Domino Pizza : Interim Results for the 26 Weeks Ended 1st July 2018

Growth driven by UK; full year outlook confirmed

26 Weeks Ended 1 July 2018	26 Weeks Ended 25 June 2017	Change
Group System Sales1	£616.6m	£546.5m	12.8%
UK & ROI System Sales1	£565.1m	£522.7m	8.1%
UK Like-for-Like2 System Sales1 excluding impact of split territories	5.9%	2.4%
Underlying3 Profit before tax	£45.7m	£44.6m	2.5%
Underlying3 Basic EPS	7.8p	7.3p	6.8%
Dividend per share	4.05p	3.75p	8.0%
Net debt	£182.1m	£61.0m	£(121.1)m
STATUTORY REPORTING
Statutory Revenue4	£259.1m	£211.3m	22.6%
Statutory Profit Before Tax	£41.7m	£46.2m	(9.7)%
Basic EPS	7.2p	7.7p	(6.5)%

Financial highlights

• Group system sales up 12.8%
  • UK system sales up 8.3%: 22 new stores, 5.9% like-for-like growth (Q2: 4.7% LFL); ROI sales up 2.5%
  • Strong local currency international growth: Switzerland +13.0%, Iceland +5.5%, Domino's Norway +180.5%, Sweden +56.4%
• Underlying PBT up 2.5% and Underlying Basic EPS up 6.8%
• Statutory PBT down 9.7% and Basic EPS down 6.5%
• Non-underlying expenses of £4.0m relating to M&A integration and IT and supply chain transformation cash outflow
• Net debt £182.1m, 1.62x LTM EBITDA at period end
• Interim dividend +8.0% to 4.05p; £38.9m share purchases in H1 2018

Strategic progress

• Digital investments to support franchisee efficiency and drive customer engagement
  • GPS in 603 UK & ROI stores: significant labour efficiencies; H1 franchisee store profitability up 5.3%
  • Investment in new e-commerce and app platforms planned, to improve the customer experience further
• Strong operational focus in acquired businesses
  • London: volume-driven growth, staff turnover down
  • International: labour cost issues affected H1; actions taken now coming into effect
• Warrington Supply Chain Centre operational, production ramped to 130 stores
• Full year Underlying PBT expected to be in line with current market expectations
  • Around 60 new UK stores for 2018, of which several uncertain on timing; unchanged long term target of 1,600
  • Total Group capex around £30m
  • Completion of £50m share purchase programme 

Commenting on the results, Chief Executive Officer David Wild said:

'It's been another good trading period for Domino's. In the UK, despite continued consumer uncertainty, we've achieved further like-for-like growth by maintaining our clear focus on product, service and value for customers. Our ongoing investments in supply chain infrastructure and our IT platform will support future growth and customer engagement. Domino's is proud to be one of the most successful franchise businesses in the UK, and we will continue to work with our franchisee partners to promote the brand and the strength of the system.

'Whilst our international businesses continue to make good progress with customers and sales, it has taken us some time to refine the operating model and cost base at store level, particularly in Norway. We are confident that the changes we have made will result in a better performance in H2, and believe that these businesses offer significant long term growth potential as we export our expertise in digital, supply chain and franchisee management.

'The Board expects that full year Underlying Profit Before Tax will be in line with current market expectations6. Our confidence in the future is underlined by continued growth in the dividend, and our ongoing investment in our own shares through the buyback programme.'

^{1 System sales represent the sum of all sales made by both franchised and corporate stores to consumers
2 Like-for-like sales performance is calculated against a comparable 26 week period in the prior year for stores that have not donated addresses to new stores within the previous 12 months
3 Underlying is defined as statutory performance excluding amounts relating to non - underlying}5 items
4 Statutory revenues represent revenues directly attributable to the Group being derived from monies paid by franchisees for foodstuffs together with royalty payments for use of the Domino's brand, rental income from freehold and leasehold property, and corporate store sales in the UK, Switzerland and the Nordics
5 Non-underlying items are defined as being items that are non-recurring, not part of the ordinary course of business or reduce understandability of business, and are disclosed separately as non-underlying items in note 5 to the accounts.
6 The range of current market expectations for 2018 Underlying Profit Before Tax is £95.9m - £101.4m, based on company-gathered consensus estimates

For further information, please contact:

For Domino's Pizza Group plc:
Peregrine Riviere
07909 907193

Maitland:
Clinton Manning
020 7395 0473 or 07711 972662
Sam Cartwright
020 7395 0415 or 07827 254561

A presentation for analysts and investors will be held at 9.00am on 7 August 2018 at Numis Securities Auditorium, LSE Building, 10 Paternoster Square, London EC4M 7LT.

The webcast can be viewed at: https://www.investis-live.com/dominos/5b3cae5f73e8551100780516/onbb

A dial-in is also available, with details as follows:

Participant dial-in numbers
Within United Kingdom (Local) 020 3936 2999 From all other locations + 44 20 3936 2999

Participant Access Code
324792

About Domino's Pizza Group

Domino's Pizza Group plc is the UK's leading pizza brand and a major player in the Irish market. We hold the master franchise agreement to own, operate and franchise Domino's stores in the UK, the Republic of Ireland, Switzerland, Luxembourg and Liechtenstein. In addition, we have a controlling stake in the holders of the Domino's master franchise agreements in Iceland, Norway and Sweden, as well as an associate investment in Germany. As at 1 July 2018, we had 1,213 stores across six markets, including 1,067 stores in the UK.

For photography, please visit the media centre at corporate.dominos.co.uk, contact the Domino's Press Office on [phone], or call Maitland on [phone].