dp eurasia n.v. · 5 domino’s pizza enterprises alsea domino’s pizza group(10) jubilant...

2018 Trading Update –Group Breakfast/Lunch

DP Eurasia N.V.

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This Presentation is not an offer to buy or sell any securities. Save where otherwise indicated, the Company is the source of thecontent of this Presentation and, accordingly, although care has been taken to ensure that the facts stated in this Presentation areaccurate and that the opinions expressed are fair and reasonable, no representation, warranty or undertaking, express or implied, ismade by any of the Company, any of its directors, officers, employees, affiliates, advisors, shareholders or representatives as to,and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinionscontained herein. Neither the Company nor any of its directors, officers, employees, affiliates, advisors or representatives shall haveany liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this Presentation or its contentsor otherwise arising in connection with the Presentation.

Certain statements in this Presentation are not historical facts and are “forward looking” statements. These forward-lookingstatements can be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “anticipates”,“expects”, “intends”, “plans”, “may”, “will” or “should” or, in each case, their negative or other variations or comparable terminology.None of the Company, its directors, officers, employees, affiliates, advisors, shareholders or representatives intend or have any dutyor obligation to supplement, amend, update or revise any of the forward-looking statements contained in this Presentation or toupdate or to keep current any other information contained in this Presentation. The information and opinions contained in thisPresentation are provided as at the date of this Presentation and are subject to change without notice. As a result, you arecautioned not to place undue reliance on such forward looking statements.

Disclaimer

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Presentation Team

Aslan SarangaChief Executive Officer

Selim KenderChief Strategy Officer and Head of Investor Relations

OverviewSECTION 1

5

Domino’s Pizza Enterprises Alsea Domino’s Pizza

Group(10)Jubilant

FoodWorks(11) DP Eurasia

Countries

Australia Belgium France

Netherlands Germany

New Zealand Japan

Mexico Colombia

SpainArgentina

ChileBrazil

UK Ireland

SwitzerlandNorwaySwedenIceland

IndiaSri Lanka

Turkey Russia

AzerbaijanGeorgia

Population Served(3) 332 MM 496 MM 95 MM 1,360 MM 238 MM

MajorPortfolio Brands

Domino’s Pizza

Domino’s PizzaStarbucks

Burger KingVips

Other(4)

Domino’s Pizza Domino’s PizzaDunkin’ Donuts Domino’s Pizza

Domino’s Store #(5) 2,135 980 1,149 1,128 643

Other Store #(5) - 2,373 - 43 -

Market Cap(6) $3,199 MM $2,858 MM $2,377 MM $2,161 MM $452 MM

L5Y Share Price CAGR(7)

33% 17% 15% 11% n/a

System Sales(8),(9) $1,748 MM $2,022 MM $1,364 MM $382 MM $215 MM

EBITDA(9) $174 MM $277 MM $127 MM $37 MM $25 MM

DP Eurasia

Domino’s Pizza Group(10)Alsea

Jubilant FoodWorks(11)

Domino’s Pizza Enterprises

DP Eurasia is a member of successful global network• With 643 stores across its network, DP Eurasia is the 5th largest master franchisee within the global Domino’s system and is consistently one of the best performing master

franchisees globally• Domino’s is one of the most successful fast food brands and the global leader of home delivery with US$10.9 Bn sales in 2016 and 14,434 stores in 85 countries with

95 consecutive quarterly positive LfL internationally(1)

• The listed international Domino’s master franchisees (excluding DP Eurasia) have created 177%(2) shareholder value in the US$ terms in the last five years

The largest Domino's master franchisees worldwide Global presence of Domino's 5 largest master franchisees

Notes:1. Store count, countries of operation and consecutive quarterly LfL figure as of October 20172. Average total shareholder return for listed franchisees excl. DP Eurasia for the period between 19 January 2013

and 19 January 20183. Population figures are 2017 actual; Source: United Nations World Population Prospects4. Includes Chili’s, California Pizza Kitchen, P.F.CHANG’S, Pei Wei, Italianni’s, The Cheesecake Factory, El

