Domino's Pizza Group H1 2025 Earnings Report

Domino's Pizza Group EPS Results

• Actual EPS: GBX 8.40
• 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: H1 2025
• Date: 8/5/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, August 5, 2025
• Conference Call Time: 4:30AM 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 H1 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: In H1 Domino’s delivered record market share gains (up 560 bps) and improved average delivery times, underscoring strong operational resilience despite a tough market.
• Negative Sentiment: Underlying EBITDA fell 7.4%, EPS dropped 14.3%, like-for-like sales were down 0.1%, and management reduced full-year guidance to £130 m–£140 m.
• Positive Sentiment: The group generated £25.7 m free cash flow, lifted its interim dividend by 2.9% and signalled plans to resume share buybacks by year-end, reflecting confidence in its cash-generative model.
• Neutral Sentiment: CapEx remains focused on supply chain automation (new robotics in Warrington and Avonmouth), alongside the rollout of a loyalty programme (c. 10% transaction incrementality) and a cautious new-store pipeline.

Presentation

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

Good morning, everybody. I'm Andrew Reni, CEO of Domino's Pizza Group. I've got Edward Jemison here with me and Will McLaren, our CFO and Head of Thank you for joining us for our half year results here 2025. We appreciate everyone's time. So with that, we'll get started.

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

Let's go first page, Will. I'm going to give an overview, just a brief overview of the half, Pass on Edward to give you a bit more detail on the financial bits and pieces. Then I'll dive into the strategy and where we're at. And then we'll open for Q and A, if that's okay. Thanks very much, Will.

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

Look, I think the most important thing is that everyone's seen the numbers. It's a tough environment, right? We're not going to sugarcoat. It's tough out there. But in this tough environment, yes, we're so happy to be part of this brand that's been around for forty years.

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

It's so resilient. The numbers we continue to punch out, the cash flow, we're getting stronger. The strong are getting stronger. And you saw our market share gains. I've never seen a five sixty point market share gain in my thirty years history.

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

It's very rare. We are taking serious gains. Our delivery times continue to get better, which is always a risk in times when costs are forced upon you that franchisees might pull back on investing into customer service. That hasn't happened. In fact, our franchisees have doubled down and made sure that our customers are getting better value than ever, which is represented by our service and our delivery times and our quality of our products.

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

I'm so proud of those numbers. Really proud of our automation team. Pete and our team delivering the robotics that we've talked about for some time now. They're actually in play and almost complete in their first two commissaries, and they're going to deliver us more efficiencies for rolling into 2026. This environment is impacting us, yes Impacting our franchise partners, yes, and impacting our customers.

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

I think the uncertainty, particularly that's been messaged around the Autumn Statement has sort of put people back on the heels a little bit since April, right? We had a terrific first four months. Momentum was building. We're feeling quite positive. The last couple of months have really sort of gone backwards, and we think a lot of it's to do with the costs that have been imposed with National Insurance, etcetera, but also this uncertainty of what's coming before us.

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

So people are sort of quite anxious about that, not only our franchisees, but also our customers. We're not anticipating any improvement just because of this uncertainty. People are just waiting to see at this stage. That's why we've been quite prudent with our numbers. We continue to assess our earnings, but we're still very positive about things like our second brand.

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

However, we have flagged, to be fair to shareholders, because of the cash flow nature of our business, that we are prepared to start buybacks again, which we'll look at that at the end of this year. We haven't got hold of that second round by that stage. Does that mean we're moving away from that strategy? No. It just means that the cash flow buildup by then will allow us with the things that we're looking at.

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

We have the balance sheet to do that. Debt is still a very healthy position. Financing is in a very healthy position. And we don't need to raise equity, which we've talked before. So there's no dilution.

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

And we have confidence in our long term strategy. It hasn't changed, right? Our ambition of 2,000 stores is still there. Okay, we're going to open a few less stores this year. But when you actually model that out, it's an extra two to four stores a year sort of thing.

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

So we're not too concerned about that. And the confidence we want to illustrate that we have confidence in where we're going is that we've lifted our dividend again. So we have complete confidence where we're going in tough times, the tough get on with business and benefit from that. So we're not immune from what's going on, but we certainly are in best place to take advantage of it. So very proud of that.

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

With that, I'd like to pass over to Edward, our CFO, to give a bit more detail, and I'll come back later and speak more about the strategy. Thank you.

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

Thank you, Andrew, and good morning, everybody. I'm now going to run you through the key takeaways from our half year 2025 results and update you on our trading outlook and guidance. So look, as we told you this morning, we saw a positive performance across the first four months, but we've been affected by the weaker consumer environment since May. So what does that mean for h one? Total orders were flat in h one at 35,100,000.0 with like for like sales down 0.1.

