DP Poland (LSE:DPP) — Trading Update

0:03 Good afternoon, ladies and gentlemen, and welcome to the DPPoland Trading Update Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Just please simply type in your questions at any time and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll. And if you give that your kind attention, I'm sure that'd be highly appreciated by the company. And I'd

0:35 like to hand over to the management team of DP POLAND. Good afternoon to you all. Thank you, Mark, and good afternoon to to everyone, good morning to to to some of you because I think we have some investors from the from The US joining. So I'm very happy to to have you with us. As promised, we we are in touch with you, and we will continue to to have this sort of financial updates to give you a more insight into our business and and and and the outlook. Today, we have three presenters. You may you may recall me. I'm Grombovskiy. I'm non executive director of of DP POLAND. I was also nominated by the largest shareholder, a fund called AMC that holds 45% of the equity.

1:24 In addition to my role as a non exec in the in the DPP, I'm also a board member and vice president of the Polish Private Equity Association.

1:33 But I'm not the most important here. The most important are our executives. You may remember the CFO of the company who is with the business already for quite some time. I will let maybe to introduce herself. But before we get there, the most important guy on this call, because he is our new CEO, he is the The the the upcoming CEO, you see a little bit of the experience summary here, and then we'll discuss it in in more detail. But maybe, you can say a few words about yourself because I'm sure we have some new new participants who didn't have a chance to hear about the background so far. Yeah. Thank so My name is.

2:21 As said, the shortcut from my first name is. As

2:27 mentioned, I'm, with the company for quite some time, and now I started, at, Dominion in in 2016, by becoming a CFO. And I became a CFO of the group, of the enlarged group, in March 2021. I started my professional career, as an auditor at PLC. Afterwards, I was, financial controller responsible for systems and corporate reporting at Fox International channels, in Poland. Thank you. Yeah. Thank you, Kasia. Niels, few words about yourself because I think we have a separate slide about my details, but maybe as an introduction. Yeah. Hi, everybody. My name is Niels, Niels Nornell.

3:14 I am Australian,

3:17 Twenty eighth year in Domino's. Started working for Domino's when I was 15. So I've done this my whole life, twenty eighth year. Franta z at 22. Should I continue on, Shamik, or elaborate details later later on. Okay. No problem. Okay. Thank thank you, Niels. So so moving on with the with the presentation, we we wanted to share with you or sort of talk through the presentation that was already published on the on the website, but we are happy to provide more color and background to it. And we'll be also very interested to get your questions that that we will answer in the course of the presentation. So don't don't hesitate. Feel free to ask questions, and then and I will read them loud, and and then we will be answering those as as appropriate, Gosha, myself, or Nils.

4:13 We would like to to to comment on the 2021 financial performance. This will be covered by Gosha, but most importantly, you a little bit of the update about the 2022 trading, which is which is very good. And then we wanted to to to share with you a little bit of of a flavor of of how the company is going. We want to comment a little bit about the the the growth potential and m and a opportunities As you may have seen already from the Arctic from the from the news that was published, we have entered into commitments to to buy Domino's Croatia. We will comment on the on the closing timeline for that that deal and then also about the strengthening of the board because it's not only Neil's, but also and, have a slide about that. So without further delay, we can we can move on. And and, Ghosh, I will hand over to you to comment about the '21 sales dynamics and and and financial summary.

5:13 Thank you. Thank you, Prashamak. So so on on this slide, we we would like to show you, how the how the sales dynamics in 2021 look like. So just to to let you know that the operational merger was finalized in July. So the q three represents the learning curve, and q four is the first quarter of with full integration of the two companies after the reverse acquisition. This is visible in the rapidly increasing system sales as we observe the acceleration of top line. We defended like for like sales, versus 2019 and 2020, although dine in sales was still suffering from, COVID lockdowns, in the first half of the year.

6:16 K. On this slide, I just want to make a quick introduction on what are the numbers in the table. So system sales represents total sales of all stores, both corporate and sub franchise. Revenue represents corporate store sales plus any other sales generated by by the company. EBITDA has been adjusted by noncash and nonrecurring items, as a lot of those have been incurred during 2021. Regarding the 2020 numbers in this table, as per IFRS three, it is Dominium SA who was the accounting acquirer. Therefore, the 2020 data in the final in published financial statements stands for Dominium SA only.