PorTon, Foster’s Holywood, Canas y Tapas, Archie’s, Lavaca

Source: Company Information for DP Eurasia, Annual Reports for Other Companies, CapIQ, EIU via S&P Global Market Intelligence

5. As of July 2017 for Domino’s Pizza Enterprises, January 2018 for Jubilant FoodWorks, October 2017 for Domino’s Pizza Group, October 2017 for Alsea, December 2017 for DP Eurasia

6. Ordered by market cap as of 19 January 20187. As of 19 January 2018, in local currencies8. Group system sales as of latest financial year reported by the company. Total income figure used for Jubilant

FoodWorks, 2016 figure for DP Eurasia9. Converted at average FX rates of each companies’ latest reported financial year respectively– USDTRY of

3.65, USDINR of 67.06, USDAUD of 1.33, GBPUSD of 1.36, USDMXN of 18.64. Adjusted EBITDA figure for DP Eurasia

10. Domino’s Pizza Group also has investments in Domino’s Iceland, Domino’s Sweden and Domino’s Norway (which will be consolidated once acquisitions of controlling interests is completed)

11. Jubilant FoodWorks also has the exclusive rights to operate Domino’s Pizza brand in Bangladesh and Nepal

6

2534

75

2014 2015 2016

DP RussiaDP Turkey

7%Average LfL(2) ’14–’17

Market Position 2017(by number of stores) #3#1#1 #1

Number of Stores 2017 514 1215 3

Corporate 142 99- -

Franchise 372 225 3

Number of Commissaries 2017 4 1- -

13%System Sales CAGR ’14–’17 118%

37%

Turkey

Russia

Georgia

Azerbaijan

Moscow

99

372 142

35

x4

22

Franchise stores Corporate stores Commissaries

Adj. EBITDA Margin (Adj. EBITDA/System Sales)

5% 6% 12%

DP Eurasia overview

Growing regional expansion from an established strong base in Turkey(1)… …combined with strong growth in System Sales…

TRY MM

Notes:1. Number of stores as of 20172. LfL calculation includes stores which are operational for more than 52 weeks and aren’t considered as split stores for the underlying period. Arithmetic average of non-split LfL for 3 years (’13–’14, ‘14 –’15 and ’15 –’16); excluding

Azerbaijan and Georgia due to no LfL stores in the period3. Adjusted for activities that are not part of the normal course of business and are non-recurring including share-based incentives, IPO costs and severance costs for Turkey and Russia

Source: Company Information, Management Accounts Source: IFRS Combined and Consolidated Financial Information, Management Accounts

Source: Management Accounts

470543

647

860

2014 2015 2016 2017

…resulted in accelerating Adjusted EBITDA(3) performanceTRY MM

7

System Sales(1) LFL Growth Store Count(1)

TRY 205.4 MM

TRY 654.4 MM 522

121

14.6%

169.0%

10.0%

28.9%

FY 17 Trading Update Highlights

27

49

Notes:1. Including Azerbaijan and Georgia

Operational ReviewSECTION 2

9

Attractive investment opportunity with high growth potential and proven business model

Leading market positions1

Highly attractive, underpenetrated markets with substantial growth potential in the Group’s addressable segments2

Strong online capabilities underpin DP Eurasia’s growth3

Globally proven business model successfully applied and adapted to DP Eurasia’s local markets4

Simple and scalable, asset-light business model5

Track record of resilient and profitable growth as well as strong cash conversion7

Founder-led, experienced management team8

Highly attractive customer proposition and strong brand equity6

10

1

603514

262192

151 13792

50

514

120 92 8544 43 33 23

4.3x larger than #2 player

27

123

6219 23

140

262

108132 121

5424

2.3x

9.7x

2.1x

116

7061

39

Delivery focused players

6.4x

Leading Market Positions

Notes:1. All Turkish data s of Oct-17 except for Domino’s (Dec-17)2. All Russia data as of Dec-173. Includes Moscow and Moscow regions

Leading the pizza market, Domino’s…DP Eurasia has become a strong challenger to the top 2 players…Chained pizza in Russia, number of stores(2)

