TIDMDPEU
RNS Number : 0511B
DP Eurasia N.V
28 January 2020
For Immediate Release 28 January 2020
DP Eurasia N.V.
("DP Eurasia" or the "Company", and together with its
subsidiaries, the "Group")
Trading Update for the Year Ended 31 December 2019
Solid growth with high double-digit growth in digital
For the year ended
31 December
-----------------------
2019 2018 Change
----------- ---------- -------
(in millions of TRY,
unless otherwise
indicated)
Number of stores 765 724 41
Group system sales (1)
Turkey 845.7 736.1 14.9%
Russia 503.3 373.5 34.8%
Azerbaijan & Georgia 21.2 15.7 34.2%
Total 1,370.3 1,125.3 21.8%
Group system sales like-for-like
growth(2)
Turkey 13.1% 9.3%
Russia (based on RUB) 0.7% 16.0%
Group(6) 10.7% 10.3%
Highlights
-- The Board expects the full year Adjusted EBITDA(5) for 2019 to be in line with expectations
-- Management appointments in Russia - CEO, COO and CFO
-- Like-for-like enhancing pricing measures implemented in
Turkey during early 2019 highly successful
-- Similar measures being implemented in Russia - starting in February
-- 41 store openings for the Group - with 800(th) store in sight
- pipeline for 2020 remains strong in line with prior guidance
(Turkey 25 -30, Russia 40 - 60 stores)
-- Group system sales growth of 21.8% driven by both Russia and Turkey
o Turkish system sales growth of 14.9%
o Russian system sales growth of 34.8% (17.5% based on RUB)
-- Group online system sales(4) growth of 39.8%
o Turkish online system sales growth of 33.5%
o Russian online system sales growth of 49.0% (29.9% based on
RUB)
-- Online delivery system sales(3) as a share of delivery system
sales reached 70% for the year (2018: 61%)
Commenting on the update, Chief Executive Officer, Aslan Saranga
said:
"We are pleased with our top line performance given the
macroeconomic and competitive headwinds in our markets in 2019. We
are particularly pleased to have recorded double-digit
like-for-like growth in Turkey despite a slow start to the year.
Our "Dürümos" wrap launch in the third quarter and the successful
celebrity-endorsed advertising campaigns resulted in solid
like-for-like in the second half of the year, surpassing 20% in the
fourth quarter. Rapidly improving macro parameters in the fourth
quarter were also a key catalyst to our success; however, the
volatile situation beforehand was not conducive for store
openings.
"It was a challenging year in Russia. Greater Moscow
like-for-like performance was below plan due to new competitor
store openings and increased aggregator activity. Issues with
regional franchisees have been successfully resolved, but the store
opening guidance has not been achieved. We have expanded our
Russian marketing team and conducted an extensive marketing survey
in 9 cities with 2,800 customers and updated our marketing and
pricing strategy accordingly. Clearly defined measures such as
cluster based pricing by region and store, building on the success
in Turkey in H2 2019, will be in place starting in February to
restore like-for-like growth. A targeted marketing relaunch is
planned for Q1'2020 using a Russian celebrity for the first time.
We have also started testing with one of the Russian aggregators in
Q4'2019. We will share more on these measures at our preliminary
results release. On the management front, we are pleased to
announce three appointments which complete the Russian team: Mr.
Mustafa Özgül, who served as the CFO of Russian Operations since
2014, will take over as the CEO of Russian Operations effective
immediately. Additionally, Mr. Tarun Bhasin, a 20-year veteran of
Domino's India who last served as President & COO, will join
the business as the COO of Russian Operations as soon as his
working permit is secured. He was an integral part of the team that
took Domino's from 100 stores to 1,000 stores. Finally, Ms. Anna
Masalova, who has most recently served as Finance Director of
McDonald's Russia, has been appointed as the CFO of Russian
Operations.
"Digital continues to drive our business forward. Online
ordering as a percentage of delivery has reached 70%, up from 61%
in 2018. We will also launch our loyalty programme in Russia in
2020, which is currently in testing phase.
"The Board remains confident in its growth strategy and 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 +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: +44 3333000804
Participant PIN code: 32873421#
URL for international dial in numbers:
http://events.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 765 stores (550 in Turkey, 203
in Russia, eight in Azerbaijan and four in Georgia as at 31
December 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 31 December
------------------------------------------------------------------------------
2019 2018
Corporate Franchised Total Corporate Franchised Total
Turkey 123 427 550 137 398 535
Russia 121 82 203 101 78 179
Azerbaijan - 8 8 - 6 6
Georgia - 4 4 - 4 4
Total 244 521 765 238 486 724
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 years ended 31 December 2019 and 2018:
For the year ended 31 December
--------------------------------------------------
2019 2018
------------------------ ------------------------
Turkey Russia Total Turkey Russia Total
Store 32.0% 18.0% 27.8% 42.4% 23.9% 37.1%
Group's online
Online platform 28.5% 80.5% 47.0% 30.2% 76.1% 44.7%
Aggregator 35.7% 1.5% 22.8% 24.2% - 16.1%
Total online 64.2% 82.0% 69.9% 54.4% 76.1% 60.8%
Call centre 3.8% - 2.1% 3.1% - 2.1%
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 years ended 31 December 2019 and
2018:
For the year ended
31 December
---------------------
2019 2018
---------- ---------
Group online system sales like-for-like
growth(2)
Turkey 32.6% 33.7%
Russia (based on RUB) 15.4% 43.5%
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.
(6) 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 year ended 31 December
----------------------------------------------------------
2019 2018
---------------------------- ----------------------------
Currency Period End Period Average Period End Period Average
----------- --------------- ----------- ---------------
EUR/TRY 6.651 6.348 6.028 5.679
RUB/TRY 0.096 0.087 0.075 0.076
EUR/RUB 69.341 72.513 79.461 73.950
Delivery - Take away / Eat in mix
For the year ended 31 December
--------------------------------------------------
2019 2018
------------------------ ------------------------
Turkey Russia Total Turkey Russia Total
Delivery 63.8% 62.2% 63.1% 63.0% 60.2% 62.0%
Take away / Eat
in 36.2% 37.8% 36.9% 37.0% 39.8% 38.0%
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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