Domino's Pizza Group Plc · LSE:DOM
Domino's Pizza — FY2023 Earnings Presentation
47 slides from Domino's Pizza's earnings presentation, Mar 12, 2024
Slide 1: Full Year Results 2023
Y Dominos wi cor THs FULL YEAR RESULTS 2023 “<3 DOMINO’S PIZZA GROUP PLC 53 WEEKS ENDED 31 DECEMBER 2023 12 MARCH 2024
Slide 2: Agenda
S AGENDA Overview — Andrew Rennie, CEO 2. Financial performance — Edward Jamieson, CFO 3. Strategic & operational update - Andrew Rennie, CEO 4. Q&A
Slide 3: Strategic Progress and Profitable Growth
STRATEGIC PROGRESS AND PROFITABLE GROWTH A system primed to accelerate growth Continued strong growth in EBITDA Franchisees performing well in uncertain environment Best year of store openings for five years New upgraded medium and long-term store targets Acquiring full control of Shorecal to meanin
Slide 4: Agenda
S AGENDA 1. Overview — Andrew Rennie, CEO Financial performance - Edward Jamieson, CFO 3. Strategic & operational update - Andrew Rennie, CEO 4. Q&A
Slide 5: Financial Highlights
FINANCIAL HIGHLIGHTS Sales and orders growth with increased returns to shareholders TOTAL ORDERS 70.5m +1.0%12 +5.7%2 £667.0m +11.1%)2 UNDERLYINGS EBITDA £138.1m4 £97.0m°® +22.8%? UNDERLYING? EPS 18.0p (4.3) %12 FULL YEAR DPS 10.5p +5.0%? 2023 BUYBACKS £90m 52-week basis FY23 vs. FY22 53-week basis
Slide 6: Trading Performance
TRADING PERFORMANCE Positive order count, driven by growth of collections Delivery & collection analysis Consistent like-for-like sales growth System sales 8am, Etim _£3im_ £1,572m £1,456m = __£21m_ 18% Te A% +5.8% DELIVERY COLLECTION WEEK 53 FY23°° FY 2022 2023 1-52 2023 1-53 Total orders * 5.8% gr
Slide 7: Sales Performance
7 SALES PERFORMANCE Strong growth in revenue while maintaining stable margins &m FY23 FY23 FY22 %change!’ 53weeks 52weeks 52weeks vs. FY¥22 UK system sales 1,488.2 1,458.9 1,380.1 +5.7% Ireland system sales 83.5 81.6 76.3 46.9% Total system sales 1,571.7 1,540.5 1,456.4 +5.8% Supply chain revenue 47
Slide 8: Technology Platforms
TECHNOLOGY PLATFORMS Investment to capture growth and drive further efficiencies &m EBITDA alibi before tan expendinne BRP OM A Bt eCommerce platform! (2.5) (0.5) (3.0) (5.7) Technology platform costs! (8.9) (1.9) (10.8) (5.7) * During FY23, we continued to develop and implement two new cloud-based
Slide 9: Analysis of EBITDA
ANALYSIS OF EBITDA Good underlying performance &m FY23 FY23 FY22 % change! 53 weeks 52 weeks 52 weeks vs.FY22 , Supply chain centre EBITDA Supply chain centre EBITDA 138.5 136.0 108.9 +24.9% | growthprimarily driven by . food costs Net royalties 43.9 43.0 40.7 +5.7% Net overheads, property & incenti
Slide 10: Group EBITDA Movement
GROUP EBITDA MOVEMENT Strong trading results &£m 3.3 138.1 2022 Trading Sale of Corporate stores Shorecal Sale of Germany Technology 53rd week 2023 underlying EBITDA freehold Valuation uplift corporate stores platform underlying EBITDA property in H1 2022 in 2022 costs # Domino's: , Wominos acon TS
Slide 11: Income Statement
INCOME STATEMENT EBITDA increase as a result of increased trading profits 1 . FY23 FY23 FY22 change . . Underlying, £m 53 weeks 52 weeks 52 weeks vs. FY22 + Increase in net finance costs, in-line with guidance, driven Group EBITDA 138.1 134.8 130.1 +3.8% by lower interest rates in H1 Depreciation &
Slide 12: Free Cash Flow
FREE CASH FLOW Continued EBITDA growth and strong working capital management &m FY23 FY22 . a _ Continuing operations EBITDA 138.1 130.1 . Working capital inflow as expected, due to timing of creditor payments and timing of cash receipts and Remove contribution from q i ayments for online sales in F
Slide 13: Capital Allocation Framework
CAPITAL ALLOCATION FRAMEWORK Investment in core business, increased dividend and share buybacks in FY23 PRIORITIES FOR CAPITAL PHILOSOPHY OUTCOMES FOR FY23 Invest in the business to drive Returns-based approach to ) Capital investment of £20.8m long-term organic growth investment in core business to
