Domino's Pizza Enterprises Limited · ASX:DMP
Domino's Pizza Enterprises — Merger or Acquisition (May 2006)
33 slides from Domino's Pizza Enterprises's merger presentation, May 1, 2006
Slide 1: Domino's Pizza Australia New Zealand expands into European market
Domino’s Pizza Australia New Zealand Limited (“DMP”) expands into European market Acquisition of European territories (“DPE”), Netherlands, France and Belgium from Domino’s, Inc. (“DPI”). ist May 2006
Slide 2: Overview of DPE
Overview of DPE The opportunity Execution of the opportunity Profile of management team Acquisition structure and funding Conclusion Page 2
Slide 3: Summary
Summary Domino's has signed an agreement to acquire the European territories of Netherlands, France and Belgium from Domino’s. Inc Purchase price of €8.9m (A$14.8m)!/ Net assets of €7.2m/ 4 year expansion plan to spend a minimum of €10m (A$16.6m) + AS at 22 February, 2006 DPE has 60 stores in the Ne
Slide 4: DMP has a track record in successfully integrating and growing businesses
DMP has a track record in successfully integrating and growing businesses 589 = Foundations of 5 current management team come together 376 294 end (refer to notes for pe 100 Network Stare numbers at financial year 80 Yeart: 1991 1993 1995 2001 2004 2008 20067 Event: Conversion Master Sitvio's Dial a
Slide 5: 1. Summary
1. Summary 3. The opportunity 4, Execution of the opportunity 5. Profile of management team 6. Acquisition structure and funding 7. Conclusion Page 5
Slide 6: DPE provides DMP with opportunity for substantial additional growth
DPE provides DMP with opportunity for substantial additional growth « Meets criteria for success Western market * Culture of eating pizza ® High per capita incomes e Rule of law Not green-field Significant scale / opportunity for significant scale Continue focus on core Domino’s systems « Significan
Slide 7: Overview of DPE
Overview of DPE DPE provides DMP with opportunity for substantial additional growth Population 16.5m GDP/capita = us$32,800 Stores: 60 Population 60.7m GDP/capita —_us$31,100 Stores: 90 Population 10.5m GDP/capita — us$32,300 Stores: 3 + Euromonitor Page 7
Slide 8: Overview of DPE: Side by side comparison to DMP
Overview of DPE Side by side comparison to DMP « DPE business model is currently weighted to a franchised system « DPE Network Sales in 12 months to December 2005: €66.2m (~A$110m) Region: France Netherlands Beigiurrn Franchised Stores 88 56 3 Corporate Stores 2 4 - Total Stores | 90 60 3 Network Sa
Slide 9: Overview of DPE: History
Overview of DPE History » France - Opened by a local master franchisee In early 1989 - Under performed and failed to grow network; undercapitalized - Came under control of DPI in 1999 - Under DPI, business has grown to 90 stores from organic roll-out and conversion of ~14 Telepizza stores; now profi
Slide 10: Overview of DPE: Current business model
Overview of DPE Current business model based around Franchised system and centralised commissary system « Stores and operations - Network primarily franchised stores - Delivery focused - not carry-out friendly ~- Simple and efficient stores: 80-100m2 « Commissary Systern ~ Central dough production -
Slide 11: Strong store level economics in France; not so strong in Netherlands
Overview of DPE Strong store level economics in France; not so strong in Netherlands * France Strong store level economics Sales growing and stores opening System at 90 stores and Is profitable Excellent platform for continued rollout Ready for mass media (TV) support « Netherlands & Belgium Low sto
Slide 12: 1. Summary
1. Summary 2. Overview of DPE 4, Execution of the opportunity 5. Profile of management team 6. Acquisition structure and funding 7. Conclusion Page 12
Slide 13: The opportunity: Pizza is a large market in these regions
The opportunity Pizza is a large market in these regions ... « In Australia, the total pizza market value is A$1.6 billion (€1.0 billion) ! Belgium Belgium €199m 714 units Netherlands 4,880 units Netherlands e4gim France €3,420m 12,844 units: France Source: Euromonitor; Pizza segments: Tast Food, Fu
Slide 14: Fast food remains highly fragmented
The opportunity .. but fast food remains highly fragmented as a total category, with independents dominant with 93% of total outlets Chains 40,087 units Independents 440,332 units Source: Euromonitor; category includes total units in France, Netherlands and Belgium across the following segments: Fas
Slide 15: Branding and chains do work in the European market
The opportunity However, branding and chains de work in the European market ... « McDonalds has expanded successfully in France (1,037 stores) and Netherlands (224 stores) to be the market leader (in the QSR sector) « Pizza Hut is the (QSR) market leader in Belgium (74 stores) « Demino’s Pizza UK ha