…and is the largest pizza player in Greater Moscow(3)…Number of stores(2)

Source: DP Russia Company Information on Competitors

Source: DP Turkey Company Information on Competitors Source: DP Russia Company Information on Competitors

Chained pizza in Turkey, number of stores(1)

…is #2 player in the fast food market…Number of stores(1)

Source: DP Turkey Company Information on Competitors

‘14 ’17‘14 ’17‘14 ’17‘14 ’17‘14 ’17‘14 ’17

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2017 Whitespace Total Potential for DP Turkey (2)

Organic growth in footprint

Increased coverage within served regions

Split of current stores

Higher OHD penetration

Entry into new regions

Improvement in store economics

(1)

2…With substantial growth potential in the Group’s addressable segments (cont’d)

Turkey: runway to double footprint… Building blocks of growth# of Domino’s stores

Notes:1. Whitespace represents the difference between Company’s store number potential in the long term and current store count2. Excluding Azerbaijan and Georgia

Source: Company estimates


…and strengthen the castlesNumber of stores, 2017 Number of Provinces

16

38

95

13

Unpenetrated Provinces150 K+ households per store0–50 K households per store

50k–100 K households per store100k–150 K households per store

>1.7x

514

c. 400c. 900

Present in 68 of 81provinces

FranchiseesCompany owned storesCommissaries

6819

Istanbul114

6Bursa

Izmir2117 2923

Ankara

12Notes:1. Whitespace represents the difference between Company’s store number potential in the long term and current store count

2017 Whitespace Total Potential for DP Russia

>12.3x

121

c. 1,400 c. 1,500

Moscow

Saint Petersburg

Volgograd

Nizhniy Novgorod

Ufa

PermSamaraRostov-on-Don

Voronezh KazanYekaterinburg

Krasnodar

Region Population (MM)Moscow and Moscow Oblast 19.8Saint Petersburg and Leningrad Oblast 7.1Krasnodar Krai 5.6Sverdlovsk Oblast (center -Yekaterinburg) 4.3Rostov Oblast 4.2Bashkortostan Republic (center - Ufa) 4.1Tatarstan Republic (center - Kazan) 3.9Nizhniy Novgorod Oblast 3.2Samara Oblast 3.2Perm Krai 2.6Volgograd Oblast 2.5Voronezh Oblast 2.3

2…With substantial growth potential in the Group’s addressable segments (cont’d)

Russia: representing vast potential Building blocks of growth# of Domino’s stores

Prioritised regions

Moscow

Second priority regions

Higher OHD penetration


(1)

Huge potential to expand the platformEuropean part of Russia

Source: gks.ru as of 1 January 2017

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3

System sales LfL growth, %Online channel supports Lfl growth...

Turkey Russia

19%

7%

38%

10%

Online Total2016 2017

141%

42%79%

29%

Online Total2016 2017

…and has further room to improveOnline delivery system sales as a % of delivery system sales

71%78% 81%

28%

34%41%

48%34%

53%67%

2014 2015 2016 2017

Domino's Pizza UK DP Turkey DP Russia

Source: Company Information for DP Turkey and DP Russia, Company Filings for Domino’s Pizza UK

Strong online capabilities underpin DP Eurasia’s growth

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Globally Proven Standards…

…with Successful Local Adaptation and Execution

DP Eurasia attracts the best talent by:

Encouraging former or existing employees to take on franchises, enabling a strong entrepreneurial spirit

Growth is fostered with new tools and techniques initiated by management

5

Exceptional Culture

DP Eurasia maximizes efficiency with a well-executed structure whereby:

Well-thought out castle strategy establishes leadership in key cities

Scalable and low cost franchise model provides stable revenue stream with low capex

Commissaries cover all existing (and potential future) stores

1

Strong Operating Setup (Corporate /

Franchise / Commissary)

DP Eurasia is the leader in delivery by:

Embracing the30-minute delivery guarantee in both Turkey and Russia while ensuring highest quality of the product

Supporting all ordering methods and ensuring that all meal occasions are captured

4

Speed of Delivery

DP Eurasia utilizes its online infrastructure to support its marketing and advertising strategy which:

