Domino's Pizza Enterprises Limited · ASX:DMP
Domino's Pizza Enterprises — H1 2012 Earnings Presentation
32 slides from Domino's Pizza Enterprises's earnings presentation, Feb 15, 2012
Slide 1: Half Year Results January 2012
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Slide 2: DPE Executive Team
For personal use only DPE EXECUTIVE TEAM DON MEU CHIEF EXECUTIVE OFFICER/ MANAGING DIRECTOR ANDREW RENNIE CHIEF OPERATING OFFICER ANZ RICHARD CONEY GROUP CHIEF FINANCIAL OFFICER
Slide 3: For personal use only
For personal use only
Slide 4: Key results summary
For personal use only ANZ Network Sales ($) SSS +8.7% Europe Network Sales (€) SSS +7.5% EBITDA +21.7% NPAT +23.0% EPS +22.1% Dividend (cps) +25.0% Free Cash Flow ($m) $12.0m Return on Capital Employed 30.3% Return on Equity 22.7% 4
Slide 5: H1 12 financial highlights
For personal use only • NPAT up 23.0% to $12.6m; Achieved despite currency movements H1 10 H1 11 H1 12 +/(-) H1 11 • Strong SSS across the system; ANZ $ mil $ mil $ mil % +8.7% and Europe +7.5% Network Sales 353.5 364.5 401.1 10.0% • EBITDA growth of 21.7% to $22.9m Same Store Sales % 2.9% 9.1% 8.4%
Slide 6: Australia/NZ highlights
For personal use only • SSS growth in Australia/NZ +8.7%, rolling 10.9% in H1 11 • Customer counts are following similar growth trends as sales • We have continued on our journey of improved ingredients resulting in higher quality and a healthier menu • The growth in our digital business continues t
Slide 7: Europe highlights
For personal use only • Strong SSS growth in Europe in H1 12, +7.5% • Corporate stores in The Netherlands have grown to 15 and delivered strong SSS% growth of 22.7% with profits ahead of expectations • We broke the national weekly sales record in The Netherlands with over €34k for an individual stor
Slide 8: Results Detail
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Slide 9: Network sales
Network Sales $m For personal use only 746.4 694.3 Total Sales Same Store Sales 676.4 H2 128.9 H2 591.2 H2 122.2 Australia/NZ 11.2% 8.7% 134.0 518.9 H2 106.0 H2 H2 H2 253.0 80.7 H2 218.6 213.8 401.1 Europe (€) 12.6% 7.5% 359.4 H2 198.2 H2 H1 306.1 187.2 127.7 Europe numbers held in constant currency
Slide 10: Australia/NZ and Europe H1 network sales
For personal use only Australia/NZ H1 Network Sales A$ European H1 Network Sales € $276.4m €95.3m €84.6m $248.6m €71.3m $223.0m €65.0m $211.6m $201.5m €52.5m $186.0m €38.8m 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 • Sales have grown 11.2% over H1 11 on a • Sales have grown 12.6% o
Slide 11: ANZ and European SSS growth
For personal use only ANZ SSS Growth European SSS Growth 15.1% 8.8% 7.5% 6.8% 10.9% 8.7% 4.7% 7.2% 3.7% 4.6% 1.1% 2.2% 1.8% (0.7%) H1 09 H2 09 H1 10 H2 10 H1 11 H2 11 H1 12 H1 09 H2 09 H1 10 H2 10 H1 11 H2 11 H1 12 • The exceptional SSS growth in • SSS continue to improve, going ANZ has continued de
Slide 12: Store numbers and network sales
H1 11 H2 11 H1 12 For personal use only Australia/NZ stores Network Sales ($ mil) 245.9 253.0 273.4 Franchised stores 439 454 475 • Addition of 28 new stores to the network Corporate stores 96 96 88 during the half. Australia/NZ added 15 Aus/NZ Network Stores 535 550 563 Stadium outlets incl in abov
Slide 13: Revenue and EBITDA by segment
For personal use only • ANZ EBITDA up 18.2% due to strong H1 10 $ mil H1 11 $ mil H1 12 $ mil +/(-) H1 11 % REVENUE network sales growth flowing through to Australia/NZ 78.0 80.0 86.8 8.6% operating profit, economies of scale and marketing activities Europe 41.4 40.9 45.6 11.6% Total Revenue 119.4 1
Slide 14: Profit and loss summary
For personal use only H1 10 H1 11 H1 12 +/(-) H1 11 $ mil $ mil $ mil % • EBITDA & NPAT ahead of full Revenue 119.4 120.9 132.5 9.6% year guidance EBITDA 15.9 18.8 22.9 21.7% • Depreciation & Amortisation up Depreciation & Amortisation (3.8) (4.1) (4.9) 17.8% 17.8% as a result of European EBIT 12.1
Slide 15: EPS
For personal use only EPS (cps) 31.3 26.2 22.6 H2 16.4 18.4 H2 18.2 13.4 14.8 H2 H2 13.2 8.8 H2 9.1 H1 H1 18.2 H1 H1 H1 14.9 12.8 H1 9.6 9.4 5.7 FY07 FY08 FY09 FY10 FY11 FY12 • EPS up 22.1% on H1 11 • This has almost doubled in 3 years 15
Slide 16: Cash flow
H1 11 H1 12 • Free cash flow +24.6% For personal use only $ mil $ mil EBIT 14.7 18.1 • Increased working capital due to Depreciation & Amortisation 4.1 4.9 timing of store construction and Change in Working Capital 1.4 (4.4) sell down of corporate stores Net Interest Paid (0.4) (0.3) Income Taxes Pa
Slide 17: Balance sheet
