Domino's Pizza Enterprises Limited · ASX:DMP
Domino's Pizza Enterprises — FY2015 Earnings Presentation
46 slides from Domino's Pizza Enterprises's earnings presentation, Feb 11, 2016
Slide 1: Full Year Results
FULL YEAR RESULTS 28 JUNE 2015 PRESENTERS FOR THE DAY DON MEIJ GROUP CEO & MANAGING DIRECTOR RICHARD CONEY ANDREW RENNIE SCOTT OELKERS NICK KNIGHT GROUP CFO EUROPE CEO JAPAN CEO AUSTRALIA & NEW ZEALAND CEO DOMINO’S PIZZA ENTERPRISES LTD AUSTRALIA | NEW ZEALAND | JAPAN | FRANCE | THE NETHERLANDS | BE
Slide 2: Highlights
HIGHLIGHTS YOUR PRESENTER IS DON MEIJ Group CEO & Managing Director DOMINO’S PIZZA ENTERPRISES LTD AUSTRALIA | NEW ZEALAND | JAPAN | FRANCE | THE NETHERLANDS | BELGIUM
Slide 3: Result Highlights
RESULT HIGHLIGHTS 3 Group Network Sales SSS +8.6% ANZ Network Sales SSS +11.3% Europe Network Sales SSS +6.4% Japan Network Sales SSS +1.8% EBITDA (1) +34.4% (1 & 2) NPAT +40.0% (1) EPS +36.0% Dividend (cps) +41.1% Free Cash Flow ($m) $33.4m Return on Capital Employed (1) 21.2% Return on Equity (1)
Slide 4: Group Highlights
GROUP HIGHLIGHTS 4 FY 13 FY 14 FY 15 +/(-) FY 14 Statutory Underlying Statutory Underlying $ m il $ m il $ m il % Revenue 294.9 588.7 702.4 19.3% • Network sales up 18.5%, or $230.5m, to $1,479.8m EB IT DA 55.9 9 5.1 1 2 7. 8 3 4. 4% Depreciation & Amortisation (12.8) (21.7) (27.5) 26.6% • Revenue u
Slide 5: FY15 Guidance Assessment
FY15 GUIDANCE ASSESSMENT 5 F Y1 5 Gui da nce As s e s s me nt As at February 2015 Actual Achieved SSS% 6-8% 8.6% New Store Openings 180-200 177 EBITDA Growth (1) in the region of 30.0% 34.4% NPAT Growth (1) in the region of 32.5% 40.0% Net Capex $70-80m $72.6m (1) FY15 guidance for EBITDA and NPAT g
Slide 6: Network Sales Growth
Sa me St o re T o t a l Sa l e s Sa l e s NETWORK SALES GROWTH Aus t ra l i a / NZ +1 6 . 6 % +1 1 . 3 % 6 1,480 Euro p e (€) +1 3 . 5 % +6 . 4% 1,400.0 1,249 1,200.0 J a p a n (¥) ( 1) +3 7. 3 % +1 . 8% 1,000.0 849 800.0 746 805 764 • Group SSS 8.6% exceeding our guidance of 6-8% 694 715 $m 673 576
Slide 7: Network Store Count
NETWORK STORE COUNT 7 FY 13 FY 14 FY 15 Aus tralia/NZ s tore s Franchised stores 501 551 606 • Almost tripled our organic store growth since FY13 with new Corporate stores Aus /NZ Ne twork Store s 84 5 85 61 612 64 670 record full year store openings of 177 across the Group Stadium outlets incl in a
Slide 8: Financials
FINANCIALS YOUR PRESENTER IS RICHARD CONEY Group Chief Financial Officer DOMINO’S PIZZA ENTERPRISES LTD AUSTRALIA | NEW ZEALAND | JAPAN | FRANCE | THE NETHERLANDS | BELGIUM
Slide 9: Geographic Summary
GEOGRAPHIC SUMMARY 9 FY 13 FY 14 FY 15 +/(-) FY 14 Statutory Underlying Statutory Underlying $ m il $ m il $ m il % • ANZ delivered another year of strong earnings growth R EVENUE driven by double digit SSS and record store openings Australia/NZ 174.2 203.3 216.8 6.6% Europe 120.7 144.4 171.3 18.6%
Slide 10: Earnings Per Share
EARNINGS PER SHARE 10 74.2 • Statutory EPS 74.2c, up 46.9% on FY14(+36.0% vs. FY14 underlying) • FY15 EPS CAGR of 23.0% in the last 8 years H2 50.5 40.4 39.1 37.2 H2 29.1 30.0 H2 H2 19.2 25.0 19.8 21.6 H2 17.6 H2 15.7 H1 14.1 H2 12.8 H2 33.8 12.6 H2 8.4 H1 H1 H1 21.4 8.7 H1 H1 19.9 H1 H1 17.4 12.2 1
Slide 11: Cash Flow
CASH FLOW 11 FY 14 FY 15 $ m il $ m il Net Profit After Tax before Minority Interest 45.3 68.4 Profit on Sale non-current assets (3.6) (6.4) • Improved operating cash flow of $106.0m being Depreciation & Amortisation 21.7 27.5 generated by strong profits from all regions Change in Working Capital 26
Slide 12: Balance Sheet
