DPEU 2018 Prelims vF - dpeurasia.com · DPEU Papa John's Dodo Russian expansion • Having successfully implemented the castle strategy in Moscow, we are continuing to expand, further

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Preliminary Resultsfor the Year ended 31 December 2018

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This Presentation is not an offer to buy or sell any securities. Save where otherwise indicated, the Company is the source of thecontent of this Presentation and, accordingly, although care has been taken to ensure that the facts stated in this Presentation areaccurate and that the opinions expressed are fair and reasonable, no representation, warranty or undertaking, express or implied, ismade by any of the Company, any of its directors, officers, employees, affiliates, advisors, shareholders or representatives as to,and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinionscontained herein. Neither the Company nor any of its directors, officers, employees, affiliates, advisors or representatives shall haveany liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this Presentation or its contentsor otherwise arising in connection with the Presentation.

Certain statements in this Presentation are not historical facts and are “forward looking” statements. These forward-lookingstatements can be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “anticipates”,“expects”, “intends”, “plans”, “may”, “will” or “should” or, in each case, their negative or other variations or comparable terminology.None of the Company, its directors, officers, employees, affiliates, advisors, shareholders or representatives intend or have anyduty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this Presentation or toupdate or to keep current any other information contained in this Presentation. The information and opinions contained in thisPresentation are provided as at the date of this Presentation and are subject to change without notice. As a result, you arecautioned not to place undue reliance on such forward looking statements.

Disclaimer

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HighlightsAslan Saranga – Chief Executive Officer

Operational ReviewGüvenç Dönmez – Chief Executive Officer of Russian Operations

Financial ResultsSelim Kender – Chief Strategy Officer and Head of Investor Relations

Current Trading & Management GuidanceAslan Saranga

ConclusionAslan Saranga

Q&A

Today’s Agenda

HighlightsSECTION 1:

5

2018 highlights

- - -

9.3%(2017: 10.0%)

16.0%(2017: 28.9%)

LIKE-FOR-LIKE GROWTH

36.8%

REVENUE

TRY 856.9m(2017: 626.5m)

STORE COUNT

SYSTEM SALES Adjusted EBITDA

TRY 1,125.3m(2017: 859.8m)

TRY 110.6m(2017: 90.8m)

21.8%

60.8%(2017: 51.8%)

30.9%

ONLINE DELIVERY

81

724(2017: 643)

9.0% points

TRY 96.5m(2017: 80.9m)

TRY 23.9m(201711.2m)

19.4% 112.2%

Operational ReviewSECTION 2:

7

Innovation is at our core: Strong product pipeline

Source: Company Information

First co-branded KitKat®chocolate pizza with Nestlé®

Chicken pizzaDopdolu, a meat based value pizza

Value Turbo line for take away / eat in Wrap as a new side

8

Innovation is at our core: Technology developments


• GPS Tracker launched with a national ad campaign in Turkey in January 2019• Delivery labour efficiencies already beginning to show• To be advertised periodically with campaigns to keep it fresh in consumers’ minds

Restaurant screensCustomer screens

9

38%

10%

34%

9%

Online Total2017 2018

79%

29%44%

16%

Online Total2017 2018

Like-for-Like performance

LfL performance continues to be strong...System sales LfL growth, %

Russia

Turkey

88%112%

2017 2018

70%

278%

2017 2018

...with the revamped apps leading the chargeApp System sales LfL growth, %

Russia

Turkey

10

67%44%

76%

52%

Delivery Total2017 2018

48%32%

54%39%


52%35%

61%43%


Digital growth

Share of online ordering growing healthilyOnline system sales, %

RussiaTurkey

Group


11

Store count growth

…with Russia increasing the pace for the 5th consecutive year# of stores at period end

Turkey approaching 550 stores...# of stores at period end (1)

# of stores at period end

Continuous and significant store rollout

Source: Company Information Source: Company Information

495522

545

450

550

2016 2017 2018

72121

179

0

50

100

150

200

2016 2017 2018

+23

+49

+58

370 432 466495 522 545

1319 43

72 121179

80 103130 160

219289

383451 509

567643

724

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

+23+27 +30

+59 +70+94

+68+58

+58+76

DP RussiaDP Turkey


+27

Notes:1. Includes Azerbaijan and Georgia

+81

12

43

72

116

149

4252

70

92

13

37

61

99

2015 2016 2017 2018

DPEU Papa John's Dodo

Russian expansion

• Having successfully implemented the castle strategy in Moscow, we are continuing to expand, further building upon our growing market presence

• Greater Moscow is the key region for Russia, that shows very high demand and still has highpotential for further growth

• Key focus outside Moscow

‒ 30 stores out of Greater Moscow

‒ New cities have a population of more than1 million people, which provides convenient delivery from commissaries

‒ Continuing planned roll out to further cities

• Yekatarinburg commissary operational with 60 store capacity

• Russia franchise store mix at 44%, from a standing start 2 years ago.

