TIDMDPEU
RNS Number : 8111U
DP Eurasia N.V
28 November 2023
28 November 2023
DP Eurasia N.V.
("DP Eurasia" or the "Company", and together with its
subsidiaries, the " Group ")
Trading Update for the ten months ended 31 October 2023 (the
"Period") (1) (2)
(millions of TRY, unless otherwise indicated)
For the period ended
31 October
-----------------------
Number of stores 2023 2022 Change
Turkey (Domino's) 678 637 41
Turkey (COFFY) 67 22 45
Azerbaijan 10 10 -
Georgia 6 5 1
Total continuing operations
(3) 761 674 87
Change
Group system sales (after (pre-IAS
IAS 29) (4) 2023 2022 Change 29)
Turkey 5,772.3 4,283.2 34.8% 105.9%
Azerbaijan 99.9 99.8 0.0% 51.3%
Georgia 68.1 52.4 30.0% 94.4%
COFFY 263.9 66.1 299.3% 499.1%
Total continuing operations 6,204.2 4,501.5 37.8% 110.6%
System sales LfL growth(5) (after IAS 29) (pre-IAS 29)
2023 2022 2023 2022
Turkey 30.0% -8.2% 98.1% 58.3%
Azerbaijan (based on AZN) 7.7% 3.7% 7.7% 3.7%
Georgia (based on GEL) 5.0% 15.1% 5.0% 15.1%
Total continuing operations 29.4% -7.8% 95.7% 57.1%
Highlights
-- Strong overall performance with Group system sales for
continuing operations up 37.8% (pre-IAS 29: 110.6%) or 29.4% on a
LfL basis.
-- Delivered excellent LfL growth in Turkey of 30.0% amid a
sustained inflationary environment, reflecting our ongoing focus on
network expansion, strategic pricing, product and service
innovation.
-- Azerbaijan and Georgia delivered LfL growth of 7.7% and 5.0%
respectively (in local currencies).
-- Online delivery system sales in Turkey increased to 84.2%
(2022: 80.6%) as a share of delivery system sales(6) , reflecting
robust positioning for the online ordering channel as Turkish
online system sales grew by a solid 41.6% (pre-IAS 29: 117.8%).
Like-for-like growth was also very strong at 37.4% (pre-IAS 29:
110.8%).
-- Net new store opening momentum has been maintained:
o 41 Domino's Pizza openings in Turkey year-on-year, reflecting
the strong demand profile. In 2023, 23 net stores have been opened
in Turkey so far. Given the accelerated pace of openings, we are
confident to deliver our 35-40 net store guidance by FY23.
o The COFFY network continues to grow rapidly. It has reached 67
stores, an increase of 45 year-on-year with 38 net openings in the
current financial year. We are well on track with our guidance of
50-60 net COFFY openings in FY23.
-- The growth opportunity for COFFY remains significant, with
excellent market dynamics in Turkey for the coffee sub-segment.
COFFY delivered TRY 264 million to Group system sales, up 299%.
-- Liquidity position as of 31 October 2023: TRY 402 million
cash and an undrawn bank facility of TRY 523 million. The Group
paid off DP Russia's external debt of 159 million TRY out of
existing cash resources.
Outlook
-- The Group continues to trade in line with its formal guidance
for FY23, which is set out below.
-- FY23 guidance for LFL growth, store openings and capital
expenditure has been maintained and is as follows:
2023 guidance*
------------------------- ---------------------
LfL growth rate High teens
(pre IAS 29: 80-90%)
Domino's Pizza net store
openings 35 - 40
COFFY net store openings 50 - 60
Capital expenditure TRY 200 millon
------------------------- ---------------------
*Russia excluded
-- The Group plans to disclose FY24 guidance within its
preliminary results announcement in April 2024.
Commenting on the update, Chief Executive Officer, Aslan Saranga
said:
"Strong trading momentum has been maintained and we remain
dedicated to our well-designed, targeted strategy. Execution of
this enables us to continue to deliver solid growth, as we focus on
three core areas - strategic pricing and product innovation,
continued digital innovation, and operational efficiencies to
generate sustainable profitability.
"We are pleased to report sustained like-for-like growth well
above inflation as well as acheiving continued network expansion
while navigating geopolitical and macro uncertainties. Our strategy
enables us to combat the high levels of volatility in the regions
in which we operate and, as Q4 progresses, we are seeing the impact
of our efforts becoming increasingly visible in terms of volume
generation and customer acquisition.
