TIDMDPEU
RNS Number : 3199H
DP Eurasia N.V
27 July 2023
27 July 2023
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 2023 (the
"Period") (1) (2)
(millions of TRY, unless otherwise indicated)
For the period ended
30 June
-----------------------
Number of stores 2023 2022 Change
Turkey (Domino's) 675* 628 47
Turkey (COFFY) 51 15 36
Azerbaijan 10 10 -
Georgia 6 5 1
Total continuing operations 742 658 84
Russia 142 184 -42
Grand Total 884 842 42
Change
Group system sales (after (pre-IAS
IAS 29) (3) 2023 2022 Change 29)
Turkey 2,424.0 1,864.6 30.0% 91.7%
Azerbaijan 42.7 44.8 -4.6% 40.7%
Georgia 30.6 22.4 36.2% 99.9%
COFFY 95.3 21.7 339.5% 529.5%
Total continuing operations 2,592.6 1,953.5 32.7% 95.6%
Russia (discontinued operations) 422.2 492.7 -14.3% -14.3%
Grand Total 3,014.8 2,446.2 23.2% 64.7%
---------------------------------- ----------- ---------- ------- ----------
System sales LfL growth(4) (after IAS 29) (pre-IAS 29)
2023 2022 2023 2022
Turkey 26.5% -8.4% 86.2% 51.0%
Azerbaijan (based on AZN) 5.2% 3.7% 5.2% 3.7%
Georgia (based on GEL) 4.3% 32.2% 4.3% 32.2%
Total continuing operations 25.9% -7.9% 84.1% 50.1%
Russia (discontinued operations,
based on RUB) -24.8% -2.6% -24.8% -2.6%
* Including nine temporarily closed stores as a result of the
earthquake in early 2023.
Highlights
-- Strong overall performance with Group system sales for
continuing operations up 32.7% (pre-IAS 29: 95.6%) or 25.9% on a
LfL basis, leading to upgraded full year LfL growth guidance.
-- Delivered excellent LfL growth in Turkey of 26.5% amid a
sustained inflationary environment, reflecting our ongoing focus on
network expansion, strategic pricing, product and service
innovation.
-- Azerbaijan and Georgian operations delivered LfL growth of
5.2% and 4.3% respectively (in local currencies).
-- Online delivery system sales in Turkey increased to 83.9%
(2022: 81.2%) as a share of delivery system sales(6) , reflecting
our robust positioning for the online ordering channel. Strong
Turkish online system sales growth of 30.7% (pre-IAS 29:
93.0%).
-- Following a swift response to the devasting earthquake in
Turkey in February, which resulted in the temporary closure of 12
Domino's Pizza stores, three have now been reopened.
-- Net new store opening momentum has been maintained:
o 47 Domino's Pizza openings in Turkey year-on-year, reflecting
the strong demand profile.
o The COFFY network has now exceeded the 50-store milestone,
having increased by 22 in the current financial year (or by 36
year-on-year) to 51. We are on track with our guidance of 50-60 net
COFFY openings in FY23.
o Georgia now has six Domino's Pizza stores, an increase of
one.
-- The growth opportunity for COFFY remains significant, with
excellent market dynamics in Turkey for the coffee sub-segment.
COFFY delivered TRY 95.3 million to Group system sales, up
339.5%.
-- The Group continues to evaluate its presence in Russia and,
as previously announced, is considering various options which may
include a divestment of its Russian operations, although a sale
process is increasingly challenging. In the meantime, the Group
continues to limit investment in Russia and remains focused on
optimising the existing store coverage. At Period end, the total
number of stores in Russia stood at 142, compared to 184 at 30 June
2022.
-- Liquidity position as of 30 June 2023: TRY 370.6 million cash
and an undrawn bank facility of TRY 515 million.
-- While we remain mindful of sustained macro-economic
volatility and inflation, our first half performance was better
than the Board's expectations thanks to solid volume generation and
customer acquisition. The Board is therefore confident that LfL
inflation adjusted growth will be in the low teens for the full
year 2023, better than the previously expected high single digit
figure. Guidance for store openings and capital expenditure has
been maintained. 2023 guidance is now as follows:
2023 guidance* Previous Revised
------------------------- --------------------- ---------------------
LfL growth rate High single digit Low teens
(pre IAS 29: 60-70%) (pre IAS 29: 70-80%)
Domino's Pizza net store
openings 35 - 40 35 - 40
COFFY net store openings 50 - 60 50 - 60
Capital expenditure TRY 160 millon TRY 160 millon
------------------------- --------------------- ---------------------
*Russia excluded
Commenting on the update, Chief Executive Officer, Aslan Saranga
said:
"It has been a strong first half performance as we continue to
successfully implement our targeted action plan to mitigate the
ongoing macro challenges that management has deep experience in
navigating. As a result, we are reporting excellent and sustained
LfL growth, enabling us to upgrade full year guidance, and
continued network expansion.
"The Board is proud of the Group's reaction to support
colleagues impacted by February's devastating earthquake. We are
restoring impacted operations and continue to stand in solidarity
with our employees, business partners and the wider community.
"Our targeted strategy focuses on three areas - strategic
pricing and product innovation, continued digital innovation, and
operational efficiencies to generate sustainable profitability.
This approach has enabled us to combat the high levels of
volatility in the regions in which we operate.
"Our focus on product innovation remains integral. We continue
to broaden our entry price product range and launched a new
mushroom pizza in January which has reached good volumes. Following
the successful Pizzetta launch last year, we added new varieties to
further enhance the potential of this product line. In addition,
our new 'snacks from the oven' range was launched in February
presenting a broad choice of attractively priced products to
customers who increasingly seek value and affordability. The latest
addition to our product range, Pizza XL, has contributed well in
its early stages and in line with our internal expectations. With a
Turkish nationwide advertising campaign being rolled out in July,
we expect the contribution from Pizza XL to continue to
improve.