Slide 14: Net Debt Bridge
NET DEBT BRIDGE Increased returns to shareholders £m Net Debt / Underlying EBITDA 253.3 1.77x at year-end Within target range of 1.5x - 2.5x 232.8 97.0 41.9 97.8 70.3 9.3 44 20.8 Opening net FCF Receipt of Funding - Disposal of Capex Share buybacks Dividends paid Closing net debt (pre capex) Germany
Slide 15: Investing to Drive Sustainable Growth
INVESTING TO DRIVE SUSTAINABLE GROWTH Capex this year to be c.£20m aay *« Automation projects * Digital acceleration Operations technology Continued capacity * Ecommerce projects development in Ireland Support office # Domino's:_ Is FULL YEAR RESULTS 2023 We GOT THIS
Slide 16: Current Trading & Guidance
CURRENT TRADING & GUIDANCE Current trading * Strong momentum against our key strategic priorities in the first quarter * Food cost deflation in FY24 which, in line with our model, will be passed through to our franchisepartners + Expect to deliver FY24 Underlying EBITDA in line with current market e
Slide 17: Agenda
S AGENDA 1. Overview — Andrew Rennie, CEO 2. Financial performance — Edward Jamieson, CFO Strategic & operational update - Andrew Rennie, CEO 4. Q&A
Slide 18: Accelerating Growth
ACCELERATING GROWTH Value for franchise partners, customers and shareholders Total system sales (£m) Domino’s revenue (£m) 679.8 Total Franchisee EBITDA' (£m) Domino’s EBITDA (em) 1572 208 120 508.3 ey v2 i- +30% i +34% il +21% +18% 2019 2023 2019 2023 2019 2023 2019 2023 App ordersas a Collection o
Slide 19: Stronger Position in a Competitive Market
STRONGER POSITION IN A COMPETITIVE MARKET Driven by collections and continued store openings Takeaway Market Share Significant opportunity given our low share of collection market FULLYEAR RESULTS 2023 Source: Kantar Worldpanel: FY23 GB Takeaway and Pizza market share is 52 weeks to 24'" Dec 23. Bes
Slide 20: Long-Term Sustainable Growth
LONG-TERM SUSTAINABLE GROWTH Clear medium and long-term targets UK & Ireland stores Total system sales (£m) H 2,500*! 2,000+ 1,572 H 121 : i 2019 2023 H 2028 2033 A clear plan to deliver meaningful earnings and cashflow growth over the medium to long-term driving shareholder value and returns co Dom
Slide 21: Shorecal Acquisition - Unique Opportunity
SHORECAL ACQUISITION - UNIQUE OPPORTUNITY Transaction details Acquisition of outstanding shareholding in Shorecal Limited, DPG already has a 15% shareholding Leading Domino’s franchisee, operating 34 of the 99 Domino’s stores across the Republic of Ireland and Northern Ireland s 9 5 ¢ Total consider
Slide 22: Shorecal Acquisition - Unique Opportunity
SHORECAL ACQUISITION - UNIQUE OPPORTUNITY Strategic rationale Underpenetrated market - 85k people per store, DPG average is 53.5k Significant opportunity to accelerate growth and materially increase store count Well invested supply chain to support the growth Additional stores and systems sales will
Slide 23: Driving Long Term Growth in Core Business
DRIVING LONG TERM GROWTH IN CORE BUSINESS Number one priority is to continue investing in and growing in the UK & Ireland Franchisee profitability Value for money Convenience Dominos: pilates HIS FULL YEAR RESULTS 2023 WE Gor THIS
Slide 24: Franchisee Profitability
FRANCHISEE PROFITABILITY Focus on improving franchisee profitability Franchisee average store EBITDA Franchisee profitability 9% ahead of FY19 £000 170 172 Outstanding performance given inflationary 166 158 pressures 145 Continued alignment is driving improvements across the system Second generation
Slide 25: Value for Money
VALUE FOR MONEY Outstanding customer service essential in current environment Over 1 minute improvement in average delivery times * GPS technology to improve performance 26.3 D Continuing to improve service Nationwide, continuous training 2022 2023 4ppts improvement in deliveries ‘on time’ 78.8% 74.
