Domino's Pizza Group H2 2024 Earnings Report

Domino's Pizza Group EPS Results

• Actual EPS: GBX 20.40
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Domino's Pizza Group Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Domino's Pizza Group Announcement Details

• Quarter: H2 2024
• Date: 3/11/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, March 11, 2025
• Conference Call Time: 5:30AM ET

Domino’s Pizza is the UK’s leading pizza brand and a major player in the Republic of Ireland. We are part of the global Domino’s system, the biggest pizza delivery operator in the world. We hold the exclusive master franchise rights in the UK & Ireland under a long term agreement with Domino’s Pizza International Franchising Inc., the international arm of Domino’s Pizza Inc, which owns the Domino’s brand. Our core business is the UK & Ireland, where we have a clear number one market share. We operate a world-class supply chain, making fresh dough and acting as a scale and expert wholesaler of other food and non-food supplies to our franchisees. As the master franchisor, we are responsible for national campaigns and marketing activities to drive sales and build the brand. We develop and run the technology ordering platforms which support both the website and the app. The majority of our almost 1400-strong store estate is run by our franchisee partners, although we directly operate some corporate stores in the Republic of Ireland and Northern Ireland.

Domino's Pizza Group H2 2024 Earnings Call Transcript

Key Takeaways

• In 2024 DPG grew system orders 1.7%, like-for-like sales 0.7%, underlying EBITDA by 6.4% and EPS by 13.3%, while raising the full-year dividend 4.8% on strong free cash flow.
• The newly agreed five-year Profit Growth Framework aligns 40,000 franchisees on profit and expansion targets, underpinning plans to exceed 1,600 UK and Irish stores and drive stable, long-term growth.
• DPG increased its ownership of the Island of Ireland joint venture from 46% to 70% for £25.6m, leveraging recent supply-chain investments to capture significant white-space opportunity and double last year’s net store openings.
• Major tech and supply-chain investments are being deployed—ERP and e-commerce platforms near completion, automation projects are accelerating and platform costs halved—to enhance capacity, accuracy (99.97%) and efficiency.
• Digital and loyalty initiatives are advancing with 13m customers in the database, app orders growing and management now targeting stronger collection growth alongside delivery to meet consumer value demands.

Presentation

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Thanks for your attendance. I really appreciate it. As you know, my name is Andrew Rennie, CEO of DPG. Beside me is Richard Edward Jamieson, our CFO. I want to give you our results this morning and then look forward to Q and A.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

First of all, I want to say thank you. Thank you to all my team and all our franchise partners and all the team members. We're about 40,000 team members in DPG now, and all their hard work is what's provided these numbers, which I'm very, very proud of. Really privileged to be part of a company and a brand that's 40 years old this year in The UK. The brand is 65 globally, but 40 years old in this country.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

And I think the one thing I'd sort of word I'd pick out particularly in this crazy world that I mean is how resilient this brand continues to be and this company is in The UK of the hard work of many, many franchisees and their team members over decades. And my goal is that make sure that we've got a strong robust business that continues to deliver for another forty years at least. And we're thinking about that every single day. It's not just about the here and now, but about the long term success of this business. Okay.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

So what do we do? First of all, we really focus on delivery. Our franchise partners and our team members really focus on the metrics, which I'll talk about later on in the presentation, that really helped underpin value for our customers. Because at the end of the day, without that 71,000,000 customers that we served last year, what do we have? We have nothing.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

So we're always thinking about those customers, how do we make sure that we give better value every single day. And value isn't just representing price, it's representing extremely proud of and the quality of the service. And not many people can deliver 71,000,000 orders in sort of twenty four point five minute average delivery times. And we've got stores that are doing that on average in eighteen minutes. It's quite incredible.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

As you know, we agreed a new five year framework with our franchisees, no longer called the MOU. It's called the PGF, Profit Growth Framework. For very good reasons. It's focused on driving profits for franchisees and for our business through growth, customer growth and store growth. So we're really proud of that.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

And that creates stability and alignment with ourselves and our franchise partners, who are the backbone of this business. We've made really strong strategic progress with our corporate business in Ireland. One of our parameters we spoke about I spoke about back in 2023, which I'll recover later in the presentation, is about focusing on the core. We're making money out of selling pizzas to customers like our franchisees do. We see a lot of upside in Ireland, in the island Of Ireland and hence, what we'll talk about later on our new acquisition or the increased shareholding in the Victor ownership in Northern Ireland there.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

We've got great franchise partners in Ireland. And there's a lot more white space there than there is in The U. K. So we really think we can drive that organic growth and be a bigger part of that success. We continue to have a disciplined approach to buying another business, another brand.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

We had a really strong balance sheet. I'll talk more about that later on. And at the end of the day, our secret sauce, we like to call it, are our people. Our market position, which continues to grow, even in these tough conditions, our market share continues to grow quite significantly, particularly these last few months. And our franchise partners, they're the real differentiators that we have between, I think, many other brands.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

I think of it this way is that I'm steering the ship into some pretty strong headwinds this year and the ship is in really good shape. 2024, we put in really good shape with lots of customer growth and you sort of build now each quarter by quarter. We got a great crew, really strong robust ship and that's how we're going to navigate this next in 2025. I'll talk about that more soon. But first, I'll hand over to Edward to talk about the numbers. Thanks very much.

