Domino's Pizza Enterprises Limited · ASX:DMP
Domino's Pizza Enterprises — FY2013 Earnings Presentation
36 slides from Domino's Pizza Enterprises's earnings presentation, 2013
Slide 1: Full Year Results to 30 Jun 2013
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Slide 2: DPE Executive Team
DPE EXECUTIVE TEAM DON MEW ANDREW RENNIE CHIEF EXECUTIVE OFFICER AUSTRALIA/NZ RICHARD CONEY GROUP CHIEF FINANCIAL OFFICER
Slide 3: Highlights
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Slide 4: Key results highlights
ANZ Network Sales ($) SSS +1.4% Europe Network Sales (€) SSS +3.1% EBITDA * +16.2% NPAT * +13.0% EPS * +11.5% Dividend (cps) +14.0% Free Cash Flow ($m) $2.8m Return on Capital Employed * 30.7% Return on Equity * 27.7% * Based on underlying results
Slide 5: FY13 underlying results summary
FY13 Significant FY13 • Underlying NPAT up 13.0% to $30.4m FY 11 FY 12 Statutory Charges * Underlying +/(-) FY 12 $ mil $ mil $ mil $ mil $ mil • Final dividend 15.4c (fully franked), bringing full year dividend to 30.9c which reflects a 70% payout Network Sales 746.4 805.3 848.6 848.6 5.4% ratio ba
Slide 6: Significant items: Japan acquisition and other costs
NPAT Im pact $'000 Domino's Japan Acquisition 1,354 Professional fees & other costs directly attributable to the Japanese acquisition Knight Acquisition 73 Transactional costs incurred during the acquisition of Nick Knight's 15 stores Speed Rabbit Pizza Litigation 153 Portion of costs (over those pl
Slide 7: FY13 guidance versus actual achieved
Measure as at Feb 2013 Actual Achieved SSS% 2-3% 2.0% New Store Openings 80+ 67 EBITDA Growth * in the region of 15% 16.2% NPAT Growth * in the region of 15% 13.0% Estimated Tax Rate * 29% 28.8% Net Capex $30-35m $30.4m * Based on underlying results
Slide 8: Australia/NZ highlights
• DPE completed the appointment of Nick Knight as Head of Corporate Operations in April 2013. In the process we acquired 15 stores as well as adding his significant operational expertise to the business • The upgrade of our online ordering website using HTML5 technology is now complete, greatly enha
Slide 9: Europe highlights
• We have opened a record 40 new organic stores during the year • Total network sales grew 12.8% (constant currency) on FY12 • Andrew Megson has returned to Europe in the newly created role of European CEO. The role will bring closer alignment to many initiatives and opportunities across each of our
Slide 10: FY Results Detail
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Slide 11: Network sales and same store sales
Total Sales Same Store Sales Network Sales $m 848.6 805.3 746.4 H2 Australia/NZ 3.4% 1.4% H2 153.0 694.3 133.5 676.4 H2 128.9 H2 591.2 H2 122.2 134.0 H2 518.9 H2 H2 Europe (€) 12.8% 3.1% 283.8 106.0 270.7 H2 H2 H2 253.0 80.7 H2 218.6 213.8 H2 H2 198.2 H1 187.2 H1 H1 127.7 132.8 • ANZ SSS in H2 were
Slide 12: Australia/NZ network sales and SSS growth
Australia/NZ H2 Network Sales A$ ANZ SSS Growth $285.3m 15.1% $273.6m $256.9m 10.9% 8.7% $220.8m $215.6m $199.1m $186.4m 4.6% 4.5% 2.6% 1.8% 0.4% 2007 2008 2009 2010 2011 2012 2013 H1 10 H2 10 H1 11 H2 11 H1 12 H2 12 H1 13 H2 13 • ANZ network sales growth was 4.9% in H2, • In addition to the launch
Slide 13: European network sales and SSS growth
European H2 Network Sales € European SSS Growth 7.5% 6.8% €118.8m €106.1m 5.3% €94.8m 4.7% 4.0% €82.2m 3.7% 2.3% €71.6m €64.1m €48.9m (0.7%) 2007 2008 2009 2010 2011 2012 2013 H1 10 H2 10 H1 11 H2 11 H1 12 H2 12 H1 13 H2 13 • Network sales have grown 12.0% over • SSS in H2 was 2.3%, resulting in a H