"Our product innovation capabilities remain integral to support
our strategic objectives. In October, we successfully launched the
Domdom Burger, ensuring it took centre stage on our delivery
channels via tailored campaigns. We have positioned it at a highly
affordable price point of TRY50 (less than USD$2). This led to a
successful launch and contributed towards an increase in overall
product mix and volume. The launch of the Domdom burger reflects
our commitment to affordability - ensuring that we have suitable
products at the lower price threshold allows us to continue to
service demand from a very diverse range of consumers.
"Elevating the end-to-end customer experience across all brands
remains a crucial element of our strategy. We continue to improve
the online proportion of our sales, with digital innovation an
important enabler for enhancing the customer experience and
solidifying our robust online position. We have increased the share
of online ordering in takeaway this financial year while
maintaining attractive pricing, enabling us to reduce cost per
order.
"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 we will deliver on our
2023 store opening guidance as well as embarking on another solid
year of network expansion in 2024.
"Demand for COFFY remains very strong with improving sales
performance. Its distinctive value proposition continues to attract
new consumers. COFFY's main growth driver will be the opening of
new stores, predominantly through franchising and with various
store concepts that fit in with local circumstance.
"To uphold our commitment to consumers, we will continue to
prioritise the development of new, fashionable products and
creating app-first digital experiences. Recognising that the coffee
business is a new venture for us, we will invest in essential
processes and capabilities while striving to attain our ambitious
targets.
"This has been another excellent period for the Group, and we
look forward to a strong end to the financial year."
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
9.00am this morning, which will be accessible using the following
details:
Conference call UK-Wide: +44 (0) 33 0551 0200
dial-in UK Toll Free: 0808 109 0700
Quote 'DP Eurasia Trading Update'
Password:
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, 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. The Group
offers pizza delivery and takeaway/ eat-in facilities at its 694
stores (678 in Turkey, 10 in Azerbaijan and 6 in Georgia) as of 31
October 2023 and operates through its owned corporate stores (12%)
and franchised stores (88%). In addition to its pizza delivery
business, the Group also has its own coffee brand, COFFY, which
trades from 67 stores at period-end, 52 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.
In line with the announcement on 21 August 2023, the Company has
initiated the steps to file for DP Russia's bankruptcy. This was
preceded by the announcement on 28 December 2022, which confirmed
that the Company was evaluating its presence in Russia, the impact
of sanctions and its continuing ability to serve its customers in
Russia. In this connection, the Russian segment was classified as
discontinued operations within the Company's audited financial
statements for the year ended 31 December 2022 and also within the
(unaudited) financial statements for the period ended 30 June
2023.
Performance Review
Store count For the period ended 31 October
----------------------------------------------------------------
2023 2022
Corporate Franchised Total Corporate Franchised Total
Turkey (Domino's) 82 596 678 93 544 637
Azerbaijan - 10 10 - 10 10
Georgia - 6 6 - 5 5
COFFY 15 52 67 7 15 22
Total 97 664 761 100 574 674
Sales channel mix
2023 2022
Store 29.5 % 34.7 %
------- -------
Online Total online 70.0 % 64.8 %
------------------------------------ ------- -------
Group's online platform 23.0 % 23.6 %
-------------------------------------------------- ------- -------
Aggregator 47.0 % 41.2 %
-------------------------------------------------- ------- -------
Call centre 0.5 % 0.5 %
------- -------
Total 100% 100%
------- -------
Delivery - Take away / Eat in mix
2023 2022
Delivery 72.3% 73.5%
Take away / Eat in 27.7% 26.5%
Total 100% 100%
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 and also for the (unaudited)
financial statements for the period ended 30 June 2023.
(3) As announced on 21 August 2023, the Group initiated
bankruptcy proceedings for its Russian subsidiary. As the
operations have been suspended accordingly, Russia is not included
in the numbers. Please note that there were 171 Russian stores in
the system a year ago.
(4) System sales are sales generated by the Group's corporate
and franchised stores to external customers and do not represent
revenue of the Group.
(5) 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.
(6) Online system sales are system sales of the Group generated
through its online ordering channel.
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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November 28, 2023 02:00 ET (07:00 GMT)
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