Progress in Greater Moscow has been rapid

Expansion outside of Greater Moscow progressing wellEuropean part of Russia

Financial ResultsSECTION 3:

14

Capex and cash conversion(2)

TRY MM %

Adjusted EBITDA with margin a function of sales mix effect

91111

2017 2018

860

1,125

2017 2018

Year on year growth

241 238

402 486

643724

2017 2018Corporate Franchise

DP Eurasia: Financial snapshot

System Sales, TRY MM

78 79

14%

29%

2017 2018

Capex Cash Conversion

63%

37%

# of Outlets

31%

TRY MM

Growth in system sales supported by store roll-out

Source: IFRS Combined and Consolidated Financial Information, Management Accounts

Notes:1. As % of System Sales2. Cash conversion defined as (Adj. EBITDA – Capex ) / Adj. EBITDA

10.6%

Adj. EBITDA Margin(1)

9.8%

67%

33%

15


TRY MM %

# of Outlets

TRY MM

System Sales

Adjusted EBITDA and margin Capex and cash conversion(4)

Store count(2)

DP Turkey: Financial snapshot(1)

8197

2017 2018

654 752

2017 2018

Year on year growth

142 137

372 398

514 535


72%

28%

14%


Notes:1. Including contributions from Azerbaijan and Georgia2. Turkey only

12.4%


12.8%

74%

26%

3. As % of System Sales4. Cash conversion defined as (Adj. EBITDA – Capex ) / Adj. EBITDA

37 37

55%62%

2017 2018

Capex Cash Conversion

16


TRY MM

# of Outlets

TRY MM

System Sales

Adjusted EBITDA Capex

Store count

DP Russia: Financial snapshot

11

24

2017 2018

205

374

2017 2018

Year on year growth

99 101

22

78121

179


82%


Notes:1. As % of System Sales

5.5%


6.4%

18%

82%

42 42

2017 2018

44%

56%

17

14%

86%

TRY RUB

38%

56%

6%

TRY EUR RUB

Cash flow generation

2017 gross debt by currency 2018 gross debt by currency

Debt profile of DP Eurasia

Cash flow generation and debt profile

Notes:1. Adjusted for activities that are not part of the normal course of business and are non-recurring including share-based incentives, IPO costs and severance costs for Turkey and Russia2. Adjusted net debt is calculated as sum of short-term borrowings and long-term borrowings, less cash and cash equivalents and adjusted for non-recurring items including long term deposit for loan guarantee and delay in

collection/payment day coinciding on a weekend

91 111

(78) (79)

12 32

2017 2018Adj. EBITDA Capex Adj. EBITDA - Capex Cash Conversion

107 155

121 61

228 216

1.2x 1.4x

2017 2018Adj. Net Debt Gross Debt

TRY MM TRY MM

Source: IFRS Combined and Consolidated Financial Information

14% 29%

(1) Adj. Net Debt / Adj. EBITDA(2) (1)(2)

FX debt completely refinanced

SECTION 4

Current trading and management guidance

19

Current trading

(1) Consumer Confidence Indec

Situation

• Inflation and interest rates improving from Q3’18 peaks

• FX stabilized; however, TRY still undervalued according to CBT’s Real Effective Exchange Rate

• Election free until 2023 – reforms?

Situation

• Focus on expanding the pizza market via proven castle strategy

• LfL averaging over 30% for the past 4 years

• Regions to enter LfL bucket in 2020

• Healthy ramp ups in new stores

Action Plan Initiated• Continued product innovation• New websites and loyalty programme improvements• Focused marketing on key price points (hero prices)

– Mar’19 3 week LfL at 8.4%• Product repricing in line with internal inflation

(Domino’s food inflation low double digits)• Labour cost optimisation with GPS Tracker

Action Plan Initiated

• Improving corporate store economics

• Optimizing supply chain margins

• Continued product innovation

• Streamlining HQ

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Management guidance

LfL(medium term)

Targeted net store openings per year

(medium term)

Total potential store count

CAPEX program

● High single digit LfL growth ● 2019: High single digit LfL growth● Thereafter: Low to mid-teens LfL growth

● 900 ● 1,500

● 25 – 30 stores● We expect franchise stores to be the main driver of

new store openings

● 40 – 60 stores ● We expect franchise and corporate stores to be

the main drivers of new store openings

● c. TRY 30 MM in 2019 ● c. RUB 450 MM in 2019

ConclusionSECTION 5:

