Domino's Pizza Enterprises Limited · ASX:DMP
Domino's Pizza Enterprises — Investor Day (June 2022)
87 slides from Domino's Pizza Enterprises's investor day presentation, Jun 6, 2022
Slide 1: Asia Investor Day presentation and leadership announcement
Domino’s Pizza Enterprises Limited 1/485 Kingsford Smith Drive Hamilton, QLD, Australia 4007 ACN: 010 489 326 www.dominos.com.au 6 June, 2022 Asia Investor Day presentation and leadership announcement For personal use only Domino’s Pizza Enterprises Ltd (ASX.DMP) is today hosting an investor day in
Slide 2: Asia Investor Day 2022
1 For personal use only ASIA INVESTOR DAY 2022 AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK TAIWAN
Slide 3: Group overview
For personal use only Group overview Presented By Don Meij Group CEO & Managing director 2
Slide 4: Index
INDEX For personal use only 1. A foundation for growth 2. Our long-term future 3. How DPE will deliver 3
Slide 5: Our purpose
OUR PURPOSE For personal use only WHY DO WE EXIST? AT OUR BEST The hard-wired human WE SMASH THE PREVAILING need for social WISDOM WHICH SAYS YOU connection – seemingly CAN’T HAVE QUALITY, SPEED better enabled than ever AND LOW PRICE… before – is breaking down. THUS PUTTING THE WORLD’S MOST DELICIOU
Slide 6: Our pizza brings people together
OUR PIZZABRINGS PEOPLE BE GENEROUS AND PROVIDE JOYFUL EXPERIENCES _> INVEST-TO. CREATE DEVOTION BECAUSE IT'S ” crUsH THING TO DO CONVENTION GROW AND PROSPER
Slide 7: A foundation for growth
For personal use only A FOUNDATION FOR GROWTH
Slide 8: Key metrics
Key metrics For personal use only Network Sales FRANCHISE STORE COUNT $3.74 BN (FY21) 79.5% (FY21) online sales Markets 78.2% (FY21) 10: EU (6) APAC (4) network Store count Total population 3327 365.2 million people Network store count at 5 June, 2022 7
Slide 9: Key metrics: two-year growth
Key metrics For personal use only Two-year growth Network1 Sales Markets 2 +29.5% + 1 (Taiwan) Digital sales Market population 1 2 +41.3% +23.3 million (+7%) Network1 Store count EBIT 1 +24.3% +25.2% 1 H1 22 vs H1 20 as presented at HY results 2 Population of Taiwan added to Group population followi
Slide 10: A track record of acquiring new markets
9 For personal use only ~ 1X GDP CHINA ~ 1X POP USA a track record of acquiring new markets 9
Slide 11: Achieving growth through uncertain times
Achieving growth though uncertain times For personal use only 80.00% Group Store Growth Network Sales Growth 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY H1 of 2022 FY Network sales in $AUD Store growth includes acquisitions:
Slide 12: Group store count and EBIT growth
Achieving growth though uncertain times For personal use only Group store count and EBIT growth ($million) 3500 350.0 3000 300.0 Domino’s Network Store Count Domino’s Group EBIT ($AU M) 2500 250.0 2000 200.0 DMP store count 1500 150.0 EBIT 1000 100.0 500 50.0 0 0.0 2013 FY 2014 FY 2015 FY 2016 FY 20
Slide 13: Our long-term future
For personal use only OUR LONG-TERM FUTURE 12
Slide 14: Long term outlook - APAC
LONG TERM OUTLOOK - APAC For personal use only CURRENT STORE COUNT 1,959 Future Store outlook 3,600 (+83.8%) 13
Slide 15: Long term outlook - Europe
LONG TERM OUTLOOK - EUROPE For personal use only CURRENT STORE COUNT 1,368 Future Store outlook 3,050 (+123.0%) 14
Slide 16: Medium term outlook
MEDIUM TERM OUTLOOK For personal use only 3-5 year new store outlook +9-12% of network 1 15 1 growth per annum
Slide 17: How DPE will deliver
For personal use only HOW DPE WILL DELIVER
Slide 18: The age of delivery
THE AGE OF DELIVERY For personal use only “THE GROWTH IN THE HOmE PIzzA mARkET WILL CONTINUE AS A RESULT Of LONGER WORkING days and the increase in dual career households supporting demand for freshly COOkED, DELIVERED fOOD” - DOmINO’S PIzzA AUSTRALIA NEW zEALAND LTD SHARE OffER - 2005 17
