DP Poland (LSE:DPP) — 2023 FY results

0:00 Good afternoon, and welcome to the DP POLAND PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the q and a tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to Niels Gornall, CEO. Good afternoon,

0:30 sir. Thanks, Lily. Welcome, everybody, and thanks for your time today. My name is Niels. I'm the CEO of DPP, and with me today is our CFO, Edward. Today, we're presenting our full year 23 audited results and share what we've been doing so far in 2024.

0:54 Sorry. Trying to find the right button. There we go. Okay. So look. It's it's been two years now that I've been with the company. You know, the foundations have for growth have been set. Now we're in the building stages and and ready to open up as many outlets as we can and really take this business to the to the next level. You know, we've changed the game with order count growth 40% over the last two years. It's some big numbers. And the good news is the momentum continues this year. So like for like system sales in '23 was close to 20%, and year to date, April 24, we're tracking exactly the same as last year at 20% like for like growth. EBITDA of 3,500,000, Greatbridge pounds for 2023, up over a 100%, you know, big improvements in our EBITDA.

1:42 Our network of stores are becoming much stronger as we as our order count has increased. We've strengthened our franchisee departments with some new staff and new systems in preparation for expansion. And on the back of the fundraise, we'll share our updates on delivering 200 stores and up upgrading our network. Okay. So 2023 financial results. So group group revenue, this includes our corporate store sales and franchisee revenue, £44,600,000, up 25%. Group system sales, so this is our corporate store sales and our franchisee sales, silver number, 46,100,000, up 25.1%.

2:25 Our AWOC in Poland over here to the right, we finished off the year at at seven at seven thirty one. So we are growing sales with volume and order counts. So, you know, with with order counts up 19%, we're nearly growing one for one. So, you know, we're really happy with growing with volume. It's a it's a sign of a very healthy business. Q four, you know, we passed the AWOC of of seven of 800, so we surpassed the 800. The momentum has continued this year in 2024. So, you know, year to date, April, we're just over 800, and and we'll share our March and April results, which are very positive. Group EBITDA, Edward will share some information on that, but we're up over a 100% on the year before.

3:12 You know, I suppose all I can say is a high going mentality is working. Yeah. The unit economics are becoming healthier and store volumes still have a lot of growth ahead as well.

3:25 Edward, if you wanna go through our p and l for '23. Sure. Hello, everyone. A couple of words about the p and l and the structure, what was the main drivers of the of the last year result. So top line, 25% is the growth both in sales and in the revenue. What is very positive is the like for like sales growth and volume growing in Poland. The the sales growth was about 20%, and it's almost equally spread over delivery and nondelivery channels. That is proof that the business is growing as a whole, not a specific channel. And what is even more important is the fact that it's driven by the volume in the high inflationary pressures over the 2022 and 2023.

4:18 We were able to convince consumers to come to us and deliver them the services that were well perceived by the consumers. That is also reflected in net promoter scores that grew almost by 30%. Below the revenue, we have a structure of different cost types. Cost of goods sold, which is the food cost, is one of the biggest elements, the biggest driver of the cost structure. It grew almost nine 18%, but comparing to the top line, it's growing slower than the top line. This connected with the dropping prices and with the inflation that stopped growing so so far since May 2023, we got automatically a breath in the in the food cost, and that's translated to the group EBITDA.

5:12 At At the the same same time, we had the pressure in energy and payroll costs. The electricity went up over the the whole Europe in 2023. We partially mitigated this electricity price pressure by having some of the contract spotted some of the fixed. So there was an internal hedge. And this growth that you can see here is something that we predicted for 2023. In regards to the payroll and social charges, we grew 32%, which is more than the top line. But this number consists of two major factors. The first one is the volume growth. So zero hours contracts had to grow because of the volume growing almost 17% year on year in the like for like business.

6:05 And the second biggest factor was the minimal salary increase that is driven by the legislation in Poland. From 2022 to '23, the increase was almost 18%, which had a direct impact on the payroll and social charges. At the same time, we look closer to the HQ structure of the payrolls because of the worst performing performance in the previous years. People were underpaid versus the average on the market. We wanted to reduce the rotations in the teams and increase know how and competencies staying within the business. So we moved the prior we moved the salaries up to the average of the market.

