Interim Results Disclaimer This Presentation is not an offer to buy - - PDF document

1

Interim Results

for the Period ended 30 June 2019

2

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

• r 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.

Disclaimer

3

Highlights

Aslan Saranga – Chief Executive Officer

Operational Review

Aslan Saranga

Financial Results & Management Guidance

Selim Kender – Chief Strategy Officer and Head of Investor Relations

Conclusion

Aslan Saranga

Q&A

Today’s Agenda

Highlights

SECTION 1:

5

2019 H1 highlights

• 7.7%

(2018 H1: 10.9%)

4.7%

(2018 H1: 18.0%) LIKE-FOR-LIKE GROWTH 21.6% REVENUE

TRY 462.5m

(2018 H1: 380.2m) STORE COUNT SYSTEM SALES Adjusted EBITDA (excl. IFRS 16)

TRY 645.4m

(2018 H1: 510.4m) TRY 46.4m

(2018 H1: 40.3m)

15.1%

67.5%

(2018 H1: 59.3%) 26.4% ONLINE DELIVERY 64

736

(2018 H1: 672) 8.2% points TRY 41.3m

(2018 H1: 36.5m)

TRY 8.6m

(2018 H1 7.4m)

13.3% 16.6%

Operational Review

SECTION 2:

7

Innovation: The strategic driver of our strong performance

Source: Company Information

Dessert Pizza - Pineapple GPS Tracker Dürümos

• Launched in

Russia

• Alternative dessert

to the chocolate souffle

• Positive initial

uptake

• Rolled out in early

2019

• Delivery order per

driver increased

• Tangible tool to

follow real delivery times for service improvement

• Tested in Turkey

and to be launched across all Turkish stores in September

• Three flavors,

including a veggie

• ption
• Test product mix

15%

• Minimal

cannibalisation

8

43% 11% 24% 8% Online Total

2018 H1 2019 H1

53% 18% 17% 5% Online Total

2018 H1 2019 H1

Like-for-Like performance

LfL performance continues to be strong...

System sales LfL growth, %

Russia Turkey

152% 33% 2018 H1 2019 H1 406% 14% 2018 H1 2019 H1

...with the apps leading the category

App System sales LfL growth, %

Russia Turkey

Online: the key driver of like-for-like

9

74% 52% 79% 55% Delivery Total

2018 H1 2019 H1

54% 39% 62% 44% Delivery Total

2018 H1 2019 H1

59% 42% 68% 47% Delivery Total

2018 H1 2019 H1

Digital growth

Share of online ordering growing healthily

Online system sales, %

Russia Turkey Group

Source: Company Information

Online as a % of delivery: up by 8.2% points

10

Store count growth

…with Russia moving towards 200th store

# of stores at period end

Turkey approaching 600 stores...

# of stores at period end (1) # of stores at period end

Continuous and significant store rollout

Source: Company Information Source: Company Information

497 530 549 450 550 2017 H1 2018 H1 2019 H1 96 142 187 50 100 150 200 2017 H1 2018 H1 2019 H1 +19 +46 +45

370 432 466 495 522 545 530 549 13 19 43 72 121 179 142 187 80 103 130 160 219 289 383 451 509 567 643 724 672 736 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2018 H1 2019 H1 +23 +27 +30 +59 +70 +94 +68 +58 +58 +76 DP Russia DP Turkey

Source: Company Information

+33

Notes:

• 1. Includes Azerbaijan and Georgia

+81 +64

800th store within sight

11

Russia Update

• Targeting 40 – 60 store openings in Russia in 2019, with 45 stores over the last twelve months
• Franchise stores reached 86, representing 46% of the store portfolio
• Second dough production facility opened in Rostov to serve Voronezh, Rostov and Krasnodar
• Took us 2 – 3 years to develop the highly effective strategy we have in Greater Moscow
• Review of aggregator strategy
• Beverage agreement renewal
• CEO search on-going
• Changes to the regional store expansion strategy
• Acquisition of approximately 15 regional franchise stores, corporate stores to be added in the regions
• Awarding new franchisees only one store at the start
• Incentivising succesful Greater Moscow franchisees to open stores in the regions
• Supply chain revamp to reduce transportation costs
• Tailored local store marketing
• Better franchise expectation management

