Domino Pizza : Q4 Trading Statement

Good trading performance, boosted by record new store openings

	Q4: 13 weeks				FY: 52 weeks
	to 24 December 2017	to 25 December 2016	Change % reported	Change % organic1	Change % organic1
Group system sales (£m)	321.8	272.4	18.2%	10.1%	8.9%
UK & ROI system sales (£m)	294.7	267.8	10.1%	9.9%	8.7%
UK LFL sales growth excl. splits	6.1%	-	-	-	4.8%
ROI LFL sales growth excl. splits	10.4%	-	-	-	10.8%
International system sales (£m)	27.1	4.6	-	23.0%	17.1%

Note: 2017 is a 53 week reporting year, and statutory accounts will include the week to 31 December 2017. Q4 performance in this announcement is reported on a 13 week vs 13 week basis for comparability purposes. Store openings are for the 53 week period.

Highlights

• Group system sales up 18.2%: strong growth in both established and newer markets
• UK system sales up 9.8% and UK LFL ex-splits sales up 6.1%
• 1,192 stores group-wide; 43 net new stores opened in Q4, and a record 95 UK openings for 2017
• Increased ownership in Iceland and greater scale in Germany for long term growth
• Further £20 million share buyback announced in December 2017
• Full year underlying PBT expected to be slightly above the current range of market expectations for the 52 week period

David Wild, Chief Executive Officer, said:

'We are pleased to report a good performance in Q4, completing another year of significant progress and growth for Domino's. With a record year for new store openings and continued like-for-like sales increases, the UK business has demonstrated its resilience in a challenging economic and competitive environment. Our international operations are growing in scale and benefiting from our expertise in supply chain and digital. We expect full year underlying profit before tax to be slightly above the current range of market expectations.'

¹ Organic growth represents year-on-year performance on a constant currency basis and excluding the impact of acquisitions or disposals.

UK & ROI

UK & ROI system sales were up 10.1% in the quarter, or 9.9% excluding currency effects. In the UK, system sales rose 9.8%, with new store openings and like-for-like performance both contributing strongly. Like-for-like sales growth, excluding stores in split territories, was 6.1%, driven by strong order growth. The like-for-like performance benefited from an additional trading day with the exclusion of Christmas Day, a non-trading day, from the 13 week period in 2017.

The start of the X Factor Final on 2 December 2017 was the catalyst for our biggest day of sales for the year, demonstrating the growing trend for combining ordering in with family entertainment. Sales were up 25% over the average Saturday across the year.

UK online sales were up 14.5% year-on-year, representing 77% of system sales in Q4 as our investment in digital capability continues to deliver benefits for customers. We had deployed GPS to 244 stores by the year end.

We opened 37 stores in the UK during Q4, taking the total for 2017 to a record 95 - comfortably surpassing the previous record set in 2016 and creating more than 3,300 jobs. By the period end we were trading from 1,045 outlets.

ROI system sales were up 12.0% on a constant currency basis. Like-for-like sales grew 10.4%, and we opened a further new store in Q4 taking the total to 49.

International

Switzerland achieved constant currency system sales growth of 23.0%, with like-for-like growth of 21.9%. The actions on menu pricing taken in H1, coupled with an improved online offer, continued to stimulate strong volume growth and we opened a new store in Q4, taking the total to 18.

In Iceland, constant currency system sales were up 6.4%, with like-for-like growth of 1.9%. Earlier this month, we completed the acquisition of a further 44.3% stake in the business.

In Norway, the conversion of Dolly Dimple's stores continues and at the year end we were trading from 27 Domino's-branded outlets. As a result of the increased store base and continued strong like-for-like performance at 16.2%, pro forma system sales growth was 140.6%.

We opened a further three stores in Sweden in Q4, taking the total to six.

Our German joint venture, in which we own a one-third stake, completed the acquisition of Hallo Pizza, the largest independent pizza chain in the country, earlier this month.

Outlook and guidance

Q4 performance has been ahead of our expectations and we have offset some of our margin investment with good volume growth. As a result we now expect full year underlying profit before tax to be slightly above the current range of market expectations. We expect capex for the 2017 year to be between £45 million and £50 million, below the previously guided range of £50 million to £60 million, mainly as a result of phasing in relation to the Warrington supply chain centre.

We will announce our Preliminary Results for the 2017 financial year on 8 March 2018.

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

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 31 December 2017, we had 1,192 stores across six markets, including 1,045 stores in the UK.