Slide 16: Domino's is well positioned in France and Netherlands
The opportunity Domino's is well positioned in France and Netherlands with 90 and 60 stores respectively « Pizza Hut is the major brand in Belgium, with 74 stores La Boite a Pizza 86 stores Pizza Hut 120 stores (85 delivery} Domino's Pizza 60 stores: Speed Rabbit New York Pizza 75 stores 73 stores,
Slide 17: 1. Summary
1. Summary 2. Overview of DPE 3. The opportunity 5. Profile of management team 6. Acquisition structure and funding 7. Conclusion Page 17
Slide 18: Operational strategy to grow DPE
, ne Execution of the opportunity Operational strategy to grow DPE « DMP has undertaken a comprehensive review of DPE, including: - Evaluation of current operations, performance, challenges - Assessment of opportunity - Design of strategy to execute the opportunity ~ Legal & Financial due diligence
Slide 19: High Volume Mentality - Stores
‘ “a Execution of the opportunity High Volume Mentality - Stores Stores Page 19
Slide 20: High Volume Mentality - Sales
— Execution of the opportunity High Volume Mentality ~ Sales Sales Page 20
Slide 21: High Volume Mentality - Develop & leverage centralized infrastructure
mj Execution of the opportunity High Volume Mentality - Develop & leverage centralized infrastructure ~ Improving store unlit economics = profitable stores + franchisees - Low cost producers that is efficient + productive Centralised Infrastructure Page 21
Slide 22: Summary
Summary Overview of DPE The opportunity Execution of the opportunity Acquisition structure and funding Conclusion Page 22
Slide 23: cranraouece |
cranraouece | Page 23
Slide 24: Profile of management team
- Oe Profile of management team DMP has the management expertise and depth of experience to execute this transaction « Experienced managers to oversee and execute the European strategy, comprising: - Senior team members from DMP - Senior European team members « Depth of local talent to maintain stre
Slide 25: Grant Bourke will be returning to a full time role
: ma i Profile of management team Grant Bourke will be returning to a full time role and will have overall responsibility for DPE Grant Bourke Managing Director, Europe Grant has been part of Domino's Pizza for 13 years since he became a Franchisee in 1993. In 2001 Grant vended his eight store franc
Slide 26: DMP has the experienced and proven management team
Profile of management team DMP has the experienced and proven management team to execute the European growth strategy Andrew Rennie President, France Andrew joined Domino's in 1994 and has held a number of rolas within Barina’s Pizza, including that of Franchisee. After bain invalved with operating
Slide 27: DMP has the depth of management to continue to grow
Profile of management team DMP has the depth of management to continue te grow and strengthen the Australia and New Zealand business PONS Kerri Heyman National Corporate, Operations Manager Kerri is the most awarded Domino's Pizza employee in Austrufia and New Zealand due to her strong feadership an
Slide 28: Summary
Summary Overview of DPE The opportunity Execution of the opportunity Profile of management team Conclusion Page 28
Slide 29: Acquisition structure and funding
Acquisition structure and funding Key transaction points: een AID EDITED STDS, DMP has entered into three new Master Franchise Agreements for the territories (25 year MFA periods & similar in nature to Australia’s MFA) Commitments received frormn local managers that will be entering Into employment
Slide 30: Acquisition structure and funding: Key transaction terms
Acquisition structure and funding Sale documentation includes: - Share Purchase Agreements (SPA) for entities ~ Master Franchise Agreements (MFA) for exclusive right to territories Key transaction Terms Agreement Commentary Acquisition of 100% of Domino’s Pizza France, Netherlands and Belgium for €8
Slide 31: Transaction timeline
Acquisition structure and funding Transaction timeline « Completion expected on 3 July 2006 « DMP management to begin involvement on 1 June to facilitate orderly transition at settlement - Through the due diligence process, DMP management has already had extensive Interaction with the DPE managernen
Slide 32: Summary
Summary Overview of DPE The opportunity Execution of the opportunity Profile of management team Acquisition structure and funding Page 32
Slide 33: Conclusion
Conclusion « DPE represents a strong platform for growth In the European pizza market - Target DPE store numbers: >1,000 stores ~ New group store count target > 1,620 stores « DPE represents an exceptional entry for DPA into the key European growth market « How will this be achieved? - Testing work
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