[Edward Jamieson, CFO & Director at Domino's Pizza Group]

Thank you, Andrew, and good morning, everybody. Our intense operational focus and our strategy is gaining traction. We're deploying capital effectively and we're seeing attractive growth across key metrics. We finished 2024 with a strong balance sheet, important in this uncertain environment. I'm now going to run you through the key takeaways from our 2024 financial results and update you on our early trading, outlook and guidance for the year ahead.

[Edward Jamieson, CFO & Director at Domino's Pizza Group]

So in 2024, we delivered growth in order count, in like for like sales and profits and the dividend. Total system orders grew 1.7, primarily driven by good performance in the delivery channel. Importantly, our like for like performance improved every quarter and was overall up 0.7% for the year. DPG's underlying EBITDA was up 6.4%, which flowed through to underlying earnings per share, which was up 13.3%, also benefiting from the lower share count. Consistent with our progressive dividend policy, we've again increased the full year dividend by 4.8%, And this is supported by our robust free cash flow, which, while down versus last year, was flat after adjusting for working capital fluctuations.

[Edward Jamieson, CFO & Director at Domino's Pizza Group]

Let me now go through some of the drivers of these numbers in more detail. So turning to the next slide. On Slide six, we've summarized the key data on system sales and order count. Starting on the left hand side, you can see that our system sales and total order count were primarily driven by the delivery channel. The chart on the right hand side shows how trading momentum accelerated throughout the year with delivery orders growing for three consecutive quarters, a meaningful improvement after ten consecutive quarters of declining volumes.

[Edward Jamieson, CFO & Director at Domino's Pizza Group]

Our collection order growth was still in growth for the overall year. You can see how our like for like sales improved every quarter and we finished the year well with Q4 like for like sales up 3% in what remains an uncertain environment. Andrew will cover the operational drivers of this improvement in more detail later in the presentation. Slide seven shows the year on year movements of system sales and DPG revenue. While system sales grew, DPG revenue was broadly flat, primarily driven by a decrease in our supply chain revenue.

[Edward Jamieson, CFO & Director at Domino's Pizza Group]

As I explained last year, food input prices fell in 2024. And in line with our model, the benefit of these lower prices was passed through to our franchise partners. As we'll see in a moment, this naturally had an impact on supply chain EBITDA as well. Corporate stores revenue was up, driven by the revenue from the acquisition of ShoreCal in April, offset by the loss of revenue following the disposal of our corporate stores in London completed in July. ShorCal has performed well since we acquired Control and in line with our expectations.

[Edward Jamieson, CFO & Director at Domino's Pizza Group]

And EBITDA margin as a percentage of system sales was up 30 basis points to 9.1%, largely driven by the supply chain margin. Let's now look at the components of underlying EBITDA. Before I do say, let me point out we've moved to a fully allocated IFRS 16 reporting approach, and so some of the comparables have changed a little. Overall, DPG EBITDA was up 6.4% to $143,400,000 with lower supply chain EBITDA more than offset by other factors, primarily growth in corporate store EBITDA and lower technology costs. Once again, our supply chain operation delivered an outstanding performance with accuracy and availability stats of 99.97 in the year.

[Edward Jamieson, CFO & Director at Domino's Pizza Group]

Pete Trundle and his brilliant team continue to deliver for our franchise partners and for our customers, and I'd like to thank all of them for their hard work and effort last year. We continue to drive efficiencies in the supply chain. But we could not entirely offset the profit impact of lower revenue resulting from food price deflation. As with revenue, corporate store growth reflects the SureCall acquisition and London store sale. As I've covered before, we've been investing substantially in the development of our technology platforms, in particular, a new ERP and e commerce system.

[Edward Jamieson, CFO & Director at Domino's Pizza Group]

With these programs largely complete, platform costs halved to $4,400,000 in FY twenty twenty four. Operationally, we've already rolled out our ERP system across half our supply chain centers and expect this will complete across the whole network by the end of H1. We expect to complete the full cutover to the new e commerce platform in early H2. So moving to the income statement. EPS is up 13.3% based on a 6.4% increase in EBITDA, an 8.4 growth in PBT and the benefit of the lower share count following the group's buyback activities.

[Edward Jamieson, CFO & Director at Domino's Pizza Group]

Looking at the line items. Depreciation and amortization was million lower due to lower amortization charges from legacy IT systems. Finance costs increased million driven by higher average levels of debt in the year, which I'll come to in a moment. And our effective tax rate has remained broadly stable at around 25.5%. Turning next to free cash flow, a strong feature of our capital light business and where, on an underlying basis, we again generated around million.

[Edward Jamieson, CFO & Director at Domino's Pizza Group]

The principal difference between FY 'twenty four cash generation and the prior year was working capital. As I outlined in the results in August, there was a million outflow in H1 and, as I guided, this mostly reversed in H2. Excluding the working capital swings, you can see that the group generated around GBP 100,000,000 in each year. Non underlying cash outflows in FY 'twenty four were the corporation tax payable on the profit on sale of the London corporate stores and advisory costs from ShoreCal. I'll now turn to how we deployed this cash generation about how we invest, recycle and return capital.