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

I'll walk you through the shape of trading this half shortly. Total system sales were up 1.3% with DPG revenue also up a similar amount. Underlying EBITDA was down 7.4% with lower volumes in our supply chain a key driver. Higher depreciation and interest costs results in an under first half underlying earnings per share down 14.3%. We continue to generate good cash flow and consistent with our progressive dividend policy and confidence in the strength of our model, we've increased the half year dividend by 2.9.

[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. Starting on the left hand side, you can see that system sales grew 1.3% with growth in both the delivery and the collection channels. Looking at orders, delivery was down 0.6% in the first half with the first quarter growth of 1.3% more than offset by a 2.6% decline in the second quarter. The success of our first ever dedicated national advertising campaign, highlighting the value in the channel, led to growth in the second quarter, and overall collection orders were up 1% in the first half.

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

The positive performance that we saw across the first four months of the year did not continue into May and June, and that resulted in the Q1 positive like for like sales reversing in Q2, which meant that overall, first half like for like sales were down 0.1%. I've covered system sales already, so I'll now move on to DPG revenue, which was up 1.4%. Firstly, our supply chain revenue was down 3.4%, and this was primarily driven by lower volumes in the supply chain. Whilst total orders were flat in the period, customers were putting fewer orders in that fewer items in their basket, and so volumes were lower in the supply chain. The other main driver of our revenue performance was corporate store revenue.

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

This increased 45.8% as a result of a full six months of ownership of ShoreCal compared to less than three months in the prior half year. We also benefited from revenue from Victor, our Northern Ireland JV, which we acquired majority control of in March. Finally, as a reminder, we sold the London corporate store estate in 2024, so there's no contribution this year. Turning to the flow of our revenue performance to underlying EBITDA. Overall, DPG EBITDA was down 7.4% to GBP 63,900,000.0, primarily driven by lower supply chain EBITDA.

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

As I've outlined, there were lower volumes through the supply chain, which flows through to lower supply chain EBITDA. Net overheads, property and incentives were up 4,300,000.0. Around half was driven by one offs. The remainder was driven by higher employment costs and investment in people, particularly in technology and cyber. And look, because of the one offs, we expect a more limited increase in H2.

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

We've been investing substantially in the development of our technology platforms, in particular, a new ERP and e commerce system. The ERP system is now complete and has been successfully rolled out across all our supply chain centers. As a result, the technology platform costs fell from GBP 3,500,000.0 in the prior half year to GBP 1,500,000.0 in the first half of this year. Depreciation and amortization was GBP 1,900,000.0 higher than the first half of last year, driven by an increase in our store estate, the new e commerce platform and investments in our delivery fleet. Our net finance costs increased GBP 600,000.0, driven by higher average level of debt.

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

Tax was GBP 1,900,000.0 lower due to a one off charge in the first half of last year. The resulting impact of these movements was a 14.7% reduction in profit after tax to GBP 33,000,000. Underlying earnings per share fell slightly less as a result of share buybacks undertaken in the prior year. Turning next to free cash flow, a strong feature of our capital light business and we remain highly cash generative. We generated £25,700,000 free cash flow in the first half of this year despite lower underlying EBITDA.

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

We had a working capital outflow of £12,100,000 in the first half, which was largely a timing issue. The shape of our working capital profile is consistent with prior years, and we expect the first half outflow to largely reverse in the second half of the year. Turning to how we deploy this cash generation and about how we invest, recycle and return capital. We introduced the capital allocation framework in March 2021 and we use it to make decisions on free cash flow deployment and our approach to leverage. There's no change to our framework, but I've shown this in a more detailed slide.

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

Our primary sources of cash are the free cash flow generated by the business as well as capital recycled, such as the £33,000,000 cash received last year from the sale of our London corporate store estate. We continue to invest in the core business to drive long term sustainable growth with rigorous internal CapEx hurdles. There's no change to our 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.

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

And if we have, we return this to shareholders. Since 2021, we've announced over GBP 500,000,000 of shareholder returns. We've increased dividends again today. We remain committed to returning excess capital in the future. We do all this within our target leverage range of 1.5 to 2.5 times.

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

So as I outlined earlier, we generated £25,700,000 of free cash flow in the year. The first priority is to invest in the core business. And to that end, we invested £8,500,000 in capital expenditure in the half year, including in supply chain automation and digital investment. Secondly, we paid dividends of £29,400,000 reflecting our sustainable and progressive dividend policy, and we've grown the interim dividend again, reflecting confidence in our long term opportunity. Applying our disciplined approach to accretive investment and recycling capital, we spent £25,500,000 in March, increasing our stake in the Northern Ireland JV, Victor, from 46% to 70%.