7:06 To make the data comparable, we have prepared pro form a consolidation for 2020. As you can see, we do have a profit improvement, but it's still highly impacted by one off costs related to to the reverse acquisition. Moreover, macro environment, represent adverse trends worldwide, with high inflationary, pressure and COVID restrictions still in place in the first half of twenty twenty one.

7:39 But still, we we managed to have food cost trending lower as percentage of sales, And we also achieved planned synergies and savings in in SG and A ex expenses, which decreased from 18 to 14% percentage percent of of revenue.

8:04 Yep. This slide is, is not that exciting. Again, 2020 data represents the minimum SA only, and all the increases in 2021 are a result of the of the reverse acquisition.

8:22 Yeah. This this slide is most exciting, and it's a privilege for me to talk about it as it shows how dynamically our sales is growing in 2022. We are achieving double digit sales growth every month since the beginning of the year, as you can see, with no perspectives to to stop. We want more. What's even more exciting is that our delivery sales is, presenting also double digit growth despite the resilience of dine in, which is exceeding 2019 levels, so the pre pre COVID environment. Another encouraging information is that, we also dynamic growth in order account.

9:15 Yeah. Maybe maybe to step in here on on my end. I think we are very happy also from from the the shareholder perspective that you know, to see that growth rates, and and that's that's quite inspiring because we are growing much faster than the market. But at the same time, we also know that there is much more space that we can we can grab and much more bigger market share. And that's why even though the the dynamics were positive and actually as you can even see accelerating, we we were looking for and for strengthening of the team. And already for for quite some time, we we are talking to various people just to bring additional experience to the to the board also operationally. And and, hence, you have Niels Guarnal on the on the presentation. But before spending or giving voice passing over voice to to Niels, I wanted to talk about because we have two high level executives of of Domino's. We were looking for the best talent globally in in in Domino's world.

10:23 And one of the most renowned executives is Andrew Reni, who who was the CEO in in in Domino's Australia, which is one of the most successful markets globally

10:36 for Domino's. But at the same time, Andrew had a lot of experience in in running Domino's Pizza Enterprises in Europe and covering the key markets like France, Netherlands, Belgium, and Germany. And it's also quite critical for us that in that role, Andrew was going through a number of acquisitions. And then we are acquisitive as reported before.

10:58 We are looking at some potential targets in Poland, and the experience of Andrew is is very valuable for us. However, Andrew being very successful, it was very difficult to get his attention to Poland. We have rain even though it's July, So the the the weather is not not perfect, but works together very closely with Niels Gore now. And and that that is sort of the the the winning

11:26 team that that that we are getting. So we are getting guidance from from from Andrew. But at the same time, on the grounds, we have a very strong executive with a lot of experience in Domino's, and and and he he is now our leader on the ground. And although it's it's only, what, two months, we already see a number of of of very positive changes, and I think it's it's already Nils got very well integrated in the team. But I think I will pass over to to Nils because I'm sure you hear want to hear more from Niels than from me. So, Niels, handing over to you. Awesome. Thank you. Yeah. As I mentioned, twenty eighth year in Domino's. I first franchised my first Domino's store when I was 22.

12:14 So I started off very young. It's been basically my only job my whole life. So I live and breathe Domino's. I've owned 20 I own 23 very successful franchise businesses, franchise stores in in Australia, winning many awards, new franchisee of the year. We won a golden golden Franny award in 02/12 from Domino's Pizza International. In 2014, 2015, I actually owned five of the top 10 sales stores in Australia. I own number number two sales stores in Australia. This store, I increased three and a half times sales in a four year period before I sold the store.

13:06 So I I certainly know how to run high volume stores. What else can I say? Very proud of I had five managers that became very successful franchisees in Australia. So that's something very proud of. And in 2020, I moved to Croatia, and we opened up the new markets. It was a new market for Domino's. We now have three stores in Zagreb, and we've established a very strong brand, great team, and we continue to open stores in Croatia, and and we have a very positive store rollout plan. I've come to Poland with lots of experience, runs on the board, especially with setting up high volume shops and running good EBITDA.