6:55 We the rotation massively dropped, and we also prepared by that the the structures for the further expansions that we are expecting in the coming months. The group EBITDA is 3,500,000, which is

7:09 doubled the EBITDA from the last year. This is the post IFRS EBITDA. The pre IFRS EBITDA amounted to zero, which is in line with the market expectations. The recent market expectations quoted o point four, if I'm not mistaken. For the pre IFRS EBITDA, we see this trend continuing in 2024, about it a bit later. Below the EBITDA, one of the major factors that is worth mentioning concept that other noncash and nonrecurring items, it's in majority connected with the adjustments of the rights to use assets related to network optimization in Poland.

7:54 And IFRS 16 adjustments to lease liabilities connected with the indexations. And this is the line where we also recorded or recognized the penalties for earlier exit from some of the contracts from the stores that were located in the malls. And the long term, they were not capable to be profitable. So that is connected with the optimization of the store network in 2023. Loss for the period is 3.5. This is an improvement of almost 20% year on year. Looking forward to the future with improving p and l structure. Looking into the balance sheet, the the non current asset hasn't changed year on year. There is just an element of small amortization.

8:48 In the current assets, the biggest change comes in two lines. Trade and other receivables increase is connected with the VAT tax refund that we are expecting to happen in q two, q three. And cash and cash equivalents drop is connected with the use of the previous fundraise from 2022. We use this cash for the investments over the 2023 for different activities from TV ad campaign beginning of the year through the store openings, optimizations of the different systems and processes. On the current liabilities, we have one major line, which is a swap of the borrowings from current to non noncurrent to current assets to current liabilities.

9:34 This is connected with the recording of the liabilities on the audit date, which is December 31. Post date, we got the extensions of the loan from Malacca until mid twenty twenty five. And, partially, this loan has been paid off, and it happened at the end of April twenty twenty four, which is a month ago. Currently, we stay with 2,800,000 loan from Malacam, our biggest shareholder, and it is due in end of June twenty twenty five.

10:17 Niels? Thanks. Thanks, Edwards. Okay. So updating the Polish numbers. So as I said, our AWOC is skyrocketing, and, you know, we expect expect a really good year. So full year '23, our AWOC ended up at seven thirty one, up 19% year on year. Year to date, April 24, with our AWOC's at 802. So we've finally surpassed the the 800. March and April were were at record highs. System sales, our sales grew together with orders, you know, a sign of a healthy business just as we did last year as well. System sales grew by nearly 20% in 2023, and our 2024 numbers were, you know, remained the same as last year at nearly 20%, and like for like order count is at 17%.

11:08 So, you know, really encouraging to see March and April sort of at the levels of q four last year. Q four last year was a record for the company, you know, and you can see here March and April,

11:22 so early in the year, we're we're already sort of hitting our record numbers so soon. So we've got the football starting here, and, you know, if we can have 20% growth on top of our q four numbers, you know, we're expecting a really massive year.

11:40 Okay. I won't spend too much time on on this slide, but just to reinforce our growth has been consistent, and we've been growing with volume. So here's the breakdown of last year. This is quarter by quarter, 20% for the year, 16.44 like for like order count as well, and consistently growth throughout the year, and you can see q four really exploded out to 27% system sales and 27% order count. So our whole our whole high volume mentality has been the main driver, and and I suppose our never ending quest of delivering value to our customers has been the main driver of this. More importantly, momentum continues in in 2024. So so far, we're sitting at, you know, just slightly higher than last year's numbers, 20% like for like system sales in our existing stores and order count growing the same as last year at 17%.

