Domino’s Investor Day Presentation – October 10, 2019 AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK Domino’s Presented by DON MEIJ AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK The cornerstone of the Company’s success has been the ability to leverage a diversified Network of both Corporate and Franchised Stores backed by strong store level economic fundamentals and the power and proprietary systems of a global network. The Company plans to continue its expansion throughout Australia and New Zealand and expects that Domino’s Pizza and its Franchisees will continue to benefit from the economies of scale generated by operating the largest pizza Network in Australia. Future growth is expected from new store openings, growth in sales from existing stores and the potential for new store and menu formats. Domino’s pizza Australia new Zealand ltd share offer - 2004 Our view hasn’t changed, but our horizons have. This is a scale business You can’t have 20 or 30 stores. It’s like a 100 storey building, the first 50 or 60 storeys pay for the construction, IT’s When you have those foundations in place that you deliver the real returns. AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK We are a pizza business and distance matters: customers are not going to drive across town to pick up a better deal – you have to be in the right suburb, on the right street, in fact, on the right side of the street. When delivering, time is temperature. Time is money. In everyBeing onmarket the wrong side of a river,of a highway,the an intersectionworld, can cost we know: proximity,thousands of dollars in and wasted time, location, wages and mileage. matters. In every market of the world, we know: proximity, and location, matters. Customers DON’T CARE ABOUT Lines ON MAPS IN THE BEGINNING THERE WAS DRIVE-THRU 62 STORES Sales more than trebled 131 STORES TITLE HERE AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK BROADER HORIZONS NEW ZEALAND BELGIUM NETHERLANDS FRANCE GERMANY JAPAN AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK • But still, we TITLE HERE viewed a time when our runway for growth could run out. But still, we viewed a time when our runway for growth could run out. AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK Shared Shared Greater access procurement technology to markets Our future 1X GDP CHINA +1X POP USA AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK The possibility Burgers Chicken Pizza Other AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK Our future WHY DO WE EXIST? AT OUR BEST The hard-wired WE SMASH THE human need for PREVAILING WISDOM social connection – WHICH SAYS YOU CAN’T seemingly better HAVE QUALITY, SPEED enabled than ever AND LOW PRICE… before – is breaking down. THUS PUTTING THE WORLD’S MOST People crave DELICIOUS AND belonging, while they VERSATILE BONDING assert their right to FOOD WITHIN REACH OF be different. EVERY PERSON. AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK Our pizza brings people CLOSER One brand, one core focus, one purpose. The growth in the home pizza market will continue as a result of longer working days and the increase in dual career households supporting demand for freshly cooked, delivered food Domino’s pizza Australia new Zealand ltd share offer - 2004 TIME IS THE ENEMY OF FOOD CUSTOMERS SEE A DIFFERENCE! TIME OUT OF THE OVEN “Fresh” “OLD AND COLD” Q1 2016 Quantitative Research Australia Australia 5:27 4:58 Ferny grove Eatons hill Aug 2019 sep 2019 netherlandS japan 3:36 2:38 Groningen Floresstraat YOTSUYA Jul 2018 Nov 2018 Australia 7:20 Eatons hill MONTH OF sep 2019 Cognitive rostering Predictive Project 4 ordering Project 3 Project 5 Fast bake Project 2 ovens Ebikes Project 1 GPS Today, you’re going to hear from members of our Global Leadership on how we’re going to apply our deep history of fortressing our business to build scale in the decades ahead. Domino’s EUROPE ANDRE TEN WOLDE – COO EUROPE AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK DPE EUROPE Benelux DENMARK 185,000,000 consumers [That’s 55% of all consumers in DPE’s markets] FRANCE GERMANY AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK DPE EUROPE • 59% of the size of Queensland • 1,097 stores • 186,500 inhabitants per store • € 713 million in network sales • 65% Digital • Close to 3 stores per franchisee Source:https://thetruesize.com AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK The French love pizzas 2nd largest market in the world La