Maximizes demand through clear customer segmentation and constant engagement

Captures demand by offering convenience to its customers, available anywhere at any time

2

Best In Class Online

Infrastructure

DP Eurasia adapted an in-house store design which:

Enables fast preparation and delivery of pizza

Is cost efficient and is anchored by store-level economics requiring moderate capital outlay

Follows Kaizen principles in order to improve the financial return profile of the new stores

3

Simple Store Operations

Source: Company Information

4Globally proven business model successfully applied and adapted to DP Eurasia’s local markets

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5 Simple and scalable, asset-light business model

Scalable business model

Industry leading standards

Corporate Stores Commissaries Franchise Stores

Centralised Strategy, Marketing and ITCentralised Strategy, Marketing and IT

Dough & Other IngredientsLogistics

Dough & Other IngredientsLogistics

Sales & DeliveryLocal MarketingCustomer Data

Sales & DeliveryLocal MarketingCustomer Data HQ

SCALABLE

Lower purchasing costs = competitive prices

Centralised supply chain = command pricing

Store network and disciplined approach = 30 minute delivery guarantee

Scale of the network = resources to invest in marketing and technology

TECHNOLOGY

Continuous investment on online capabilities

Highest website traffic among fast food players in Turkey in 2017

Android application is the most downloaded app of a fast food company in Turkey Google Play Store

Introduced Facebook Messenger, and intends to launch WhatsApp and text message “one-click” ordering capabilities

Best value for money

Quick and convenient

Delicious pizza

Support for employees

Well-designed incentive system

WINNING CULTURE


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6Highly attractive customer proposition and strong brand equity

Attractive pricing vs competitors in Turkeyand Russia with high value for money

Quick delivery times all year round in Turkey and Russia, despite the challenging weather conditions

Why do consumers choose DP Eurasia?

Value for money?% of affirmative respondents

Value for money?(1)

% of affirmative respondentsDelivery on Time%

Delivery on Time%

I II

Innovation – New ProductsIII

65

24 20

50 47

Domino'sPizza

PizzaHut

LittleCaesar's

BurgerKing

McDonald's

84.5

2017

93.0

2017

4033

28

Domino's Pizza Pizza Hut Papa John's

Source: Ipsos Connect Brand Health and Ad Tracking, Feb/Mar 2017

Source: "Russian OHD market and dining habits" consumer survey in 2016 conducted by Ipsos


RussiaTurkey

Oven baked Sandwich Dev Malzemos Ultra thin crust Mosaic cake

Notes:1. The figures are representing only Moscow


17

Adjusted EBITDATRY MM

3139

H1 2016 H1 2017

370 432 466 495 52213

19 43 72 121

80 103 130 160 219289

383451 509 567

643

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Continuous and significant store rollout# of stores at period end

+23+27 +30 +59 +70

+94+68

+58 +58+76

470543

647

860

2014 2015 2016 2017

7 Track record of resilient and profitable growth…

DP RussiaDP Turkey

…generating strong momentum in system sales…TRY MM

Source: IFRS Combined and Consolidated Financial Information, Management Accounts


18

Neval Korucu Alpagut, Group CFO• 10 years at DP Turkey• Prev. at Volkswagen

Experienced management team

Awards received

Aziz Babacan, Corporate Operations Director• 6 years at DP Turkey• Prev. at Pizza Hut

Ayça Mutluer Bayraktar, Sales and Marketing Director• 4 years at DP Turkey• Prev. at Unilever, Pepsico

Kerem Ciritçi, Franchise Operations and Business Development Director• 10 years at DP Turkey• Prev. at Ritz Carlton, Alarko

Gökhan Yoluaçık, Online Channels and Information Technologies Director• 3 years at DP Turkey• Prev. at Aksigorta, UlkerMuhsin Çevlik, Supply Chain, Purchasing and Investments Director• 6 years at DP Turkey• Prev. at Danone

Turkey, Azerbaijan and Georgia

Gold FrannyGiven yearly to best master franchisees for operational excellence, revenue increase and growth rate

Golden Drum2014

Felis2014

Kristal Elma2013

Effie Reklam Etkinliği Yarışması

2014

Best Data Infrastructure

of the Year2015

Altın Örümcek

2015

2008 2009 2010 2011 2012 2013 2014 2015 2016

Experienced management team

Awards received

Mustafa Özgül, CFO of Russian Operations 3 years at DP Russia Prev. at Migros, Bechtel Int.