Financial Results

SECTION 3:

13

Capex and cash conversion(2)

TRY MM %

Adjusted EBITDA (excl. IFRS 16) and margin

40 46 2018 H1 2019 H1 510 645 2018 H1 2019 H1 Year on year growth 246 237 426 499 672 736 2018 H1 2019 H1 Corporate Franchise

DP Eurasia: Financial snapshot

System Sales, TRY MM

33 30 17% 36% 2018 H1 2019 H1 Capex Cash Conversion 63% 37%

# of Outlets

26%

TRY MM

Growth in system sales supported by store roll-out

Source: IFRS Combined and Consolidated Financial Information, Management Accounts Notes:

• 1. As % of System Sales
• 2. Cash conversion defined as (Adj. EBITDA (excl. IFRS 16)– Capex ) / Adj. EBITDA (excl. IFRS 16)

7.9%

• Adj. EBITDA Margin(1)

7.2% 68% 32%

Higher cash conversion with controlled capex

14 System Sales, TRY MM TRY MM % # of Outlets TRY MM

System Sales Adjusted EBITDA (excl. IFRS 16) and margin Capex and cash conversion(4) Store count(2)

DP Turkey: Financial snapshot(1)

37 41 2018 H1 2019 H1 358 396 2018 H1 2019 H1 Year on year growth 145 136 376 402 521 538 2018 H1 2019 H1 Corporate Franchise 72% 28% 11%

Source: IFRS Combined and Consolidated Financial Information, Management Accounts Notes:

• 1. Including contributions from Azerbaijan and Georgia
• 2. Turkey only

10.2%

• Adj. EBITDA Margin(3)

10.4% 75% 25%

• 3. As % of System Sales
• 4. Cash conversion defined as (Adj. EBITDA (excl. IFRS 16) – Capex ) / Adj. EBITDA (excl. IFRS 16)

21 19 43% 54% 2018 H1 2019 H1 Capex Cash Conversion

Margin preserved despite challenging macro

15 System Sales, TRY MM TRY MM # of Outlets TRY MM

System Sales Adjusted EBITDA (excl. IFRS 16) and margin Capex Store count

DP Russia: Financial snapshot

7 9 2018 H1 2019 H1 153 249 2018 H1 2019 H1 Year on year growth 101 101 41 86 142 187 2018 H1 2019 H1 Corporate Franchise 63%

Source: IFRS Combined and Consolidated Financial Information, Management Accounts Notes:

• 1. As % of System Sales

4.8%

• Adj. EBITDA Margin(1)

3.4% 29% 71% 13 10 2018 H1 2019 H1 46% 54%

Solid top-line growth and increased franchise mix

16

33% 67% TRY RUB 31% 64% 5% TRY EUR RUB

Cash flow generation 2018 H1 gross bank borrowings by currency 2019 H1 gross bank borrowings by currency Debt profile of DP Eurasia

Cash flow generation and debt profile

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

40 46 (33) (30) 7 17 2018 H1 2019 H1

• Adj. EBITDA

Capex

• Adj. EBITDA - Capex

Cash Conversion 155 225 61 77 216 302 1.4x 1.9x 2018 2019 H1

• Adj. Net Debt

Gross Debt

TRY MM TRY MM

Source: IFRS Combined and Consolidated Financial Information

17% 36%

(1)

• Adj. Net Debt(2) / Adj. EBITDA (1)

(2)

No hard currency bank debt exposure

Conservative leverage ratio and no currency exposure

SECTION 4

Management guidance

18

Management guidance

LfL (medium term) Targeted net store openings per year (medium term) Total potential store count CAPEX program

