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, February 2012
Slide 1: Half Year Results to 1 January 2012
HALF YEAR RESULTS TO 1 JANUARY 2012
Slide 2: DPE Executive Team
DPE EXECUTIVE TEAM DON MEIJ CHIEF EXECUTIVE OFFICER/ MANAGING DIRECTOR ANDREW RENNIE CHIEF OPERATING OFFICER ANZ RICHARD CONEY GROUP CHIEF FINANCIAL OFFICER
Slide 3: Highlights
1 HIGHLIGHTS
Slide 4: Result Highlights
RESULT HIGHLIGHTS 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: Group Highlights
group HIGHLIGHTS • 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 $22.9m Same Store Sales % 2.9% 9.1% 8.4% • St
Slide 6: Australia/NZ Highlights
Australia/nz HIGHLIGHTS • SSS growth in Australia/NZ +8.7%, rolling 10.9% in H1 11 • Customer counts are following similar growth trends as sales • We have continued on our journey of improved ingredients resulting in higher quality and a healthier menu • The growth in our digital business continues
Slide 7: DPE Europe Highlights
Dmp europe HIGHLIGHTS • Strong SSS growth in Europe in H1 12, +7.5% • Corporate stores in The Netherlands have grown to 15 and delivered strong SSS% growth of 22.7% with profits ahead of expectations • We broke the national weekly sales record in The Netherlands with over €34k for an individual stor
Slide 8: Results Detail
2 RESULTS DETAIL
Slide 9: Network sales growth
Network sales growth Total Sales Same Store Sales Australia/NZ 11.2% 8.7% Europe (€) 12.6% 7.5% Europe numbers held in constant currency (€) • Strong ANZ SSS – continued sales growth despite rolling 10.9% in H1 11 • A continuation of the positive sales trend in Europe has lead to a fourth consecutiv
Slide 10: Network sales by segment – H1
Network sales by segment – h1 • Sales have grown 11.2% over H1 11 on a • Sales have grown 12.6% over H1 11 constant currency basis • CAGR for H1 07 – H1 12 is 19.7% • This has been the biggest year on year H1 network sales growth we have seen in the last 5 years • Continued focus on driving customer
Slide 11: Same store sales by segment
Same store sales by segment • The exceptional SSS growth in • SSS continue to improve, going ANZ has continued despite rolling from +6.8% in H2 11 to +7.5% in 10.9% in H1 11 H1 12 • H2 12 will be more challenging • The momentum has continued in having to roll over the 15.1% of H2 line with expectati
Slide 12: Network store count
Network store count H1 11 H2 11 H1 12 Australia/NZ stores Network Sales ($ 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 above
Slide 13: Geographic summary
Geographic summary H1 10 H1 11 H1 12 +/(-) H1 11 • ANZ EBITDA up 18.2% due to strong $ mil $ mil $ mil % 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 119.4 120.
Slide 14: Profit & loss
Profit & loss 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 (3.8) (4.1) (4.9) 17.8% • Depreciation & Amortisation up 17.8% as a result of European EBIT 12.1 14.7 18.
Slide 15: Earnings per share
Earnings per share • EPS up 22.1% on H1 11 • This has almost doubled in 3 years 15
Slide 16: Cash flow
Cash flow H1 11 H1 12 • Free cash flow +24.6% $ 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 Paid (3.4) (4.
Slide 17: Balance sheet
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 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 due to
Slide 18: Key financial ratios
Key financial ratios H1 11 H1 12 Net Debt to Equity (4.9%) (17.8%) Return on Equity 20.4% 22.7% Return on Capital 24.7% 30.3% Employed NB. Negative Net Deb t equates to Cash Positive position 18
Slide 19: Achievements
3 achievements
Slide 20: Product innovation
Product innovation • New full flavour mozzarella, which took 2 years to develop, 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 • Smokey P
Slide 21: Digital enhancement
Digital enhancement • Most popular pizza chain website by visits in 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 now
Slide 22: Theatre of food
Theatre of food • 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 some of
Slide 23: A new chapter in our history
A new chapter in our history • Our new Surfers Paradise store is one that stands out 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
Slide 24: Domino's is on a journey
Domino’s is on a journey • Domino’s is on a journey to further improve the 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
Slide 25: European achievements
European achievements • Corporate stores in The Netherlands have grown to 15 and 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: Outlook
(4) OUTLOOK
Slide 27: Looking forward – Australia/NZ
Looking forward – australia/nz • 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 technolog
Slide 28: Looking forward – DPE Europe
Looking forward – dmp europe • 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%
Slide 29: FY12 guidance update
Fy12 guidance update 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: Trading update
trading update • Network sales have started well in H2 12 • 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 Guinness
Slide 31: Conclusion
conclusion • 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 growth • Wo
Slide 32: Disclaimer
disclaimer • 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 representa
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