BALANCE SHEET 12 FY 14 FY 15 +/(-) FY 14 $ m il $ m il $ m il Cash & equivalents 42.3 43.2 0.9 Trade & Other Receivables 36.6 43.9 7.3 Other Current Assets Curre nt As s e t s 24.3 103.1 29.5 116 .5 5.2 13.4 • Increase in Plant & Equipment and Intangibles of $38.5m Property, plant & equipment 93.3 1
Slide 13: Key Financial Ratios
KEY FINANCIAL RATIOS 13 FY 14 FY 15 Underlying Statutory Net Debt to Equity 30.0% 2 6 . 8% • Net Debt to Equity and interest coverage has improved due to higher profits with no material increase in borrowings Net Debt $77.6m $81 . 7m • Net Debt continues to be in line with the prior year and expecta
Slide 14: Australia/New Zealand
AUSTRALIA/NEW ZEALAND YOUR PRESENTER IS NICK KNIGHT AUSTRALIA & NEW ZEALAND CEO DOMINO’S PIZZA ENTERPRISES LTD AUSTRALIA | NEW ZEALAND | JAPAN | FRANCE | THE NETHERLANDS | BELGIUM
Slide 15: Highlights and Achievements – Australia/New Zealand
HIGHLIGHTS AND ACHIEVEMENTS 15 AUSTRALIA/NEW ZEALAND • Appointment of Nick Knight to CEO ANZ, a role that has been vacant since Andrew Rennie moved to Europe. Don Meij remains involved in the ANZ business through his role as Group CEO. We are excited about the talent and depth we are creating in thi
Slide 16: Highlights and Achievements – Australia/New Zealand
HIGHLIGHTS AND ACHIEVEMENTS 16 AUSTRALIA/NEW ZEALAND • Continued roll out of the Electric Push Bike initiative; improving store level profitability and community relations, through the reduction of noise pollution and providing cleaner more effective delivery in neighbourhoods • Launched Domino’s Li
Slide 17: Network Sales – Australia/New Zealand
NETWORK SALES 17 AUSTRALIA/NEW ZEALAND 15.1% Australia/NZ H2 Network Sales A$ $376.7m ANZ SSS Growth 11.8% $321.1m 10.9% 10.6% $283.8m 8.7% $270.7m $253.0m 6.9% 5.6% 4.5% 2.6% 0.4% 2011 2012 2013 2014 2015 H1 11 H2 11 H1 12 H2 12 H1 13 H2 13 H1 14 H2 14 H1 15 H2 15 • Network sales growth continues t
Slide 18: Product Innovation – Australia/New Zealand
PRODUCT INNOVATION 18 AUSTRALIA/NEW ZEALAND • Capitalising on street food trend by introducing Chef’s Best Pulled Beef and Pulled Pork pizza ranges • Our core menu is GMO FREE and our fresh dough made daily is preservative FREE • Extra value layer providing customers greater variety including Italia
Slide 19: Looking Forward – Australia/New Zealand
LOOKING FORWARD 19 AUSTRALIA/NEW ZEALAND • We are currently rolling out a program to offer a 15 minute and 20 minute delivery guarantee (see Slide 36) • We have fully rolled out our new responsive online ordering site and have immediately seen an increase in average ticket prices and on mobile order
Slide 20: Europe
EUROPE YOUR PRESENTER IS ANDREW RENNIE Europe CEO DOMINO’S PIZZA ENTERPRISES LTD AUSTRALIA | NEW ZEALAND | JAPAN | FRANCE | THE NETHERLANDS | BELGIUM
Slide 21: Highlights and Achievements – Europe
HIGHLIGHTS AND ACHIEVEMENTS 21 EUROPE • Franchise and Corporate stores are exceeding in all metrics in the Netherlands • Corporate stores in France, particularly Paris, are starting to lead the growth • Over 200 electric push bikes now delivering to customers. We have a growing number of stores in t
Slide 22: Highlights and Achievements – Europe
HIGHLIGHTS AND ACHIEVEMENTS 22 EUROPE • Record organic growth in FY15, opening 54 new stores in Europe. Achieved the milestones of 200 stores in Netherlands/Belgium and 250 stores in France • Strong SSS despite rolling a 3% VAT increase (Jan 14) in France and a tough macro environment • Global onlin
Slide 23: Network Sales – Europe