13:52 So I'm ready for basically the biggest the biggest challenge yet. And that's me. Moving on. Maybe a little bit about Croatia. As as as you may know, Dominos Pizza Poland signed an agreement to acquire Dominos Croatia. This is this is a market with with three stars. I will I would put a little bit of color on it because the the the our funds is operating in Central Eastern Europe. We have offices in Vienna, Budapest, Bucharest, Warsaw, and Prague. So the Central European market is quite familiar to us, and we did consider

14:34 expansion of of Domino's franchise from Poland to to to neighboring markets because this is where we feel comfortable. And this this acquisition came a little bit ahead of what we have planned, but but it came also with with some additional features that made it really attractive to us. One is that that the the market this was the market that was partially owned by Neil's and and Andrew and Andrew. So with with this, when we started to talk to each other, we wanted to get their full attention on the combined business. We want didn't want them to, you know, to to to split time between the two markets, so we wanted to to have it all in the under one umbrella. So that made sense. That made also sense from the from our growth perspective because I think Croatian market is very attractive.

15:23 But the most but one of the most interesting things is on this slide. I think this slide shows you the potential that we are trying to build in Poland, and it's quite inspiring to to the team

15:35 on the ground, but also, I think, for us as shareholders and and and and and and executives and nonexecutives. Because we were always referring to to Western European markets or global markets of Domino's where Domino's was successful, and we were aspiring to to get in that to get that to those levels. You may remember that on previous presentations, we are showing them the EBITDA levels of other Domino's markets that were that were very attractive and also the the store penetration per capita. This was this was also very interesting to us. But we are all all also saying that this is our

16:15 aspiration and inspiration, but but then when we look at dominant Croatia, it's a market that is very similar to to to to to Poland in terms of the GDP per capita. It's actually lower GDP per capita. So the the typical comment that one could get is that, you know, the the different incomes has a translation into the overall profitability of Domino's. It does not hold because Domino's Croatia under Neil's leadership has revenue per store that are two times higher than Poland. And when I when we were saying before on the slide comment presenting the numbers for the first six months, we're saying we're happy to see those, but but this slide is is actually showing that there's much more potential for us to grab, and we are clearly getting into into this into these numbers.

17:10 So our aspiration is is as presented here. This is on the top line, but that also has a translation in the in the bottom line and the profitability. We have performed due diligence we have performed due diligence on on on Croatia. We have studied the the the profitability. And if you see that there's €93,000 of profit per store, and if you imagine the number of stores that we have in Domino's Poland, then you all of a sudden see the the picture that we have seen when we did the deal. So this is this is this is where we are heading to, and this target is not

17:48 as as remote as as people would think because we have a guy on the ground who has who has built Domino's creation. Actually, that business keeps keeps growing. I I think this is the slide where we would probably where you would like to hear more from from from Neil. So I'm looking to the to the right because there are some questions coming up. So so thank you for those. Maybe maybe I will I will start some of the questions as they come. So and

18:18 then I will try to allocate them to the respective people. Niels, the first question I see is is is to you. This is about the question is, what attracted Niels and Andrew to effectively invest in DP POLAND by selling their existing business into DP POLAND? Could you could you comment? Okay. Yep. Yep. Okay. So Poland's basically one of the the last sizable markets in Europe, not dominated by Domino's. DPP, the the Australian company operates in in European markets and have been very successful in France, Netherlands, and most recently, Germany.

18:56 UK and Ireland are also very successful markets for Domino's. So I know Andrew Andrew Rennie's been eyeing off Polish market for a number of years, and and finally, the opportunity has arised. I'm very bullish and excited about Domino's Poland. There's a big opportunity here. And I suppose Croatia really proved it to us,

19:20 you know, that Domino's can be very successful in in Eastern Europe. And and Croatia even has a lower GDP per capita than Poland, so it's very, very exciting. As Shamik mentioned, I've I've moved to Poland. As most Australians, we we love we love Europe. So I'm super excited to be able to live in Warsaw. It's look at it it's a great city, very vibrant. It is summer, so I haven't experienced the the winter yet. But so far, so good. It's got lots of growth, attitudes

19:55 clearly being being driven by the younger generation, and it's a very exciting future for POLAND. Yes. I have two other questions. One one from actually, more, but there's there's a question from Tim and Richard. I'll I'll I'll I'll read them. The the first is, what is the difference between an Australian consumer and the Polish consumer?