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

The net effect was a £41,100,000 increase in net debt to £306,600,000 giving leverage of 2.32x, within our target range of 1.5x to 2.5x, and we expect net debt to be lower at the year end. On this slide, I've outlined the guardrails, which the Board applies for a second brand as well as the returns, which we use to assess potential opportunities. Many of you will be familiar with the guardrails on the left hand side, which we first outlined in December 2023. On the right hand side, I've laid out the returns assessment which the Board undertakes. We apply strict internal hurdle rates when we assess any project.

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

And importantly, as Andrew outlined in his initial presentation back in December 2023, there must be EPS accretion from a potential acquisition. We carefully evaluate the risk adjusted premium relative to our weighted average cost of capital as well as run calculations as to whether capital will be better deployed in buying back shares. Aligned to the guardrails, which we've clearly laid out, there must be clear synergies across our assets, particularly across our national supply chain and procurement capability. We would not issue equity for any of the opportunities on the current consideration. And while a second brand remains a core part of the strategy, no acquisition is announced by the 2025.

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

The Board expects to resume share buybacks. We're now guiding for CapEx to be around GBP 22,000,000 for this year, slightly lower than the around GBP 25,000,000 figure we guided earlier this year. We see opportunities for further automation across our supply chain, and we're accelerating projects across our existing centers to focus on this opportunity. Andrew will go into this in more detail shortly. When we announced the new profitability and growth framework with our franchise partners, we also announced that we plan to open a fifth U.

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

K. Supply chain center in Avonmouth, where we currently operate a cross stock facility. CapEx spend this year on this is expected to be around GBP 6,000,000 on the initial work in Avonmouth. This spend relates to bringing the distribution capability, which is currently outsourced in house. We also plan to invest in the continued innovation of our app to drive frequency.

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

Finally, we expect some new store CapEx in Shore Cal in the second half as we unlock the growth opportunity. So moving to outlook and guidance. As I've said, we saw positive performance across the first four months, but we've been affected by the weaker consumer environment since May. Although we've seen sales improve somewhat towards the July post the Men's Euro's comparative period, we've now seen enough to conclude that the tougher consumer environment means that we should revise our range to 130,000,000 to £140,000,000 despite our increased market share and operational progress so far this year, which Andrew will cover in his presentation. Thank you, and let me now pass you back to Andrew.

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

Thanks, Edward. Okay. Into the strategy. So if we look at the numbers, it's pretty clear that the market is in a tough place, right? There's no new news there.

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

Everything's down. UK takeaway market's down, the pizza market's down, but we're up in both categories. So in a tougher market, the stronger getting stronger, there's no doubt about it, and we are taking market share. So I think it's evidenced of a, how strong this brand is and b, how strong our value proposition is. Consumers, through third party research, continue to tell us that we're the best value they've seen since 2022.

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

And I do believe that after a couple of hard years of hard work of just continually being consistent with the service and the product and the value that we offer. So extremely proud of all the work that a, the franchisees, the 40,000 team members we have, our head office team, we can't shy away from that whilst the market we can't control, the macro. What we can control is what we do and what we're doing is we're winning in this tough market. So very proud of that. And as Edward said, it's an incredible business that's given back over GBP $05,000,000,000 in four years to shareholders.

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

That's quite impressive, right? And I'd like to think that we're going do the same looking forward because we've set up a strong base. Next. This speaks to why we're up so much. We're over 1,000 stores bigger than our nearest competitor now.

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

And not only in store count, it's significantly more when you take it into sales as well. There's been some media, I think, out today about one of our competitors started closing more stores. It's tough out there, right? And if you don't have a strong brand that has strong marketing capabilities and has strong operators, you're faltering, all right? And that's what's happening at the moment.

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

So we continue to open stores, albeit a little bit slower. But if you put it in context relativity, it's dramatically more than those obviously closing stores. A big delta there. Moving forward. This is our unique and scalable platform and sort of the flywheel.

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

I wanted to remind a few people, particularly those who might be sort of quite new to the brand. But we have got an incredible supply chain. The efficiency that we're bringing to it now through automation, it's going to make us even more efficient. The distribution we have across all of UK and Ireland and soon to be more with Overmouth. The buying power that we have, right, which is obviously we bring all these benefits to another brand in the future.

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

The large customer base, we're in over one in two households is ordering from Domino's every year. So the data we have on those customers and knowledge we have with the consumer is quite impressive. We have an incredibly rich data and insights. The digital and technology, there's been a lot of investment put into that in the last sort of three years or so. And as Edward said, the ERP now is fully done.

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

The IT system is done. All that investment is now starting to come to fruition. A lot of people were concerned that one of those things might have blown up. 70% of those things falter. Ours didn't.

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

We got it through to the end, which is fantastic. Marketing. We had an incredible marketing team, incredible insights team. The work they do, social media, branding, data, it's phenomenal. We are very, very fortunate to have the marketing team that we have, that shines through.

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

In these results, when others are negative double digit, we're basically flat. A lot of management experience. It makes me feel old, of course, but there's two hundred years of management experience in QSR here from both UK and also international. So you've got a team here that's been through rough times before. I've seen a few recessions in my time in different countries and what we're seeing here is perfectly normal.