12:35 Once again, we had a massive blowout here in in April, 26% like for like and and 23% order count. So, you know, rolling some pretty big numbers. You know, the constant focus on operational excellence, you know, remains our number one focus. You know, it's it's paying dividends and it's working, and and we don't see that stopping. Delivery times of around twenty five minutes throughout the winter was a really good result for us. And and this year, you know, we've launched we've really focused on on on our dessert and sides menu. So last year, we really worked on upgrading our our pizzas and upgrading aspects on our meats and, you know, putting more more cheese, etcetera, into our pizzas. This year, we're concentrating on our sides and our desserts. So we just rolled out our new dessert menu early in the year, you know, things like Kit Kat calzone and rolls of raspberry and chocolate. You know, once you start putting, you know, chocolate and and and raspberry on digital ads with really good marketing, you know, it really drives customer a customer visit, new customers coming into our stores, and then existing customers also ordering more often. You know, the last couple of years, it's been really hard to lift to lift our average ticket and to increase the box basket size.

13:53 And and with this new promotion with all the desserts, one thing we've seen that, you know, it's either people are watching their pockets a little bit less or people are diving in for the new for the new dessert. Store economics. Ebel, if you wanna take this slide. Yes. So when we combine this hard work of meals, just explain on the volume and the sky volume mentality and combine it with the with the cost structure that got less impact from the inflationary pressure over the last months. You can see exactly this pattern which you see now on the screen. Over the thirty months, we dramatically changed the store EBITDA structure, having in mind also this very difficult situation on in in the macroeconomic perspective.

14:48 And we see a constant increase of the EBITDA. And starting from May 23, we started delivering positive EBITDA store EBITDA. What is even more important is the beginning of the year. Quarter one for the for the pizza sector is always the most difficult period during the year. And 2024, q one, is for the first time positive this business. Comparing to the previous years, we see a visible change. Looking into the future, this is also a good forecast that we are entering into the long term change trend and then positive trajectory for the EBITDA.

15:34 Okay. So customer satisfaction continues to improve. You You know, know, our net promoter scores are are still, you know, still increasing. New new customers was 19% increase in the score, and their returning customers is 37%. So, you know, the our existing customers are giving us a lot of credit for what we're doing, and you can see on the right hand side here with the consumer base, you know, not only are we growing the consumer base, but the the the existing customers are also ordering more frequently as well. So, you know, I really think, you know, we've we've been two years now of of consistent product and consistent service, and, you know, the the consumers finally starting to trust us and become regular users. So, you know, I think, you know, as the journey goes on, you know, in Croatia, we've been giving this outstanding service for four years now and and and, you know, and the stores are are much, much busier. So, you know, we're confident with another couple of years of consistent service that's that will absolutely match the other European markets.

16:36 Customer loyalty over here to the left hand side with the mobile apps. You know, I really see that mobile app usages as loyal customers. You know, it's gonna be hard to go to the huts if if you've got a Domino's app on your phone. So, you know, we work really hard to to get these numbers up and 280% increase in in mobile app usage from the year before is massive. You know, we're still driving that and and expect some good numbers moving forward.

17:06 Okay. Over to Croatia. So we ended up the store ended up the year with five stores. I I won't spend too much time on this slide. We've already presented last year's numbers. So we had five stores, 44% up for the year. Like for like sales were fairly flat at at 3%. I suppose just a bit of a reference for for the Croatian market. So last year, Poland was at 730 average weekly orders. Crisis over 1,200. So, you know, the volumes are much much higher. And and and this year this year moving forward, we're seeing some some some increases. So like for like sales this year, year to date, April, we're looking at 10%. System sales up 77, but the like for like is encouraging at 10% growth.

17:56 So, you know, the bad news is that we did have Pizza Hut open this year. They opened up the last week of December last year. I I suppose the joys of being a public listed company and and us being so open with our numbers. So frustrating to see Pizza Hut move into into the market. There's plenty of European markets they're not in.

18:18 So I was really disappointed that they that they came in, but we keep on fighting and then it it only makes us better. So, you know, it was a it was a good excuse for the team to once again up the level of our delivery service and pizza quality. And, you know, I think we've come out come out looking pretty good. So we did have a couple of months of flat growth, but April saw plus 16%, and we're we're tracking at 10%. So some good results there. Know, we're madly trying to get store six and seven open this year. You know, the more stores we have, the more marketing spend we get. So, you know, we we need stores as quickly as we can so we can just spend more and more on on our branding and just protect ourselves from from Pizza Hut coming in.