20:19 Why is Australia Australia so successful, and why can you succeed in Poland? That's the first question. The other question that is, I think, similar comes from Richard. It says, do you believe that the Polish market is similar to other European markets where DPP have succeeded? Are there any challenges in the Polish markets that are not in other markets where DPP have been successful in? So comparing Poland to Australia, why do you think, you know, it can be successful as team is asking and as Richard is asking maybe to other DP mark to to other European markets? If you could comment, please. Yep. No problems. Look. I mean, it doesn't matter where you are. We all seem to have the same eating habits. You know, pizza is just as popular here in in in Poland as it is in Australia. So,

21:07 you know, the the only difference here is in in Poland, we we we are not number one yet, and it was the same in in Australia. You know, when I started, there was 90 Domino's and there was a whole lot of Pizza Huts. And now it's completely opposite. So, look, they're they're very similar similar markets. I see no reasons why we can't make this market just as successful. You know, Domino's has come a long way over the years. You know, we have amazing technology in our stores. Our menu and and ingredients continue to to get better and better. But at the end of the day, the pizza game is still driven by the basics. Deliver a great tasting pizza, deliver it fast, and deliver it with a smile.

21:51 You know, doing the basics better is the key to this business. So, yeah, I I I I see no reason why we why we can't be just as successful here. Okay. Thank you. And maybe last last last question that I think would be relevant at this slide, again, coming from team. What practical things can be done in a Warsaw store, for example, to get to Zagreb levels of

22:13 revenue? So Warsaw to Zagreb, what what what what do you think? I would say it is, like I said before, do doing the basics better. So, you know, making a great product, delivering it fast. I mean, that is definitely definitely the focus for me. Speed and quality is is is my biggest focus. You know, removing the bottlenecks in our stores here in Poland to allow staff to focus on on the Domino's core beliefs. Simplifying our menu is definitely one thing we're looking into so the team can can focus on on making great pizzas. You know, the the new stores we build will have faster ovens like we do in Croatia.

23:04 But the the new stores will have newly newly developed equipment all to promote speed, basically. Yeah. And, also, a different attitude in the store layouts to encourage faster times. I mean, basically, in in the pizza game, every every second saved in this business equals more customers and more profits. Thank you. So maybe maybe moving on. I I see some other questions coming also about the franchise business and currently owned coming from Simon and and from others, but I will keep them for later. Then about the improvement in profitability. Could you could you comment on this slide, which is about tackling the the the the the inflation?

23:56 Yeah. Thank you, So as I already mentioned, the high inflationary pressure was impacting 2020. Unfortunately, this is still in place for 2022, but we have tools to mitigate that. We have already implemented three price increases in 2022. We're also seeking for solutions for food cost reductions, through recipes review, and changes of suppliers. The costs are are are also our point of focus. So, we are also looking for savings in deliveries through, for example, refurbishment of scooter's fleet to reduce the the cost of maintenance of the fleet and also implementation of dynamic minimum order value.

24:45 But we are also promoting dine in and carryout offer as they don't incur delivery costs. Yeah. And continuing to to new stores openings. In June, as promised, in in one of of our announcements, we have opened two new stores, which presented excellent sales in the first weeks of operations. The stores were opened in and two totally different Polish cities. Is a rather small city with 80,000 approximately 80,000 citizens, and we were not present in that city before.

25:39 We already we were already present in, but both both stores presented excellent sales. So this actually, is encouraging us to look for new premises in smaller cities in Poland. Yeah. If I can if I can add to that as well. Yeah. Look, the the last two stores we opened have been very successful, and we're we're very proud of those openings. The our store, as Gosz just said, is in a regional town, is a regional city. So it really proves the Domino's brand is strong and we have the opportunity to open many stores in Poland, not just in the big cities, but in the regional towns as well.

26:29 In Australia, the most successful stores are in the regional towns, so we're super excited about that. You know, we plan to open the stores that focus on delivery, but also boast a dine in model that show, you know, that shows our brand is adapting to customer needs and value driven dining. Our model allows for value value for money pizza in an environment that's comfortable and looks great. I take great pride in building good looking stores that suit suit today's customers' needs and and style. And I've brought a lot of good ideas from from the Australian model, and the the stores were built in Croatia as well. I mean, the three stores we have in Croatia look fantastic.

27:17 And we have we have the dining model, and, you know, we we do big sales out of dining as well. Thank you, Niels. I'm also getting a question from Richard about the growth, whether this is organic or acquisition opportunities. Maybe I can I can comment comment on that? I think we we are we are very disciplined in in in that that's here. We are looking at the return on the investment. We we have both options still open. I think we we are quite active into into in in m and a discussions. I think this could give us an update to accelerate our growth. As I as I mentioned, I mean, we we we have a a. We have a lot of potential to open new stores.