"We continue to improve the online proportion of our sales, and
digital innovation remains an important enabler for us to enhance
the customer experience and further solidify our robust positioning
for the online ordering channel.
"We retain a fundamental commitment to ensuring franchisees
remain profitable. As a result, franchisee demand for both Domino's
Pizza and COFFY continues to be very healthy. We have a strong
pipeline of new sites and are confident that 2023 will be another
solid year for network expansion.
"Consumer demand for COFFY stands very strong owing to its
already proven sales performance. This demand, alongside our
ambitious targets for 2023, will enable us to add further scale to
the business.
"Overall, we are pleased with the strong first half performance
with strong customer acquisition and elevated volumes. We will
continue to deliver on our targeted strategy to make the most of
what continues to be a significant growth opportunity. Whilst the
Board is conscious of the ongoing uncertainty, current trends
suggest that adjusted EBITDA for 2023 is likely to be above the
current market expectations."
Enquiries
DP Eurasia N.V.
İlknur Kocaer, CFA - Investor Relations
Director +90 212 280 9636
Buchanan (Financial Communications)
Richard Oldworth / Toto Berger / Verity +44 20 7466 5000
Parker dp@buchanan.uk.com
A conference call for investors and analysts will be held at
9.30am this morning, which will be accessible using the following
details:
Conference call dial-in: 08006522435
For further details, please contact Buchanan on +44 20 7466 5000
/ dp@buchanan.uk.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 833 stores (675 in Turkey, 142
in Russia, 10 in Azerbaijan and 6 in Georgia) as of 30 June 2023
and operates through its owned corporate stores (10%) and
franchised stores (90%). In addition to its pizza delivery
business, the Group also has its own coffee brand, COFFY, which
trades from 51 stores at period-end, 38 of which are franchised.
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.
Performance Review
Store count As of 30 June
--------------------------------------------------------
2023 2022
Corporate Franchised Total Corporate Franchised Total
Turkey (Domino's) 82 593 675 94 534 628
Azerbaijan - 10 10 - 10 10
Georgia - 6 6 - 5 5
COFFY 13 38 51 5 10 15
Total 95 647 742 99 559 658
Russia 0 142 142 92 92 184
Grand Total 95 789 884 191 651 842
Delivery channel mix and online LfL growth
The following table shows the Group's delivery system sales (7)
, 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 2023 and 2022:
For the period ended 30 June
--------------------------------------------------
2023 2022
------------------------ ------------------------
Turkey Russia Total Turkey Russia Total
15.5 5.7 15.8 18.3 17.6
Store % % % % 6.5 % %
Group's online 22.0 72.0 28.5 25.1 72.2 34.4
Online platform % % % % % %
61.8 22.3 55.2 56.1 21.3 47.7
Aggregator % % % % % %
83.9 94.3 83.7 81.2 93.5 82.0
Total online % % % % % %
0.5
Call centre 0.6 % - % 0.5 % - 0.4 %
Total 100% 100% 100% 100% 100% 100%
The following table shows the Group's online LfL growth (4) ,
broken down by the Group's two largest countries in which it
operates, for the periods ended 30 June 2023 and 2022:
Group online system sales (after IAS 29) (pre-IAS 29)
LfL growth
2023 2022 2023 2022
Group(5) 17.2% -2.9% 65.4% 45.2%
Turkey 28.0% -3.0% 88.6% 59.7%
Russia (based on RUB) -23.8% -2.5% -23.8% -2.5%
--------------------------- ------------ ---------- ------- ------
Notes
(1) COFFY numbers are included in all Turkey and Group figures,
unless presented separately. Like-for-like figures exclude COFFY.
These numbers are not audited.
(2) IAS 29 'Financial Reporting in Hyperinflationary Economies'
is currently applicable in Turkey. Company's preliminary results
for the year ended 31 December 2022, published on 12 April, was
adjusted accordingly.
(3) System sales are sales generated by the Group's corporate
and franchised stores to external customers and do not represent
revenue of the Group.
(4) 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). This is a non-IFRS
measure and non-IFRS measures are not audited.
(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 (4). This is a non-IFRS measure and non-IFRS measures are
not audited.
(6) Online system sales are system sales of the Group generated
through its online ordering channel.
(7) Delivery system sales are system sales of the Group
generated through the Group's delivery distribution channel.
(8) EBITDA, adjusted EBITDA and non-recurring and non-trade
income/expenses are not defined by IFRS. These items are determined
by the principles defined by the Group management and comprise
income/expenses which are assumed by the Group management to not be
part of the normal course of business and are non-trading items.
These items which are not defined by IFRS are disclosed by the
Group management separately for a better understanding and
measurement of the sustainable performance of the Group.
Appendices
Exchange Rates
For the period ended 30 June
----------------------------------------------------------
2023 2022
---------------------------- ----------------------------
Currency Period End Period Average Period End Period Average
----------- --------------- ----------- ---------------
EUR/TRY 28.154 21.407 17.522 16.196
RUB/TRY 0.303 0.256 0.321 0.200
EUR/RUB 95.105 83.651 53.858 83.520
Delivery - Take away / Eat in mix
For the period ended 30 June
--------------------------------------------------
2023 2022
------------------------ ------------------------
Turkey Russia Total Turkey Russia Total
Delivery 73.1% 72.6% 72.7% 75.7% 75.9% 75.4%
Take away / Eat in 26.9% 27.4% 27.3% 24.3% 24.1% 24.6%
Total 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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END
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July 27, 2023 02:00 ET (06:00 GMT)
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