19:03 You know, Croatia is an exciting market, and we continue on our on our growth plan.

19:10 Okay. Business expansion. So this is straight from from the fundraise a couple of months ago. So as we presented, you know, we're targeting 200 stores for the group by the end of two thousand and twenty six. We're targeting to challenge numb the number one position in Poland. So our goal here is to replicate the success of all the other Domino's markets. You know, we know we we know what's successful. We know how to do it, and it's just a matter of time of us bringing that in in into Poland. So we're targeting 900 orders by the end of two thousand and twenty six, and, you know, we're well on the way to hitting that number and hitting it very early. Number of stores, we're going for 200, and we'll share on the next slides our progress on that.

19:56 Franchisee share, so not too much to share with that. We'll have more information next time we we present, you know, maybe later in in the year September. I suppose all I can say now is that we're really thrilled with the newest employee that we've that we've taken on board. We're we're headhunted, a gentleman with twenty years experience in in QSR and franchising in the Polish market. So he comes with great experience. So he's just started with us. He's setting up and setting up the building blocks for the whole department, getting all of his staff ready. And then we'll be out there. We'll be out at expos, and we'll be trying to bring new franchisees into the system, and and then we'll actually have a department that can facilitate the sell down of our of our corporate stores.

20:44 So store new store openings and network upgrades. So so since the refurb since the the fundraise, so we've opened up one store so far for the year in Bratzlove. It's opened up very well. Great sales. We couldn't be happier. We've got seven rent con contracts signed, and now the plans are in the government just waiting for approvals. So we expect those stores to open in in q three and q four of this year. We have five more locations that's with legal at the moment. So, you know, we've got 12 locations that we've committed to, and we expect to open up later this year. We also have you know, we've got 17 in the pipeline for full evaluation at the moment, all at different levels, but that pipeline keeps on keeps on evolving and keeps on growing. So, you know, like I mentioned in the fundraise, the development here in Poland is is massive. We've got 40,000 people throughout throughout Poland. We should have 500 stores. So finding good locations in the right places without taking sales away from our existing stores, we're finding at this stage very easy. So, you know, we feel that our Polish store opening is on track, and and we'll get the numbers that we that we expect.

22:02 As I mentioned in Croatia, we also for for 2025, I mean, we're working with a lot of new new developments. So we've also

22:10 earmarked five locations for next year that we've committed to. As soon as that development is is finished, we're straight in there. And getting in early, we've got the good corner sites, full visibility, good signings. So, you know, we're well into the way for next year's openings as well. As I mentioned, we have two locations in Croatia in planning, and we expect to have them open in q four this year.

22:35 Store refurbishments. Since the the fundraise, we've finished one store refurbishment. We've got two booked in for q three, and then we've got three booked in for q four. We are also still actively searching for acquisitions to speed up the growth. So when we have some news or if any news on that, we'll certainly bring it to the market. As you can see, the team's busy. In q three and q four, you know, we should see 10 to 15 new stores open in in the Polish market. On the back of the fundraisers as committed, you know, we continue to make investments in the company to make it stronger, more capacity, and to bring savings to the company. So our our flower silos and our wood commissary will be in operation in July, you know, bringing down the cost of our of our flour and reducing the the labor costs as well for our dough production. You know, we've just ordered some new equipment for in our wood commissary to to

23:33 increase our capacity of our dough production. Once again, we're gonna be making more dough in a smaller period of time, bringing down our labor costs. You know, we're also investigating. We have some opportunities for extra white space in our Warsaw commissary as well. So we're just investigating that at the moment. Optimization in our stores. So a big project we've been working on is the automated order placing of aggregators. So, you know, we're doing nearly 20% of our sales through the aggregators. And at the moment, you know, we're still bringing the order onto the onto the iPad, onto the tablet, and then manually putting it into our into our system. So, you know, we're rolling that out now. We've got a few stores to finish and then the whole system's done.

