Trading Update

RNS Number : 4388F

DP Eurasia N.V

15 July 2019

 

For Immediate Release

15 July 2019

DP Eurasia N.V.

("DP Eurasia" or the "Company", and together with its subsidiaries, the "Group")

Trading Update for the Six Months Ended 30 June 2019

Continued top line growth driven by network expansion and online sales

	For the period ended 30 June
	2019	2018	Change
	(in millions of TRY, unless otherwise indicated)
Number of stores	736	672	64
Group system sales(1)
Turkey	386.4	351.6	9.9%
Russia	249.0	152.7	63.0%
Azerbaijan & Georgia	10.0	6.1	63.6%
Total	645.4	510.4	26.4%
Group system sales like-for-like growth(2)
Turkey	7.7%	10.9%
Russia (based on RUB)	4.7%	18.0%

Highlights

·     The Board expects the full year Adjusted EBITDA⁽⁵⁾ for 2019 to be in line with expectations

·     64 new stores were added over the last 12 months, bringing the total number to 736

·     Group system sales growth of 26.4% driven by strong growth in both Russia and Turkey

o  Turkish system sales growth of 9.9%

o  Russian system sales growth of 63.0% (30.1% based on RUB)

·     Group online system sales⁽⁴⁾ growth of 42.5%

o  Turkish online system sales growth of 24.9%

o  Russian online system sales growth of 72.7% (37.9% based on RUB)

·     Group's online delivery system sales⁽³⁾ as a share of delivery system sales reached 67.5% for the period (H1 2018: 59.3%)

Commenting on the update, Chief Executive Officer, Aslan Saranga said:

"We are pleased with our performance for the first half of 2019 amidst challenging trading conditions.  Following pro-active steps at the start of the year, we have been able to put the slow start in Turkey behind us, posting 7.7% like-for-like growth in the period.  Our 4.7% like-for-like growth in Russia reflects the strong comparatives due to the 2018 FIFA World Cup.  We remain confident in delivering high single digit like-for-like growth in Russia as we moved to a simplified menu, increased investment in our digital channels and refocused local store marketing activities as of July.  Our search for a CEO of our Russian Operations is continuing and we are targeting an appointment by year-end.

Digital continues to drive our business forward. Online ordering as a percentage of delivery has reached 67.5% - an increase of 8.2 percentage points from twelve months ago. 

We remain on target for store openings for the full year in both our main markets and the Board expects the full year Adjusted EBITDA⁽⁵⁾ for 2019 to be in line with expectations."

Enquiries

DP Eurasia N.V.
Selim Kender, Chief Strategy Officer & Head of Investor Relations	[phone]
Buchanan (Financial Communications)
Richard Oldworth / Maddie Seacombe	[phone] [e-mail]

A conference call for investors and analysts will be held at 9.00am this morning, which will be accessible using the following details:

Conference call:

UK Toll: [phone] UK Toll Free: 0800 358 9473 Participant PIN code: 81518842# URL for international dial in numbers: http://events.arkadin.com/ev/docs/FEL_Events_International_Access_List.pdf

A recording of the conference call will subsequently be available at www.dpeurasia.com.

Notes to Editors

DP Eurasia N.V. is the exclusive master franchisee of the Domino's Pizza brand in Turkey, Russia, Azerbaijan and Georgia. The Company was admitted to the premium listing segment of the Official List of the Financial Conduct Authority and to trading on the main market for listed securities of the London Stock Exchange plc on 3 July 2017. The Company (together with its subsidiaries, the "Group") is the largest pizza delivery company in Turkey and the third largest in Russia. The Group offers pizza delivery and takeaway/ eat-in facilities at its 736 stores (538 in Turkey, 187 in Russia, seven in Azerbaijan and four in Georgia as at 30 June 2019), and operates through its owned corporate stores (32%) and franchised stores (68%). The Group maintains a strategic balance between corporate and franchised stores, establishing networks of corporate stores in its most densely populated areas to provide a development platform upon which to promote best practice and maximise profitability. The Group has adapted the Domino's Pizza globally proven business model to its local markets.