• High single digit LfL growth
• 2019: High single digit LfL growth
• Thereafter: Low to mid-teens LfL

growth

• 900
• 1,500
• 25 – 30 stores
• We expect franchise stores to be the

main driver of new store openings

• 40 – 60 stores
• We expect franchise and corporate

stores to be the main drivers of new store openings

• c. TRY 30 MM in 2019
• c. RUB 450 MM in 2019

Medium term guidance remains unchanged

Conclusion

SECTION 5:

20

Conclusion

Source: Company Information

• Strong system sales and adjusted EBITDA growth
• 64 new stores opened over the last twelve months
• Online share continues to increase: 67.5% of delivery (+8.2% year-on-year)
• No change to business fundamentals
• Adjusted EBITDA in line with expectations

Notes:

• 1. Includes Azerbaijan and Georgia
• 2. Adjusted EBITDA (excl. IFRS 16) as % of System Sales

Appendix

SECTION 6:

22 10.2% 10.4% 2018 H1 2019 H1

Future growth driven by four core strategy pillars

Innovation and online ordering to drive like-for-like growth

Source: Company information

Potential to export the platform Large whitespace opportunity in countries of presence

Domino’s stores, #

Source: Company estimates Notes:

• 1. Excluding Azerbaijan and Georgia

Russia Adj. EBITDA / System Sales, %

Source: Company information

Leverage scale advantage to further improve profitability

System sales LfL growth, % 43% 11% 24% 8% Online Total 53% 18% 17% 5% Online Total

Turkey Russia 2018 H1 2019 H1

2019 H1 Total Potential 538

• c. 900

2019 H1 Total Potential 187

DP Russia DP Turkey

• c. 1,500

(1)

Turkey Adj. EBITDA / System Sales, % DP Eurasia

1 2 3 4

• Adj. EBITDA / System Sales

4.8% 3.4% 2018 H1 2019 H1

23

Attractive investment opportunity with high growth potential and proven business model

Leading market positions

1

Highly attractive, underpenetrated markets with substantial growth potential in the Group’s addressable segments

2

Strong online capabilities underpin DP Eurasia’s growth

3

Globally proven business model successfully applied and adapted to DP Eurasia’s local markets

4

Simple and scalable, asset-light business model

5

Track record of resilient and profitable growth as well as strong cash conversion

7

Founder-led, experienced management team

8

Highly attractive customer proposition and strong brand equity

6

24

DP Eurasia: Financial summary

Key KPIs DP Eurasia income statement

System sales

• Sales generated by the Group’s system stores

(both corporate and franchise) Corporate revenue

• Revenue from the Group’s corporate stores

Franchise revenue and royalty

• 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 Cost of sales

• 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 sub- franchisees); labour; rent; utilities and other, including D&A of corporate stores and commissaries General and administrative expenses

• Consists of headquarters expenses such as

personnel (excl. marketing and selling personnel), rent, utilities, commissaries’ rents and non- production related personnel and headquarters- related D&A expenses Marketing and selling expenses

• Includes marketing and selling personnel costs,

royalties paid by the Group (on-going fees) and promotion and advertising expenses

Source: Company Information, IFRS Combined and Consolidated Financial Information, Management Accounts

(TRY MM) 2019 H1 2018 H1 Change Revenue 462.5 380.2 21.6% Cost of Sales (excl. IFRS 16) (314.5) (251.8) 24.9% Gross Profit (excl. IFRS 16) 148.0 128.5 15.2% General Administrative Expenses (excl. IFSR 16) (72.1) (63.0) 14.4% Marketing and Selling Expenses (63.8) (50.0) 27.5% Other Operating Income / (Expense) (excl. IFRS 16) 3.3 (0.6) n.m. Operating Profit (excl. IFRS 16) 15.5 14.9 4.1% Foreign Exchange (losses)/gains (excl. IFRS 16) 2.8 (8.6) n/a Financial Income (excl. IFRS 16) 3.2 0.5 n/a Financial Expense (excl. IFRS 16) (25.1) (16.8) 48.8% Profit / (Loss) Before Tax (excl. IFRS 16) (3.5) (10.0) n/a Tax Expense (excl. IFRS 16) (5.3) (0.3) 1476.0% Net Income (excl. IFRS 16) (8.9) (10.4) n/a Adjusted EBITDA (excl. IFRS 16) 46.4 40.3 15.1% Adjusted net income (excl. IFRS 16) (7.4) (9.1) n/a