NETWORK SALES 23 EUROPE European H2 Network Sales € European SSS Growth €146.1m 7.5% 7.5% €129.3m 6.8% €118.8m €106.1m 5.3% €94.8m 4.9% 4.7% 4.6% 4.0% 2.3% 0.7% H1 11 H2 11 H1 12 H2 12 H1 13 H2 13 H1 14 H2 14 H1 15 H2 15 2011 2012 2013 2014 2015 • Strong SSS in both France and the Netherlands has se
Slide 24: Product Innovation – Europe
PRODUCT INNOVATION 24 EUROPE • The high quality of our products remain the most important part of our journey and we have hired a new Product Development Chef in Europe • In Belgium we introduced the Hot Dog Stuffed Crust, Gyros, Asparagus and Tiramisu, offering more variety than ever before to the
Slide 25: Looking Forward – Europe
LOOKING FORWARD 25 EUROPE • GPSDT to be rolled out later in the year in the Netherlands • Complete Pulse rollout in France this year • Adding the ability to order via new growing digital mediums like social media • Strong organic store growth trend continues in Europe • New Paris commissary under wa
Slide 26: Japan
JAPAN YOUR PRESENTER IS SCOTT OELKERS Japan CEO DOMINO’S PIZZA ENTERPRISES LTD AUSTRALIA | NEW ZEALAND | JAPAN | FRANCE | THE NETHERLANDS | BELGIUM
Slide 27: Highlights and Achievements – Japan
HIGHLIGHTS AND ACHIEVEMENTS 27 JAPAN • Constructed a total of 64 new stores in twelve months • We have financed 29 new stores through our Can Do! Partners franchising program • Franchised stores are now 26% of the system, up from 17% at the time of the DPE acquisition, and 20% at the end of FY14 • T
Slide 28: Highlights and Achievements – Japan
HIGHLIGHTS AND ACHIEVEMENTS 28 JAPAN • Highest pick up sales in Dominos Japan history: 46% in the second half, versus 34% last year • Opened the 350th store in December and finished the year at 384 stores • Leveraged our learning and development tools to recruit and train 130 new managers from withi
Slide 29: Network Sales – Japan
NETWORK SALES 29 JAPAN Japan H2 Network Sales ¥m Japan SSS Growth 14.4% ¥16,889.7m 7.8% ¥14,840.5m 2.2% 1.3% (1) (1) 2014 2015 H1 14 H2 14 H1 15 H2 15 • Achieved annual Same Store Sales (SSS) growth of 1.8% despite lapping high growth in 2014, impact of increase in sales tax and a tough economic env
Slide 30: Product Innovation – Japan
PRODUCT INNOVATION 30 JAPAN • Launched new tiered pick up promotion in January, with entry prices starting at ¥1,000 • Conducting regular sensory panel research, resulting in the launch of new hand tossed dough with improved texture. The end result is a product we are all proud of. It’s fluffy, has
Slide 31: Looking Forward – Japan
LOOKING FORWARD 31 JAPAN • Upgrading our store outlook in Japan to 850 stores (up from 700 stores) • Opening the 400th store prior to our 30th anniversary in September • PULSE will begin rolling out before the end of the fiscal year • Relocation of 26 stores to pick up friendly locations in the firs
Slide 32: Digital
DIGITAL YOUR PRESENTER IS DON MEIJ Group CEO & Managing Director DOMINO’S PIZZA ENTERPRISES LTD AUSTRALIA | NEW ZEALAND | JAPAN | FRANCE | THE NETHERLANDS | BELGIUM
Slide 33: Digital – Australia/New Zealand
AUSTRALIA/NEW ZEALAND 33 • Having successfully delivered significant projects in FY15 we are continuing our investment in digital with in excess of 40 new projects in the pipeline for this year • Strong online and mobile sales growth with order counts +26% on prior year • Successful role of out of a
Slide 34: GPS Driver Tracker (GPSDT)
GPS DRIVER TRACKER (GPSDT) 34 • This year saw us introduce the biggest change to pizza delivery in the Global Brand’s 54 year history • Domino’s GPSDT was trialled in ACT in May and rolled out nationally across all stores in Australia in July and New Zealand in August • GPSDT enables the delivery of