Performance Review

Store count	As at 30 June
	2019				2018
	Corporate	Franchised	Total		Corporate	Franchised	Total
Turkey	136	402	538		145	376	521
Russia	101	86	187		101	41	142
Azerbaijan	-	7	7		-	6	6
Georgia	-	4	4		-	3	3
Total	237	499	736		246	426	672

Delivery channel mix and online like-for-like growth

The following table shows the Group's delivery system sales, broken down by ordering channel and by the Group's two largest countries in which it operates, as a percentage of delivery system sales for the periods ended 30 June 2019 and 2018:

		For the period ended 30 June
		2019			2018
		Turkey	Russia	Total	Turkey	Russia	Total
Store		34.0%	20.8%	30.0%	43.2%	25.7%	38.6%
Online	Group's online platform	30.1%	79.2%	48.0%	29.6%	74.3%	42.5%
	Aggregator	31.9%	-	19.5%	24.1%	-	16.8%
	Total online	62.0%	79.2%	67.5%	53.7%	74.3%	59.3%
Call centre		4.0%	-	2.5%	3.0%	-	2.1%
Total(3)		100%	100%	100%	100%	100%	100%

The following table shows the Group's online like-for-like growth⁽²⁾, broken down by the Group's two largest countries in which it operates, for the periods ended 30 June 2019 and 2018:

		For the period ended 30 June
		2019	2018
Group online system sales like-for-like growth(4)
Turkey	24.1%		42.8%
Russia (based on RUB)	16.9%		52.5%

Notes

⁽¹⁾ System sales are sales generated by the Group's corporate and franchised stores to external customers and do not represent revenue of the Group.

⁽²⁾ Like-for-like growth is a comparison of sales between two periods that compares system sales of existing system stores. The Group's system stores that are included in like-for-like system sales comparisons are those the Group considers to be mature operations. The Group considers mature stores to be those stores that have operated for at least 52 weeks preceding the beginning of the first month of the period used in the like-for-like comparisons for a certain reporting period, assuming the relevant system store has not subsequently closed or been "split" (which involves the Group opening an additional store within the same map of an existing store or in an overlapping area).

⁽³⁾ Delivery system sales are system sales of the Group generated through the Group's delivery distribution channel.

⁽⁴⁾ Online system sales are system sales of the Group generated through its online ordering channel.

⁽⁵⁾ Adjusted EBITDA is not defined by IFRS. Adjusted EBITDA excludes income and expenses which are not part of the normal course of business and are non-recurring items, consisting of restructuring costs, IPO-related expenses and share based incentives. Management uses this measurement basis to focus on core trading activities of the business segments and to assist it in evaluating underlying business performance

Appendices

Exchange Rates

	Period ended 30 June
	2019			2018
Currency	Period End	Period Average		Period End	Period Average
EUR/TRY	6.557	6.343		5.309	4.942
RUB/TRY	0.091	0.086		0.072	0.068
EUR/RUB	71.820	73.840		72.992	71.822

Delivery - Take away / Eat in mix

	For the period ended 30 June
	2019			2018
	Turkey	Russia	Total	Turkey	Russia	Total
Delivery	63.9%	60.3%	62.5%	63.9%	62.3%	63.3%
Take away / Eat in	36.1%	39.7%	37.5%	36.1%	37.7%	36.7%
Total(2)	100%	100%	100%	100%	100%	100%

Forward looking statements

This press release includes forward-looking statements which involve known and unknown risks and uncertainties, many of which are beyond the Group's control and all of which are based on the Directors' current beliefs and expectations about future events. They appear in a number of places throughout this press release and include all matters that are not historical facts and include predictions, statements regarding the intentions, beliefs or current expectations of the Directors or the Group concerning, among other things, the results of operations, financial condition, prospects, growth and strategies of the Group and the industry in which it operates.

No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Group. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed, or implied in such forward-looking statements.

Forward-looking statements contained in this press release speak only as of the date of this press release. The Company and the Directors expressly disclaim any obligation or undertaking to update these forward-looking statements contained in this press release to reflect any change in their expectations or any change in events, conditions, or circumstances on which such statements are based.

 

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