24:17 And and that just brings the order straight into our online ordering, you know, removing mistakes, human error mistakes, and and also removing labor. I mean, we can take off a whole employee off a Friday, Saturday, and Sunday and once again bring our our labor cost down. We've invested in cash in cash collection process, small labor savings, and also reduces our theft and employee our automated employee contract warehouse just to take some pressure off our off our legal and HR departments. On the back of the recent fundraise, we went to the market trying to fundraise £16,000,000. It was well oversubscribed, more than double. So we did increase the fundraise. We increased it by by 4,000,000, and we paid off that debt. So we paid off the debts from the Milligan. We paid off 60% of the debt, and that was in April, and we're left with with 40%.

25:16 So in summary, 2023, you know, it's it's been a really successful year for the company, and 2024 is looking even better. Sales continue to increase, you know, year to date, April like for like, 20% year on year. You know, the growth trends, both top line and the EBITDA is in the right direction. You know, our focus on product quality, service, our brand image continues to drive sales and continues to drive customer growth,

25:46 and we see no reason why that would be stopping. Store economics continue to improve as our average weekly order count surpasses 800. And our new store rollout is is on track, and we have a have a long pipeline of potential locations. So that's our presentation for today. We have Alex on the line. Alex, if you want to go through any questions, and we're happy to answer any questions that anyone has.

26:13 Neil, Edward, thank you very much for your presentation. Let me just bring back up your cameras. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab situated on the top right hand corner of your screen. Just while the company takes a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. As you can see, we have received a number of questions, and thank you to all investors for submitting their questions. Alex, could I please ask you to read out the questions and give response where appropriate to do so? And I'll pick up from you at the end. Thank you. The first question is for you, Nils, and it's, to help give confidence that you can sustain a high pace of openings. Can you please detail how you're structured with regards to expansion?

27:00 So team structure, process, recite selection, target areas of 24, 25. And when you transition to a franchise led business, how will you adapt? Okay. No worries. Look. It's just people. So we increased our our development department by two heads just to make sure there was no bottlenecks in what we're trying to achieve here. So, you know, our builders and architects are subcontracted, and they can scale up with our demands. So, you know, we've got five builders working for us, and and two of them can can scale up to whatever demand we give them. So we're working with big companies. So we see no bottlenecks with that. As far as site selection,

27:45 you know, we we we know we know the KPIs that work for us. So we, you know, we know what population we need. You know, we know our current presence. We know what the competition is doing as well. So, you know, that's our first the first thing we do is population and, you know, whether we have stores there, we don't wanna be putting stores on top of our stores. I mean, we've got 40,000,000 people here in Poland. We should be having 500 stores. So there's plenty of place to find the right locations. Then we may ensure that the price is gonna match and the location is perfect. So I am a big one on making sure that location is absolutely spot on, and we've got, you know, we've we've got some really good structure to make sure there is plenty of people approving a site before it even gets to the board for approval. So, you know, we've got some really stringent

28:41 rules in place, and and, yeah, I'm confident in the sites we're selecting are really quite good. As far as the franchise side, how we adapt to that, like I mentioned, we've just hired a new head of franchisee department. And when we start selling down the stores, basically, the only extra staff members you need is is business consultants and, you know, the business support for the franchisees. So it's just a matter of hiring new heads that are experienced in that field. Next question is one for you, Edward. Why does it take so long for DPP to close the financial statements at the period end? What's your road map to shorten this process?

29:32 When I joined the company a year ago, what I can say is that we improved already the period for the closures for about one and a half months, more or less. This is what what we will face 2024 for the for the financial statements 2023. When we joined, we've been sitting on two companies running two different systems.

29:55 Not the team was also affected with the with the high rotations. So over the last twelve months, I think we upgraded the team very massively. We have the rotation stop there, and we build up the competencies that were missing. Currently, the company is running on the same system, meaning those two subsidiary companies that are in Poland. And till end of this year, we were also some bit affected by the way way how the company performed because we also chose the, let's say, time slots that are not the most expensive from the auditor point of view. We had to look into the cost of the audit. I think that this year, the situation, meaning for the financial statements 2024, which will be reported '25, the situation shall massively change. We are just in there before the merger of two Polish companies legally so that we will eliminate some non value adding processes. We should have only one audit, not two statutory audits in Poland, so it should improve visibly.

