TIDMDPEU
RNS Number : 5479T
DP Eurasia N.V
21 July 2020
For Immediate Release 21 July 2020
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 2020
Digital drives resilient performance
For the period ended
30 June
-------------------------------
2020 2019 Change
---------------- ------------- -------
(in millions of TRY,
unless otherwise indicated)
Number of stores 754 736 18
Group system sales (1)
Turkey 438.9 386.4 13.6%
Russia 212.7 249.0 -14.6%
Azerbaijan & Georgia 13.1 10.0 30.4%
Total 664.7 645.4 3.0%
Group system sales like-for-like
growth(2)
Group(5) 6.0% 7.3%
Turkey 13.5% 7.7%
Russia (based on RUB) -20.1% 4.7%
Post-Covid
Group system sales(1) like-for-like (16 Mar-30
growth(2) Jun)
Turkey 5.8%
Russia (based on RUB) -29.7%
Pre-Covid y-o-y growth Post-Covid y-o-y growth
(1 Jan-15 Mar) (16 Mar-30 Jun)
(in millions of TRY, unless otherwise
Group system sales(1) indicated)
Turkey 200.6 26.2% 238.4 4.7%
Russia 113.1 9.6% 99.9 -31.0%
Azerbaijan & Georgia 5.6 43.3% 7.4 21.3%
Total 319.3 20.0% 345.7 -8.7%
Highlights
-- Strong pre-Covid (1 Jan-15 Mar) group system sales growth of 20.0% driven by Turkey
o Turkish system sales growth of 26.2%
o Russian system sales growth of 9.6% (-6.3% based on RUB)
-- Post-Covid (16 Mar-30 Jun) group system sales performance resulted in an 8.7% contraction
o Turkish system sales growth of 4.7%
o Russian system sales contraction of -31.0% (-33.2% based on
RUB)
-- Group online system sales(4) growth of 27.7%
o Turkish online system sales growth of 38.2%
o Russian online system sales growth of 14.2% (5.3% based on
RUB)
-- Online delivery system sales(3) as a share of delivery system
sales surpassed 75% (H1 2019: 67.5%)
-- Strong liquidity position - TRY 259 million of cash at hand
and additional available bank lines of TRY 82 million as at 30 June
2020
-- 11 net store closures in H1 2020 due to Covid
Commenting on the update, Chief Executive Officer, Aslan Saranga
said:
"Group performance has been resilient during the last quarter.
Our business, along with the sector, was heavily affected by the
on-set of the Covid-19 pandemic from the middle of March. We took
immediate anti-infection measures for business continuity, such as
contactless delivery, contactless take-away and compulsory mask
utilisation to ensure the well-being of our customers and
employees. However, governmental measures implemented in our core
markets resulted in varying operational constraints. In Istanbul,
26 days of curfew, mostly on weekends and public holidays, was
instigated, whereas in Moscow the curfew lasted 72 days straight
until 9 June 2020. Turkey also started the normalisation process
earlier compared to Russia, such as the opening of restaurants for
dining in as of 1 June 2020. As a result of these different
approaches by local governments, Turkey is moving closer to its
pre-Covid level of operations; however, Russia has some ground to
make up especially in dine-in, which opened on 23 June 2020, and
take-away. The start of the normalisation resulted in better sales
performance in June compared to May in both Turkey and Russia.
" As Covid continues to have a deeper effect in Russia, its
effect on our Russian business and its results is also more severe.
In line with the Russia plan, we have also taken action to right
size the cost base and minimize capital expenditures; however, the
impact of Covid is making it difficult to gauge the full benefits
of the plan especially on the top line.
" Despite these challenging circumstances, digital continues to
be a core focus and to drive our business forward. Online ordering
as a percentage of delivery surpassed 75% in the period, up from
67.5% in H1 2019 as we continuously fine tune our user experience,
network architecture and loyalty programme.
"Through our experience during the first wave of the pandemic,
we feel more comfortable that a full shut down of our stores in the
future would be a very remote possibility. Assuming that we are not
faced with significantly worse operational constraints, the Group
remains confident in its near-term plans for business continuity
and cash flow as well as its overall prospects in the longer term.
"
Enquiries
DP Eurasia N.V.
Selim Kender, Chief Strategy Officer &
Head of Investor Relations +90 212 280 9636
Buchanan (Financial Communications)
Richard Oldworth / Victoria Hayns / Tilly +44 20 7466 5000
Abraham dp@buchanan.uk.com
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 Free: 08003589473
UK Toll: 03333000804
Participant PIN code: 52942107#
URL for international dial in numbers:
https://events-ftp.arkadin.com/ev/docs/NE_W2_TF_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 754 stores (542 in Turkey, 199 in Russia,
nine in Azerbaijan and four in Georgia as at 30 June 2020), 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
--------------------------------------------------------
2020 2019
Corporate Franchised Total Corporate Franchised Total
Turkey 121 421 542 136 402 538
Russia 120 79 199 101 86 187
Azerbaijan - 9 9 - 7 7
Georgia - 4 4 - 4 4
Total 241 513 754 237 499 736
Delivery channel mix and online like-for-like growth
The following table shows the Group's delivery system sales (3)
, 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 2020 and 2019:
For the period ended 30 June
--------------------------------------------------
2020 2019
------------------------ ------------------------
Turkey Russia Total Turkey Russia Total
Store 28.3% 10.9% 23.5% 34.0% 20.8% 30.0%
Group's online
Online platform 25.1% 73.9% 41.5% 30.1% 79.2% 48.0%
Aggregator 44.4% 15.2% 33.6% 31.9% - 19.5%
Total online 69.5% 89.1% 75.1% 62.0% 79.2% 67.5%
Call centre 2.3% - 1.4% 4.0% - 2.5%
Total 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 2020 and 2019:
For the period ended
30 June
-----------------------
2020 2019
----------- ----------
Group online system sales like-for-like
growth(2)
Group(5) 32.3% 22.9%
Turkey 38.6% 24.1%
Russia (based on RUB) 8.9% 16.9%
Liquidity
The Group continues to have a strong liquidity position, having
access to cash at hand and additional borrowing capacity available
from its Turkish banks. As at 30 June 2020, the Group had TRY 259
million of cash at hand and additional available bank lines of TRY
82 million.
The Group's strong liquidity position enables it to prepay its
bank borrowings in Russia if required, and still maintain a strong
liquidity position. The Group obtained a waiver from Sberbank with
respect to its covenants on 30 June 2020 due to Covid and will
either obtain a waiver for the rest of the year or repay the
remaining loan. The principal outstanding under the Sberbank loan
currently amounts to RUB 1.6 billion, of which RUB 0.3 billion is
supported by a cash collateral deposit.
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) Group like-for-like growth is a weighted average of the
country like-for-like growths based on store numbers as described
in Note (2).
Appendices
Exchange Rates
For the period ended 30 June
----------------------------------------------------------
2020 2019
---------------------------- ----------------------------
Currency Period End Period Average Period End Period Average
----------- --------------- ----------- ---------------
EUR/TRY 7.708 7.132 6.557 6.343
RUB/TRY 0.097 0.093 0.091 0.086
EUR/RUB 78.678 77.961 71.820 73.840
Delivery - Take away / Eat in mix
For the period ended 30 June
--------------------------------------------------
2020 2019
------------------------ ------------------------
Turkey Russia Total Turkey Russia Total
Delivery 70.0% 77.4% 72.4% 63.9% 60.3% 62.5%
Take away / Eat
in 30.0% 22.6% 27.6% 36.1% 39.7% 37.5%
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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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