Oleg Yudin, Head of Franchise Development 1 year at DP Russia Prev. at Traveler’s Coffee,

Arpicom

Elena Ivanova, Marketing Director 4 years at DP Russia Prev. at 4DK

The Supervisor of the Year 2015AWUS(2) Award 2014 Global Viking Award 2014

Russia

2016 Gold Franny

DP Eurasia

Aslan SarangaGroup CEO

Neval Korucu Alpagut Group CFO

Selim Kender Group Chief Strategy Officer and Head of Investor Relations

Güvenç DönmezCEO of Russian Operations

Aslan Saranga CEO of DP Eurasia and Executive Director

Dmitry Osipov, Real Estate Development Director 4 years at DP Russia Prev. at Enter-Svyaznoy,

MTS

Igor Kiselev, Head of Information Technology 1 year at DP Russia Prev. at Zurich Financial

Services, Sportmaster Maksim Chinenov, CorporateOperations Director 1 year at DP Russia Prev. at KFC Russia

8 Founder-led, experienced management team

Notes:1. Includes top 10 countries in the Domino’s global network2. Average weekly unit sales

Company leadership

• Joined DP Eurasia in 2015 as DP Russia’s CEO and kick-started the accelerated growth of the company

• Previously, he was the CMO at Samsung Russia between 2012-2015. Before that, he held several senior marketing roles at P&G in Russia and Europe

• Holds a BSc in Industrial Engineering from Bogazici University

• Founding CEO of DP Eurasia – been with the company for 20 years, making it the 5th largest Master Franchisee in Global Domino’s network

• Member of General Management Council (″GMC″)(1) – the leadership team of global Domino’s network

• Holds an M.A. in Finance from Istanbul University

DP Turkey’s global awards DP Russia’s global awards

External Awards

Financial ResultsSECTION 3

20

566 646

2016 2017

Year on year growth

144 142

344 372

488 514

2016 2017Corporate Franchise

70%

30%

14%

72%

28%

76

205

2016 2017

6899

22

72

121

2016 2017Corporate Franchise

169%

18%

82%

6%

94%

Financial snapshot

Store count# of Outlets

System SalesSystem Sales, TRY MM

Store count# of Outlets

System SalesSystem Sales, TRY MM


Year on year growth

21

19%

7%

38%

10%

Online Total

2016 2017

141%

42%

79%

29%

Online Total

2016 2017

Like-for-like performance

LfL performance in line with guidanceSystem sales LfL growth, %


RussiaTurkey

22

53%

34%

67%

44%

Delivery Total

2016 2017

41%26%

48%

32%

Delivery Total

2016 2017

42%

27%

52%

35%

Delivery Total2016 2017

Online channel

Share of online ordering growing healthilyOnline system sales, %

RussiaTurkey

Group


23

Total potential store count

Targeted net store openings per year

(medium term)

LfL(medium term)

CAPEX program

• 1,500

• Low to mid-teens LfL growth

• 2017: 40 stores**• Medium term: 40–60 stores • We expect franchise and corporate stores to be the

main drivers of new store openings

• 900

• High single digit LfL growth

• 30 stores**• We expect franchise stores to be the main driver of

new store openings

• c. TRY20 MM in 2017**• c. TRY22 MM in 2018**

• c. RUB500 MM in 2017**• c. RUB300 MM in 2018**

Original management guidance

** short term management guidance was given on 19 September 2017 – some variance in 2017 store numbers/mix and associated capex – full update at prelims

