TIDMDPEU
RNS Number : 8354M
DP Eurasia N.V
26 May 2022
For Immediate Release 26 May 2022
DP Eurasia N.V.
("DP Eurasia" or the "Company", and together with its
subsidiaries, the " Group ")
Trading Update for the four months ended 30 April 2022 (the
"Period")
Significant growth achieved in testing macro environment
For the period ended
30 April
---------------------------------
2022 2021 Change
------------ ------------------- ----------
(in millions of TRY,
unless otherwise indicated)
Number of stores (1) 816 775 41
Group system sales (2)
Turkey 726.6 469.0 54.9%
Russia 283.0 180.6 56.7%
Azerbaijan & Georgia 25.9 12.1 114.2%
Total 1,035.5 661.6 56.5%
Group system sales like-for-like
growth(3)
Group(4) 36.1% 49.4%
Turkey 47.6% 62.1%
Russia (based on RUB) -1.5% 13.1%
Financial Highlights
-- Group system sales increased 56.5%, with a like-for-like
growth of 36.1%, driven by excellent demand in Turkey.
-- Growth achieved despite the challenging comparatives in both Turkey and Russia.
-- Group online system sales (5) growth of 61.0%.
o Turkish online system sales growth of 61.9%.
o Russian online system sales growth of 58.3% (-4.7% based on
RUB).
-- Online delivery system sales further increased to 82.1%
(April 2021: 77.3%) as a share of delivery system sales (6) ,
reflecting DP Eurasia's robust positioning for the online ordering
channel.
-- 12 new store openings in Turkey in the Period (all but one by
the existing franchisees) with a strong 2022 pipeline meaning the
momentum of last year, which had seen the highest level of store
openings in Turkey since 2014, is expected to be maintained.
-- Good liquidity position at Period-end with TRY 67.8 million
cash and an undrawn bank facility of TRY 172.6 million.
-- Following launch of new COFFY concept in 2021, performance
has been very strong. Currently trading from 12 stores by
Period-end, seven of which are franchised, while more openings are
expected in the coming months. While COFFY remains in its early
stages, having launched in 2021, the Group believes it represents
an outstanding growth opportunity.
Corporate Highlights
-- Jubilant Foodworks Limited ("JFL"), through its wholly owned
subsidiary Jubilant Foodworks Netherlands B.V., increased its
shareholding to 42.2% by the end of April 2022, up from 40.3% at
the end of 2021, via open market purchases.
-- Extraordinary General Meeting convened on 13 April 2022 and
voted through the proposal to embed takeover protection for
minority shareholders in the articles of association. With this
protection, the requirement to launch a mandatory offer will be
applicable to any investor which acquires 50% or more of the
Company's issued share capital.
-- On 25 April 2022, the Group announced the intended
appointment of an independent non-executive director (INED) at the
AGM in June 2022. Appointment of a second INED is also in advanced
stages. As previously shared, JFL has agreed to reduce its
representation from three board directors to two following the 2022
AGM.
-- In line with the statement during the release of 2021
preliminary results and given the prevailing uncertainties of
inflation and the wider macro-environment, the Group is still
unable to provide meaningful guidance for the full year ending 31
December 2022.
-- IAS 29 'Financial Reporting in Hyperinflationary Economies'
will be applicable for Turkey starting from 30 June 2022. In DP
Eurasia's case, this will be implemented starting with the first
half trading update to be released in July 2022.
Commenting on the update, Chief Executive Officer, Aslan Saranga
said:
"We have started the year well despite the headwinds of high
inflation and geopolitical tensions. Owing to management's
experience in navigating volatility, Group system sales remained in
strong growth at 56.5% with a solid 36.1% like-for-like performance
versus a year ago.
"Our Turkish operations were robust with system sales growth of
54.9%, or 47.6% LFL . We are pleased with this LFL performance,
given it is set against a tough prior comparative. 2021 was
enhanced by a pandemic-driven boost to deliveries and a tailwind
from temporary VAT reduction to 1% from 8%, while 2022 has taken in
an additional Ramadan impact of 11 days, making the year-on-year
comparison less favourable . While responding to high inflation via
price increases on sales to both consumers and franchisees, we
remain committed to providing the best value for money proposition
and ensuring our franchisees remain profitable. We believe that we
are well positioned to succeed in this environment and deliver
long-term sustainable growth.
"Our online channel continues to be the main driver behind our
solid growth rates. In Turkey, like-for-like growth for online
system sales was 55.8%, carrying the share in Turkish delivery
system sales to almost 80%. This corresponded to more than six
percentage point increase over the last twelve months and is a
composition that supports our costumer centric approach as we gain
more insight from their purchases and accordingly develop our
tailor-made offerings.