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

And finally, our world class franchisees. These results, the delivery times we're achieving, the Google reviews we're getting, best in class in the world through their hard work. And these guys have been around twenty, thirty plus years. They've seen it all before as well, right? And we'll get through tough times like we are now, and we'll get to the better times.

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

But 40,000 dominoids who are employees, they're not contractors, they work for us. And they love this brand, and they work every day for this brand and for our customers. So that's the flywheel of what DPG is all about. Very scalable. So next is we talk about the capital discipline at the heart of what we're doing.

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

And for those who say, maybe I've been distracted looking for other brands. Well, I think a five sixty point market share gain sort of dispels that. How could we be distracted if we're taking such market gains? How could we be doing that if we're achieving best in class and best ever in history delivery times? Because we have a team who are all focused on these every single day.

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

So our first focus is the core business. And the core business, okay, in a tough market continues to be solid. Grow Ireland, we've invested in Ireland. And as you've seen from the results, we'll talk a little bit later on, is that we're over indexing there with growth. We had a record organic store opening there last year, double the highest previously, and we'll continue to grow that market.

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

We see the fact that we're 50% less penetrated there on a per capita basis than The UK, which is one of the reasons why we're there and we believe in it. The brand is very strong there, and we've got a great bunch of franchisees out there as well. Step three is acquire, acquire another brand. We've been talking about it for some time now, but we understand that shareholders might be saying, well this is taking a bit long, and that's because we're being disciplined, right? If we don't find the right thing that has a long term growth, then we get multiples of value upside for shareholders, we won't do it.

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

So therefore, if we haven't achieved what we want by the end of this year, we will start buybacks again, right? That's what we expect to do. And number four, in the future, other brands, other international markets, etcetera, but step by step. And the reason is because I spoke about before the platform that we have to leverage off is quite impressive. Not many brands have that vertically integrated platform that we have.

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

Next. So maximize the value of Domino's UK using the multiple levers. So we look at the growth system order volume, right? So we new store openings, all right, and we'll talk a little bit more detail about that soon. Frequency and loyalty, our loyalty program, a million customers an hour on our loyalty program, and we look like we will roll that out towards the end of next year for the whole business.

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

Showing double digit incrementality there. And we think that one of the big advantages is it keeps those customers inside our ecosystem. So it has a real part to play. Our aggregators, our third party providers and just to remind everyone, we do all the deliveries ourselves. They bring an order to us, but they're delivered by us.

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

And why is that important? Because that's our superpower. No one else is delivering as fast. And people think, well, so what? Twenty minutes faster, is that a big deal?

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

Yes it is. Because the quality of the product is so much higher, Which is why people come back to you so often. The consistency of it. And the market research is very clear. We would rather have a delivery through you guys than someone else, because of the consistency and the quality.

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

So that is our superpower. Next, we want to maximize profit, right? We are even though shareholders today probably aren't happy with what's happening in the context of the environment, I think it could be a hell of a lot worse if you're on backing some of our other competitors, is that we are investing in automation. We haven't changed from that, right? They are real.

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

And they'll also give us scale and give us capacity for more growth without having to invest a lot more CapEx. Our procurement, because of the volume, we can procure exceptionally well and ahead of time, and the ERP is going to help those things, of course. And last again, franchisee partnerships. We're in this together, right? Their success is our success.

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

We have incredible operators. We can't understate that. We're on the same page. We're working together. They're just as frustrated as us by all the macro things that have been forced upon us.

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

But they're resilient. They've been around 30, so we're fighting together and we will win. Next. So loyalty program, as I said before, it's focusing on low, medium and high frequency cohorts, but we're being very tactical about how we do that. We're seeing sort of a 10% incrementality on that at the moment, which is fantastic, and that's without really any marketing behind it.

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

It's a great system so far. We're just ironing the bugs out of it. We're learning lots. The team are doing an incredible job on that. So we feel very confident that we'll start launching that towards the end of next year.

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

Because you have to build a whole new system to make this happen. So we've got that plugged in now, so we feel very confident where that's going. So I know that's been talked about for a long time. I don't want to oversell it. I think it's going to play an important part of our growth and our business, particularly keeping people inside of our ecosystem.

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

But yes, it's very positive. And we get, again, a lot of insights from that as well. Those sort of insights also help us in the main business, not just in the loyalty part of the business. Next slide. This is something that's very interesting because we have the doubters about how do you get to 2,000 stores, etcetera.

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

So we wanted to just pull out a few data points here. We've opened a bunch of stores the last couple of years in the smaller towns, so less than 10,000 addresses. And just to remind everyone, our average store count is about 20,000 addresses, 20,000, 21,000 addresses for the average store. So some have 30,000, 35,000, 40 some have 15,000, 12,000 and then we've got the small towns, which is below 10,000. We've actually been opening stores in these areas for the last couple of years.

