Domino’s Pizza UK & IRL plc Preliminary Results for the 52 weeks ended 1 January 2006

Domino’s Pizza UK & IRL plc Preliminary Results for the 52 weeks ended 1 January 2006

Domino’s Pizza UK & IRL plc The Team

Stephen Hemsley, Chief Executive

Chris Moore, Chief Operating Officer

Lee Ginsberg, Finance Director

2

Domino’s Pizza UK & IRL plc

Financial Highlights

• System sales up by 15.1% to £200.7m (2004: £174.3m*)

• Profit before tax increased by 26.6% to £11.2m (2004: £8.8m)

• Earnings per share:- Basic EPS up 22.8% to 16.25 pence (2004: 13.23 pence)- Diluted EPS up 22.1% to 15.47 pence (2004: 12.67 pence)

• Total dividend up 38.1% to 7.25 pence for the year (2004: 5.25 pence)

• 50 new delivery stores opened (2004: 40)

* NOTE: 53 week period in 2004

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Domino’s Pizza UK & IRL plc Financial Highlights contd.

• Like-for-like sales in 317 mature stores up 7.1% (2004: 6.6%)

• 407 stores at the end of the period (2004: 357 stores)

• E-Commerce sales up 69.5% to £13.9m (2004: £8.2m), representing 10.4% of UK delivered pizza sales

• Strong cash generation with cash at hand of £5.9m (2004: £4.8m)

• £8.2m cash returned to shareholders from share buybacks during the year (2004: £1.6m)

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Domino’s Pizza UK & IRL plc System sales

0

50

100

150

200

250

2001 2002 2003 2004 2005

+29%+21%

+20%

+23%

+15%

+17% on comparable 52 weeks

£m

£98.4m

£118.9m

£142.3m

£174.3m

£200.7m

5

(53 weeks)

Domino’s Pizza UK & IRL plc Like-for-like sales growth

0

5

10

15

20

25

2000 2001 2002 2003 2004 2005

0

50

100

150

200

250

300

350

4.8%

21.4%

11.2%

7.4% 6.6%

LFL store population

% G

row

th

LF

L s

tore

po

pu

lati

on

Solid growth from a larger group of stores

6

7.1%

Average mature store now takes £180,000 p.a. more than in 2000

Domino’s Pizza UK & IRL plc Store count

0

50

100

150

200

250

300

350

400

2001 2002 2003 2004 2005

Store Population

237269

318

357407

nu

mb

er o

f st

ore

s at

yea

r e

nd

7

Potential for 800 – 1,000 stores

34

50

24

50

40

Domino’s Pizza UK & IRL plc Profit and Loss

2005 2004 %

£’000 £’000 IncreaseSystem sales 200,678 174,292 15.1

Operating profit * 11,004 9,138 20.4

Profit/(loss) on sale of stores 876 (47) -

Accelerated LTIP charge (626) - -____

Profit before interest and tax 11,254 9,091 23.8

Net interest payable (85) (270) -____

Profit before tax 11,169 8,821 26.6

Taxation (2,922) (2,058) (42.0)

Profit after tax 8,247 6,763 21.9

Dividends - pence 7.25p 5.25p 38.1

- cover 2.2 x 2.5 x -

Earnings per share

- basic 16.25p 13.23p 22.8

- diluted 15.47p 12.67p 22.1

* Before exceptionals

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Domino’s Pizza UK & IRL plc Balance Sheet

2005 2004

£’000 £’000

(Restated)

Fixed assets 15,370 16,498

Current assets 20,992 20,980

Creditors due within (13,742) (13,590)

one year

Net current assets 7,250 7,390

Creditors due after (9,085) (8,102)

more than one year

Deferred tax and provisions (1,447) (857)

NET ASSETS 12,088 14,929

Fixed Assets: At 01 Jan 06 At 02 Jan 05

£’000 £’000

Intangible 1,326 1,520 Tangible 13,593 14,595 Investment 451 383

in JV’s 15,370 16,498

Current Assets:

