DP Eurasia N.V. Interim Results for the Period ended 30 June 2017

Transcription

1 DP Eurasia N.V. Interim Results for the Period ended 30 June 2017

2 Disclaimer This Presentation is not an offer to buy or sell any securities. Save where otherwise indicated, the Company is the source of the content of this Presentation and, accordingly, although care has been taken to ensure that the facts stated in this Presentation are accurate and that the opinions expressed are fair and reasonable, no representation, warranty or undertaking, express or implied, is made 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 opinions contained herein. Neither the Company nor any of its directors, officers, employees, affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this Presentation or its contents or otherwise arising in connection with the Presentation. Certain statements in this Presentation are not historical facts and are forward looking statements. These forward-looking statements 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 duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this Presentation or to update or to keep current any other information contained in this Presentation. The information and opinions contained in this Presentation are provided as at the date of this Presentation and are subject to change without notice. As a result, you are cautioned not to place undue reliance on such forward looking statements. 2

3 Presentation Team Aslan Saranga Chief Executive Officer Selim Kender Chief Strategy Officer and Head of Investor Relations 3

4 SECTION 1 Overview

5 DP Eurasia overview Growing regional expansion from an established strong base in Turkey (1) Moscow combined with strong growth in System Sales TRY MM 8 88 Russia Georgia Turkey x4 3 4 Azerbaijan Franchise stores Corporate stores Commissaries DP Turkey DP Russia Source: Management Accounts resulted in accelerating Adjusted EBITDA (3) performance TRY MM Market Position H (by number of stores) #1 #1 #1 #3 5% 6% 12% Number of Stores H Corporate Franchise Number of Commissaries H System Sales CAGR Average LfL (2) % 6% 96% 40% Adj. EBITDA Margin (Adj. EBITDA / System Sales) Source: Company Information, Management Accounts Source: IFRS Combined and Consolidated Financial Information, Management Accounts Notes: 1. Number of stores as of H 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, and 15-16); excluding Azerbaijan and Georgia due to no LfL stores in the period 3. 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 5

6 H Highlights SYSTEM SALES REVENUE Adjusted EBITDA TRY m TRY m TRY 39.4 m 29.0% 38.5% % LIKE-FOR-LIKE GROWTH STORE COUNT CAPEX AUG JUN 6.9% 31.3% TRY 30.0 m 6

7 SECTION 2 Operational Review

8 Store count growth Continuous and significant store rollout # of stores at period end DP Turkey DP Russia Aug 2017 Source: Company Information 500th store in Turkey imminent... # of stores at period end with Russia surpassing 100 in less than 4 years # of stores at period end Aug Aug 2017 Source: Company Information Source: Company Information 8

9 Like-for-like performance LfL performance in line with guidance System sales LfL growth, % Turkey Russia 33% 225% 18% 7% 7% 85% 59% 31% Online Total Online Total Source: Company Information 9

10 Online channel Share of online ordering growing healthily Online system sales, % Turkey Russia 39% 46% 25% 30% 48% 63% 32% 42% Delivery Total Delivery Total Group 40% 50% 25% 33% Delivery Total Source: Company Information 10

11 Market positioning Why do consumers choose DP Eurasia? I Attractive pricing vs competitors in Turkey and Russia with high value for money II Quick delivery times all year round in Turkey and Russia, despite the challenging weather conditions Value for money? % of affirmative respondents 65 Value for money? (1) % of affirmative respondents Delivery on Time, % Delivery on Time, % Domino's Pizza Pizza Hut Little Caesar's Burger King Mc Donald's Source: Ipsos Connect Brand Health and Ad Tracking, Feb/Mar 2017 III Innovation New Products Domino's Pizza Pizza Hut Papa John's Source: "Russian OHD market and dining habits" consumer survey in 2016 conducted by Ipsos H Source: Company Information H Turkey Russia Chicken popcorn Cold chocolate bites Greek salad Caesar salad Source: Company Information Notes: 1. The figures are representing only Moscow 11