31:06 Hope I know. Question

31:08 here for you, Nils. Well, firstly, congratulations. So thanks for your work and the impressive '23 results. Going forward, much of DPP's growth is gonna come through rollout. However, do you see continued potential for growth in the older existing store estate, same store sales in The US remain strong, for example?

31:30 Yeah. Well, I mean, you can obviously see it in in the presentation today. So like for like sales are tracking at 2020% for last year, and so far this year, we're tracking exactly the same. So, you know, our existing network has got a lot of catching up, you know, and and we we expect this until until we catch our our other markets. So, you know, if we're at 800 now and Croatia's at 1,200, you can sort of see how many years of double digit growth we're expecting, and and then we'd start hopefully just matching matching matching the more mature markets around the world.

32:07 Thank you. Next question here. Attractive unit store economics will attract quality sub franchisees. Do you see any barriers to potential sub franchisees being able to finance their initial setup?

32:19 And is the Polish banking sector supportive to offering loans to entrepreneurs? Maybe Neil's to start off with that and Edward to to come in at the end. Yeah. Edward can talk about the the banking barriers for potential sub franchisees. So, look, I've I've said it many times, but the best franchisees that we that we want are the current people running our stores. And the problem with with that is that they are young and, you know, they're not entrepreneurs yet, and they come with no money. So so that is obviously what the barrier is. So, you know, like a lot of markets, we can sell option data on the store or the manager writes on the store and then help that franchisee save for the deposit, and and then they can go to the bank with the deposit and a nice track record. So, you know, that is the the barrier, and and and there is a way there is a way through that. It's worth fighting for because they are the best franchisees.

33:23 I mean, you know, when I was a franchisee, was a franchisee at twenty years old. I didn't have the money either. The same thing happened to me, and and and look where we are today. Edward, if you got any information on your banking in Poland? In case of the banking system, definitely, this is not something that is easy, applicable, or available on the market for this such young entrepreneurs, but we are currently in discussions with two banks that has in their history this kind of a products offer to the franchisees. So it should be easier to to find the solutions, how to support and prepare the standardized products for this young entrepreneurs.

34:08 Probably, to some extent, we as a company needs to be the guarantor of the of the loan. But I believe that in the coming months, we should be ready with some standardized proposal for the for for the future entrepreneurial. Thank you. Question here for you, Niels. The master franchise agreement for Poland expires sooner than some may realize. Are you confident in being able to renew when the time comes and meet the required required KPIs? Absolutely. Yes. Yes. Yep. Absolutely. I think MFA is mid next year, '25, and and then we have a ten year option at the same terms and conditions. And then at that time, then we then we add another ten year option on top of that. So it does seem to be rolling.

35:02 But, yes, we are we're aware that it expires mid next year, and and and, yes, there'll be we'll be exercising our ten year option. Croatia is the same sort of setup. We've got we opened the business four years ago, so we've got six years left on our first option, and then we have a second ten year option in exactly the same terms and conditions. Okay. Question here. Where do you see DP POLAND in ten years' time? Okay. Well, at the end of twenty twenty six, you know, we've got 200 stores, 900 AWOC, 45% franchise share. So, you know, in ten years, I mean, the market should be 500 plus. You know, I'd really like it to be 90% franchise.

35:49 And, you know, and I I I see the sales similar to the to the other to the other markets. You know, I also see Poland as I mean, it's a big country in in Central And Eastern Europe and, you know, we've got a lot of small countries around us. So, you know, I I see us following the same path as many other businesses and and running Central And Eastern Europe out of Poland. You know, we we have good labor laws here. We have high education, and and there's no reason why we can't why we can't run several markets out of our Poland office. Thank you. Got a question here for you, Edward. Why is there a focus from management to enhance EBITDA as a relevant operational metric when post IFRS 16 is an important operational expense such as rent falls below EBITDA?

