Professional Documents
Culture Documents
Domino's Pizza Investor Day Presentation For Thomson
Domino's Pizza Investor Day Presentation For Thomson
Note: This is being recorded and webcast live. This will also be
available on our website for replay.
2
Forward-Looking Statements
These statements relate to future events or our future financial performance and are subject to known
and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity,
performance or achievements to differ materially from those expressed or implied by these forward-
looking statements. This presentation and our accompanying comments do not purport to identify the
risks inherent in an investment in Domino’s Pizza and factors that could cause actual results to differ
materially from those expressed or implied in the forward-looking statements. These risks include but
are not limited to those risk factors identified in Domino’s Pizza, Inc.’s Annual Report on Form 10-K for
the fiscal year ended January 1, 2012, as well as other SEC reports filed by Domino’s Pizza, Inc. from
time to time. Although we believe that the expectations reflected in the forward-looking statements are
based upon reasonable estimates and assumptions, we cannot guarantee future results, levels of
activity, performance or achievements. We caution you not to place undue reliance on forward-looking
statements, which reflect our estimates and assumptions and speak only as of the date of this
presentation. We undertake no obligation to update the forward-looking statements to reflect
subsequent events or circumstances. In light of the above, you are urged to review the disclosures
contained in the Domino’s Pizza, Inc. SEC reports, including the risk factors contained therein.
This presentation contains trade names, trademarks and service marks of other companies. We do not
intend our use or display of other parties’ trade names, trademarks and service marks to imply a
relationship with, or endorsement or sponsorship of, these other parties.
3
Patrick Doyle
Chief Executive Officer
Domino’s is Poised to Lead
5
Quality Food
6
Efficient Operations
7
Known for Service
8
Strong Brand Equity
9
Three Headlines
10
1. United States: A Share Game
1. The United States: A Share Game
12
1. The United States: A Share Game
QSR Hamburger
2.1% 1.9%
Major Chains
Small Chains
Independents
96%
Years Ending September 2012, Share of Visits. Source: The NPD Group/CREST®
13
1. The United States: A Share Game
QSR Mexican
9.8%
Major Chains
8.2%
Small Chains
82% Independents
Years Ending September 2012, Share of Visits. Source: The NPD Group/CREST®
14
1. The United States: A Share Game
QSR Sandwich
Major Chains
19%
Small Chains
71%
10% Independents
Years Ending September, 2012, Share of Visits. Source: The NPD Group/CREST®
15
1. The United States: A Share Game
Major Chains
Small Chains
30.6% 55.0%
Independents
14.4%
Years Ending September 2012, Share of Pizza Delivery Consumer Spending. Source: The NPD Group/CREST®
16
1. The United States: A Share Game
Domino’s and major chains have gained 3% in delivery share from small chains and
independents over the last five years
2007 2012
Domino's
20% 22.6%
31.7% Major Pizza Chains 30.6%
Small Pizza Chains
31.9%
Pizza Independents 32.4%
16.4% 14.4%
Years Ending September 2007 and 2012, Share of Delivery Consumer Spending. Source: The NPD Group/CREST®
17
1. The United States: A Share Game
Share of Online Dollars – QSR Pizza
7.7%
7.1%
Domino's
Online marketing has influenced a restaurant visit for 38% of smartphone owners
Use Smartphones To
Indicate a Smartphone
38% Influenced A
Restaurant Visit
Restaurant Website 35
Facebook 30
Google Ad/Offer 25
Groupon 22
Yelp 20
Urbanspoon 17
Restaurant Email/Text 15
22
2. Technology: Key to Winning
23
2. Technology: Key to Winning
24
2. Technology: Key to Winning
25
International Growth: A Scale Game
26
3. International: A Scale Game
95% of Population
Outside of the U.S.
27
Source: US Census Bureau
3. International: A Scale Game
DPZ global footprint - 5,144 stores outside the U.S.
Vietnam
Malaysia
India
Store count as of Q3 2012 28
3. International: A Scale Game
Dunkin’ Domino’s
McDonald’s Yum Brands Starbucks Burger King
Brands Pizza
19,903 19,619 6,938 5,214
7,554 5,144
international international international international
international international
stores stores Stores stores
Stores stores
Store counts are as of most recent quarter in 2012. Burger King excludes Canada.
29
3. International: A Scale Game
A Quiz
What is the
world’s largest
restaurant
company that is
not based in the
U.S.?
30
3. International: A Scale Game
Enterprise
Inns (UK)
31
Global Growth: Restaurant Parallels to Packaged Goods
Global Growth: Restaurant Parallels to Packaged Goods
33
Global Growth: Restaurant Parallels to Packaged Goods
34
Source: http://www.convergencealimentaire.info/
Global Growth: Restaurant Parallels to Packaged Goods
35
Closing
Domino’s Pizza (DPZ)
Total Cumulative Return of $100 Investment
$700
23.8% CAGR
$600
$500
$400
$300
$200
$100
$0
37
Kevin Vasconi
Chief Information Officer
Our Technology Objectives
40
Our Technology Objectives
41
Invest in Digital Growth
Why Invest?