[Edward Jamieson, CFO & Director at Domino's Pizza Group]

We introduced the capital allocation framework in March 2021 and used it to make decisions on free cash flow deployment and our approach to leverage. We continue to invest in the core business to drive long term sustainable growth and to pay a progressive dividend to shareholders. We also continue to selectively invest in additional accretive growth opportunities, which we can partially fund through recycling capital. Finally, we assess if we have excess capital considering our investment opportunities and leverage. And if we have, we return this to shareholders.

[Edward Jamieson, CFO & Director at Domino's Pizza Group]

Since 2021, we've announced nearly 500,000,000 of shareholder returns. We've increased dividends again today, and we remain committed to returning excess capital in the future. We do all of this within our target leverage range of 1.5x to 2.5x. Let me now turn to how we deployed our capital in 2024. So as I outlined earlier, we generated £84,700,000 of free cash flow in the year.

[Edward Jamieson, CFO & Director at Domino's Pizza Group]

We're highly cash generative, and so we're able to both invest in the business and return to shareholders. The first priority is to invest in the core business. And to that end, we invested million in capital expenditure in the year, including the completion of work to expand our Irish supply chain center. Secondly, we we paid dividends of million reflecting our sustainable and progressive dividend policy, and we've grown dividends again. Combined with share buybacks executed in the year, we returned million to shareholders in 2024.

[Edward Jamieson, CFO & Director at Domino's Pizza Group]

Applying our disciplined approach to accretive investment in recycling capital, we spent million in the year. This comprised million in the SureCall acquisition, million in the DP Poland stake, partially offset by a cash inflow from the disposal of the London corporate store estate. The net effect was a $32,700,000 increase in net debt to $265,500,000 giving leverage of 1.93 times in the middle of the target range of 1.5 to 2.5 times, so a strong balance sheet position. Today, we've announced an additional accretive investment in our Northern Irish JV for £25,600,000 This is a combination of £7,200,000 of equity and £18,400,000 of debt and on a pro form a basis takes our leverage to around 2.1 times. This increases our shareholding in the JV from 46% to 70%, further enhancing our ability to drive growth in Ireland.

[Edward Jamieson, CFO & Director at Domino's Pizza Group]

And Andrew will cover this in more detail later. We've guided CapEx to be circa million in FY 2025 as we continue to invest more in our system to support sustainable growth. We see opportunities for further automation across our supply chain center, And we are accelerating projects across our existing centers to focus on this opportunity. When we announced the new profitability and growth framework with our franchise partners, we also announced that we plan to open a fifth U. K.

[Edward Jamieson, CFO & Director at Domino's Pizza Group]

Supply chain center. CapEx spend on this year is expected to be around million on the initial work and relates to increasing the distribution capacity of our network. We also plan to invest in the continued innovation of our app to drive frequency. And finally, there'll be some new store CapEx in SureCal as we unlock the growth opportunity. Moving to outlook and guidance.

[Edward Jamieson, CFO & Director at Domino's Pizza Group]

We made good strategic progress during 2024 with trading momentum accelerating as the year progressed. In the first ten weeks of the year, our growth has been positive with total system sales up 2.4%, total orders up 0.7% and like for like sales up 0.7% despite The U. K. Economic environment remaining uncertain. We expect FY 2025 underlying EBITDA to be in line with current market expectations, excluding the positive impact of the Victor investment.

[Edward Jamieson, CFO & Director at Domino's Pizza Group]

We expect Victor to contribute around million to underlying EBITDA this year. We'll be EPS neutral this year with earnings accretion next year. Our full technical guidance is laid out below. Thank you. And let me now pass you back to Andrew.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Thanks, Edward. These numbers here are the ones I'm particularly proud of. If we look at the year that was purely by focusing on operations, really relentless focus on what we do every day, how we deliver to our customers. When you see that the delivery times of sub twenty five minutes with more than 80% of our orders delivered on time, The app orders going up another couple of points. The ecosystem of our universe with our customers inside our database growing.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

And franchise EBITDA continue to grow even after a huge impost of the national leading wage last year was huge. And our franchisee still managed to get over the top of that, extremely proud of those numbers. If we go through to the next slide, the long term growth in core business, right? As I said before, we've been around for forty years, we want to be around for another forty years. We'll be crossing over 1,400 stores this year.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

We'll be exceeding those numbers. That's a huge milestone. There's not many brands that are more than 1,400 stores in The UK and Ireland. We continue to focus on these key four points: franchisee profitability, value for money for our customers, digital and convenience, and we'll talk more about those now. But they're consistent, they're the same focus.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

We're not changing strategy. It's the same strategy we've had now since I've been here. Value for money. If you look at these metrics here, this is part of the value equation, right? When people can consistently get their orders on time, that means that they're hot and they're fresh, they taste better, and they're more likely to come back to you compared to other competitors who may not be so consistent with their delivery times, etcetera.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

This is not easy, all right? These are best in class numbers globally, particularly when you're talking about the scale that we have. We work very hard for this. As I said before, we've got 40,000 dominoids, we call an army of dominoids around the country, who every day wake up and are passionate about making sure their customers get an incredible service. And from the outside, it probably looks easy.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