ConclusionSECTION 4

25

Conclusion


• Group system sales growth of 32.8%

o Turkey: 14.2%

o Russia: 169.0%

• LfL growth of 10.0% in Turkey and 28.9% in Russia

• Online share increasing: 51.8% of delivery

• 76 store additions in the period

o Turkey: 27

o Russia: 49

26

Future growth driven by four core strategy pillars

Innovation and online ordering to drive like-for-like growth

Source: Company information

Potential to export the platform

Large whitespace opportunity in countries of presenceDomino’s stores, #


Notes:1. Excluding Azerbaijan and Georgia

Adj. EBITDA / System Sales, %

Source: Company information

Leverage scale advantage to further improve profitability

System sales LfL growth, %

19%

7%

38%

10%

Online Total

141%

42%

79%

29%

Online Total

Turkey Russia

2016 2017

2017 Total Potential

514

c. 900

2017 Total Potential

121

DP

Rus

sia

DP

Turk

ey

c. 1,500

(1)

+0.6 p.p.

4.1%

12.6%

2016 2016

Turkey Adj. EBITDA / System Sales, %

DP Eurasia

1 2

3 4

10.5% 11.1%

H1 2016 H1 2017Adj. EBITDA / System Sales

Russia Turkey

Adj. EBITDA / System Sales

APPENDIX

28

DP Eurasia: Financial summary

Notes:1. One-off items include activities that are not part of the normal course of business and are non-recurring including share-based incentives, IPO costs and severance costs for Turkey and Russia

System sales • Sales generated by the Group’s system stores (both corporate and franchise)

1H 2017 1H 2016 ChangeCorporate Store Count 223 188 35Franchise Store Count 370 326 44System sales (TRY MM) 398.5 308.8 29.0%

DP Eurasia income statement(TRY MM) 1H 2017 1H 2016 Change

Revenue 289.8 209.3 38.5%

Cost of Sales (184.7) (135.0) 36.8%

Gross Profit 105.1 74.2 41.6%

General Administrative Expenses (44.3) (33.9) 30.6%

Marketing and Selling Expenses (41.3) (30.1) 37.0%

Other Operating Income / (Expense) (0.9) 1.2 n.m.

Operating Profit 18.6 11.4 63.7%

Foreign Exchange (losses)/gains (7.3) 5.5 n/a

Financial Income 0.4 0.1 n/a

Financial Expense (10.0) (7.9) 27.2%

Profit / (Loss) Before Tax 1.7 9.1 n/a

Tax Expense (3.8) (2.2) 71.4%

Net Income (2.1) 6.9 n/a

EBITDA 37.9 27.0 40.3%

Adjusted EBITDA 39.4 31.2 26.4%

Adjusted net income (0.8) 11.0 n/a

Corporate revenue • Revenue from the Group’s corporate stores

Franchise revenueand royalty

• Consists of revenue from commissary sales to franchise stores and royalties calculated based on franchise store sales to customers, including the contribution to national advertising

Cost of sales

• Corporate store costs; production related costs of the Group’s commissaries, such as merchandise and raw materials; ingredients and non-food items (including those sold to the Group’s sub-franchisees); labour; rent; utilities and other, including D&A of corporate stores and commissaries

General and administrative

expenses

• Consists of headquarters expenses such as personnel (excl. marketing and selling personnel), rent, utilities, commissaries’ rents and non-production related personnel and headquarters-related D&A expenses

Marketing and selling expenses

• Includes marketing and selling personnel costs, royalties paid by the Group (on-going fees) and promotion and advertising expenses

Source: Company Information, IFRS Combined and Consolidated Financial Information, Management Accounts

Key KPIs

29

Exchange Rates

Year ended 31 December

2017 2016

Currency Period End Period Average Period End Period Average

EUR/TRY 4.516 4.116 3.710 3.338

RUB/TRY 0.065 0.062 0.057 0.045

EUR/RUB 68.867 65.901 63.811 74.231


30

63% 62%

37% 38%

2016 2017Delivery Take-away / Eat-in

63% 63%

37% 37%

2016 2017

Delivery Take-away/Eat-in

62% 60%

38% 40%

2016 2017

Delivery Take-away / Eat-in

Delivery – Take-away/Eat-in mix

% of system sales

RussiaTurkey

Group


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