Higher Ticket
Competitive Advantage
42
Invest in Digital Growth
Why Invest?
Digital provides a ubiquitous customer relationship
34.0%
32.0%
30.0%
28.0%
26.0%
24.0%
22.0%
2012
20.0%
2011 P11
2011 P12
2011 P13
2012 P10
2012 P11
2011 P1
2011 P2
2011 P3
2011 P4
2011 P5
2011 P6
2011 P7
2011 P8
2011 P9
2012 P1
2012 P2
2012 P3
2012 P4
2012 P5
2012 P6
2012 P7
2012 P8
2012 P9
2011 P10
2011 2012
44
Invest in Digital Growth
U.S. Market:
45
Invest In Digital Growth: Online
People who order online have higher satisfaction
5.0
4.5
Satisfaction
4.0
3.5
3.0
49
Invest in Digital Growth
51
Evolve Customer Database
52
Evolve Consumer Database
AB Testing
53
Evolve Consumer Database
Understanding the order funnel
54
Evolve the Customer Interface
55
Evolve Customer Database
56
Evolve Customer Database
Who is the Domino’s customer – individual, household or both
Cell
E-Mail
Family
Social
Address
CUSTOMER Work
Group
Name
Social
Group
Walk-in
Carry Out
Preferences Ad-
Order Hoc
History Group
Demo-
graphics
Payment
Type
58
Our Technology Objectives
59
Next Generation Pulse and OLO
First Pulse store in 2001 & the world today
60
2002 Domino’s Pizza Menu
61
2012 Domino’s Pizza Menu
62
Update and Improve Infrastructure
Managed like a
commercial Underlying Continue to
Single, global, software architecture is enhance Pulse
unicode, code product SOA to support to address
base (published 3 cloud in the international
year cycle future growth
plans)
63
Upgrade and Improve Infrastructure
API
Pulse
OLO PWR
64
Upgrade and Improve Infrastructure
U.S. Stores International Stores Total Countries Installed
4,846 2,628 38
*Numbers as of Q3 YTD 65
Upgrade and Improve Infrastructure
66
Upgrade and Improve Infrastructure
Infrastructure and Security Investments
67
Domino’s: Leveraging Technology
Where We Are Now Where We Are Going
Pulse Pulse
OS
VM
OS
HW VM
OLO Database
OLO
OS
VM
Data
Warehouse
Data Warehouse
Video
69
Richard Allison
Executive Vice President, International
2012 Has Been A Year of Important Milestones
73
Today’s Objectives
Industry Outlook
74
Today’s Objectives
Industry Outlook
75
Overview of Recent Performance
Store count more than doubled since 2003 - pace of growth has accelerated
5,144
8.5%
500
4,835
4,422
450
4,072
400
3,726
3,469
4,000
3,223
350
2,987
2,749
300
2,523
250
200
2,000
150
- -
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Q3
YoY Growth 5.9% 9.0% 8.7% 7.9% 7.6% 7.4% 9.3% 8.6% 9.3% 10.6%*
*vs Q3 2011
76
Overview of Recent Performance
Retail sales surpassed $3.5B; grown at 14.5% CAGR over last eight years
Retail Sales
Retail ($M)
Sales
Q3 2012 TTM Retail
$4,000M Sales
$3.7B
3,500
3,519
3,000
2,952
2,500
2,531
2,452
2,222
2,000
1,870
1,679
1,500
1,459
1,189
1,000
2003 2004 2005 2006 2007 2008 2009 2010 2011
YoY
Growth 14.7% 22.7% 15.1% 11.4% 18.8% 10.4% 3.2%* 16.6% 19.2%
* Negatively Impacted by FX
77
Overview of Recent Performance
FX has helped over the long term
1.30
1.20
1.10
Global Economic Crisis
1.00
0.90
Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12
78
Overview of Recent Performance
Retail Sales are diversified across our three operating regions
Americas
19%
No brand presence Domino’s brand is
EMEA in 3 of the top 15 relatively more
43% Total Pizza markets penetrated in top
– Italy, Argentina markets of APAC
APAC and South Africa than EMEA or
38% Americas
58% 42%
Developed
+506 Stores +374 Stores
Emerging
80
Overview of Recent Performance
Five markets driving >50% of net unit growth; India has accelerated
1,000
2010 Q3 - 2012 Q3 Net Store Growth
186
880
900
800
21
25
700
30
33
34
600
35
37
48
500 Developed
51
102
Emerging
400
107
300
171
200
100
0
France
2010 Q3
Brazil
2012 Q3
Malaysia
UK
Australia
India
Other
Turkey
Japan
Canada
Spain
S. Korea
Indonesia
4,264 5,144
81
Overview of Recent Performance