But when you think about 80% of our orders come in 20% of the time, right, you're talking about hundreds of orders over a two hour window quite often. In the rain, the snow, the hail, you name it, our guys just keep delivering and keep providing. It's one of our IPs, if you think about it, we get forty years of this inherent knowledge that's been built up. And we have people that are inside our business that have been there thirty plus years that have been doing it over and over again. So it really is part of our magic.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Moving on to the next slide. We don't forget that every day, we have to look after our customers. Without those customers, we don't have a business. So we're constantly focused about how do we make sure that our customers are getting better value for money. Last year, we're really focused on delivery service, and you saw massive momentum throughout the year.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

We're really proud of that, nearly 8% in order count growth in Q4. But this year, we're going to add the extra part of that lever, right? We've got two parts of the engine we can drive, delivery and collection. And this year, we're going to start soaking up the fires in the collection engine as well because consumers are seeking out more value and collection is a great value offering. Now for franchisees, it's got great margins.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

So it's actually wins for both side, both the franchisees and for our customers. The thing that we have that's a competitive advantage for our business is that with almost 1,400 stores, we have we're really close to our customers. So the proximity to them is the number one driver of a collection customer's decision process. So by having so many points of sale, we are closer to the customers to be able to drive this part of the business unlike others. And if you look at things like our four pound lunch, it still continues to drive particularly perception about value and the collection angle we're going to drive more and more this year, which been omnipresent, we're circa 35% collection orders, The U.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

S. Of 55%. So there's a massive delta there that we can pick up on and grow into, I believe. We move on to the next slide, digital acceleration. I think the key message here is one, first Phase one has worked really well.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

We're moving to Phase two to three main customers in our database. But what does this do for us? What it does is that loyalty widens that moat on our business, makes that even more tougher to penetrate our business because we have all these people inside our ecosystem. We've got 13,000,000 customers in our database. We can talk to them more frequently.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

We can reward them now. And having that knowledge allows us to drive incrementality in frequency. So that's going in a really good direction. So we're really proud of the team and the digital team and all the work they've done, the marketing team. It's really the knowledge and the data we have is quite amazing really when you think about it.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

So that's going in a really good direction. We'll continue to step that up this year. Next slide, convenience. As I said before, getting closer to our customers is really important, not only for delivery perspective, but also it's really important from a collection perspective. We're still there's still 15% of The UK and Ireland that's white space can't get a Domino's Pizza delivered there at the moment.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

So we still have all this growth to go into. The small territories continue to outperform. We have franchisees that opened in fact, one of our franchisees opened a store about three weeks ago, broke the national new store opening sales record, hadn't been broken in ten years in a tiny village about half the size of our traditional stores. It just goes to show the pent up demand of the brand in these small towns. So we can't wait to take the brand that these people have been waiting for, for forty years to their villages.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

We had 21 different franchise partners open those 54 stores last year, so we have a broad spectrum of our franchisees doing so. And it's a good balance between splitting stores, so carving out stores and getting close to the customers and giving better service and new territories. We've got a strong pipeline for 2025, like most years it's always more back ended because it takes a while to get the hopper filled up. But we feel pretty confident about that. And the ROIs of the stores are incredible, so that certainly drives it.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

This is all underpinned, of course, by that PGF we put into place that underpins that growth in that store count. If we come on to the next slide, we fully rolled out Uber Eats now. So we've got Uber Eats and Justine, who've been great partners, very incremental partners, very complementary to our business. Overall, it's a small but important part because it's the incrementality. So we continue to work with them in a very positive way, and I think they're pretty happy with the relationship they've got with us as well.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

So we'll continue to work with those partners and keep to leverage and maximize those relationships. If we go on to the next slide. Yes, all the hard work of the franchisees and all their team members provide these incredible market gains. If you look at across the last couple of years, we've opened over 115 stores where others have closed sort of similar amounts. That's not an accident, right?

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

That's through many, many years of hard work, of great service, of consistent service, consistent value. So we continue to grow market share. The last couple of months have been incredibly good market share gains for us as well. So in a market that's tough and up and down and all over the place, we're winning. And I think it sort of again speaks to the strength of the brand.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Next slide. So if we look at our business, what we're trying to do is build a larger, more cash generative business. As Edward said, we've basically got about $100,000,000 free cash flow. We want to continue to grow that. We continue to invest in the core.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

The Island Of Ireland strategy, we think is the right thing to do because we've got more growth we can help drive there. The PGF with the franchisees has created alignment with them and also stability for themselves and ourselves through the next five years and past and beyond. The focus on the core business, as I said, with ShoreCal and the corporate store disposals, we're doing what we said we would do. The small investment in Poland, we said we wanted to just invest there and wait and see. We think that there's good upside there, so we continue to be confident about that investment.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

And we continue to recycle capital and we'll continue to do so for shareholders benefits. Next slide. Again, same story. Long term sustainable growth underpinned by the PGF, we believe. This target of 1,600 is not a pipe dream and even 2,000, I don't think is a pipe dream.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

I will be here to come back and cut the ribbon on 2,000 stores. I'm determined to do that. It will happen. I really believe that because the brand is just so strong and so loved in this country, loved by not only our team, but loved by our customers. It's quite incredible the amount of times we get pulled up in shops.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

And I get stories from people of my age talking about how their Domino's converts and now their teenage children sort of beat them up about ordering Domino's as well. So it's generational, it's quite incredible. But we've got a clear plan to keep delivering on earnings, right? It's not for us, it's at the end of the day, it's still about EPS, it's still about EBITDA, right, delivering those two key metrics. And I know I'm probably getting some people who beat me up today and say, well, why aren't you announcing more buybacks?