22

Conclusion


• Record number of store openings for the Group and Russia

• Online share increasing: 60.8% of delivery (+9.0% year-on-year)

• No change to business fundamentals

• Adjusted EBITDA in line with expectations

System Sales EBITDA Margin(2)

Turkey(1) +14.9% +19.4% +0.5%

Russia +81.8% +112.2% +0.9%

Notes:1. Includes Azerbaijan and Georgia2. Adjusted EBITDA as % of System Sales

AppendixSECTION 6:

24

12.4% 12.8%

2017 2018

Future growth driven by four core strategy pillars

Innovation and online ordering to drive like-for-like growth

Source: Company information

Potential to export the platform

Large whitespace opportunity in countries of presenceDomino’s stores, #

Source: Company estimates

Notes:1. Excluding Azerbaijan and Georgia

Russia Adj. EBITDA / System Sales, %

Source: Company information

Leverage scale advantage to further improve profitability

System sales LfL growth, %

38%

10%

34%

9%

Online Total

79%

29%

44%

16%

Online Total

Turkey Russia

2017 2018

2018 Total Potential

535

c. 900

2018 Total Potential

179

DP

Rus

sia

DP

Turk

ey

c. 1,500

(1)

Turkey Adj. EBITDA / System Sales, %

DP Eurasia

1 2

3 4

Adj. EBITDA / System Sales

5.5%6.4%

2017 2018

25

Attractive investment opportunity with high growth potential and proven business model

Leading market positions1

Highly attractive, underpenetrated markets with substantial growth potential in the Group’s addressable segments2

Strong online capabilities underpin DP Eurasia’s growth3

Globally proven business model successfully applied and adapted to DP Eurasia’s local markets4

Simple and scalable, asset-light business model5

Track record of resilient and profitable growth as well as strong cash conversion7

Founder-led, experienced management team8

Highly attractive customer proposition and strong brand equity6

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DP Eurasia: Financial summary

Key KPIs

DP Eurasia income statement

System sales ● Sales generated by the Group’s system stores (both corporate and franchise)

Corporate revenue ● Revenue from the Group’s corporate stores

Franchise revenueand royalty

● Consists of revenue from commissary sales to franchise stores and royalties calculated based on franchise store sales to customers, including the contribution to national advertising

Cost of sales

● Corporate store costs; production related costs of the Group’s commissaries, such as merchandise and raw materials; ingredients and non-food items (including those sold to the Group’s sub-franchisees); labour; rent; utilities and other, including D&A of corporate stores and commissaries

General and administrative

expenses

● Consists of headquarters expenses such as personnel (excl. marketing and selling personnel), rent, utilities, commissaries’ rents and non-production related personnel and headquarters-related D&A expenses

Marketing and selling expenses

● Includes marketing and selling personnel costs, royalties paid by the Group (on-going fees) and promotion and advertising expenses

Source: Company Information, IFRS Combined and Consolidated Financial Information, Management Accounts

Notes:1. One-off items include activities that are not part of the normal course of business and are non-recurring including share-based incentives, IPO costs and severance costs for Turkey and Russia

2018 2017 Change

Corporate Store Count 238 241 (3)

Franchise Store Count 486 402 84

System sales (TRY MM) 1,125.3 859.8 30.9%

(TRY MM) 2018 2017 Change

Revenue 856.9 626.5 36.8%

Cost of Sales (566.3) (398.7) 42.0%

Gross Profit 290.6 227.8 27.6%

General Administrative Expenses (136.1) (108.7) 25.3%

Marketing and Selling Expenses (104.3) (82.6) 26.2%

Other Operating Income / (Expense) 3.105 (3.6) n.m.

Operating Profit 53.3 32.8 62.3%

Foreign Exchange (losses)/gains (18.8) (11.7) 60.9%

Financial Income 5.5 1.2 355.6%

Financial Expense (43.9) (21.6) 103.0%

Profit / (Loss) Before Tax (3.9) 0.7 n/a

Tax Expense (7.2) (0.6) n.m.