Net Store Growth: DPII consistently outgrowing top two competitors combined
450
413
400
370
346 350
350
113 309
300
Papa John's
249
250
227
DPII
194 74
200 51
Pizza Hut
150 90
257
100
175 176
50 104
-
2009 2009 2009 2010 2010 2010 2011 2011 2011 2012 Q3
YTD 2012 Q3
Q3 2012
Note: PJ’s figures do not include AK, HI and Canada; PH figures include licensees. 82
Overview of Recent Performance
Our share and relative market share has grown in Total Pizza and Delivery/Carryout
2010 vs. 2011 Estimated Domino’s Pizza Share of International Pizza Market
14.0%
12.2%
12.0%
10.7%
Total Pizza DelCo
10.0%
2011 RMS 0.65 1.70
8.0%
2010 RMS 0.62 1.54
6.0%
4.0%
4.0%
3.5%
2.0%
0.0%
'10 Total Pizza '11 Total Pizza '10 Delco '11 Delco
Market Share Estimates Source: DPII Actuals, Third Party Research, DPII consultants and franchisees
83
Today’s Objectives
Industry Outlook
84
Industry Outlook
Total International Pizza Market projected to grow nearly $30B (~33%) by 2021 (2.9% CAGR)
$16.9 $24.2
EMEA EMEA
$34.6
$8.5 Italy $47.5
Italy
APAC $14.0 APAC
Americas Americas
$28.0 $31.0
$88B ~$117B
$4.0 $6.1
$8.7 EMEA $14.7 EMEA
$5.0
Italy Italy
$9.0
APAC APAC
Americas Americas
$11.0 $12.0
$29B ~$42B
Source: Third Party Research, NPD Crest, DPII Consultants & Franchisee input
86
Industry Outlook
87
Today’s Objectives
Industry Outlook
88
Runway for Growth
89
Runway for Growth
90
Runway for Growth
Developed Market Example - Japan
91
Runway for Growth
Developed Market Example - Germany
92
Runway for Growth
Emerging Market Example - India
94
Runway for Growth
Greenfield Market Example - Nigeria
95
Runway for Growth
96
Runway for Growth
97
Runway for Growth
Align field and support resources against priority opportunities
98
Runway for Growth
99
Runway for Growth
International POS deployment
2011 2012 – Q3
21% 16%
100
Executive Summary
101
Mike Lawton
Chief Financial Officer
KEY STATISTICS 2012
Key Statistics
YTD Q3 2012
EBITDA + 7.4%
EPS amounts are adjusted for items affecting comparability. Items adjusting reported EPS are detailed in the respective Earnings Release on Form 8-K.
105
2012 Highlights: U.S.
• Financial
– Completed ABS recapitalization in March
• Digital
– Surpassed $1 billion in annual digital sales
– About 40% of delivery orders from digital channels
• Product news
– Parmesan Bread Bites
– Gluten-Free Crust
– Handmade Pan Pizza
106
2012 Highlights: International
• Opened 5,000th international store
– now 10,000+ stores worldwide
108
Successful History of Operating with Leverage
7.7
7.2
6.7
5.5 5.5
4.9 5.0
4.7 4.8
4.1
3.7
3.2 3.1 3.0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q3 2012
109
LOOKING AHEAD AT 2013
Looking Ahead at 2013
Commodities
Projected increase of 3 to 4%
111
Looking Ahead at 2013
G&A
Range of $224 - $228M
Technology innovation
Technology upgrades
International growth
112
Looking Ahead at 2013
Impact of Currency
113
Looking Ahead at 2013
Tax Rate
114
Looking Ahead at 2013
Cap Ex
Long range outlook of $25 - $35 million
Technology
115
FOCUS ON STORE LEVEL PROFITS
Focus On Store Level Profits
100
75
50
25
0
2008 2009 2010 2011 2012
Average store economics are internal Company estimates based on results reported by franchise owners. Estimates for 2012 are a projection as of Q3 2012.
117
Improved Store Level Profits
118
Improved Store Level Profits
Smart Marketing
• Better couponing
• Targeted promotions
• Sides
• Carryout
• Online
• Efficient advertising
119
Improved Store Level Profits
Operational Changes
• Energy efficiency
• Supply chain innovations
• Telephony
• Leveraging early week-part
120
LONG RANGE OUTLOOK
Long Range Outlook
Outlook does not constitute specific earnings guidance. Domino’s does not provide quarterly or annual earnings estimates.
122
Use of Cash
123
Questions