12 SECTION 3 Financial Results

13 DP Eurasia: Financial snapshot Growth in system sales supported by store roll-out System Sales, TRY MM # of Outlets % % % % % Year on year growth Corporate Franchise Adjusted EBITDA and margin Capex and cash conversion (2) TRY MM 10.1% 9.9% TRY MM % 39 64% % Adj. EBITDA Margin (1) Capex Cash Conversion Source: IFRS Combined and Consolidated Financial Information, Management Accounts Notes: 1. As % of System Sales 2. Cash conversion defined as (Adj. EBITDA Capex ) / Adj. EBITDA 13

14 DP Turkey: Financial snapshot (1) System Sales System Sales, TRY MM Store count (2) # of Outlets 11% % % % % Year on year growth Corporate Franchise Adjusted EBITDA and margin Capex and cash conversion (4) TRY MM 10.5% 11.1% TRY MM % % 68% 6 11 Adj. EBITDA Margin (3) Capex Cash Conversion Source: IFRS Combined and Consolidated Financial Information, Management Accounts Notes: 1. Including contributions from Azerbaijan and Georgia 2. Turkey only 3. As % of System Sales 4. Cash conversion defined as (Adj. EBITDA Capex ) / Adj. EBITDA 14

15 DP Russia: Financial snapshot System Sales System Sales, TRY MM Store count # of Outlets 200% % % 30 Year on year growth Corporate Franchise Adjusted EBITDA TRY MM 5.9% 5.6% Capex TRY MM Adj. EBITDA Margin (1) Source: IFRS Combined and Consolidated Financial Information, Management Accounts Notes: 1. As % of System Sales 15

16 Cash flow generation and debt profile Cash flow generation TRY MM Debt profile of DP Eurasia TRY MM 31 64% 24% x 2.0x (11) (30) 2016 H (1) Adj. EBITDA Capex Adj. EBITDA - Capex Cash Conversion (2) Adj. Net Debt Gross Debt Adj. Net Debt / Adj. EBITDA LTM (2) (1) DP Eurasia s debt profile by currency DP Eurasia s debt profile by segment H Gross Debt TRY 217 MM H Turkish Gross Debt TRY 93 MM H Russian Gross Debt TRY 124 MM 5% 28% 35% 8% 75% Hedged via EUR deposit 65% 68% 92% TRY EUR RUB TRY EUR RUB EUR Source: IFRS Combined and Consolidated Financial Information Notes: 1. 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 2. Adjusted net debt is calculated as sum of short-term borrowings and long-term borrowings, less cash and cash equivalents and adjusted for non-recurring items including long term deposit for loan guarantee and delay in collection/payment day coinciding on a weekend 16

17 Management guidance Total potential store count 900 1,500 Targeted net store openings per year (medium term) 30 stores We expect franchise stores to be the main driver of new store openings 2017: 40 stores Medium term: stores We expect franchise and corporate stores to be the main drivers of new store openings LfL (medium term) High single digit LfL growth Low to mid-teens LfL growth CAPEX program c. TRY 20 MM in 2017 c. TRY 22 MM in 2018 c. RUB 500 MM in 2017 c. RUB 300 MM in

18 SECTION 4 Conclusion

19 Conclusion Solid topline and profitability growth o System Sales: 29.0% o Adjusted EBITDA: 26.4% LfL growth in line with guidance Online share increasing: ~ 50% of delivery Milestone store openings achieved in August o Group: exceeded 600 o Russia: exceeded 100 Source: Company Information 19

20 APPENDIX

21 DP Eurasia: Financial summary Key KPIs DP Eurasia income statement 1H H 2016 Change Corporate Store Count Franchise Store Count System sales (TRY MM) % System sales Sales generated by the Group s system stores (both corporate and franchise) (TRY MM) 1H H 2016 Change Revenue % Cost of Sales (184.7) (135.0) 36.8% Gross Profit % 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 % Foreign Exchange (losses)/gains (7.3) 5.5 n/a Financial Income n/a Financial Expense (10.0) (7.9) 27.2% Profit / (Loss) Before Tax n/a Tax Expense (3.8) (2.2) 71.4% Net Income (2.1) 6.9 n/a Corporate revenue Revenue from the Group s corporate stores Franchise revenue and royalty Cost of sales General and administrative expenses 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 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 subfranchisees); labour; rent; utilities and other, including D&A of corporate stores and commissaries Consists of headquarters expenses such as personnel (excl. marketing and selling personnel), rent, utilities, commissaries rents and nonproduction related personnel and headquartersrelated D&A expenses EBITDA % Adjusted EBITDA % Adjusted net income (0.8) 11.0 n/a Source: Company Information, IFRS Combined and Consolidated Financial Information, Management Accounts Marketing and selling expenses Includes marketing and selling personnel costs, royalties paid by the Group (on-going fees) and promotion and advertising expenses 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 21