36:45 You called adjusted EBITDA 3,600,000 in '23. However, there's almost 3,000,000 of rent expense below EBITDA. Maybe do you want to just talk about the difference between the two metrics? Yeah. I think I will have a very straightforward answer. Actually, we are looking on both parameters, both post and pre IFRS EBITDA. For us, internally, as an operational metric, it's more important the pre IFRS EBITDA because, of course, we pay the rent. So this is a cost line that we need to take into consideration. The way how we presented the at the p and l in the presentations, it was recommended by FRC, the the authorities in The UK. So for that reason, that was the recommendation based on the previous year financial statements.

37:33 So for that reason, we we go alongside with the recommendations. We are aware already that some of the investor asked about the pre IFRS parameter. And for for the future, I think we will be presenting as a side comment to the to the presentation. So definitely for us, pre IFRS is also very important. Thank you, Edward. Broader question here. Can you talk about the local demand for pizza, the price of competition, who are the competitors, and what's the sort of local pizza culture like in Poland? Okay. Pizza culture, I mean, look, I'm I'm I'm a traveler. I've been in many places around the world, and it seems exactly the same to me. So I think that, you know, the pizza pizza culture here is just as strong as as any other country.

38:24 Traditionally, Poland's, you know, favorite foods are on the heaviest sides. Pizza works in in in with that, so I see no issues there. You know, our competition who have been here longer, I mean, the first in the market was De Grasso, and, you know, they've hit 200 stores. They're a 100% franchise business. So, you know, it just shows that, you know, you can franchise in this company, and and you can hit a hit a big number of stores, you know, you know, with time. So, you know, I don't know whether I've answered that question, but yeah. That's great. Thank you. Next question. The business has grown to significant scale. This might provide further opportunities for raising debt capital if needed as opposed to further dilutive equity raising. How do you see this optionality?

39:17 I think there is Yeah. I I agree. Yeah. Yeah. I'll I'll just quickly jump in, and then you can finish off, Edward. Yeah. Look. I I I agree. The fundraise and the corporate store sell down, you know, provides the capital to hit 200 stores, and and and and then our goal is self funding organic growth after that. I would say the following. Currently, we are entering into the green zone on the operational cash flow. So we start generating operationally the cash for the company. At the same time, we have a lot of the cash still frozen in the fixed assets. So this is also the area where we can release some capital for further investments while selling the source to the franchisees. And going further with those parameters and current fundraising growing the network, the appetite of the banking sector for supporting us with the further development will be more and more visible. So definitely, we will look into this option as well.

40:21 Thank you. Question here for you, Nils. How and where do you find sub franchisees? Okay. I suppose I mentioned a little bit before. Well, you know, we would like to find a lot from from our existing business. You know, we've got a 110 corporate stores with people that have been running our business from, you know, one one to to ten years. So that's where all the experience is. That's who we want to franchise. But, obviously, we're not gonna get all of our franchisees from from internal. So we need to be open for externals. You know, I've mentioned it many times before, the second best franchisee that we're gonna attract is from the QSR business from, you know, from the McDonald's, the Burger Kings, the KFC's, the Pizza Hut. So, you know, these are these are the people that that's that we need. You know, we we want operators that are hands on.

41:19 Thank you. This is a a good question about global Domino's business. Domino's is a global business. Is there anything you've seen recently that your fellow Domino's are doing elsewhere that you think are interesting or exciting perhaps, but perhaps not for this year? Okay. Well, we just got back from we had a worldwide rally in in Vegas. There was 10,000 dominoes at this at this conference, and there is a lot of technology in the pipeline. So I think that's where where the future is. There's a lot that's being worked on, and and that'll be you know, it's being rolled out in The US now. A lot of the conference was was how we roll out this out in other markets, including the European market. So definitely technology is is a big thing.