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

And as you'll see there, the average sales per address is almost double that of a larger address count, the more average, which is why that gives us confidence to go into these territories. There's over 400 of these territories just in these smaller address counts. And we've had some stores open recently where they're doing five, six times the national average in sales in some of these smaller towns. Because they've been wanting Domino's for thirty, forty years and we finally come to town and service these rural customers. And I grew up in a regional small town myself.

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

My first Domino's store was in a regional small town. I know how important we are to the community, not only providing jobs, but providing a service that they haven't had, that their cousins in the city have had. It's a very important role that we play. Next. Delivery times I've spoken about already.

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

Extremely proud. These are extremely hard to do. You look around the Domino's world, there's no one else delivering it across the sort of size of our business, these sort of numbers. And these are accurate because they're all GPS tracked, right? They're not numbers that can be fudged.

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

They're real numbers. And it's really important to us. We track these literally by the minute. Because we know that today's bad service is tomorrow's lost customers. And consequently, today's great service is tomorrow's customers as well.

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

So a it's lot of work. You've had a lot of skill to do this and that's why our team continue to double down on this and improve it every month and every week. Next. Our innovation team. We've got a fantastic innovation team.

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

We sold out the Cream Egg Cookies again this year. We launched the Hot Honey Pepperoni, which sold out as well. We had a couple of really exciting things coming down the pipeline I cannot talk about because they are confidential. I don't want our competitors to get a look into those things. I'm extremely positive about those and we're doing a test in a couple of months' time.

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

If that goes as I think it will, we'll be really going after that next year and I feel very positive about that. So we continue to innovate. Innovation is very important for us. But we won't move away from our core. The pepperoni passion is still something that people love.

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

We also have again, we're also respectful about providing balanced meals. We have less than 600 calorie pizzas, less than 400 calorie wraps, less than 150 calories, believe it or not, mini pizzas, etcetera. So we're always trying to provide a balanced meal for people, because we know nutrition is important. We have our own nutritionists on board now as well to help us with those things. But at the end of the day, we supply people with their favorite treat, and that's really important to us.

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

Next. Supply chain, which I've spoken about. Pete and his team do an amazing job. The sort of 99.96% accuracy, 99.9, it's the same as our IT system. We're in that last sort of 0.1% sort of accuracy, way above competition and best in class around the world.

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

Our guys are exceptional. And because it why is that important? Well, our customers therefore have always got products in stock, etcetera. Our online is always up, etcetera. So these things all they're all point ones, but they make a massive difference.

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

And the robotics, etcetera, which I think is on the next page. All these things about whether it be transport costs, we're getting more efficiencies through fleet utilization with using GPS tools. The warehousing costs are coming down because we're investing in the robotics. Production costs are coming down. So that robot there is called Nessie.

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

It's up in Scotland, and it's actually operating as we speak now and replaced some of the hours that we had there before. And we'll continue to invest in that area for the next couple of years. Next. This one here is an actual photo of Warrington. It's soon to be up and running, bringing 10% labor cost efficiencies and giving us an extra 30% capacity.

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

So therefore, when you do this in the commissary, you don't have to build another commissary in the future because you've created all this capacity inside these current facilities. Great ROIs, three to four year sort of ROIs on these investments, so very good for shareholders' returns. Next. Resilience. So I think that's the key word for me is that we've got a franchisee base that have been around thirty odd years.

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

Forty years old, the company this year in The UK, extremely resilient. Profits are down a little bit. We don't like that. We're to fight hard. The franchisees are fighting hard to find more efficiencies and grow more customer accounts in this next six months.

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

Who knows? We get a bit of good luck. We get a bit of a tailwind. We get some positive news in the market, which would be fantastic for a change. Who knows?

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

We may snowball into some success. The last quarter is also always a very big month, big quarter rather for us. So a really good last quarter, who knows? Maybe the autumn statement is nowhere near as bad or maybe it's positive for business. We may get this body of momentum that actually flies us into 2026 with a lot of positive momentum.

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

They're certainly out there fighting hard for that. The good thing is that I say to people is that the franchisee profitability was in such a healthy position last year that when you come off a little bit, you're still in a very healthy position. I'd hate to be our competitors, and I've seen some of their numbers horrific. Nothing like these numbers, and in fact, we've seen why they're closing stores. So extremely confident.

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

We're working with our franchisees. We're using an AI scheduling tool now that's helping. We're always continually trying to find ideas to work together to find how we can deliver more efficiently, how we can find look after our customers. And particularly in these times like this, when you have a big group like this with so much data, so much experience, it plays to our strengths. The strong is certainly getting stronger.