28:03 But the recent openings are very encouraging for us as well. It's it's it seems that well, it seems we we see that that the the economics of the of the organic growth are actually very strong for us, so we are quite happy about that, and we can continue with the rollout. This may be a bit slower than than acquisition. I think acquisition will accelerate our growth, and that's why it is attractive. But acquisition comes with the conversions and and the merger, so there's a extra cost to it. So we are we are basically very disciplined. We're looking at the return on the on the investment that we have. Acquisitions, I think we give ourselves well, we there there is no deadline for that, but I think we we should resolve on that within within by the end of this year.

28:51 But if we don't see anything tangible happening, which can be the case, then we will progress with more aggressive for a lot of our stores. And then this can take two, four well, this can be with the corporate stores, but also through the the franchise stores. And I see there is a question again also on the on the list. It's about the actually, I have two questions. One is about what's the ideal speed between the franchise stores and corporate owned stores? And then there is another question that I that I got from Richard. This was also about DP p DP POLAND has a small number of franchisees as a percentage of the overall store count. My understanding is that the most Domino's chains worldwide are all a large part of their success to having success a successful franchisee network.

29:41 How and when will DP POLAND expand the franchise franchisee network in Poland, and what changes do the do they see or do you see in attracting franchisees to take on stores? I would ask Niels to address this, but as an intro, I would only say that we will look we're waiting with some of those actions regarding the franchise stores because we are actively looking at m and a. And it's easier to integrate with the acquired network if we have corporate stores. It's simply about delivery areas and and basically redesign of the network. It's easier when when we have corporate stores. But definitely, our our future is more on the on the franchise stores than it is now, but I will hand over to Niels.

30:28 So coming back, what is the idea split between the franchise stores and corporate owned stores? And and also what are the what are the lessons from other markets? Because there's a question from Richard on that as well. Niles, could you comment? Yep. No problems. Yeah. Look. Totally agree. Franchising our stores is a is a massive opportunity and will return great dividends. With great franchisees, you can really see accelerated growth and and and that'll really cement a solid business model. You know, when I started in Australia, like I said, there was 90 stores. Australia has over 700 now, seven seven hundred and thirty, I think. And this was created by having awesome franchisees. And and these franchisees came from store managers, pizza makers, delivery makers, you know, the other famous CEO, Don May, who's still with with the Australian brand at the moment. You know, he started as a delivery driver. So and, you know, all the franchisees, all the good franchisees, they were all started as as young guys in the stores.

31:32 So basically, we will, you know, we'll follow the same model as Australia, grow franchisees and grow the franchise business here in Poland. You know, basically, we'll we'll set the standards in our corporate stores and then allow our best managers and staff to franchise the business and start fortressing the market. You know, it it is a massive opportunity and something I'm very, very passionate about. Being a franchise being a franchise owner of Domino's is awesome. And it it you know, it's a it's an amazing opportunity for young people to become entrepreneurs. Thank you for this. One one two other questions that are related.

32:19 It's about the financing of the growth and and of and it's coming from Richard and Mark. How to how to finance this? I think I can I can answer, but maybe, Ghosh, I can complement? We what we have is we have few levers to pull. One is, you know, when we look at m and a, we want parts or we were negotiating as a part of the deal that part of the the transaction is financed with equity swap. It's because we want the shareholders who who are selling also to have aligned interest with us because there's always a process of conversion, so we would feel sort of more comfortable if the the seller still had skin skin in the game.

33:07 So that that's that's not all cash. We could do all cash as well because we have interest from individual investors, from various investors, actually. I'm I'm talking about more sizable investors, so the the company attracts a lot of still a lot of interest. Thirdly, when we go for the for the sell down of the stores, as Niels mentioned, to the employees, that should also generate us cash. And thought is about the the the the financial institutions. Right, Russia? We got some like, when we got now for the for the for the bikes, the scooters, we got to offers to finance those. Right, Russia? You are on mute. Yeah. No. Just switched my screen. Sorry for that. Yeah. Just wanted to jump in, and and what I can say is we are just finalizing financing for some new scooters with more options becoming available for us. So so, yes, we have access to to to bank financing.