Slide 35: New Responsive Online Ordering
NEW RESPONSIVE ONLINE ORDERING 35 • Fresh new look and image • A better and more visually enriched user friendly ordering experience • The website seamlessly adjusts across any screen size • An enhanced order details section • Larger product shots – the very reason customers come to the website • Im
Slide 36: 15 & 20 Minute Guarantee
15 & 20 MINUTE GUARANTEE 36 • In a QSR first, Domino’s will activate a 15 and 20 Minute Delivery Guarantee for customers • The algorithm behind this Guarantee, as well as GPSDT, means it is only activated when we can do this safely from an operations perspective - safety of our staff is always our n
Slide 37: Digital – Europe
EUROPE 37 • Introduction of Pizza Chef platform to allow customers the ability to customise their order • The convenient platform of Quick Ordering was implemented in the Netherlands in December 2014 and Belgium in April 2015, allowing customers the ability to place their online order in as little a
Slide 38: Digital – Japan
JAPAN 38 • Pulse point of sale project is underway and expected to begin rolling out by the end of the year • Launched a new smartphone service which allows pinpoint delivery with GPS function in July • Renewed the Domino’s Live Pizza Tracker with attractive product images to maximise customers’ app
Slide 39: Outlook
OUTLOOK YOUR PRESENTER IS DON MEIJ Group CEO & Managing Director DOMINO’S PIZZA ENTERPRISES LTD AUSTRALIA | NEW ZEALAND | JAPAN | FRANCE | THE NETHERLANDS | BELGIUM
Slide 40: Future Outlook – Group Store Count
FUTURE OUTLOOK – GROUP STORE COUNT 40 Australia/NZ Europe Japan 900 Stores 1,350 Stores 850 Stores • We are upgrading our Japan store count forecast from 700 to 850 stores. This is based on territory optimisation as well as continued expansion across the country • The ANZ and Europe store count targ
Slide 41: FY16 Group Guidance
FY16 GROUP GUIDANCE 41 FY15 Actual FY16 Guidance SSS% - ANZ 11.3% 6-8% - Europe 6.4% 4-6% - Japan 1.8% 1-2% New Store Openings 177 180-200 EBITDA Growth 34.4% in the region of 20% NPAT Growth 40.0% in the region of 20% Net Capex $72.6m $70-80m • Assumed AUD FY16 FX rates JPY – 96.00; EUR – 0.71 ; NZ
Slide 42: Trading Update
TRADING UPDATE 42 Up da t e t hro ugh fi rs t 5 we e ks o f F Y1 6 Australia/NZ Europe Japan Group SSS% 13.36% 3.82% (5.09%) 8.39% New Store Openings 0 1 12 13 • ANZ SSS continues to show impressive growth supported by the launch of GPSDT and ongoing success of Cheaper Everyday • Europe SSS continue
Slide 43: Summary
SUMMARY YOUR PRESENTER IS DON MEIJ Group CEO & Managing Director DOMINO’S PIZZA ENTERPRISES LTD AUSTRALIA | NEW ZEALAND | JAPAN | FRANCE | THE NETHERLANDS | BELGIUM
Slide 44: Conclusion
CONCLUSION 44 • Exceeded our Group EBITDA and NPAT guidance achieving +34.4% and +40.0% respectively • Double digit ANZ SSS growth and impressive Group SSS of 8.6% have contributed to an exceptional result • Record organic growth in DPE’s 10 year history, nearly tripling our organic store growth sin
Slide 45: Conclusion (Cont.)
CONCLUSION (Cont.) 45 • We continue to push the boundaries of what is possible in digital innovation and adding convenience to our customer with multiple world-first initiatives, out-of-the-box digital innovation and investment right across the Group • Pizza Mogul, GPS Driver Tracker, Pizza Tracker
Slide 46: Disclaimer & Important Information
DISCLAIMER & IMPORTANT INFORMATION 46 • 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. • Domino’s does not undertake any obligation to p
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