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

That's because we have a focus on driving the EBITDA with some growth opportunities. And as Edward said, if those growth opportunities don't come to fruition and there's a few on the pipeline that we're looking at right now, we will do more buybacks like we did last year. But we're pretty confident we've got some things in the pipeline that excite us greatly. Moving on to the next slide. The PGF, we've probably said enough about it already.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Just for me, it's most important. And for the franchisees that we've put it to bed, we can focus about the core business now. It's behind us. It helps drive order count growth. It's more investment into digital.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

It's investment into smaller towns. They're all things that matter to us for our shareholders, they matter to our customers, they matter to our franchisees. So we think that it's a win win win for all stakeholders. And it's about driving profitability for everybody involved, not just one party. Moving ahead to the next slide.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

As Edward spoke about, we had the acquisition. We're already 46% shareholder of that business, so we know that business very well. We took a bigger stake there. Why? Because we believe in Ireland, in the whole of the island of Ireland.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

We believe the growth there, we think we can help grow faster there. We've got a great franchisee up there, Mike, who's leading the business. We'll continue to lead it, but we'll have we'll play a bigger part in the direction of that business, which we're excited about. It also allows us to leverage infrastructure that we've already invested in Ireland. As Edward said, we've invested in the commissary over there and upgraded that.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

We've already got the Sure Cow business. So we're really, really confident and really happy about that investment. And again, it's an investment in the courts and the investment of the business we know and understand very, very well. Again, rolling over the next page, Shawcor continues to do fantastic. We're really happy we really like and love what we see in Ireland and the upside there.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

So we will continue to double down on that. Just an interesting point is that the previous record of organic openings in the island of Ireland previous to last year was eight stores. Last year, we did 16. We doubled the organic growth in Ireland last year. So long strong leadership there with our team in Shorecowl, with Stoffel helping to lead that with Mike up in the North.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

So they're business partners of ours and they continue to be really great business partners and lean in. So we're really, really happy about that. Moving on to the next slide. Not too many to go. Guardrails, really good guardrails in place.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

They've always got a really clear mandate about what we can and what we can't do. We feel like we're building a big business. We want to add to that. I think one of the things that I've misunderstood is about the infrastructure and Edward alluded to before about Pete Tranley and the team and our supply chain is incredibly high quality, world class supply chain. And we think and not only think we know, particularly with all this automation, we're speeding up, accelerating that automation, creates more capacity.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

So therefore, that capacity, we can fill that capacity up and not only with more Domino's stores, but with other things that really complement what we're doing. So you got to have scalability, you got to have synergies, you got to be profitable. So there are things that we're looking at very, very closely. We've analyzed a lot of things and we'll only take the things that really we think will have a big benefit to our business and for our shareholders. And I want to reiterate what Edward said is that our current pipeline of opportunities we're looking at, we could fund all of those with our existing balance sheet capacity, right?

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

We don't need to go out and raise equity like some people might assume. Next slide. So this is a slide I showed back in December 2023. I want to sort of give myself a bit of a scorecard here, how we track into what we said we would do. We said we would grow corporate stores and joint ventures, etcetera.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

We've done that with SureCare. We've done that we've recycled the capital out of London and put that into Ireland with our Victory investment. We continue to evaluate in a very disciplined way that second brand opportunity. And we made a small investment into the international markets without doing something stupid and wasting capital. We think it's been well deployed and we think that it's going to pay off in the near term.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

So we feel as though that we're doing what we said we would do for the market, which is really important for us. And with that, we get down to the last two slides, which is sustainability, very important to us. We published our first ever sustainability report in 2024. Nutritionally, we've been focused on this for a couple of years now. Things like we launched the Loaded Veg, 160 calories, going really well.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

We've got pizzas at 190, two hundred calories. We've got our Cheeky Little Pizzas at 400 calories. We're giving customers choice because of those in the family who do want a lighter meal, which is fantastic. So we're able to provide that. The good thing about pizza is you can make it as healthy or as indulgent as you want.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

We're also focused on reducing carbon, so we put the initiatives in place there and we've signed up to the free commitments on those. And we're also making sure that we have better products in place for packaging that are more recyclable, etcetera. So they're very important to us and very important to our team members as well. So we are on the train for that. And the last one, disciplined execution delivers growth.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

So we continue to make progress and we have strong momentum. This is a dynamic business that we can flex. We're going to flex more into collection this year, not taking our buy off delivery. In fact, we're going to double down on delivery. We're going to go even harder now that we've got the momentum.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