Slide 19: The engine of our growth has been digital
18 THE ENGINE OF OUR GROWTH HAS BEEN DIGITAL For personal use only $4,000 $2,930 M Millions $3,500 $3,000 $2,500 $2,000 $1,500 $557 M $1,000 $500 $ 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY Domino's Group Digital Sales ($M) Domino's Group Offline Sales ($M) Including sales via
Slide 20: The age of delivery: online QSR spend
THE AGE OF DELIVERY • For personal use only The move to online has grown the online market for total QSR $3.66 B QSR spend ($AU billions) – Online Only $1.04 B $0.95 B $0.85 B $0.81 B $0.74 B $0.62 B $0.72 B 2016 2017 2018 2019 2020 2021 Source: The NPD Group/ CREST® Australia - Year End Mar 2022 Di
Slide 21: The age of delivery is our future
THE AGE OF DELIVERY IS OUR FUTURE • Online Food Delivery – total market For personal use only $40,000 $34.87 B $35,000 $30,000 $23.74 B $25,000 $US Million $20,000 $15,000 $8.58 B +46.9% growth $10,000 Forecast by 2026 $5,000 $- 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 APAC Europe Statista:
Slide 22: The age of delivery
THE AGE OF DELIVERY Delivery is the fastest For personal use only growing part of the QSR MARKET we are a fraction of QSR competitors total QSR: are growing the we have room to grow total market The challenge: there will not be enough people to meet demand 21
Slide 23: The age of delivery: long-term focus
THE AGE OF DELIVERY For personal use only We face historic headwinds, including inflation, conflict in Europe, and currency movements, but we are focused on the long-term: Food offering that can A customer-focused be tailored for Internal franchising Strong unit economics A sustainable company appro
Slide 24: A sustainable QSR
A SUSTAINABLE QSR For personal use only Mapped our corporate ESG reporting: our footprint: on track to Responsible sourcing next report will develop ambitious of products – working include GRI and SASB targets. world-class partners standards 23 GRI: Global Reporting Initiative SASB: Sustainable Acco
Slide 25: Domino's can deliver: value
DOMINO’s DOMINO’S CAN DELIVER For personal use only We are a value-based business: PROducT+SERVICE+IMAGE = VALUE PRICE 24
Slide 26: Domino's can deliver
DOMINO’s DOMINO’S CAN DELIVER For personal use only INCREASED STORE COUNT Reduced cost of GROWING delivery ADVERTISING FUNDS Increased customer ACCESSING NEW satisfaction CUSTOMERS (more customers, more frequency) 25
Slide 27: Advertising funds
Advertising ADVERTISING funds FUNDS For personal use only GROWTH OF NATIONAL MORE FIREPOWER INCREASED ADVERTISING FUNDS FOR ADVERTISING TELEVISION SPEND 26
Slide 28: Cost of delivery
COST OF DELIVERY For personal use only Increased labour pool REDUCED RELIANCE ON SHORTER DELIVERY TIMEs CARS = Lower costs 27
Slide 29: Cost of delivery
For personal use only COST OF DELIVERY 28
Slide 30: Shorter run times = more profitable deliveries
Shorter run times = more profitable deliveries For personal use only Fortressing example (Bradbury NSW) – provided Investor Day November 2020 29
Slide 31: A 1/3 reduction in delivery cost is possible in every market
A 1/3 reduction in delivery cost is possible in every MARKET market For personal use only Average runtime (minutes): Highest vs Lowest delivery cost stores 30.00 25.00 24.02 22.55 21.05 20.33 19.06 Run time (minutes) 20.00 17.55 18.12 13.48 13.24 13.33 15.00 12.38 12.30 12.42 10.11 10.00 5.00 0.00 J
Slide 32: Strong unit economics
UNIT ECONOMICS For personal use only STRONG uNIT ECONOMICS + EXPERIENCED FRANCHISEES = INCREASED STORE OPENINGS store payback target 3 years 31
Slide 33: Domino's offers an unrivalled pathway
DOMINO’S OFFERs DOMINO’s OFFERS AN UNRIVALLED PATHWAY From team For personal use only member to store manager Talent incubators To franchisee developing future (DMP financing) leaders expansion To multi-unit through bank (Potential DMP lenders & cash financing) flow 32