Slide 14: Store numbers and network sales by region
FY 11 FY 12 FY13 Australia/NZ stores Network Sales (A$ mil) 498.9 544.1 562.8 • We have added a record 67 additional new Franchised stores 454 476 501 stores to the network during the year. Corporate stores 96 83 84 Australia/NZ 27, Europe 40 Aus/NZ Network Stores 550 559 585 Stadium outlets incl in
Slide 15: Revenue and EBITDA by segment
FY 11 FY 12 FY 13 * +/(-) FY 12 $ mil $ mil $ mil % • ANZ EBITDA up 17.5% due to a combination of REVENUE improved margins, economies of scale and the Australia/NZ 161.1 168.5 174.2 3.4% continued sell down of corporate stores Europe 85.5 96.4 120.7 25.2% • Expect the introduction of Nick Knight and
Slide 16: Europe profit factors
There were several key factors that contributed to the lower profit result in Europe this year. • In an attempt to grow the European business at an accelerated rate, we have opened a significant number of new corporate stores in the past 18 months, predominantly in The Netherlands, growing from 19 t
Slide 17: Underlying income statement
FY 11 FY 12 FY 13 * +/(-) FY 12 $ mil $ mil $ mil % • EBITDA ahead of FY13 guidance Revenue 246.7 264.9 294.9 11.3% EBITDA 39.1 48.1 55.9 16.2% • Depreciation & Amortisation up 27.6% as Depreciation & Amortisation (8.7) (10.0) (12.8) 27.6% a result of the accelerated corporate store rollout in Europ
Slide 18: Earnings per share history
43.4 38.9 2.5 31.3 H2 26.2 H2 20.1 20.7 22.6 H2 18.4 16.4 H2 14.8 13.4 H2 H2 13.2 8.8 H2 H1 H1 20.8 9.1 H1 H1 18.2 H1 H1 12.8 14.9 H1 9.6 9.4 5.7 FY07 FY08 FY09 FY10 FY11 FY12 FY13 * FY13 additional EPS based on underlying results
Slide 19: Cash flow
FY 12 FY 13 • Increase in working capital as a result of $ mil $ mil timing and additional stock & equipment Net Profit After Tax 26.9 28.7 relating to stores under construction Profit on Sale non-current assets (2.2) (3.0) Depreciation & Amortisation 10.0 12.8 • Increase in Capex predominantly rela
Slide 20: Balance sheet
FY 12 FY 13 +/(-) FY 12 $ mil $ mil $ mil Cash & equivalents 40.3 18.7 (21.6) Trade & Other Receivables 21.0 26.4 5.4 • Capital return allowed surplus cash to be returned to Other Current Assets 12.6 15.3 2.6 Current Assets 74.0 60.4 (13.6) shareholders Property, plant & equipment 35.0 49.7 14.7 Goo
Slide 21: Net debt, interest cover and returns
FY12 FY13 * Net Debt & Interest Cover 106.5x $25.7m Net Debt to Equity (22.5%) 20.5% 84.5x 90.0x $21.0m $15.9m 41.4x 30.8x 40.0x Return on Equity 24.3% 27.7% 14.1x 9.0x 5.3x $3.6m -10.0x Return on Capital ($2.3m ) 31.2% 30.7% Employed ($12.5m ) NB. Negative Net Deb t equates to Cash Positive positio
Slide 22: Achievements
Slide 23: Chef's Best range launch
• The Chef’s Best range was launched in March 2013 in response to a survey of over 1,600 of our customers • The survey revealed that 80% of respondents want more toppings and over 70% want more restaurant quality ingredients on their pizza • The new range offers customers more of the quality topping
Slide 24: New websites, HTML5 and digital in ANZ
• The new Domino’s websites in Australia and New Zealand were released in May 2013, greatly enhancing the customer experience along with an improved platform to showcase our product range, all using HTML5 technology • The HTML5 ordering platform allows us to tailor the ordering experience for the cu
Slide 25: European initiatives: Artisan range, Pulse POS