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

Next. Grow Islands. It's only a tiny, tiny place, Ireland or the Island Of Ireland, as I like call it these days. We've got investments now in both The Republic and in Northern Ireland. If you look at that graph on the bottom there, you'll see that there, that's the incremental growth over the market.

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

So 5.5% incremental order count growth in those stores that we own there now compared to the rest of the market. We're driving the growth over there. We're controlling that future for ourselves and the brand. Very profitable market. A lot of white space over there.

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

So we're doubling down on all, and we feel very confident about that. And you'll see through our investments going forward that we're going to maximize the investments we already had there, not only in corporate stores, but our supply chain, which we've already invested into. So we continue to invest in that business, and we see it a great part of our growth. And I know it's a small part of the overall picture in terms of revenue, if you like, but if you look in terms of profitability, that's going to become quite a significant part of our revenue base. We're quite proud of that.

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

Next. So delivering a sustainable future. This is very important. Of course, we've got electric trucks in our fleet with more coming due in 2025. We've got a nutritionist, as I said, because we want a balanced meal for our customers, because quite often, there might be four or five people in the family, and there's somebody that wants to eat a particular way.

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

We want to make sure we cater for everyone in that family to the purchase for others, of course, as well. The new two vegetable sides under 200 calories is quite phenomenal, right? You can have something from Domino's for under 200 calories. It's very possible. And of course, we're always on top of strengthening our modern slavery and risk mitigation in those processes, etcetera.

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

So these things are also very important for us because they're the right thing to do. Right thing to do for our customers, right thing to do for our team members. Next. So if I step back for a second, I'd like to say this is that we haven't changed our ambition. Still on the path to doing exactly what I said back when arrived.

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

Our capital allocation program hasn't changed. We have the same mentality. Yes, it's a point in time at the moment, it's a bit tougher, but I'm thankful that we have such a strong business to plough through these tougher times. We're not anticipating any change in the environment at the moment, mainly because that Autumn statement has got such a cloud over how people are feeling at the moment. We're hoping it's good news, but we can't be sure of that.

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

So we're being quite prudent there. But we're making sure that whilst it's tough for our customers at the moment, it's tough for our franchisees and ourselves, that we stick together. We keep delivering incredible value to our customers. We keep working on finding efficiencies for ourselves and our franchisees that we'll get through this year in a pretty good place and set ourselves up for a great 2026. Our pipeline for stores in 2026 is also very healthy.

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

And I'd say our long term ambition has not changed one little bit. So with that, I'd like to hand over for Q and A and open up the floor. Yes, front here.

[Ivor Jones, Equity Analyst at Peel Hunt]

Are we doing microphones?

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

Yes, we have. Here we go.

[Ivor Jones, Equity Analyst at Peel Hunt]

Good morning. Ivor Jones from Peel Hunt. Can I ask you three things, maybe one at a time? In terms of return on investment, could you just talk about how the Avonmouth project will pay off for the group? You gave us a bit of detail about Warrington, but if you could talk about the step up from third party logistics to in house, I think that'd be really interesting.

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

Thank you. Yes, sure. So thanks for the question, Ivor. So pretty well all of our investments in our supply chain all come in between sort of three and five year return on investments. Now the question you have to ask yourself is that that depends on how many stores you open and like for like etcetera with transaction growth.

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

However, we feel pretty comfortable they're between three and five years. Some are two, some are slightly higher, more towards a five, but typically that's what they run at.

[Ivor Jones, Equity Analyst at Peel Hunt]

What is the payback? Why is it better than what it replaces?

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

Simply because we can put more stores down there and from a freight point of view, freight's a very important cost of our system. So when you put over mouth and we can distribute more from over mouth, we don't have to spend as much on freight.

[Ivor Jones, Equity Analyst at Peel Hunt]

That's great. Thank you.

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

Just to point, in addition to those transport cost efficiencies and as Andrew has talked about, remember, what it also does is provide much greater resilience and future capacity. So there's a range of benefit. There's financial benefits but also non financial benefits.

[Ivor Jones, Equity Analyst at Peel Hunt]

Okay. Thank you. That's really interesting. I'd to ask a similar question about what you said about the first national advertising campaign. And again, the same sort of question really.

[Ivor Jones, Equity Analyst at Peel Hunt]

Why was that better than what preceded it? Why was it better than the local campaigns?

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

Yes. Just to be clear, it was the first national campaign of a collection offer. Typically, we'd always advertise delivery offers that we went after, particularly when consumers are looking for better value, because collection is better value, much cheaper, because it doesn't involve a cost for delivery drivers, etcetera. We wanted to make sure the customers knew. We've been advertising it locally for a long time, but we wanted to put it above the lines, just reminded people that may not have got our local store marketing that we also have this amazing collection offer, and that grew collection customers.