Slide 34: Hear from those delivering on our success
For personal use only Hear from those delivering on our success… 33
Slide 35: Domino's Pizza Japan
34 For personal use only DOMINO’s PIzzA JAPAN DOMINO’S Investor PRESENTATION June 6th, June 6th, 2022 2022 AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK TAIWAN
Slide 36: Presented by Josh Kilimnik, CEO APAC
For personal use only Presented By JOSH kilimnik CEO apac 35
Slide 37: Domino's Pizza Japan management team
DOMINO’S DOMINO’s PIzzA JAPAN MANAgEMENt tEAM For personal use only Josh Kilimnik Benjamin Oborne Eric Yutaka Tai Tony Sai APAC CEO Japan COO Japan CFO Japan CIO joined Domino’s in Australia began his Domino's journey at Joined DPJ in 2016. Along joined the Domino’s in 1992. He worked in Domino's La
Slide 38: Japan total stores / new stores opened
For personal use only JAPAN TOTAL STORES 919 NEW STORES OPENED 119 37
Slide 39: We are delivering
WE ARE DELIVERING For personal use only Agenda • Update on 2017 strategy (100% ownership) • THE ‘REbASING’ Of 2021 • Our future DPJ Investor Day – April 2019 38
Slide 40: Our strategy is delivering - customers
Our strategy is delivering - customers For personal use only • Building on customer insights, new menu offerings and new marketing approach outlined here • Targeting more occasions DPJ Investor Day – April 2019 39
Slide 41: Our strategy is delivering - customers
Our strategy is delivering - customers For personal use only DELIVERY AS YOU LIKE HALF PRICE CARRYOUT MENU OFFERINGS FAMILY OCCASIONS 40
Slide 42: Our strategy is delivering - team
Our strategy is delivering - TEAM For personal use only NUMBER OF STORES PER FRANCHISEE Capitalising on the real estate opportunity available for new store builds Becoming an employer of choice for team members, including store managers Expanding our franchisee base – developing new franchisees, and
Slide 43: Our strategy is delivering - expansion
Our strategy is delivering – - TEAM EXPANSION For personal use only Domino's Market Position by Market Opening new markets Apr 19 May 22 +11 markets (36 → 47) Opening kitchens closer to our customers People per store (Y207K → Y137K) #1 Brand by Market Apr 19 May 22 Domino’s Pizza-la Pizza Hut Others
Slide 44: Our strategy is delivering - national approach
Our strategy is delivering – - TEAM NATIONAL APPROACH For personal use only DOUGH PROJECTS FREIGHT HARMONISATION STRATEGIC REFRANCHISING 43
Slide 45: National approach: franchise store percentage
Our strategy is delivering – - TEAM NATIONAL APPROACH FRANCHISE STORE % For personal use only (As of April 2022) 100% (14 prefs) 50-99% (24 prefs) 1-49% (3 prefs) 0% (6 prefs) 44
Slide 46: The rebasing - 2021
tHE ”REBAsINg” ”REBASINg” - 2021 2012 For personal use only Following the lifting of the 4th State of Emergency • We lost frequency of the single person, single pizza occasion • Other occasions / customer demographics did not see the same decline • mANAGEmENT ANTICIPATED A ‘V-SHAPED’ RECOVERY, bASED
Slide 47: We have more, more frequent customers
WE OurHAVE MORE,isand strategy more frequent, delivering - TEAM customers For personal use only AVERAGE STORE CUSTOMERS – BY FREQUENCY • Despite the rebasing, we have built customer loyalty and frequency across our stores • Awareness and loyalty has moved new customers up our frequency range • There
Slide 48: Post-COVID: a materially stronger business
“POSt-COVID”: “POst-COVID”: A MAtERIALLY Our strategy is delivering -StRONgER MATERIALLY STRONGER TEAM BUSINESS For personal use only Average WEEKLY Average weekly Franchisee Franchisee CUSTOMERS/STORE sales/store profit/store margins/store: >20% Higher >10% higher >35% higher +60bps Source: Company
Slide 49: The rebasing: where are we now?