22 DP Eurasia: Revenue & Expense Breakdown (TRY MM) 1H H 2016 Change 1H H 2016 System sales % Corporate % as a % of system sales 43.6% 38.2% Franchise % as a % of system sales 56.4% 61.8% 1H H 2016 Change 1H H 2016 Revenue % Corporate % as a % of revenue 60.0% 56.3% Franchise % as a % of revenue 35.7% 40.7% Other revenue % as a % of revenue 4.3% 3.0% Cost of Sales (184.7) (135.0) 37% Cost of Food/Non-Food/Transportation (100.5) (76.4) 32% as a % of system sales 25.2% 24.7% Corporate Store Expenses (70.5) (46.8) 51% as a % of corporate system sales 40.5% 39.7% Depreciation and Amortization (13.7) (11.8) 16% Gross Profit % as a % of system sales 26.4% 24.0% General Administrative Expenses (44.3) (33.9) 31% Overhead (Including Commisary) (38.6) (26.1) 48% of w hich one-off (1.4) (0.2) Overhead (excluding one-offs) (37.2) (25.9) 44% as a % of system sales 9.3% 8.4% Share based incentives (0.1) (4.0) n/a Depreciation and Amortization (5.6) (3.8) 46% Marketing and Selling Expenses (41.3) (30.1) 37% Marketing and Advertising (23.0) (16.3) 41% as a % of system sales 5.8% 5.3% Corporate Store Local Marketing (2.5) (1.9) 31% as a % of corporate system sales 1.5% 1.6% Royalty (15.8) (11.9) 32% as a % of system sales 4.0% 3.9% Other Operating Income / (Expense) (0.9) 1.2 n/a Operating Profit % 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 22

23 Adjusted EBITDA and Net Debt calculation DP Turkey DP Russia (TRY MM) 1H H 2016 System Sales Operating profit D&A EBITDA Non-recurring (income)/expenses Adjusted EBITDA % of system sales 11.1% 10.5% Adjusted EBIT % of system sales 6.8% 5.7% Capital expenditures Cash conversion 67.9% 78.0% (TRY MM) 1H H 2016 System Sales Operating profit (0.8) (0.4) D&A EBITDA Non-recurring (income)/expenses Adjusted EBITDA % of system sales 5.6% 5.9% Adjusted EBIT (0.7) (0.2) % of system sales -0.8% -0.8% Capital expenditures Cash conversion n.m. n.m. DP Eurasia (TRY MM) 1H H 2016 System Sales Operating profit D&A EBITDA Non-recurring (income)/expenses Adjusted EBITDA % of system sales 9.9% 10.1% Adjusted EBIT % of system sales 5.0% 5.0% Capital expenditures Cash conversion 23.7% 64.2% (TRY MM) 1H Short term bank borrowings Short-term portions of long-term financial lease borrowings Long-term bank borrowings Long-term financial lease borrowings Total borrowings Cash and cash equivalents Net debt Non-recurring items Long term deposit for loan guarantee (25.0) (23.2) Adjusting delay in collection/payment day coinciding on a weekend - (10.4) Adjusted net debt Notes: 1. Excludes income and expenses which are not part of normal course of business and are non-recurring items 23

24 Exchange Rates Period ended 30 June Currency Period End Period Average Period End Period Average EUR/TRY RUB/TRY EUR/RUB Year ended 31 Decem ber Currency Period End Period Average Period End Period Average EUR/TRY RUB/TRY EUR/RUB Source: Company Information 24

25 Delivery Take-away / Eat-in mix % of system sales Turkey Russia 38% 36% 37% 38% 62% 64% 63% 62% Delivery Take-away / Eat-in Delivery Take-away / Eat-in Group 38% 36% 62% 64% Source: Company Information Delivery Take-away / Eat-in 25