34:07 K. Thank you. Well, I will I will I will read a question from Richard because it it's also comforting. It starts with a lot of positives, so it's a pleasure to read. Thank you, Richard, for for the good intro. The company has changed from organic franchise and owns store strategy in Poland to significant merger of Polish restaurant business to merging with Croatian business dealt with pandemic, whilst first merger completed and now sales growth is really impressive. Stock issued to new management at a premium as was the capital raised to market, but the market has completely ignored it in terms of share price reaction. So key question other than this investor webcast, what does the new management team plan to do to get the message to institutional investors to build real demands in the share price?

34:59 By that, I mean, pay for the research coverage by engaging other stock brokers, get current broker to build better roadshows in UK, consider adding more investor relations consultancy to support today's profile. All very valid points, Richard. I think I I can cover this this this topic as, like, a little bit closer to the shareholders. Yes. It is irritating and frustrating to see the the share price. We are focused on the long term growth, and we we think that the value will be unlocked in the midterm, maybe not even long long term, but not in the short term. And and it's frustrating to see that 300 shares are setting the closing price, and it's set low.

35:47 And we are we want to do more and more about that. We have new board members, non executive level non execs, Peter and Jeremy Dieb. They are not, of course, executives, but we are learning from their experience. They are very experienced investors in public markets, and Jeremy is the head of investor relations in another company that is also doing this quite successfully. So we are doing step by step. As as as you noted, there was we had a lot on our plates, and we are still looking at m and a. So so that's I think the the key thing is to have the the sort of the core fixed and and done. But we're not forgetting about the the the the the, you know, the marketing side of of what we are doing this. So that's why we have this this webinar. I think we will be participating in some small cap conferences.

36:36 One is to come in September organized by by. So this we want to be present there. We started running some some press articles. We have set up in Instagram account. So there is there's more coming, but but please well, I mean, we'll ask for your patience because we we are still getting the we are still a small business. So we are very disciplined on the cost, and we are trying to not to waste money. Well, not to to to to spend money, which doesn't really bring us, you know, the benefits. I think when I'm talking to Niels about buying a a coverage and Nick, Niels would tell me about how many scooters he could buy. So so we try to be very disciplined and look at every euro because it's it's our money. It's it's your money. So but we'll definitely not not not sort of ignoring this, and I promise we'll be doing better and better. I think there is some progress already, but but we could we could go We could get even better than that.

37:39 There are more questions coming from from Mark, but maybe I we could go and and also from the others. So so nothing is is is left unanswered, but we can maybe move on to come to the end of the presentation. And then then at the end, we can go through all other questions that that I think are coming, but I'm not I cannot get attached to the particular slide. This slide, maybe I can cover as well. This is a bit about Patricia. We have a new opening in in marketing, I think, with with, with Neil's coming on board and seeing that, you know, we're growing very, very fast and having a bigger ambition, we thought we should also strengthen the the the the sort of the strategy for the marketing. And I think Patricia started with us in May, And I think it was a a really flying start and strong start. So we're not forgetting about this. It's about the corporate identity, the brand recognition.

38:37 We intend to go very very aggressive campaigns, marketing campaigns, and we need we need to have the best talent on the market possible. So so that that is what we wanted to to comment on. Maybe a little bit about the ad outlook. Maybe and then we can move back to questions because there are still questions coming. Neil, yes, maybe there were questions about, you know, the difference in Asia, but there are also questions I think I I saw questions about your six to twelve months quick wins and and the way what what what quick wins you can get in six to twelve months, what you can implement, and what opportunities you can see. Please be mindful news that our competitors are are watching this because I saw on the list that, you know, our competitors are watching this, so don't give them free advice. You know?

39:30 Look. Like like I said before, doing the basics better is is the key. My focus has always been on fast delivery, making really good pizzas, and the secret to this is having amazing staff and and franchisees. Word-of-mouth advertising is is vital in the pizza game. You know, if you can deliver deliver a pizza in fifteen minutes, you know, the customer will be impressed and they will tell their friends. You know, the the pizza will be steaming hot and it will taste amazing. But if you deliver a pizza in thirty minutes, you know, that customer is not gonna be spreading the Domino's love. Thirty minutes is normal, and and we here at Domino's are certainly not normal. That's probably all I can really say on on that. Okay. Thank you. I mean, on the m and a, here on the outlook, I I did I did mention that so that that's that's on the sort of more strategic level. We are we are actively looking at m and a. We we have some progress, but but we need to to to be very disciplined to to to look, you know, that we are using our capital wisely.