tHE ”REBASINg” WHERE ARE WE NOW? - 2012 For personal use only Market dashboard DISTRIBUTION OF MULTI-UNIT SUB-FRANCHISEES (% of total sub-franchisees) • TOTAL STORES 919 (June-22) • NUMBER OF SUB-FRANCHISEES: 133 • AVERAGE NUMBER OF STORES PER SUB-FRANCHISEE: 3.9 37% • POPULATION: ~125.5m • PEOPLE P
Slide 50: #1 in every neighborhood
#1 in every neighborhood For personal use only FY13 FY19 FY22 17 36 47 #1 market #1 market #1 market 0 8 20 Domino’s stores presence by prefecture 49
Slide 51: Store network
STORE NETWORK For personal use only Hokkaido • DPJ is now operating in all of 47 prefectures after opening the Izumo store in Shimane (December) TohOku • DOmINO’S market position is #1 in 20 out of 47 prefectures. Hokuriku Kaisai Kanto Chugoku Tokai Kyushu Shikoku FY19 FY22 Okinawa 36 47 PREFS PREFS
Slide 52: Delivery pizza market overview in Japan
DELIVERY PIZZA MARKET OVERVIEW IN JAPAN For personal use only Major 3 Store Count 2013 2019 2022 YTD 919 642 552 529 536 482 358 416 287 CY Changes of Store Count of Japan Delivery Pizza Industry 2,632 2,662 2,460 2,270 2,324 2,161 2,210 2,210 2,230 2,145 882 919 287 742 354 432 472 503 550 642 552
Slide 53: A clear path to our future
A CLEAR PATH TO OUR FUTURE For personal use only Targeting #1 Building profits Reaching more In every through lower customers, on neighbourhood cost of delivery more occasions 52
Slide 54: Our strategy is delivering - customers
Our strategy is delivering - customers For personal use only We will focus on segments with high occasion size, but low pizza penetration Opportunities • Solo after-work dinners • Weekday solo lunches • Late lunch gatherings • Solo weekend dinners • Late afternoon meals with families and children •
Slide 55: We will target the barriers to entry
Our strategy is delivering - customers We will target the barriers to entry For personal use only Pizza Rice Bowl and No Minimum Delivery initiatives key to meeting consumer needs 54
Slide 56: Cost of delivery: time and distance = money
Cost of delivery: Time (and distance) = money For personal use only Japan Delivery Cost vs Avg Runtime Japan Delivery Cost vs Avg Delivery Distance Average Distance to Customer 19.4 Runtime (minute) 17.7 (Meters) 17.1 16.4 13.3 (min) Delivery Costs per Order (JPY) Delivery Costs per Order (JPY) Deli
Slide 57: ESG
ESG For personal use only DOmINO’S JAPAN INTENDS TO DO OUR PART fOR DOmINO’S DOING OUR PART for Good • WE ARE LEADING THE DOmINO’S GROUP WITH ‘fEED THE kNEAD’ • We have launched internal events to enhance EmPLOYEE ENGAGEmENT WITH OUR ‘bETTER SLICE fOR EVERYONE’. • We have launched our Local Harvest
Slide 58: Long term outlook - Japan
LONG TERM OUTLOOK - JAPAN For personal use only CURRENT STORE COUNT 919 Future Store outlook 2,000 (+117.6%) 57
Slide 59: Domino's Pizza Taiwan
58 For personal use only DOMINO’s PIzzA tAIwAN DOMINO’S Investor PRESENTATION June 6th, June 6th, 2022 2022 AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK TAIWAN
Slide 60: Presented by Martin Steenks, CEO Taiwan
For personal use only Presented By Martin Steenks CEO Taiwan 59
Slide 61: Index
INDEX For personal use only 1. 100% Ownership 2. Market Overview 3. Where We Are Now 4. Our Goals and Future Plans 60
