revenue & EBITDA Results Australia & New Zealand Corporate Franchise Corporate Development & Unallocated 4. Financial Details 5. Looking Forward 6. Europe 7. Conclusion RICHARD CONEY KERRI HAYMAN Chief Financial National Corporat
Slide 3: Executive Summary
EXECUTIVE SUMMARY Exceeded IPO forecast and 2006 guidance • 104.4% NPAT increase on last year • Revenue and EBITDA growth +29.6% and +38.8% respectively • Same Store Sales (SSS) grew 4.3% • 52 weeks in 2006 vs 53 weeks in 2005 • NZ full maiden profit year – strong performer – exceeded forecasts • Fi
Slide 4: Executive Summary
EXECUTIVE SUMMARY Store Roll-out Continues • Added 51 stores to end year at 438 in Australia and New Zealand • 20 stores more than original IPO forecast; 9 over forecast IPO additions for the year; two over updated 2006 guidance • Acquired Belgium, France, Netherlands and Principality of Monaco – se
Slide 5: Executive Summary
EXECUTIVE SUMMARY Australia/NZ Europe F/Y 2007 Guidance Forecast Forecast F/Y 07 F/Y 07 • Australia/New Zealand – SSS 2.6% Store Count 478 175 – Build 40 new stores SSS 2.6% 12.0% – Corporate Development profits to be significantly less in 2007 • Europe – SSS 12% – Build 20 new stores • Not achieved
Slide 6: Network Store & Sales Growth
NETWORK STORE & SALES GROWTH Current target continues to be 620 stores in Australia/New Zealand Network Sales 400 NT 359.4 6 STORES 350 306.1 % .6 20 300 R: 252.9 QLD 250 C AG 103 STORES 212.5 $M SA 200 174.7 24 STORES WA NSW 140.6 150 41 STORES ACT 130 STORES 10 STORES 100 VIC Nth NZ 58 STORES 42 S
Slide 7: Network Store & Sales Growth
NETWORK STORE & SALES GROWTH Store Roll-out Continues • At year end 438 stores vs IPO forecast of 418 and 2006 guidance of 436 • 137 Corporate stores at year end – exceeded IPO forecast of 125 • Exploiting the opportunity to grow faster in new markets with more Corporate stores – Used extra capital;
Slide 8: Revenue & EBITDA Results
REVENUE & EBITDA RESULTS Revenue Composition EBITDA Composition 35 200 24.7 172.9 30 180 . 4% 160 .9 % 25 51 37 133.4 G R: 17.8 140 G R: CA 20 CA 120 109.7 13.4 A$m 11.3 A$m 15 100 88.0 7.8 80 70.4 10 3.1 60 5 34.7 40 0 20 0 (5) 2001 2002 2003 2004 2005 2006 2001 2002 2003 2004 2005 2006 Corporate S
Slide 9: Results - Australia & New Zealand
RESULTS - AUSTRALIA & NEW ZEALAND Australian business consistently growing • Melbourne is challenging but travelling to plan NZ business seeing benefits of scale and brand growing • On national TV in 2006 • NZ fastest growing market, highest growing SSS • Outstanding results in Auckland • Pizza Have
Slide 10: Results – Corporate
RESULTS – CORPORATE • Revenue and EBITDA growth of +27.3% and +30.0% on previous year • Overall margin has improved year on year 10.3% vs 10.1% • Good results but worth noting higher number of Corp. stores in Melbourne than originally forecast diluting national result F/Y 04A F/Y 05A * F/Y 06A +/(-)
Slide 11: Results – Franchise
RESULTS – FRANCHISE • In two years almost doubled both Revenue and EBITDA • Margin % is confusing due to store construction being in revenue (06 H2 store construction revenue 29% down on H1) • Extra training investment in Melbourne F/Y 04A H1 05A * H2 05A * F/Y 05A * H1 06A H2 06A F/Y 06A +/(-) 05A
Slide 12: Results – Corporate Development & Unallocated
RESULTS – CORPORATE DEVELOPMENT & UNALLOCATED • Corporate development activity consistent – Opening, development and sale of Corporate stores continues as network grows and we manage our Corporate store portfolio • Head Office departments generating revenues improving other/unallocated segment resul
Slide 13: Profit & Loss
PROFIT & LOSS • EBITDA up 15.4% over IPO forecast • NPAT 27.5% over IPO forecast • EPS 21.7 cents, in excess of 2006 guidance figure of > 20 cents • Interest cover 12.5 times IPO F/Y 04A F/Y 05A * F/Y 06A +/(-) 05A F/Y 06F * $ mil $ mil $ mil % $ mil Revenue 109.7 133.4 172.9 29.6% 151.9 EBITDA 13.4
Slide 14: Cash Flow
CASH FLOW F/Y 05A * F/Y 06A • Generated additional $7.4m $ mil $ mil cash from operations over 2005 EBITDA 17.8 24.7 • Positive movement in working Change in Working Capital 0.6 2.1 Other (6.3) (7.3) capital of $2.1m Net Cashflow from Operations 12.1 19.5 • Portfolio management of Payment for PPE, i
Slide 15: Balance Sheet
F/Y 05A * F/Y 06A +/(-) 05A BALANCE SHEET $ mil $ mil $ mil Current assets Cash and cash equivalents 2.7 19.3 16.6 Trade & other receivables 5.0 5.3 0.3 Other financial assets 0.1 0.0 -0.1 • Europe cash $14.6m, raised Inventories 1.1 1.4 0.3 Other 6.0 6.3 0.3 via Westpac debt facility Total current
Slide 16: Looking Forward - Major Activities
LOOKING FORWARD - MAJOR ACTIVITIES Store expansion target +1,600 stores • Store roll out will continue – now in five countries • Will open our 600th network store in the next few weeks • Strong store growth in NZ based on strong store economics • Top 4 growth markets include NZ, Melbourne, Perth and
Slide 17: Looking Forward - Major Activities
LOOKING FORWARD - MAJOR ACTIVITIES Innovation • New Vision 2020 image – from end of calendar year all new and refurbished stores will be in new image • All stores to be in new image in 7 years St Kilda, Melbourne Currimundi, Qld West End, Brisbane Page 17
Slide 18: Looking Forward - Major Activities
LOOKING FORWARD - MAJOR ACTIVITIES Innovation • Phase 2 internet rolled out – 97% of stores to be completed by June 2007 • 97% of stores to be Pulse enabled by June 07 • Expect continued growth in mobile phone ordering Page 18
Slide 19: Looking Forward – Major Activities
LOOKING FORWARD – MAJOR ACTIVITIES Innovative new products expected to continue • Exciting new products • Intend to slightly extend menu Management aware and pro-active towards • Corporate store margins continue to be impacted by number of Corp stores in Melbourne • Melbourne similar to investment i
Slide 20: Europe
EUROPE • Open 20 new stores in 2007 • Will take time for changes to impact whole system – expect more of new stores in H2 • Grow SSS 12% • Europe will show seasonality – due to July/August summer holidays – first half softer than second half Page 20
Slide 21: Europe
EUROPE • H1 profits impacted by ‘one off’ restructuring costs • Purchasing & recipe reviews have identified significant opportunities • Fr & NL advertising agencies appointed & consumer research commissioned • Increased variety & frequency of print advertising • Capacity upgrade of French commissary
Slide 22: Conclusion
CONCLUSION • Achieved strong results well ahead of IPO prospectus and 2006 guidance • Store roll out continues • New Zealand strong performer • Melbourne challenging but in natural maturation path for new market, as evident in NZ for example • Feeling positive about Europe & our future growth Page 2
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