40:37 And and also we are encouraged by the new opening. So I think we will see what the next weeks or months bring. We we we are actively working on it. This can accelerate our growth, but but our growth plans are anyway unchanged, and we will do it one way one way or the other. Now there is a question coming to well, this is primarily addressed to me. It's about the largest shareholder. What is the level of patience or time scale on this investment? This this this I can cover. I was always saying that this is a three, four year investment for us from the from the onset. We we see the potential of the market is for five to 600 stores, and and and we we said within our sort of we we want to double the stock count.

41:28 And and for that, we need to to we we need three, four years. Now it's two to three years. This can be organic or or acquisitive. So this is our time timescale. There's a there's a question about the patience. We are very patient in terms of, you know, the the stock price, which is frustrating, but we are very about the growth of the business. So that's why when we saw the the growth levels of sales of 30%, that's that's normally great, but we think, you know, we're we're impatient. We want more. And that's that's why we have Niels and Andrew to help us to to double the business. But from the investment perspective, you know, we we we have time. We are not not in a rush. There's a there is a suggestion from Richard, but, Richard, I it's about yeah.

42:21 But I I it's it's about the the more media coverage. But if if you don't mind, I I will I will sort of take it offline because it's about thank you for the hints about the media coverage and investor relations coverage. And and, yeah, we will we'll tackle this. There is there is a question about access to finance, but we have covered this. There's a question to well, there's a question about the the the financial forecast for with investors for this year and for the next year. So may maybe, to to you. So, actually, it was not our practice so far to to to publish any forecasts for investors, and so we do not intend to change.

43:11 We are currently focused on client acquisition. Okay. Thank you for this. Firstly, from from Mark, there will be natural economies of scale as the store estate grows. How do you see the balance between prioritizing immediate store growth, fortress building, and longer term margin expansion? Well, I can I can I can I can cover this, and then maybe I hand over to to to Niels for for more details? I would say that at the moment, the key objective, at least from from from my perception of the of the shareholder value is to to fortress exactly as you say, Mark, to fortress the the market and the the the the the local markets where we are present.

44:02 As you know, we are dominant in the biggest Polish cities like Warsaw, Wroclaw, Krakow, and the others. But with the 30% growth that we have, you can imagine that our competition suffers. So that's why we have some of our competitors who subscribe to this webinar. But but we are taking the market share from from other people, and we want to double the sales. So for the moment, for the time being, we are prioritizing customer acquisition, building the top line, and then profitability will will continue. So that's that's our focus. That also refers to the question about the patience of of the largest shareholder. I think we are looking here a little bit longer story. This is a growth story here. It's not like other Domino's markets where where you can sort of dividend out because there's not much space to grow. I think we have a lot to gain on this market. We we can multiply the network.

44:57 We can grow the profits and profitability per store, but this is step by step, and economics will come. We already see economics coming on the supplies. So so the supply chain, we can see economics on the advertising and so on. But but but maybe, Niels, I mean, commenting on, you know, how would you prioritize store growth versus profitability? What's what's your view? Yep. Definitely. Yep. Yeah. Look. Growing market share and store count in Poland is definitely my number one priority. Look, it all depends on the success of the m and a as as you mentioned. But yeah. Look. If if if we don't go through down that down that road, then, you know, we'll we'll roll out a a, you know, a fast store store build rollout. So, you know, like I was saying before, the Cheddar Rulsa is a great example of a city, 80,000 people, and then we can open up very successful stores. So there's many many cities like that in Poland.

46:03 And, you know, also see lots of lots of opportunities in the biggest cities as well. You know, the successful Domino's Markets continue to to split their stores and and add more stores into the city areas. You know, if you cut your delivery area in half, not only you're reducing your labor costs, but you're able to deliver the pizza faster and hotter. And and then sales and customer pro customer growth increases. So, you know, and and I suppose the big one is, you know, competitors struggle and they find it hard to compete when they have so many Domino's stores around their one store. So, you know, in in Australia, they have 26,000,000 people, over 700 stores.