France est le 2ème pays au monde qui 7.7M consomme le plus de pizzas, après les États-Unis eat pizzas France is the 2nd country in the world that consumes the most pizza, after the United States At least 15% of the USA France Italie ONCE PER WEEK french population 10kg/an over 15 yo 13kg/an 5kg/an 26 pizzas 819 Million eaten per 90% second pizzas in france sold per year 90% of the French population over 15 Years old eat pizza PIZZA: part of the culture for more than 125 years • 1851 : Start of the Italian Immigration in France • 2 million Italians crossed the borders between 1873 and 1914. • 1891: 1st Pizzerias in Marseille : • 14 years before the 1st Pizzeria in New York • 70 Years before Milan and the north of Italy and 60 Years before Australia. • 1950: Pizzas accessible in all big cities in France • 1962: Launch of the 1st Pizza truck in the world in Marseille • 1987: Launch of Pizza Hut in France • 1989: Launch of Domino’s Pizzas AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK That is why you can buy pizzas in more than 100,000 places Canteen Supermarkets 18% 26% Trucks 6% Delivery & take away 4% Kiosks & vending Machines 1% Pizzeria 45% AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK DPE NETHERLANDS Penetration of Domino’s second highest in total QSR market. Only McDonalds has higher penetration. In the delivery market Domino’s has the highest penetration. # Stores Mc Donalds 245 Domino’s Pizza 285 Subway 213 New York pizza 200 Burger King 63 KFC 68 Kwalitaria 129 FEBO 141 Spare Rib Express 39 Happy Italy 23 Bezorgbeer 24 Sushi Point 25 Big Snack 71 Döner Company 39 Wok to go 21 Pizza Hut 5 Taco Mundo 26 Papa John’s: 25 0 50 100 150 200 250 300 AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK Market share domino’s 34% in pizza market but just 5% in total QSR Share of Pizza Share of QSR Domino's Share Other Pizza Restaurants Domino's Share Other QSR Asian and Fast food highest share in qsr market followed by pizza Share in QSR 8% 9% 25% 9% 12% 23% 14% Asian Burgers / Fries Pizza Sandwhiches Other Meals Grill Dutch/French AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK TV SPEND BENELUX Netherlands: Optimal. Belgium and Luxemburg: NO TV FRANCE Very low TV presence GERMANY First very light TV started 2 weeks ago DENMARK NO TV What if? Europe had the Europe had the Europe had the Europe had the current current current current penetration of: penetration of: penetration of: penetration of: THE NETHERLANDS THE UK ANZ ICELAND Meaning 1 store Meaning 1 store Meaning 1 store Meaning 1 store per 78,000 per 56,500 per 35,000 per 15,669 customers: customers: customers: customers: 2,372 3,274 5,286 11,806 stores stores stores stores Remember our official Europe future outlook is 2,850 stores, +160%, by 2025-2030 AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK FORTRESSING Debunking the myths AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK BERLIN AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK BERLIN AUSTRALIA NEW ZEALAND BELGIUM FRANCE NETHERLANDS JAPAN GERMANY LUXEMBOURG DENMARK reduction of the run time by fortressing stores: the run time decreases with an average of 2 minutes Average Run time Average Run Time 0:19:26 0:18:43 AfterAfterFortressingsplit 0:18:18 0:18:43 0:18:00 0:18:00 0:17:17 0:17:17 0:16:34 0:16:34 0:16:19 0:15:50 0:15:50 0:15:07 0:14:24 0:15:07 1 3 5 7 9 11131517192123252729313335373941434547495153 Vóór split Na split The reduction of the average run time reduces the wage costs per ORDER Weekly labour decrease Yearly labour decrease More than 16 hours More than 832 hours Drive time to the customer has a positive effect on nps As the average driving time decreases, the NPS increases 0:00:00 0:01:26 0:02:53 0:04:19 0:05:46 0:07:12 0:08:38 Average drive time to customer 1 2 3 4 5+6 7+8 9 10 Recommendation score There is a strong correlation between nps and sss: a relatively high NPS translates into relatively high Same store sales Same store sales 14.0% 13.2% 11.8% 12.0% 9.9% 10.0% 8.0% 6.0% 5.5% 4.0% 2.2% 2.0% 1.8% 0.0% < 0% NPS 0% NPS tot 10% NPS 10% NPS tot 20% NPS 20% NPS tot 30% NPS 30% NPS tot 40% NPS 40% NPS > Total orders higher for stores with huge delivery areas, but orders per household ARE way lower Orders May x #Households delivery area Orders per household, per month 4500 0.30 4208 4000 3602 0.25 0.24 3392 3500 3262 3000 0.20 0.19 2641 2500 0.15 0.15 0.13 2000 0.11 1500 0.10 1000 0.05 500 0 0.00 < 15.000 15.000-20.000 20.000-25.000 25.000-30.000 Meer dan