Net Income (11.1) 0.1 n/a

Adjusted EBITDA 110.6 90.8 21.8%

Adjusted net income (6.7) 16.9 -139.8%

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DP Eurasia: Revenue & Expense Breakdown

Notes:1. One-off items include activities that are not part of the normal course of business and are non-recurring including share-based incentives, IPO costs and severance costs for Turkey and Russia

(TRY MM) 2018 2017 Change 2018 2017

System sales 1,125.3 859.8 31%

Corporate 481.9 370.7 30% as a % of system sales 42.8% 43.1%

Franchise 643.4 489.1 32% as a % of system sales 57.2% 56.9%

2018 2017 Change 2018 2017

Revenue 856.9 626.5 37%

Corporate 481.9 370.7 30% as a % of revenue 56.2% 59.2%

Franchise 301.3 226.6 33% as a % of revenue 35.2% 36.2%

Other revenue 73.2 29.2 151% as a % of revenue 8.5% 4.7%

Cost of Sales (566.3) (398.7) 42%

Cost of Food/Non-Food/Transportation (292.7) (213.8) 37% as a % of system sales 26.0% 24.9%

Corporate Store Expenses (234.5) (155.5) 51% as a % of corporate system sales 48.7% 42.0%

Depreciation and Amortization (38.9) (29.4) 33%

Gross Profit 290.6 227.8 28% as a % of system sales 25.8% 26.5%

General Administrative Expenses (136.1) (108.7) 25%

Overhead (Including Commisary) (117.8) (80.1) 47% as a % of system sales 10.5% 9.3%

Depreciation and Amortization (14.3) (11.7) 22%

Share based incentives (2.5) (1.5) n.m. as a % of system sales 0.2% 0.2%

IPO Costs & Other One-offs (1.5) (15.3) n.m.

Marketing and Selling Expenses (104.3) (82.6) 26%

Marketing and Advertising (52.3) (43.4) 20% as a % of system sales 4.6% 5.1%

Corporate Store Local Marketing (7.2) (4.9) 46% as a % of corporate system sales 1.5% 1.3%

Royalty (44.9) (34.3) 31% as a % of system sales 4.0% 4.0%

Other Operating Income / (Expense) 3.1 (3.6) n.m.

of w hich One-off (0.0) - n.m.

Operating Profit 53.3 32.8 62%

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Adjusted EBITDA and Net Debt calculation

DP Turkey DP Russia

DP Eurasia

Notes:1. Excludes income and expenses which are not part of normal course of business and are non-recurring items

(TRY MM) 2018 2017System Sales 373.5 205.4

Revenue 372.2 205.9

Operating profit (3.2) (4.2)

D&A 24.4 14.0

EBITDA 21.2 9.9 Non-recurring (income)/expenses 2.7 1.4

Adjusted EBITDA 23.9 11.2 % of system sales 6.4% 5.5%

Adjusted EBIT (0.5) (2.8) % of system sales -0.1% -1.4%

Capital expenditures 42.2 41.7 Cash conversion n.m. n.m.

(TRY MM) 2018 2017Short term bank borrow ings 36.5 136.9Short-term portions of long-term financial lease borrow ings 7.8 5.2

Long-term bank borrow ings 161.6 74.5

Long-term financial lease borrow ings 9.7 11.2

Total borrowings 215.6 227.9

Cash and cash equivalents 28.4 76.1

Net debt 187.2 151.8

Non-recurring items

Long term deposit for loan guarantee (32.5) (28.2) Adjusting delay in collection/payment day coinciding on a weekend - (16.8) Adjusted net debt 154.6 106.7

(TRY MM) 2018 2017System Sales 751.8 654.3

Revenue 484.7 420.6

Operating profit 66.5 51.7

D&A 28.9 27.1



Adjusted EBIT 67.6 53.8 % of system sales 9.0% 8.2%

Capital expenditures 36.8 36.7 Cash conversion 61.9% 54.6%

(TRY MM) 2018 2017System Sales 1,125.3 859.7

Revenue 856.9 626.5

Operating profit 53.3 32.8

D&A 53.3 41.1



Adjusted EBIT 57.3 49.7 % of system sales 5.1% 5.8%

Capital expenditures 79.0 78.5 Cash conversion 28.6% 13.6%

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Exchange Rates

Period ended 31 December

2018 2017

Currency Period End Period Average Period End Period Average

EUR/TRY 6.028 5.679 4.516 4.116

RUB/TRY 0.075 0.076 0.065 0.062

EUR/RUB 79.461 73.950 68.867 65.901


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62% 62%

38% 38%

2017 2018Delivery Take-away / Eat-in

63% 63%

37% 37%

2017 2018

Delivery Take-away / Eat-in

60% 60%

40% 40%

2017 2018

Delivery Take-away / Eat-in

Delivery – Take-away / Eat-in mix

% of system sales

RussiaTurkey

Group


Documents

DPEU 2018 Prelims vF - dpeurasia.com · DPEU Papa John's Dodo Russian expansion • Having successfully implemented the castle strategy in Moscow, we are continuing to expand, further