46:49 Poland has a population of over 38,000,000 people, so you can see the potential. Thank you, Niels. Somehow I cannot turn on my camera, so apologies, but I'm still around. There's there is a there's a question about the stock option plan because it's about I I will read the question. Have Neil and Andrew any short term operational financial targets that they can share with us? I would say that there there are targets as a part of the stock plan, but but there is an and we we cannot share those. But there are targets, but I think the most important is that when when when I was negotiating with with Niels and Andrew, the the most important thing to me was that they are they also have skin in the game.

47:41 So this is this is happening as we speak. Niels and and Andrew will become the shareholders of of of DPP. It's it's in days, so maybe I will comment why it's not done yet. And they they also, they are also investing in in the the savings, and Andrew is subscribing has committed to subscribe for €500,000 of new shares at 8p. As you may remember, we well, we treat 8p as a cost and and of our investment. And the the price of the shares is below, but but the trades are low, and and it's it's a little bit frustrating. We cannot buy the largest shareholder because we'd need to call for the all the shares. But the deals with the management team, are okay, plus they invest their own money.

48:27 So that gives us a little bit a a lot of comfort that we have the same objective, and we all share the same ambition of of multiplying this business value because this is where where people make money, and and that's the the that's the way to to develop. About yeah. Then then we have the short term goals, but the most important is is, you know, the the the the midterm value creation, long term value creation. And, you know, they the the two gentlemen have put their their money to work with us, and it's alongside the the investors like you and us. So I think that's the most important thing for us. So I think we covered that. The question about from Richard about inflation again, so I'll defer to in current cost inflation environment, are you able to pass through via price increases and still grow sales?

49:23 Yeah. I I I wanted to answer that. Thank you, Prashamak. So as I already said, we have already increased our prices three times in 2022 with with the last, price increase made on twelfth, July, so, like, two weeks ago. We are very careful with with price increases, and the the sales increase that you could see in in one of those, you know, in one of our slides, the double digit sales growth, is, despite is is being, achieved despite the, the prices increases. We we have different tools to do that. That is not a secret. We can and and and we use that tools.

50:11 We can decrease discounts offered to our clients, but also increase menu prices. Thank you, Ghosha. I think we have I think we have exhausted the the questions, the the the what what I see. Shermit, let me just jump in. Absolutely. You've taken every question from investors that have come through throughout today's meeting. So thank you to you, and also thank you for the engagement shown by all the investors on today's call. Shermit, I don't know if there's anything further that you wish to add, but I I do know that investor feedback is particularly important to you and the management team at DP POLAND. I will redirect investors to give you their thoughts and expectations. But I thought before doing so, if I could ask you for any closing comments.

51:03 Yeah. We we thank you. Apologies. Still cannot turn on camera, but but I think to me, I would I would hand over for the closing comments for Niels. I'm I'm I'm very excited that we have Niels and Andrew on the on the in the team. So the team is even stronger. You could see the performance of the team in the shape prior to Niels and Andrew arrival. I think this the performance should be even better, so I'm quite quite happy about that. We're growing very nicely. We are prioritizing the the the client acquisition and the top line growth because we we think there's much more that we can gain. But but maybe the closing remarks I would I would give to to to Niels because he is our our our boss here on the ground. Niels?

51:50 Yes. Thank you. Yeah. Look. Yeah. Closing remarks. Look, suppose I'm really excited about the sales this this year, and and look, they they keep on getting better. What what really excites me is the customer growth we are seeing. You know, I always judge my stores on customer growth as this sign sign sign of a strong strong business that's going in the right direction. So not only we, you know, double digit sales, but, you know, our our customer growth is also very strong as well. So, yep, as as Shamik mentioned, you know, I've invested a 100% of my creation equity into DPP at AP as well. So I have skin in the game. You know, I'm very excited to be here. It's been a very positive start as CEO in the last two months.

52:42 Received lots of great feedback from staff and peers, and we're having a lot to win. So, yeah, just really excited and excited about the future. That's great, Niels. Thank you very much, Shamak. Nice to to just get you back for those closing comments. So thank you once again to the entire management team for your your time this afternoon. Can I please ask investors not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order the management team can better understand your views and expectations? This will only take a few moments to complete, but I'm sure as you've heard already, that will be highly appreciated by the company. On behalf of the management team at DP POLAND PLC, we'd like to thank you for attending today's presentation. That now concludes today's session, and may I wish you all a very pleasant afternoon. Thank you all. And thank you, everyone.