Domino Pizza : Preliminary Results for the 52 Weeks ended 31 December 2018

Continued UK growth; sharpened operational focus on International

	52 weeks to 30 December 2018	53 weeks to 31 December 2017	52 weeks to 31 December 2017	Change % 52 weeks vs 52 weeks
Group system sales1	£1,259.5m	£1,179.6m	£1,155.7m	9.0%
UK & ROI system sales1	£1,155.4m	£1,101.5m	£1,079.4m	7.0%
UK like-for-like system sales1,2 growth (excluding splits)	4.6%	-	4.8%
Underlying profit before tax4	£93.4m	£96.2m	£94.4m	(1.1)%
Non-underlying items before tax5	£(31.5)m	£(14.8)m	£(14.8)m	n/m
Total profit before tax	£61.9m	£81.4m	£79.6m	(22.2)%
Underlying basic EPS3	16.1p	16.0p	15.7p	2.5%
Net debt	£203.3m	£89.2m	-	n/m
Recommended total dividend per share	9.50p	9.00p	-	5.6%
Total revenue	£534.3m	£474.6m	£466.5m	14.5%
Statutory basic EPS	10.3p	13.8p	13.5p	(23.7)%

David Wild, Chief Executive Officer, said:

'2018 was a mixed year. In the UK and Ireland, which account for around 90% of the business, we extended our excellent track record of growth and cash generation, responding well to the very challenging environment for the casual dining market. Our franchisees opened 59 new stores, creating more than 2,000 jobs and sold a record 102 million pizzas. We also continued investing for future growth in digital and by successfully completing our new Supply Chain Centre in Warrington, our most significant investment to date, which supports our target of 1,600 stores in the UK.

'Internationally, we have experienced some growing pains which have hampered our overall financial performance. These are all good markets, with more than 100 million population, good appetites for pizza and little, if any, global brand competition. This is why we have strengthened our management teams and are committing disciplined capital to support future development. We expect an improved performance from International, with the business targeted to break even this year.

'I would like to thank our highly talented colleagues and franchisee partners for their ongoing dedication to the brand and our customers.'

Financial highlights

• Group system sales¹ of £1,259.5m, up 9.0% on a 52 week basis
  • UK system sales up 7.1%, like-for-like² sales up 4.6%
  • Republic of Ireland system sales up 5.2%, like-for-like sales up 4.0%
  • Pro forma³ International system sales up 7.7%
• Group statutory revenue up 12.6% to £534.3m
• Group underlying⁴ PBT £93.4m, down 1.1% on a 52 week basis
• Underlying PBT excludes net non-underlying⁵ charges of £31.5m relating mainly to International impairments, UK supply chain transformation and integration costs. See note 3 for full details
• Group statutory PBT £61.9m, down 24%
• Underlying basic earnings per share of 16.1p, up 2.5% on a 52 week basis
• Net debt £203.3m; net debt/EBITDA 1.85x

Strategic highlights

• Growing market positions in six countries: platform for long term growth
• 81 new Domino's stores opened across the Group; 58 in UK
• Completion of Warrington supply chain centre, supporting future growth in the UK business
• Dividend growth track record continued: full year dividend +5.6%
• Total cash returns to shareholders of £103.5m, comprising £44.3m dividends and £59.2m share buybacks

Outlook

• 2019 UK store pipeline similar to 2018 at the same time last year, although actual openings likely to be lower than 2018 given ongoing franchisee discussions
• Continued UK growth expected; International targeted to break even
• 2019 capex of £25-30m, including £5m of supply chain capacity and efficiency investments in UK & ROI. Controlled international investment
• Net debt/EBITDA expected to remain around 2018 year end level

Note: 2017 was a 53 week reporting period to 31 December 2017. For the purposes of comparability, all growth rates in this release are given on a 52 week basis.

¹ System sales represent the sum of all sales made by both franchised and corporate stores in the United Kingdom, Republic of Ireland, Switzerland and Nordics to consumers.
² Like-for-like system sales are defined as system sales from stores that were opened before 25 December 2016 and have not been impacted by donating territory to a new store (Split), compared to the corresponding 52-week period in the prior year.
³ Pro forma sales growth is calculated on a constant currency basis assuming the businesses were owned for the entirety of both years.
⁴ Underlying performance measures are defined as statutory performance measures excluding amounts relating to discontinued operations and non-underlying items.
⁵ Non-underlying items are defined as being items that are material in size, unusual or infrequent in nature and are disclosed separately as non-underlying items in the notes to the accounts. See note 3 for more information.

For further information, please contact:

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

Maitland:
Neil Bennett
07900 000777
Sam Cartwright
020 7395 0415 or 07827 254561

A presentation for analysts and investors will be held at 9.00am this morning at the offices of Goldman Sachs, Peterborough Court, 133 Fleet Street, London EC4A 2BB, with breakfast from 8.30am. The event will also be webcast live at https://www.investis-live.com/dominos/5c66cbddcad1ac0c00f38b16/jjub.

Participant dial-in numbers:
United Kingdom (Local) 020 3936 2999
All other locations + 44 20 3936 2999
Participant Access Code : 803742

Replay information:
A recording will be available until Tuesday 19th March 2019
UK: 020 3936 3001
USA: 1 845 709 8569
All other locations: [phone]
Access Code: 375196

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 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 associate investments in Germany and Luxembourg.

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].