[Ivor Jones, Equity Analyst at Peel Hunt]

Thank you. And the last thing, going into this environment where competitors are suffering and demand is uncertain, Could you just talk about your tactics around pricing? So obviously, the trade off with volume, how are you thinking about trying to drive the second half? And what's the priority?

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

Yes.

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

So the relativity of price is that our pricing is fairly similar to a lot of the other competitors. The difference that we have in the value proposition is that we can deliver on much better service times, I think a much better quality product, much more consistent. Because the analogy I use with people is if you paid £10 for a pizza, and it took forty minutes to get there, and it was cold, versus £11 or £12 for a pizza that was there in twenty two minutes, and it was hot, and it was fresh, and tasted better. Which one's better value? So it's an analogy I use over and over again, but it's very real.

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

Because where are you more likely to go back to next time when you want that occasion with your family? All right. You don't want the cold light pizza no matter what the price is. Now having said that, our price is pretty well parody. And yes, there's offers from competitors and ourselves from time to time, but we like to be as consistent as possible and not confuse the customer.

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

So consistency is very important in both terms of service and also in terms of pricing. There's no doubt people have had to take price because the costs have been forced upon all of us, but it's about the whole package because some others are cutting back on labor, therefore giving worse service, so making their value proposition in a much worse position than ours. And our franchisees have gone the other way, they're giving better service. So in times like this, others are cutting back. We're investing in that service and that value. Ivor.

[Katie Cousins, Equity Research Analyst at Shore Capital]

Thank you. Katie Cousins from Shore Capital. Two from me, if you don't mind. Firstly, on loyalty. So about a third adoption of the loyalty program so far.

[Katie Cousins, Equity Research Analyst at Shore Capital]

Is that kind of how we should broadly think about your target going forward in the full rollout? Or actually, what steps are you taking to be able to achieve higher than that?

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

Yes. Thanks, Kate. Great question. I don't know the answer yet because we're still in test phase, and it varies by customer. So think of it this way, that if you're a light user, your propensity to take up is probably much lower than a heavy user.

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

However, a heavy user, you want to be careful that you just sort of don't push it too hard either, because they're already buying from you a lot anyway. So you've to get this nuance between light and medium users correct first before you sort of go too headfirst into heavy users. So look, the more the merrier. We'd like to get everyone on there. Just remember too, we haven't pushed it nationally yet.

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

We haven't put it above the line. So typically, you do that, a bit like collection, you will see a bump up as well. We won't do that until we've got it all better down working properly. So that might happen in 2017, except we might push it a bit above the line. So but I feel we do a lot of consumer research.

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

What are they thinking of the program, etcetera, get feedback so we can adjust it. The feedback's been really good. So we're feeling quite positive about it.

[Katie Cousins, Equity Research Analyst at Shore Capital]

And then secondly, just on GLP weight loss drugs. How would you find that's impacting the sector? And is that a concern for you guys going forward?

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

Good question. Look, we do a lot of research, not only here, but also what's happening in The U. S, etcetera. The thing that we find is that it doesn't feel like it's having an impact on us for a couple of reasons.

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

One is our frequency is so low in context of sort of some of the heavy users. We're only 4.3 times a year. So once a quarter on average, it doesn't seem to particularly when you put that in the context of 1,000 meals possible in a year, 4.3 is nothing in that context. The other thing is a shared meal. So quite often, if one person of a family is on GLP, there's three or four others who aren't, all right?

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

So being a shared meal is that you don't tend to see the impact. If you have more of a singular purchase, you might see it more so, but we're a shared meal. So we don't see an impact from that in our business. Based on what I've seen from around the world, it doesn't seem to be affecting anyone else in the pizza industry that I've seen.

[Katie Cousins, Equity Research Analyst at Shore Capital]

Thank you.

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

Good questions. Thank you.

[Anubhav Malhotra, Equity Research Analyst at Panmure Liberum]

Anwar Lhotra from Panmul Ibram. I have two, if you don't mind. The pizza takeaway market down 9% compared to the overall market down 4%. Why do you think that is? I guess it's got to do with the competition exiting the market.

[Anubhav Malhotra, Equity Research Analyst at Panmure Liberum]

But does that give you opportunity to open stores, especially in those areas where they are closing stores? I know that may be a case of doubling down on stores, but it's definitely those stores may be catering to some consumers that you can cater to now if you open stores there. And then secondly, on the incrementality that's coming from the loyalty program, the 10% incrementality versus giving customer a free pizza after five orders, the cost of that. If you balance those two, is it a profitable proposition? Or is it more about keeping the customer in the system through the loyalty program?

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

Yes, a great question. So I'll answer the last one first. So the incrementality has to be actually, to make it profitable is a lot lower than that. So we're already well above the breakeven for ourselves and franchisees. So that was an important part of the program.

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

It had to be profitable for ourselves and franchisees, particularly franchisees. Otherwise, we wouldn't roll it out. But we've been very careful to do that in a way that make sure it is has incrementality. So we're fine with that part at this stage. On your first question, yes, there's a couple of factors.