We're going to drive it harder. But consumers are going are looking for value, which we understand, right? It's a tough market out there. Delivery a collection really plays to that. And having been in a few markets and been around for over thirty years, I've seen this before, I can assure you that it really helps to drive growth.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

I think the big thing for me is this business is resilient, right? It continues to deliver, it continues to the thing that amazes me is that we had a net debt went from $1,800,000,000 to $1,900,000,000 right across the last twelve months. And inside of that, we had acquisitions, we had buybacks and we had dividends. And we still only moved 1.1. So still a sub two balance sheet, really strong.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

And I think it's sensible in times like this. Franchisees are aligned with our new PGF, so we've got stability there. We're focused on investing in the core like we've done with ShawCal and now Victor. So we're really focused on the core. We continue to recycle capital like we did with the London stores, but with some more capital, we will recycle that and continue to reinvest that in ways that will drive more growth.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

And at the end of the day, our strength is our people and our franchise partners in this environment, people that have been around for decades, have been through the tough times, and this brand continues to sail through those waters with a really strong crew and a strong ship. So with that, I will open the floor up to questions. Thank you very much. Over to Ross.

[Analyst]

Thanks. Ross from RBC. This is loud, isn't it? First of all, on the loyalty scheme, could you give us any indications on what you've observed from customers, customer behavior? Number two, the M and A pipeline now funded from the balance sheet.

[Analyst]

What's changed in the plan there? And how have your aspirations shifted in terms of a second brand? And then finally, new stores in excess of 50 for this year, that's obviously including an acceleration at ShoreCal. Victor, could you talk a little bit to the appetite in the rest of the group, please? Thank you.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Yes, sure. So we'll talk about the last point first. So look, there's appetite there. Finding stores is not easy in this market for planning, etcetera, can take a couple of years sometimes. So you do have to think a couple of years out with your pipeline.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

The plan is to do in excess of 50, maybe it's a lot more than that, who knows, but planning is a really a big variable these days. But we feel confident to say $50,000,000 which will be the third year in a row above $50,000,000 which I think is pretty incredible. There's not too many brands I think that are outgrowing. That may be one that I know of. So that's the first one.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Your other point was around the loyalty. Look, we're seeing some really good numbers in terms of our lower users, smaller users, if you like, less frequent users who are really engaging with the offers we're putting in. We've kept it really simple. The team kept the amount of data we have is quite incredible. So that helps us make decisions for the future of it.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

But so far with what we've launched, we're really happy with. We're just dialing up slowly. We don't want to do a hole as follows because as you can trip over yourself. But certainly, what we've seen so far is that there's an incrementality, particularly those lower to medium users, which is great. Do I miss any other questions, Ross, about About

[Analyst]

M and A.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

M and A. So look, we haven't changed our strategy in that. The M and A is still very clear. The board is still very clear on our capital framework. We want to get a brand that fits with us, so it'll be food and beverage that can be franchised that we can apply all the synergies and leverage that we have through our commerce areas, our digital, our data on consumers.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

I mean, we're literally with 30,000,000 customer base, we're literally in every second household. We have incredible market share with the Domino's brand. We won't be taking our focus of that, that's the golden goose. But we're thinking about the medium to long term here. We're thinking about a brand that can become 500, eight hundred, one thousand stores in the future.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

So we're trading very carefully. We've got a few things we're looking at the moment quite seriously that we think could fit that basket, but we'll jump through all the hoops to make sure they tick the boxes. So we're not going to do anything silly. And we feel pretty confident we'll make the right choice.

[Analyst]

Thanks.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Thank you. Douglas? Over here.

[Douglas Jack, Equity Analyst at Peel Hunt]

Yes. Douglas Jack at Peel Hunt. I've got three questions, please.

[Douglas Jack, Equity Analyst at Peel Hunt]

The first one is for Edward. The technology platform costs in 2024, there are £4,400,000 charged to OpEx. What's the equivalent do you think would be in 2025, given all the things that are going on? How have your value for money scores moved in the year? And last question was about the average number of households per store.

[Douglas Jack, Equity Analyst at Peel Hunt]

Where are you at now? And how does that compare to The U. S. And Australia?

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Good questions. Edward, do you want to handle the first one?

[Edward Jamieson, CFO & Director at Domino's Pizza Group]

Yes. If I handle the first one. So as I said, sort of so we completed the sort of the e commerce build and so we're completing the cut over of that. The ERP, we expect to deploy by the end of H1 in full. So there'll be very limited cost this year.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

On your other two questions, Douglas, so first of all, the consumer research tells us that consumers think we're the best value that they have seen since 2020 from Domino's. So we're sort of going back in time to create better value, which is fantastic. And that it comes from a combination of great value offerings that our stores are offering £4 lunch, $7.99 collection perfection, etcetera, but also the delivery service. Because value really represented by the whole package, right, as I've spoken about before, it won't bore you again, but the whole value equation is more than just the price because you can get a pretty poor product at a cheap price and it's late and it's cold and it's worth nothing in effect, right? So customers are telling us with the research we get, they're very happy with that.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

And the market gains that we're getting, big steps forward shows that that's also playing through. And then your other question was around house counts. So yes, house counts are coming down, but there's still around 20,000 addresses per store at the moment. If you look at places like Netherlands, New Zealand, Australia, U. S, their U.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

S. Numbers, I don't know specifically off the top of my head, I don't want to quote the wrong number. The others I know, and they're closest to sort of 10,000, 11 thousand, 12 thousand addresses, so almost half of what we are. So if you did the exact math, it means that we should be probably 2,800 stores. We're focused on 1,600 or 1,400 this year and then 2,000, so we don't want to get ahead of ourselves.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Maybe when we get to 2,000, we'll really have to reevaluate that. But at the moment, we have a clear path to a couple of thousand stores quite comfortably. Thank you. We're yes, over the front here to Richard first.