Stock 2,186 2,700 Debtors 12,921 13,456 Cash 5,885 4,824

20,992 20,980

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Domino’s Pizza UK & IRL plc Analysis of Shareholder Funds

2005 2004

£’000 £’000 (Restated)

At beginning of year 14,847 11,763

Share issues in year 472 1,071

Share buyback in year (8,222) (1,610)

Increase in EBT shares (1,140) (1,200)

Attributable profit for year 8,255 6,731

LTIP charge (Including 06/07 acceleration) 963 332

Dividends (3,169) (2,240)

12,006 14,847

Minorities 82 82

12,088 14,929

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Domino’s Pizza UK & IRL plc Analysis of Borrowings

2005 2004

£’000 £’000Cash at bank 5,885 4,824

DP Capital (2,500) (2,640)

EBT loans (7,500) (6,360)

Other (26) (42)

Net debt (4,141) (4,218)

Shareholders funds 12,006 14,847

Gearing % 34.5% 28.4%

Interest cover 122 times 33.7 times

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Domino’s Pizza UK & IRL plc Net Cash Inflow From Operating Activities

2005 2004

£’000 £’000

Operating profit 10,214 * 9,033

Depreciation 1,508 1,386

Amortisation 131 133

LTIP charge 963 333

Decrease/(increase) in stocks 489 (857)

Decrease/(increase) in debtors 337 (1,505)

(Decrease)/increase in creditors (968) 1,420

12,674 9,943

* After £626k LTIP acceleration

12

Domino’s Pizza UK & IRL plc Cash Flow Statement

2005 2004

£’000 £’000

Net cash inflow from operating activities 12,674 9,943

Servicing of finance + returns on investment (38) (215)

Taxation paid (1,549) (2,021)

Capital expenditure + financial investment (1,999) (3,428)

Disposals/acquisitions 3,048 (280)

Dividends paid (3,169) (2,235)

Net cash inflow before financing 8,967 1,764

Financing (7,906) (661)

INCREASE IN CASH 1,061 1,103

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Domino’s Pizza UK & IRL plc Cash returned to shareholders

2 year

£’000 2005 2004 Total

PBT 11,169 8,821 19,990

Share Buybacks 8,222 1,610 9,832

Dividends 3,169 2,240 5,409

11,391 3,850 15,241

Cash at year end 5,885 4,824 -

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Basic Earnings Per Share Growth

15

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

2001 2002 2003 2004 2005

Basic EPS Linear (Basic EPS)

4.00

5.60

9.02

13.23

16.25

Pen

ce

Compound increase of 42%

Domino’s Pizza UK & IRL plc Dividends Per Share Growth

16

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

2001 2002 2003 2004 2005

Dividends per Share Linear (Dividends per Share)

Pen

ce

1.332.00

3.50

5.25

Compound increase of 53%

7.25

Domino’s Pizza UK & IRL plc The future for pizza delivery

17

Convenience & Takeaway Market £7.2 billion

Convenience & Takeaway Market £12.3 billion

2005 2015

Predicted growth in total convenience & takeaway market: 70%

Predicted growth in pizza delivery market: 91%

Source: Convenience Food Sector 2015 – Future Foundation* Excludes carry-out sales

pizza delivery* £578 million

pizza delivery £1.1 billion


Right place, right time, right brand

Cash-rich, time-poor society

Ideal environment for the

convenience of pizza delivery

70% of families feel time pressured...

…..ordering 25% more takeaway meals

Homes are fast becoming

leisure destinations

Our Point-of-Sale

In-home leisure spend £63b (from £39b in 1999)

Growth outstripping out-of-home leisure spend

Mostly on new technologies (and new sales channels; PC, iTV, convergence)

Source; Future Foundation, Convenience Food 2015

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Domino’s Pizza UK & IRL plc Right place, right time, right brand

Increased informality in eating habits

50% of meals eaten in front of the TV

Average time spent preparing food now only 13 minutes per day

But customers are looking for choice, novelty and fresh ingredients

Demographic shift in our favour

Pizza no longer stops at 55

At least once a month, 33% of over 55s ordered takeaways in 2003 (vs. 24% in 2000)

