DP Poland : Interim Results for the half year to 30 June 2018

Written by dppolandAdmin on 18th September 2018. Posted in Regulatory News

Continued expansion with a 38% increase in System Sales, 61% increase in corporate store EBITDA and a 39% increase in commissary gross profit.

Financial highlights:

• 38% increase in System Sales* to 37m PLN H1 2018 (27m H1 2017)
• 15% like-for-like** growth in System Sales H1 2018 on H1 2017, adjusting for delivery area splits***
• 61% increase in corporate store EBITDA
• 39% increase in commissary gross profit†
• Group EBITDA†† losses widen, impacted as expected by investment in commissary and store operations

Operational highlights:

• 77% of delivery sales ordered online H1 2018 (73% H1 2017)
• 5 new stores opened in H1 2018, 1 further opened since the period end
• 60 stores open to-date, across 27 towns and cities
• 8 further leases already signed
• Latest like-for-like System Sales (PLN): July +6% and August +1%, adjusting for delivery area splits, impacted by hot weather and very high comparatives
• July and August 2017

Peter Shaw, Chief Executive of DP Poland said:

'DP Poland delivered continued expansion and strong growth in System Sales and profit across both corporate stores and commissary during the first half of the year. Pleasingly, this was achieved despite unseasonably hot weather impacting sales expectations as previously reported.

We have expanded the store estate by 11% so far this year and anticipate up to 20% expansion for the year as a whole. The store roll-out is underpinned by our expanded commissary capacity, logistics capabilities and area management, providing a strong platform for the Group's long-term growth plans. We remain convinced by the longer-term growth trajectory of both sales and profit performance, as more stores are opened and as sales continue to grow across the high proportion of currently immature stores.

The Polish food delivery sector continues to grow impressively††† and we are confident that, underpinned by our well-invested infrastructure and world-renowned service and products, Domino's Pizza in Poland will continue to outperform this growth. The Polish economy's strong fundamentals and the continued expansion of our market supports the growing opportunity for the highly successful and competitively robust Domino's proposition in Poland.'

18 September 2018

• * System Sales - total retail sales including sales from corporate and sub-franchised stores.
• ** Like-for-like growth in PLN, matching trading periods for the same stores between 1 January and 30 June 2017 and 1 January and 30 June 2018
• *** When a store's delivery area is split, by opening a second store in its original delivery area, a significant portion of the original store's customer database is allocated to the new store, resulting in the original store losing sales. Calculating pre-split like-for-likes allows us to see sales growth by matched delivery areas, irrespective of the opening of new stores. Pre-split like-for-likes are a standard measure adopted by many major Domino's Pizza master franchisees. See note under Finance Director's Review.
• † Sales minus variable costs
• †† Sales minus variable costs
• ††† Source: Euromonitor 2018
• ‡ Non-like-for-like stores that are less than 12 months old, with no matching trading periods year on year.
• ‡‡ Exchange rate average for H1 2018 £1: 4.7988
• ‡‡‡ Exchange rate average for H1 2017 £1: 4.9625