Slide 62: Domino's Pizza Taiwan history
DOMINO’S DOMINO’s PIzzA tAIwAN HIStORY HIstORY For personal use only 1989 DOmINO’S TAIWAN OPENED ITS fIRST STORE 1999 May Commence franchise operations 2007 Owned by the Formosa International Hotels Corporation 2021 September DPE acquired the business ▪ DOmINO’S PIzzA TAIWAN HAS GROWN TO bECOmE THE
Slide 63: Domino's Pizza Taiwan under 100% ownership
DOMINO’S PIzzA tAIwAN UNDER 100% OwNERsHIP DOMINO’s OwNERSHIP For personal use only GARY WANg JOYCE LEE THELMA HUANG REBECCA CHAO GENERAL MANAGER CFO OPERATIONS DIRECTOR MARKETING DIRECTOR 27 years in Domino’s, in 27 years in Domino’s, in 24 years in Domino’s, in 20 years in Domino’s, having charge
Slide 64: Market overview
For personal use only OVERVIEW MARKET 63
Slide 65: Where are we now?
WHERE ARE WE NOW? For personal use only Market dashboard DISTRIBUTION OF MULTI-UNIT SUB-FRANCHISEES (#; % of total sub-franchisees) • TOTAL STORES 167 (May-22) • NUMBER OF SUB-FRANCHISEES: 34 29% • AVERAGE NUMBER OF STORES PER SUB-FRANCHISEE: 4.4 • POPULATION: ~23.2m 24% • PEOPLE PER STORE: ~ 139k 1
Slide 66: Market overview
Market MARKET overview OVERVIEW Number of Chain Stores (2) Before DPE As of Apr-22 For personal use only 264 271 • DOmINO’S PIzzA TAIWAN HAS GROWN SALES bY 167 156 taking market share within the pizza category 110 116 as well as innovations on marketing and menu TO mEET CUSTOmER‘S NICHE • DOmINO’S E
Slide 67: Store network and store locations
STORE NETWORK STORE LOCATIONS For personal use only 3 28 New Taipei City 17 4 Taipei City • DOmINO’S TAIWAN HAS bUILT A STRONG STORE NETWORk 25 Taoyuan City with stores located across all major cities 1 Keelung City 11 Xinzhu County • Management intends to expand the store footprint through opening
Slide 68: Our three year plan
OUR THREE YEAR PLAN For personal use only • New store openings • In-fill stores in current regions (fortressing strategy) • Planned store relocations • Growing our franchisee base • Marketing and menu innovations • Brand relaunch • LEVERAGE DPE’S DIGITAL ExPERTISE TO ACCELERATE customer engagement a
Slide 69: We're already delivering
wE’RE ALREADY DELIVERINg For personal use only • New store openings ✓ 11 stores already rolled out since acquisition ✓ • In-fill stores in current regions ✓ • Planned store relocations ✓ • Growing our franchisee base ✓ Programs in place for new franchisee recruiting ✓ 68
Slide 70: We've delivered
wE’VE DELIVERED For personal use only ✓ Marketing and menu innovations Brand relaunch ✓ LEVERAGE DPE’S DIGITAL ExPERTISE to accelerate customer ✓ engagement and sales growth ✓ ESG 69
Slide 71: Dual-track program to grow our franchisee base
Dual-track Program to grow our franchisee base For personal use only Incentives to motivate Franchisees to grow Project Ignite their own manager (DPT Internal) (Franchisee) 70
Slide 72: Experienced franchisees - ready for growth
Experienced franchisees – ready for growth For personal use only See more at https:investors/dominos.com.au/videos
Slide 73: A new approach to marketing
A NEW APPROACH TO MARKETING For personal use only We will revolutioniSe PRODUCT PRICING BRAND IMAGE 72
Slide 74: Consumer insights