Growth in single person households; high PDI and spend on socialising


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Right place, right time, right brand

Focus on the detail; delivering a great pizza in under 30 minutesthe core challenge; a third of the business comes in just 8 hours of the week 11+million deliveries, 90% on timeMore product training & field supportIn-store speed and product quality are key areas of focus for stores going forward (2000+ audits in 2006)

Increased support behind new product strategy4% National Ad FundStrong campaign formula boosts overall salesTV, Direct Mail, LSM, PRE-commerce capitalising on growth in broadband (38% of UK adults have bought online in last six months)Expected to grow to 68% by 2015Greater potential for ‘lock-in’


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4%

5%

6%

7%

8%

9%

10%

11%

12%

13%

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91 94 97 100 103 106 109

weekly e-commerce as a percentage of delivery sales from 2004 to date


Right place, right time, right brand e-commerce net sales of £13.9 million, 69.5% up on 2004 10.4% of UK delivery sales in 2005 Future Foundation; 35% of pizza delivery sales by 2015

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New website launch July 04

20052004

Domino’s Pizza UK & IRL plc The competition

Strengthened our lead in pizza delivery segment 2005

Stores Openings Sales

- Domino’s 407 50 £200m- Pizza Hut Delivery* 232 30 £110m- Perfect Pizza * 112 (7) £ 23m - Papa Johns * 80 7 £ 17m

- Others * 2,000 n/a £340m

Highest sales per store in industry

* estimates

22

6%

23%

56%66%

100%

0%

20%

40%

60%

80%

100%

23Coverage of approx. 47% of UK & IRL households

Source; Mintel Home Delivery Report, 2004

Domino’s Pizza UK & IRL plc The size of the opportunity

6%

23%

56%66%

100%

50%

75%

0%

20%

40%

60%

80%

100%

Domino’s Pizza UK & IRL plc The size of the opportunity

24Coverage of approx. 47% of UK & IRL households

Source; Mintel Home Delivery Report, 2004Source: Ipsos-UK US market study, Feb 2006

U.S

.mar

ket

U.S

.ma

rke

t

Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

2004 2005

Domino’s Pizza UK & IRL plc Sales performance2005 Average Mature Store Sales Per Period

25

New Simpsons licensing deal

Introducing the “Ay Carumba Fajita Pizza” (TV ad)

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The year ahead

27


The year ahead ‘Football Fanatics’ and the

World Cup

More investment in e-commerce channel

new customer acquisition drive

WAP ordering launch in Q2

Second Simpsons menu addition in H2

Tough comparables in Q4

Domino’s Pizza UK & IRL plc Board Management Team

• Strengthening of Board• Appointment of Michael Shallow, Non-Executive Director• Appointment of Dianne Thompson, Non-Executive Director

• Board now comprises:• Chairman

• Colin Halpern• Three Executive Directors• Four Non-Executive Directors

• Nigel Wray• Michael Shallow• Dianne Thompson• John Hodson

• Management Focus• Appointment of Operations Director• Appointment of IT Director

STRONGER TEAM IN PLACE TO SUPPORT GROWTH

28

Domino’s Pizza UK & IRL plc Continuing strategy

• Focus on roll out of Domino’s system in UK and Ireland

• Maintain consistent new store opening programme

• Build infrastructure for 1000 stores

• Drive like-for-like sales growth

• Manage number of franchisees

• Operational leverage to drive net margin

• Resulting cash generated to be returned to shareholders

29

Domino’s Pizza UK & IRL plc Current trading & prospects

• Store openings on track for our target of 50 stores

• Like-for-like sales up 10.3% (2004: 6.6%) for the first six weeks of 2006

• E-commerce up 59.5% (2004: 49%) now 11.8% of delivered pizza sales in UK.

• Strong cash generation set to continue

30

Well placed for another year of strong growth

Documents

Domino’s Pizza UK & IRL plc Preliminary Results for the 52 weeks ended 1 January 2006