[Richard Stuber, Director at Deutsche Numis]

Richard Stuber from Deutsche Numis. Three questions, please. The first is on franchise profitability. I know that's a core pillar of yours. It was up 7% this year given sort of higher labor costs again and potentially sort of food costs and fuel costs.

[Richard Stuber, Director at Deutsche Numis]

Do you expect franchisee profitability to continue to grow again this year? Second question is on current trading. Life Flight's zero point seven percent. I think another sort of QSR company said that January was particularly weak, February was a lot better. Could you give any more granularity around January versus February in current trading?

[Richard Stuber, Director at Deutsche Numis]

And the third question is on the loyalty program. I know you've done a few trials going well, but how have you actually have you tweaked the generosity that you've given to clients, to customers? Anything around what's changing and therefore, I guess, why it takes so long for you to roll out in full next year?

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Sure. Good questions, Richard. So first of all, franchisee profitability is extremely important to us because they are the backbone of this business for growth. So look, we've got a plan in place where we think we can get back to the same sort of number. If we can get back to the same sort of number with all the imports that are coming towards us, we us and ourselves, the franchisees would be grateful for that.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Would we like more? Yes. Will we go after more? Yes. But getting back to that current number would be great outcome.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

We have a plan. We think we can get there. We don't know what the world holds in front of us. It changes every day at the moment, but we feel pretty comfortable we've got a plan to get there, that's for sure. Your other question was around loyalty.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Have we tweaked it? We've tweaked a little bit. I would say that we've got the offering sort of where we want it to be at the moment. It seems to be resonating with customers, but we'll continue to evaluate that, particularly if we go into this bigger group, Rob, we've gone from 630,000 to sort of 3,000,000 at the moment. That's where we get a lot more data there that will give us a lot more indication of what we do the year after.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

But certainly from what we've seen incrementality at the moment, we're very happy with it, particularly the customers that we're targeting, so very positive. And then your other question was around January, February. So look, I think the reality is depending what you're rolling over has something to do with it. And it's also depending on where you're spending your marketing. January, February typically are some of our slowest months of the year.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

So we're also saving our gunpowder for later in the year when we think strategically they'll have bigger bang for our buck. So could we have driven higher sales in those months by throwing more marketing at it? Definitely, without a doubt. But we decided not to do that like last year because we want to use it for certain parts of the year that we have strategic sort of initiatives. So it would be wrong for me to comment which was good and which was bad.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

One was okay and one was better, you could say that. But it's too lumpy to sort of break it out and explain why. So but we from a strategy point of view, budgeting point of view, it's sort of as we expected. Over to UBS team.

[Analyst]

Hi from UBS. So I have a couple of questions, please. In terms of the like for like shape for the rest of the year, where do you see the volume and price dynamic? And that's the first question.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Yes. That's the first question. Yes. So we definitely see both. We had a lot of volume last year.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

As you know, we specifically went after volume. We actually took ticket down last year. We think because we took ticket down and we focused on growth in order count growth last year, we had the right the ability to take both this year. So we're very focused on both. Collection, a big driver of volume.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

And delivery, we had to get volume as well, but we also have the ability, we think, to take a bit of price as well later in the year. So that's our key focus.

[Analyst]

Have you taken pricing through the first two months?

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

No, not this stage, no.

[Analyst]

No? Okay. Second question, just to follow-up on the point about franchise profitability. When you say you want to get to similar sort of numbers, are you talking about absolute EBITDA or are you talking about margins?

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Absolute.

[Analyst]

Absolute. And then lastly on the M and A side, so you've got 2.1 times net EBITDA after the Extra acquisition in Ireland. So that leaves you based on just quick calculation, $80,000,000 80 million dollars 90 million dollars if you're guiding for $270,000,000 net debt by end of the year. Is that the sort of numbers you're looking for in terms of growth opportunities that you're willing to spend?

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Yes. Well, I don't want to speculate on what we will or won't spend. What I'll say is that we with the balance sheet we have and our cash flow, and we have the ability to recycle some capital as well is that we have some ability to buy some things out there at the moment that aren't super expensive, to be fair, in the scheme of things. So yes, we think it's pretty realistic and disciplined to go about it that way. So we're not expecting to go anything crazy.

[Analyst]

Thank you. And sorry, lastly, comments on activity, competitive activity on loyalty. Papa John just revamped their loyalty scheme to a lot more competitive. Do you think that affects anything on your side?