Slide 26: Value for Money
VALUE FOR MONEY Domino's SMALL MEDIUM LARGE NZZA FP omnincs £8 £10 £12 FULL YEAR RESULTS 2023
Slide 27: Value for Money
VALUE FOR MONEY Outstanding product and continued innovation :. all ZZ | . NEW RANGE OF D) TTALIAN-STYLE B d FULL YEAR RESULTS 2023
Slide 28: Digital Acceleration
DIGITAL ACCELERATION Significant growth in app customers 9.1m 6.1m 5.3m 2021 2022 2023 App orders as % of digital orders 73.8% 52.2% 46.2% 2021 2022 2023 FULL YEAR RESULTS 2023 App only customers have higher sales and frequency than web only customers New ecommerce platform will enable more agile ma
Slide 29: Convenience - Store Openings
CONVENIENCE - STORE OPENINGS Material acceleration in FY23 1 1 70+! ! 1 61 ' ! ' 1 ! 1 ! 1 ! 1 . - ! 1 1 32 a 35 1 i ! 1 19 1 i ' 1 1 1 d 1 ! t 61 new stores in FY23 (41 splits & 20 new territories) 1 ' H 23 different franchisees opened stores in FY23 FY19 FY20 FY21 FY22 FY23 | FY24 { Low address co
Slide 30: Convenience - Store Openings
CONVENIENCE - STORE OPENINGS Significant opportunity to grow the store estate New customers Improved customer service Lower address counts Incremental collection opportunity Leverage national brand Reduced deliver costs for franchisees Franchisees growth their business Franchisees growth their busin
Slide 31: Convenience - Just Eat and Uber Eats
CONVENIENCE - JUST EAT AND UBER EATS First full year on Just Eat with rapid roll-out of Uber Eats trial Full roll-out on Just Eat at the end of FY22 FY23 was first full year on the platform Continue to drive incrementality from being on the Just Eat platform Uber Eats Trial started in January 2024 E
Slide 32: Additional Growth Opportunities
ADDITIONAL GROWTH OPPORTUNITIES DPG is a highly cash generative business, with clear track record of investing in the core business and returning capital to shareholders We continue to assess additional second brand and international value enhancing opportunities to build a larger and more cash gene
Slide 33: Classification: Confidential
Classification: Confidential
Slide 34: Summary
SUMMARY 2023 was a year of strong progress, benefits of aligned system Core UK & Ireland is the focus, will look at additional growth opportunities Upgraded long-term targets Well placed to deliver sustainable long-term growth and returns rd Dominos: oe HIS 34 FULL YEAR RESULTS 2023 We Got THIS
Slide 35: Draft
DRAFT
Slide 36: Appendix
Appendix WE GOT THIS
Slide 37: UK & Ireland Unit Metrics - 2023
UK & IRELAND UNIT METRICS - 2023° LFL Inc Splits (YOY Growth) Total (All Stores) Items Per Orders Order Product Mix YOY Order UK & ROI Sales (Volume) (Volume) (Volume) Price Orders (m) Growth Total Qi 3.5% 0.6% (10.1%) 2.3% 10.7% 18.0m 2.8% Q2 7.3% (0.0%) (7.2%) 1.3% 13.2% 17.4m 2.8% Q3 2.4% (4.2%)
Slide 38: UK & Ireland LFL Sales Growth - 2023
UK & IRELAND LFL SALES GROWTH - 2023 al Q2 Q3 Q4 FY LFL sales growth ex VAT 2023 2023 2023 2023 2023 Excluding splits UK 10.6% 8.6% 3.8% 0.5% 5.7% Ireland 6.5% 4.3% 1.7% (1.0)% 2.8% UK & Ireland combined 10.7% 8.6% 3.7% 0.4% 5.7% Including splits UK 9.6% 7.5% 2.5% (1.0)% 4.5% Ireland 6.1% 3.4% 0.4%