FY 11 H1 12 +/(-) FY 11 $ mil $ mil $ mil Cash 28.1 34.3 6.3 Trade & Other Receivables 18.6 21.0 2.4 For personal use only Other Current Assets 10.7 10.7 (0.0) Current Assets 57.4 66.0 8.6 • Cash +$6.3m Property, plant & equipment 34.4 33.2 (1.2) Goodwill 47.5 47.0 (0.5) • Increase in debtors in ANZ
Slide 18: Net debt, interest cover and returns
For personal use only H1 11 H1 12 Net Debt & Interest Cover 55.9x $25.7m $15.9m 41.4x Net Debt to Equity (4.9%) (17.8%) 30.8x $3.6m 14.1x 9.0x ($2.3m) Return on Equity 20.4% 22.7% 5.3x ($12.5m) ($19.8m) Return on Capital 24.7% 30.3% Employed FY07 FY08 FY09 FY10 FY11 H1 12 Net Debt Interest Cover NB.
Slide 19: Achievements
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Slide 20: Product innovation
• New full flavour mozzarella, which took 2 years to develop, For personal use only has 30% less fat than 2 years ago and is currently proprietary to DPE • Better tasting pepperoni with 34% less fat • Free range chicken and sweeter, late harvest pineapple have been added to our product lines • Smoke
Slide 21: Digital and mobile ordering
• Most popular pizza chain website by visits in For personal use only Australia* • Mobile Ordering continues to play a bigger part in overall online strategy • Android App launched in September 2011 and became #1 Free Lifestyle App on the Android Market • Almost any mobile with internet access can n
Slide 22: New store concept and refurbishment
For personal use only • Two of our stores are featuring a brand new concept designed to entice the senses and showcase our love of pizza • These stores bring a real sense of theatre to our customer experience as our pizzas are made directly in front of the customer • This new design also features so
Slide 23: Surfers Paradise store
• Our new Surfers Paradise store is one that stands out For personal use only above all QSR’s as one of the most innovative food and retail image designs • A number of elements within the store are designed to entice the senses and add theatre to pizza making – Glass dough room, make line and cut be
Slide 24: Quality and sustainability of products
• Domino’s is on a journey to further improve the For personal use only quality of our products as well as ensure the sustainability of our business • Improved ingredients and better quality means healthier products • More than half of our ingredients have reduced sodium and more than a third of our
Slide 25: Europe achievements
• Corporate stores in The Netherlands have grown to 15 and For personal use only had a SSS% growth of 22.7% • We broke the national weekly sales record in The Netherlands with over €34k • More than 50% of our stores in The Netherlands have upgraded their store image • We launched a new fresh look we
Slide 26: For personal use only
For personal use only
Slide 27: ANZ outlook
For personal use only • Management are confident of rolling the strong like-for-like sales achieved in the last 2 years: – Significant investment in our digital platforms to continue. We believe we have a competitive advantage in this space, particularly as we invest in additional technologies. We e
Slide 28: Europe outlook
For personal use only • Despite a difficult economy in each European country, we expect to deliver continuing positive SSS • We will relocate the Paris Commissary in 2013 • In The Netherlands we are experiencing strong growth in our profits in the corporate stores and are now targeting a 25% mix of
Slide 29: FY12 guidance
For personal use only FY12 Guidance as Current FY12 Measure at August 2011 Guidance SSS% 3-5% 5-7% New Store Openings 60-70 60-70 in the region of EBITDA Growth 15-20% 20% in the region of in the region of NPAT Growth 15% 20% Estimated Tax Rate 29% 29% Net Capex $14-18m $14-18m • Upgrading SSS% to 5
Slide 30: Current trading
• Network sales have started well in H2 12 For personal use only • ANZ SSS still positive in January despite rolling a 20.7% month last year and YTD +7.9% • Europe SSS still positive in January despite rolling an 11.0% month last year and YTD +7.0% • On January 21, 2012 our Bundaberg store set the G
Slide 31: Summary
For personal use only • We have achieved significant SSS in the first half across ANZ and Europe • Management is confident of achieving an upgraded SSS range for the full year of between 5-7% in both ANZ and Europe • ANZ continues to demonstrate a combination of delivering material profit and store
Slide 32: Disclaimer
For personal use only • 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. • While due care has been taken in preparing these statements, no
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