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

No. I don't look at competitors. What I've worked out thirty years ago was that I have more to lose by not focusing on what we do than we focus on the competitors. So we focus every day about what we can do better. And I can't control what competitors do, but I can focus I can control what we do.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

So that's what we've done, it's been working and that's why market shares continues to grow. Because the other thing to factor into is that when you look at our store count, it's not only is it sort of three, four times the size, if you look at it in terms of sales, it's more than that again, all right, because our average unit sales are over double and triple in some cases. So the market share we have is phenomenal. And more importantly, the distribution we have is huge, that proximity to customers. That's where our big advantage is.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

We have a structural difference between a lot of our competitors. Thank you. Thanks, Hai. Straight behind you, Sharon. Thank you.

[Katie Cousins, Equity Research Analyst at Shore Capital]

Katie Cousins from Shaw Capital.

[Katie Cousins, Equity Research Analyst at Shore Capital]

Just a couple of follow on questions actually from what's already been asked. So in the year to date numbers, the price is pretty low, Well, implied price compared to what some of your peers are saying. So how much is promotional activity wrapped up in that? Also, the weather impact on the year to date numbers, if there's been any there. And then also just on app numbers and order frequencies, how does that compare to the wider group?

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Yes. I would say that our promotional activity is the same as it was this time last year. It hasn't really changed. We've always got promotional activity going. I would say that whether what I've learned in this country, the weather is either shit or really shit.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

So excuse my French. Look, you have to take swings around about it. So sometimes the weather is in your favor, sometimes not. Not. The good thing is when you've got a collection and delivery business, you can sort of you play to both.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

So I wouldn't say the weather has had a huge impact on us. It tends to be controlled by what we do. When we do really good promotions, when we do really good give really good service, when we're really on our game, we get better results. That's the reality. And when we deploy our capital in marketing, etcetera, we can get an even bigger jump, right?

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

But we have to be quite strategic about where we spend that and when we spend that. So as I said before, we're spending that in the right places this year because we think there's a couple of inflection points throughout the year where it's more important to invest than others. And what was the other question of

[Katie Cousins, Equity Research Analyst at Shore Capital]

Just on frequency per customer for app versus LTV?

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Yes. So on app, it's better on app. There's no doubt about that as it is with loyalty as well. And that's the other big advantage about loyalty is it's through app only. So it helps enhance those numbers.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

But at the moment, we're not seeing any massive changes in frequency. Again, we can control that to a certain degree, but I haven't seen any massive changes at this stage. There's no doubt the consumer is looking for value. And thankfully, we are a really good value offering, right? And collection can really play into that issue more so than it has in the past.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

So we think we have that extra engine to drive that.

[Katie Cousins, Equity Research Analyst at Shore Capital]

So it can still assume around about once every 12 at once a quarter?

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Yes, correct. Yes. Thanks very much.

[Anubhav Malhotra, Equity Research Analyst at Panmure Liberum]

Hi, guys. It's Anupam Malhotra from Panmiolibrium. A couple of questions from me, please. Firstly, on the supply chain automation investment, what sort of returns are you expecting? Maybe if you could guide us in terms of payback period on that million you're investing there?

[Anubhav Malhotra, Equity Research Analyst at Panmure Liberum]

And then maybe on the stores in Ireland, what do you see the potential number of stores in Ireland specifically? I know you have given a target for the group as a whole, but maybe what's planned for Ireland? And in the first couple of months of this year, the order counts that you have the like for like growth that you have delivered 0.7%, does that imply your volumes are probably negative in the first two months or not really?

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Yes. So the first one is no, I'd say volumes aren't negative. No, it's because we're actually ticket's down a little bit, so it's actually opposite. Ireland, I won't give you a specific number because the reality is with planning, it can vary so much. I I would just say that as we showed with last year, we doubled the previous record with organic openings, and we'd like to do that again.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Not that I can say double, but if I can hit those sort of numbers, then I'd be really happy. But it's never that easy, right? It's availability of sites. And then your other question was around

[Anubhav Malhotra, Equity Research Analyst at Panmure Liberum]

Supply chain.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

Supply chain, yes. So automation, so look, really happy the automation is now underway. Look, the ROI, we don't break them out specifically, but they're anywhere because every each piece has a different ROI, right, depending on what part of automation you're doing. But they're all generally between three and five times, right? So they're pretty, pretty accretive.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

So we're pretty excited by that, hence why we're also accelerating that rollout. So it's something that we're probably going to to naturally do over four or five years. We're going to do over two or three years. So we're quite happy with that. And I think there's other call out is that last year, we spent $18,500,000 on CapEx, quite light, right?

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

And we spent a bit more this year, but we're going to get automation gains from that. And on that $18,500,000 we upgraded one of their commissaries in Ireland as well. So I think those metrics are pretty positive.

[Anubhav Malhotra, Equity Research Analyst at Panmure Liberum]

Thank you.

[Andrew Rennie, Director & CEO at Domino's Pizza Group]

You're welcome.

Participants

Executives

• Andrew Rennie, Director & CEO
• Edward Jamieson, CFO & Director

Analysts

• Analyst
• Douglas Jack, Equity Analyst at Peel Hunt
• Richard Stuber, Director at Deutsche Numis
• Katie Cousins, Equity Research Analyst at Shore Capital
• Anubhav Malhotra, Equity Research Analyst at Panmure Liberum