CONSUMER consumer INSIGHTS How consumers perceive pizza compared to other food? For personal use only The enjoyment of taste makes pizza good for indulgent or gathering events, but the taste variety and value make it distant to daily meal Cheap / Western food: flour based & meats Asian food: rice ba
Slide 75: Revolutionising our brand image
Revolutionising our brand image For personal use only 74
Slide 76: Our product
OUR PRODUCT Revolutionising our For personal use only A new diverse product offering in our menu A NEW APPROACH TO MARKETING OUR PRODUCT FOR OUR BRAND RELAUNCH 75
Slide 77: New technology: Domino's app
NEW TECHNOLOGY For personal use only DOmINO’S APP: launched in July 2021 and is a growing part of digital sales 100% 17.9% 20.0% 90% 18.0% 80% 16.0% 69.5% 70% 64.8% 14.0% 60% 12.0% 50% 10.0% 11.6% 40% 8.0% 30% 6.0% 20% 4.0% 10% 2.0% 0% 0.0% 21-Jul 22-Apr OLO APP DOmINO’S APP (TAIWAN) 76
Slide 78: Taiwan ESG missions and goals
TAIWAN ESG MISSIONS AND GOALS For personal use only 2022-2023 MISSION AND GOAL IN TAIWAN MARCH 2022 JULY 2022 JULY 2022 DECEMBER 2022 2022-2023 ELIMINATE PLASTICS E-SCOOTERS INTROduCING ESG FEED THE NEED EMPLOYEE CARE FOOD SAFETY ON WEBSITE PACKAGING FSC 77
Slide 79: Our goal and future plans
For personal use only OUR GOAL AND FUTURE PLANS 78
Slide 80: Our goal: become dominant number 1
OUR GOAL: BECOME DOMINANT NUMBER 1 For personal use only 79
Slide 81: Our goal
OUR GOAL For personal use only To help our local operations grow by introducing them to new technologies and operations that have helped franchisees grow and prosper in multiple markets DIGITAL AND DATA AND INVESTING IN MARKETING TECHNOLOGY INSIGHTS GROWTH 80
Slide 82: Strategic plan for growth
STRATEGIC PLAN FOR GROWTH For personal use only Our strategic plan for the market is METHODICAL, building on lessons from entering new marketS INTEGRATION AND TEST AND LEARN GROWTH (0-1 Years) INVESTMENT (THEREAFTER) (0-2 Years) 81
Slide 83: How we get there
HOW WE GET THERE For personal use only • HVM (High Volume Mentality) • PTE (Path to Excellence) • New Technology • Customer Lifetime Value (PSI/$=V) • Strategic Marketing • Fortressing the market • Motivated Franchisees
Slide 84: Cost of delivery
83 COST OF DELIVERY For personal use only Top 10% of stores with a delivery cost 20-30% lower than other stores Dec 2021 Feb 2022 March 1 – April 30, 2022
Slide 85: Domino's Taiwan future outlook
DOMINO’S tAIwAN FUtURE OUtLOOK DOMINO’s We have a long way to become the Dominant #1 For personal use only ✓ But we have the runway to get there Long-term outlook of 400 stores TAIWAN NEW STORE GROWTH Corporate new store Franchise new store Total store count 20 350 300 300 15 250 200 176 200 161 162
Slide 86: Q&A and leadership announcement
85 Q&A For personal use only and LEADERSHIP ANNOUNCEMENT Presented By Don Meij Group CEO & Managing director 85
Slide 87: Introducing our Asia leadership team
INTRODUCING OUR ASIA LEADERSHIP TEAM For personal use only JOSH kilimnik MARTIN STEENKS RONALD DEKKER CEO ASIA PACIFIC CEO JAPAN CEO TAIWAN ~20 years in Domino’s, starting in stores in 25 years in Domino’s 25 years in Domino’s, Australia as a delivery driver and store manager. including as an award
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