Slide 39: Store Numbers
STORE NUMBERS 31Dec 25 Dec &m 2023 2022 UK 1,258 1,202 “cranchice beens oe toy | Lees “an . a en hee ROI 61 59 UK & ROI total 1,319 1,261 39° FULL YEAR RESULTS 2023 cd Dominos: ie car Hs
Slide 40: Group Balance Sheet
GROUP BALANCE SHEET &m Intangible assets Property, plant and equipment — Right-of-useassets Trade and other receivables _ Inventory a Cash and cash equivalents: EE. Deferred consideration a hauuhediogae OO = Total Assets cd Dominos: ohn HIS 40 FULL YEAR RESULTS 2023 We GOT THIS
Slide 41: Group Balance Sheet (Continued)
GROUP BALANCE SHEET (CONTINUED) 31Dec 25 Dec &m 2023 2022 Lease liabilities (230.3) (223.4) Tradeandotherpayables ==» (1N.6)_—(98.8)_ RCF and PP (284.9) (283.7) Share buy back obligation oe Bll Texliabiities 8D BD Provisions (3.8) (15.3) Total liabilities (646.5) (633.5) Net liabilities (134.0) (112
Slide 42: Historical Share-Based Compensation Arrangements
HISTORICAL SHARE-BASED COMPENSATION ARRANGEMENTS * Inprior years an employment tax provision of £13.0m was recorded relating to the employment tax treatment for certain of the Group’s historical share-based payment compensation arrangements * These schemes had grant dates dating from 2003 to 2010 as
Slide 43: Franchisee Profitability
FRANCHISEE PROFITABILITY FY22 VAT FY21VAT FY20 VAT FY23 FY22 adjusted FY21 adjusted FY20 adjusted FY19 Store level Average EBITDA £158k £182k £166k £287k £172k £229k £170k £145k EBITDA margin 13% 16% 14% 23% 16% 20% 16% 14% # Dominos: ———7Hh6 HIS 43 FULL YEAR RESULTS 2023 We GOT THIS
Slide 44: Glossary
GLOSSARY Item Definition ecommerce fund German associate The fund used to recharge costs for the development and maintenance of our eCommerce platform with franchisees Represents a 33% associate investment in the trading operations of Domino’s Pizza Germany (also referred to as Daytona JV), disposal
Slide 45: Alternative Performance Measures
ALTERNATIVE PERFORMANCE MEASURES Item Definition OVERALL TERMINOLOGY Non-underlying items Group operating profit before tax excluding non- Net interest before norrunderlying items | Underlying profit before taxation Underlying profit for the period Earnings | before Interest and Tax CeBIT)» Non- und
Slide 46: Alternative Performance Measures
ALTERNATIVE PERFORMANCE MEASURES Item Definition REVENUE MEASURES System sales System sales represent the sum of all sales made by both franchised and corporate stores to consumers. Like-for-like (LFL) sales growth excluding splits — LFL | excluding sp splits ‘sales performance is s calculated for U
Slide 47: Forward-Looking Statements Caution
FORWARD-LOOKING STATEMENTS CAUTION These full year results, our Annual Report and the Domino's Pizza website may contain certain "forward-looking statements" with respect to Domino's Pizza Group plc and the Group's financial condition, results of operations and business, and certain of Domino's Pizz