42:10 And then with our relationship with Domino's Pizza Group, you know, we're we're not gonna miss out on on any of that technology moving forward. So that was really exciting to see. Look. I think a lot of other markets are coming to us for advice as well. I mean, we won store manager of the year in the whole world. So, you know, to win an award like that, we won the most prestigious award in in the rally. It was one of our Ukrainian managers from here in Warsaw, and, you know, he he got presented with manager of the year in front of ten ten thousand people. So we've had actually a lot of people coming to us for advice. I would have made me to this one comment that it would be also good to look at the consumer basket, how many consumers we have, who who who comes to us, who is leaving us, and for what reason. There there are some countries doing a great job and analysis around it, and this is definitely something that we want to adapt into into our our business as well in the future.

43:15 Thank you. Got a question here for you, Edward. Yeah. You probably want to answer this in the context of market expectations. Are you on track to deliver an EBITDA margin above 10% in FY 2024? I already look into that questions and just try to Should be 20 I would say we announced here. End of twenty six, we're going for 10%. Yes. So I will try to be a bit more precise. So when we talk about the post IFRS adjusted EBITDA margin, yes, we are on track. Thank you. Question here on M and A. Are you considering it as an option as a tuck in to accelerate the openings or for market consolidation? And if the former, would you consider this in addition to the 20 store target for 2024?

44:03 Yeah. Yes. So if there is any m and a opportunities, it is purely just to speed up our store growth. So if if we do do something, we'll still be building 20 stores in the background as well. We're we're not slowing down. So if anything happens, we're just gonna get to that 200 mark quicker. Thank you. Then the question on your competition. What do De Grasso offer franchisees, and how have they been successful in this model? Look. It it it's probably of I mean, I don't I don't know their system a 100%, but I would say, you know, what attracts the franchisees is a profitable model. De Grasso has been on the in in the market here in Poland. They were first here, so they've got trust. They've got the the presence, and they've been a solid business for a long time. So, yeah, I would say it's a profitable model.

44:57 And and for us, you know, Domino's has had a a dark past in in Poland where we're we're trying to change that in people's minds, and and I think we're well on the way to that. Thank you. What is the level of non pizza sales, and how extensive is the sides and the desserts range? Percentage wise, I've I've tell you off the top of my head, but look. I think it's I I remember, you know, Don May still talks about it a lot in in Australia, you know, when he when he started doing the desserts and offering desserts that no one offers, you know, that's when Domino's in Australia really to take off. You know, he talks about the lava cake a lot, how we were the first to bring it out, and, you know, now that lava cake is in, you know, competition and restaurants, you know, all all over the world. So I think it's unique when we can have a product that nobody else can have. It certainly drives sales. So it might only be a small percentage, but it's it's definitely driving customers.

46:01 I would say the following. We look into that comparing to the other businesses of Domino's around the world, and we have the area to catch up, and we are concentrating on that in the coming months and years. The strategy, it could be it could be bigger chunk of the of the sales, and we are working on that. That will be a nice answer. So we've got one more question that's been submitted, and it's nice to know that, actually, every question that's been submitted has been asked on this webinar today. So thank you for everyone for submitting those questions. And the last question is, look, just to clarify, the 10% EBITDA margin target is pre IFRS 16. So just responding to this, the for this year, the target is to be 1.6.

46:46 This is what was communicated to the market, million pounds, prior for us. And this is not 10%, but around three three ish plus percent. So this is on the prior for us. In 10% zone, we were expecting to to land in three years times more or less from now on the prior for us EBITDA. Yes? So I think this might be a bit of the misunderstanding for the pre IFRS. This year, we are going for £1,600,000, and we are on track with this. Neil, Edward, Alex, thank you for answering all those questions you can from investors. And, of course, the company can review all questions submitted today, and we'll publish those responses on the investment company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Niels, could I please just ask you for a few closing comments?

47:41 Yeah. Thanks, Lily. I think I've said my closing. Look. You know, we're we're we're really happy. We're expecting a big year. You know, it's always challenging, but we're just having so many wins. So we're all very happy. We're pushing pushing, you know, pushing hard on on our growth plan, and so far, no hiccups. Neil, Edward, Alex, thanks for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations? This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of DP POLAND PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.

48:26 Thanks, everyone.