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

Yes, competitors closing is part of the Pizza Market being down for sure. Also, there's a slight swing towards, as we saw, collection. When you drive collection, it's a lower ticket. So therefore, it may be the same transaction quantity but a smaller ticket average because people are looking to save money at the moment. So I read more in the fact that people is probably slight switch out from delivery to collection rather than not from pizza per se.

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

But certainly having competitors closed doors doesn't help. But are we picking up the slack? Yes. The one thing about our franchisees, they're classic entrepreneurs. They're competitive.

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

They like to win. And they've been doing that for thirty odd years in this market or forty years this year. They're going out after taking making sure that they pick up the pieces and make sure we can service those customers who really want a good pizza delivered or collection. So yes, we are making hay while the sun shines. You. Richard?

[Richard Stuber, Director at Deutsche Numis]

Richard Stuber from Deutsche Numis. Just a few questions for me, please. In terms of EBITDA for the franchisees, would you expect it to be sort of flat year on year or back to growth when we get to the second half?

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

No, not at this stage, Richard. There are a couple of reasons. One is they're down 5% at the moment, but we've got to remember that the National Insurance, etcetera, only came in, in April, okay? So you're not seeing a full six months impact of that, and they've got a full six months impact in the second half. So again, unless we see something dramatically change in the autumn statement, that consumer being sitting back on the heels doesn't help that cause.

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

Now franchisees, as said, are quite entrepreneurial, right? They can go after it and they can do some tactical things locally. Our competitors closing, there's opportunities there, and we're certainly seeing some franchisees are up on last year, all right? They are winning. So being the competitive nature of our franchisees, I'm sure a lot of them are to fight to death to get to back to where they were last year, and we're certainly doing what we can to help them get there.

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

That sort of would be our goal. But at this stage, it's fairly similar to where we are, is that we expect the second half to be just as tough, and we'll both be down a bit on last year, unfortunately. But if we set ourselves up in a really good position, we've done the right thing by the customers, we can take more advantage of those declines from others into next year.

[Richard Stuber, Director at Deutsche Numis]

So the second question is, I know it's still probably quite early days, but do you have any sort of idea what the basket the food basket inflation will be for 2026?

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

For 2026, yeah, that is a big ask, particularly with the world moving so much. Beef globally is definitely on the up, right? We don't have too much beef on our products to be fair. Cheese is up at the moment, but we'd like to think that that probably starts to temper towards the back end of 2026. We've factored this into our numbers by the way.

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

A lot of other things are fairly constant at the moment. So I wouldn't say massive inflation. I'd like to think that they balance each other out at this stage, but it's a long way away at this stage. I'll have a better idea towards the end of this year, Richard. But at the moment, Flowr is in a good place. There's no reason for panic, that's for sure.

[Richard Stuber, Director at Deutsche Numis]

So the final question is on the buyback, you say if you haven't done a second brand by that stage, you'll initiate that. Would that also be back would go straight would you look to get net leverage up to sort of 2.5 times pretty much immediately after that? Or would you sort of make the buybacks not quite as aggressive as you have done in the past, keeping some sort of wiggle room for acquisitions?

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

Yes. Look, I think we'd want to keep our powder dry. I mean this is a Board decision to be fair. I But think we'd always want to keep some wiggle room there for acquisition because we're not walking away from an acquisition strategy. What we're saying is that the cash flow we would have accumulated by then would put us in a position where we feel like we can do both.

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

But our ambition hasn't changed with getting the right brand.

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

And just to add to that, none of the current opportunities we're evaluating would put us outside our stated leverage range. We've been clear on that and that there'll be finance from our existing facilities. So it's important just to reiterate that point as well.

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

Okay. Well, okay. Kiara?

[Analyst]

Chiara from UBS. On the store count, can you please emphasize on the target of 1,600 stores by 2028? Do you still think that the 2,000 store target by 2033 is still achievable?

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

Yes, a good question. So we still think that those the targets are still achievable in terms of numbers. We want to get through this year first and reevaluate. We'll probably at full year come back and sort of based on what how the year unfolds and how the next year looks. Again, the autumn statement plays a lot into this, right?

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

So we just don't know what that's going to look like at this stage. There's no doubt in my mind that getting to 1,600 stores and 2,000 stores is very achievable. Will we need to adjust that by a year or so? I don't know the answer yet. So I want to wait until we've got some more informed data before we come back to the market on that.

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

No more questions? All right. Well, thanks for your time today. I really appreciate it. And I'd like to think that you walk away from me again that Domino's is still a very solid company, probably best in class.

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

So and we're certainly benefiting from these tougher times in market share gains. Thank you very much for your time. Talk to you again soon. Bye.

Participants

Executives

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

Analysts

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