• Successful launch of the Artisan pizza range putting the emphasis on the quality of our ingredients and toppings • The rollout of the global POS system (Pulse) in The Netherlands is progressing well, with over 50% of stores already converted in the first 6 months • The new store “Entice” image dev
Slide 26: Outlook
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Slide 27: ANZ outlook
• The sell down of corporate stores will continue to be a key objective in FY14 • We remain focussed on our “more for less” strategy, driving both sales and customer count growth • In line with our sell down of corporate stores we expect to predominantly open franchise stores during FY14 • Our digit
Slide 28: Europe outlook
• All stores in The Netherlands to be running the Pulse POS system by end of October • The move to HTML5 technology will enable us to rollout the majority of the ANZ digital platforms to The Netherlands by December 2013. We expect this to deliver a strong lift in sales • In the coming year our new s
Slide 29: Management changes after Japan acquisition
• As a result of the Domino’s Japan acquisition, a number of management changes will take effect • In order to align the structures across all three regions, Andrew Rennie will step into the role of Australia/NZ CEO • Andrew Megson has returned to Europe in the newly created role of European CEO. Th
Slide 30: New senior management structure
Don Meij Managing Director & CEO (Domino’s – 26 years) Andrew Rennie Andrew Megson Scott Oelkers Richard Coney John Harney Group Chief Financial Chief Procurement CEO Australia/NZ CEO Europe CEO Japan Officer Officer (Domino’s – 19 years) (Domino’s - 26 years) (Domino’s - 25 years) (Domino’s – 19 ye
Slide 31: FY14 guidance
Measure FY13 Actual FY 14 Guidance SSS% 2.0% 2-4% New Store Openings 67 70-80 EBITDA Growth * 16.2% in the region of 15% Net Capex $30.4m $20-25m • Refer to the Domino’s Japan acquisition presentation for further group guidance • FY14 guidance is based on underlying results for FY13 • DPE guidance i
Slide 32: Long-term store targets
Australia/NZ 750 Stores • At the end of FY11 we lifted our incl 60 2Go outlets expectations of store count for both ANZ and Europe • Corporate stores will still account for a substantial portion of the store count, DMP Europe although not as high as current levels • Digital sales continue to grow ea
Slide 33: Pizza share of fast food market
DPE Share of Fast Food Domino's Pizza as % of Total Fast Food FY12 Market in Australia FY12 3.1% Other Pizza 11.9% 22.9% 18.4% Other Chicken 16.3% 34% 11% 15.0% Australia United Kingdom Canada USA Sandwiches Hamburgers Source: Euromonitor International 25% 15% • Pizza accounts for only 15% of the to
Slide 34: Current trading update
• The momentum that we have seen in the latter part of FY13 has continued into the start of FY14. ANZ SSS are currently +4.7% in the first 5 weeks of the year, rolling a 2 year cumulative growth of 15.6% (same period FY12 + same period FY13) • Europe sales are being impacted by the timing of Ramadan
Slide 35: Summary and capital returns
• In addition to our dividends, we have made a $30 million capital return to our shareholders during FY13, bringing the total returns to shareholders in the year to 73.7c per share with Return on Equity increasing from 23.0% to 29.7%* • We continued to produce a solid underlying profit growth across
Slide 36: 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 representation or war
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