Notes:

• 1. All 2019 H1 figures are excluding the effects of the adoption of IFRS 16.
• 2. 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

2019 H1 2018 H1 Change Corporate Store Count 237 246 (9) Franchise Store Count 499 426 73 System sales (TRY MM) 645.4 510.4 26.4%

25

DP Eurasia: Revenue & Expense Breakdown

Notes:

• 1. All 2019 H1 figures are excluding the effects of the adoption of IFRS 16.
• 2. 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

(TRY MM) 2019 H1 2018H1 Change 2019 H1 2018H1 System sales 645.4 510.6 26% Corporate 243.8 222.3 10% as a % of system sales 37.8% 43.5% Franchise 401.6 288.3 39% as a % of system sales 62.2% 56.5% 2019 H1 2018H1 Change 2019 H1 2018H1 Revenue 462.5 380.2 22% Corporate 243.8 222.3 10% as a % of revenue 52.7% 58.5% Franchise 187.0 135.0 39% as a % of revenue 40.4% 35.5% Other revenue 31.7 23.0 38% as a % of revenue 6.9% 6.0% Cost of Sales (excl. IFRS 16) (314.5) (251.8) 25% Cost of Food/Non-Food/Transportation (171.9) (131.1) 31% as a % of system sales 26.6% 25.7% Corporate Store Expenses (excl. IFRS 16) (121.1) (103.0) 18% as a % of corporate system sales 49.7% 46.3% Depreciation and Amortization (excl. IFRS 16) (21.5) (17.7) 21% as a % of system sales 3.3% 3.5% Gross Profit (excl. IFRS 16) 148.0 128.5 15% as a % of system sales 22.9% 25.2% General Administrative Expenses (excl. IFRS 16) (72.1) (63.0) 14% Overhead (Including Commisary) (excl. IFRS 16) (63.3) (55.3) 14% as a % of system sales 9.8% 10.8% Depreciation and Amortization (excl. IFRS 16) (8.0) (6.4) 24% Share based incentives (0.8) (1.1) n/a IPO Costs

• (0.2)

n/a Marketing and Selling Expenses (63.8) (50.0) 28% Marketing and Advertising (34.4) (26.9) 28% as a % of system sales 5.3% 5.3% Corporate Store Local Marketing (3.6) (3.0) 20% as a % of corporate system sales 1.5% 1.3% Royalty (25.7) (20.1) 28% as a % of system sales 4.0% 3.9% Other Operating Income / (Expense) 3.3 (0.6) n/a Operating Profit (excl. IFRS 16) 15.5 14.9 4%

26

DP Eurasia: IFRS 16 Impact

(TRY MM) without IFRS 16 IFRS 16 effect with IFRS 16 Revenue 462.5

• 462.5

Cost of Sales (314.5) 9.1 (305.4) Gross Profit 148.0 9.1 157.1 General Administrative Expenses (72.1) 0.8 (71.3) Marketing and Selling Expenses (63.8)

• (63.8)

