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Domino's Pizza Group plc

Domino’s Pizza Group Continued UK growth; sharpened operational focus on International

Domino’s Pizza Group (LON:DOM) has today announced its preliminary results for the 52 weeks ended 30th Dec 2018.

Financial highlights

· Group system sales¹ of £1,259.5m, up 9.0% on a 52 week basis

o UK system sales up 7.1%, like-for-like² sales up 4.6%

o Republic of Ireland system sales up 5.2%, like-for-like sales up 4.0%

o Pro forma³ International system sales up 7.7%

· Group statutory revenue up 12.6% to £534.3m

· Group underlying⁴ PBT £93.4m, down 1.1% on a 52 week basis

· Underlying PBT excludes net non-underlying⁵ charges of £31.5m relating mainly to International impairments, UK supply chain transformation and integration costs. See note 3 for full details

· Group statutory PBT £61.9m, down 24%

· Underlying basic earnings per share of 16.1p, up 2.5% on a 52 week basis

· Net debt £203.3m; net debt/EBITDA 1.85x

Strategic highlights

· Growing market positions in six countries: platform for long term growth

· 81 new Domino’s stores opened across the Group; 58 in UK

· Completion of Warrington supply chain centre, supporting future growth in the UK business

· Dividend growth track record continued: full year dividend +5.6%

· Total cash returns to shareholders of £103.5m, comprising £44.3m dividends and £59.2m share buybacks

Outlook

· 2019 UK store pipeline similar to 2018 at the same time last year, although actual openings likely to be lower than 2018 given ongoing franchisee discussions

· Continued UK growth expected; International targeted to break even

· 2019 capex of £25-30m, including £5m of supply chain capacity and efficiency investments in UK & ROI. Controlled international investment

· Net debt/EBITDA expected to remain around 2018 year end level

David Wild, Domino’s Pizza Group Chief Executive Officer, said:

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

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

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

52 weeks to 30 December 2018

53 weeks to 31 December 2017

52 weeks to 31 December 2017

Change % 52 weeks vs 52 weeks

Group system sales1

£1,259.5m

£1,179.6m

£1,155.7m

9.0%

UK & ROI system sales1

£1,155.4m

£1,101.5m

£1,079.4m

7.0%

UK like-for-like system sales1,2growth (excluding splits)

4.6%

4.8%

Underlying profit before tax4

£93.4m

£96.2m

£94.4m

(1.1)%

Non-underlying items before tax5

£(31.5)m

£(14.8)m

£(14.8)m

n/m

Total profit before tax

£61.9m

£81.4m

£79.6m

(22.2)%

Underlying basic EPS3

16.1p

16.0p

15.7p

2.5%

Net debt

£203.3m

£89.2m

n/m

Recommended total dividend per share

9.50p

9.00p

5.6%

Total revenue

£534.3m

£474.6m

£466.5m

14.5%

Statutory basic EPS

10.3p

13.8p

13.5p

(23.7)%