Other Operating Income / (Expense) 3.3 (1.7) 1.6 Operating Profit 15.5 8.1 23.6 Foreign Exchange (losses)/gains 2.8 (0.6) 2.3 Financial Income 3.2 (1.8) 1.4 Financial Expense (25.1) (12.7) (37.8) Profit / (Loss) Before Tax (3.5) (6.9) (10.5) Tax Expense (5.3) 2.2 (3.1) Net Income (8.9) (4.7) (13.6) Adjusted EBITDA 46.4 33.1 79.6 Turkey adjusted EBITDA 41.3 14.2 55.5 Russia adjusted EBITDA 8.6 18.9 27.5 Adjusted net income (7.4) (4.7) (12.1) For the period ended 30 June 2019

27

Adjusted EBITDA and Net Debt calculation

DP Turkey DP Russia DP Eurasia

Notes:

• 1. Excludes income and expenses which are not part of normal course of business and are non-recurring items

(TRY MM) 2019 H1 2018 H1 System Sales 249.0 152.7 Revenue 201.5 151.9 Operating profit (excl. IFRS 16) (7.2) (3.6) D&A 15.0 10.1 EBITDA (excl. IFRS 16) 7.8 6.5 Non-recurring (income)/expenses 0.8 0.8 Adjusted EBITDA (excl. IFRS 16) 8.6 7.4 % of system sales 3.4% 4.8% Adjusted EBIT (excl. IFRS 16) (6.5) (2.8) % of system sales

• 2.6%
• 1.8%

Capital expenditures 10.4 12.5 Cash conversion n.m. n.m. (TRY MM) 2019 H1 2018 H1 System Sales 396.4 357.7 Revenue 261.0 228.3 Operating profit (excl. IFRS 16) 26.1 22.1 D&A 14.5 14.0 EBITDA (excl. IFRS 16) 40.6 36.1 Non-recurring (income)/expenses 0.7 0.4 Adjusted EBITDA (excl. IFRS 16) 41.3 36.5 % of system sales 10.4% 10.2% Adjusted EBIT (excl. IFRS 16) 26.8 22.4 % of system sales 6.8% 6.3% Capital expenditures 19.2 21.0 Cash conversion 53.6% 42.5% (TRY MM) 2019 H1 2018 Short term bank borrow ings 94.0 24.8 Short-term portions of long-term financial lease borrow ings (excl. IFRS 16) 13.7 19.5 Long-term bank borrow ings 187.0 161.6 Long-term financial lease borrow ings (excl. IFRS 16) 7.4 9.7 Total borrowings 302.2 215.6 Cash and cash equivalents (21.5) (28.4) Net debt 280.6 187.2 Non-recurring items Long term deposit for loan guarantee (41.3) (32.5) Adjusting delay in collection/payment day coinciding on a weekend (14.4)

• Adjusted net debt

224.9 154.6 (TRY MM) 2019 H1 2018 H1 System Sales 645.4 510.4 Revenue 462.5 380.2 Operating profit (excl. IFRS 16) 15.5 14.9 D&A 29.5 24.2 EBITDA (excl. IFRS 16) 45.0 39.0 Non-recurring (income)/expenses 1.5 1.3 Adjusted EBITDA (excl. IFRS 16) 46.4 40.3 % of system sales 7.2% 7.9% Adjusted EBIT (excl. IFRS 16) 16.9 16.1 % of system sales 2.6% 3.2% Capital expenditures 29.6 33.5 Cash conversion 36.3% 16.9%

28 63% 63% 37% 37% 2018 H1 2019 H1 Delivery Take-away / Eat-in 64% 64% 36% 36% 2018 H1 2019 H1 Delivery Take-away / Eat-in 62% 60% 38% 40% 2018 H1 2019 H1 Delivery Take-away / Eat-in

Delivery – Take-away / Eat-in mix

% of system sales

Russia Turkey Group

Source: Company Information

29

Exchange Rates

Period ended 30 June 2019 2018 Currency Period End Period Average Period End Period Average EUR/TRY 6.557 6.343 5.309 4.942 RUB/TRY 0.091 0.086 0.072 0.068 EUR/RUB 71.820 73.840 72.992 71.822

Source: Company Information