"In Russia, we have returned a flat like-for-like performance as
a result of a strong comparable period and the sustained conflict
in the region. However, trends improved since our preliminary
results release and our average like-for-like growth in April was
8%. The online system sales share increased to 93.6% delivering
around one and a half percentage point increase. We continue to
monitor the situation in the region closely while the safety and
welfare of all the Group's employees and customers remains our
primary priority. The Group has been focused on optimising the
existing store coverage areas in Russia, resulting in closure of
four stores during the first four months of the year.
"Product innovation continued in 2022. In Turkey, we introduced
Cheddarlı Dev Sosisli pizza as well as new side offerings, such as
the extension of the oven-baked bread line with new toppings, and
the renovation of the Do ner (shawarma) wrap range. Turkey also
extended its entry-price offerings by adding two topping pizzas
(Kantin and Favori İkili) to the product range. With these
developments, we increased the segments from four to five,
enhancing the variety our offerings.
"The strong performance in Turkey is continuing to generate a
very robust franchisee demand. We opened 12 new stores in Turkey
during the first four months. Given our strong pipeline, we remain
confident that 2022 will be another solid year for store
growth.
"Our own-branded COFFY concept that was launched last year has
performed extremely well so far. I am personally very excited for
the future growth prospects for COFFY and believe it has the
ability to make a considerable contribution to our investment story
in years to come."
Enquiries
DP Eurasia N.V.
İlknur Kocaer, CFA - Investor Relations
Director +90 212 280 9636
Buchanan (Financial Communications)
Richard Oldworth / Toto Berger / Verity +44 20 7466 5000
Parker 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 UK Toll Free: 08003589473
call: UK Toll: +44 3333000804
Participant PIN code: 83704319#
URL for international dial in numbers:
https://events- f tp.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 816 stores (617 in Turkey, 184 in Russia,
10 in Azerbaijan and five in Georgia as of 30 April 2022) and
operates through its owned corporate stores (24%) and franchised
stores (76%). 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 As of 30 April
count
------------------------------------------------------------------------------
2022 2021
Corporate Franchised Total Corporate Franchised Total
Turkey 100 517 617 104 466 570
Russia 92 92 184 116 76 192
Azerbaijan - 10 10 - 9 9
Georgia - 5 5 - 4 4
Total 192 624 816 220 555 775
Delivery channel mix and online like-for-like growth
The following table shows Group delivery system sales (6) ,
broken down by ordering channel and by the Group's two largest
operational geographies, as a percentage of delivery system sales
for the periods ended 30 April 2022 and 2021:
For the period ended 30 April
--------------------------------------------------
2022 2021
------------------------ ------------------------
Turkey Russia Total Turkey Russia Total
Store 19.8% 6.3% 17.6% 26.2% 7.7% 22.4%
Group's online
Online platform 24.8% 72.9% 37.8% 26.6% 70.5% 37.8%
Aggregator 55.0% 20.8% 44.3% 46.9% 21.9% 39.5%
Total online 79.8% 93.6% 82.1% 73.4% 92.3% 77.3%
0.3
Call centre 0.4 % - % 0.4 % - 0.3 %
Total 100% 100% 100% 100% 100% 100%
The following table shows the Group's online like-for-like
growth (3) , broken down by the Group's two largest operational
geographies, for the periods ended 30 April 2022 and 2021:
For the period ended
30 April
---------------------------
2022 2021
-------------- -----------
Group online system sales like-for-like
growth(3)
Group(4) 42.7 % 77.8 %
Turkey 55.8 % 97.6 %
Russia (based on RUB) -0.4 % 21.6 %
Liquidity
The Group continues to have a strong liquidity position with TRY
67.8 million of cash and access to an additional banking facility
of TRY 172.6 million.
The Group's sufficient liquidity position enables it to pre-pay
its bank borrowings in Russia, despite the recent devaluation of
TRY, if required. The Group obtained a waiver from Sberbank with
respect to its covenants for all four quarters of 2022 and is in
negotiations to reset the covenants or repay the remaining loan.
The principal outstanding amount under the Sberbank loan currently
amounts to RUB 0.7 billion, of which RUB 0.02 billion is supported
by a cash collateral deposit.
Notes
(1) Excluding COFFY stores
(2) System sales are sales generated by the Group's corporate
and franchised stores to external customers and do not represent
revenue of the Group.
(3) 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).
(4) Group like-for-like growth is a weighted average of the
country like-for-like growths based on store numbers as described
in Note (3).
(5) Online system sales are system sales of the Group generated
through its online ordering channel.
(6) Delivery system sales are system sales of the Group
generated through the Group's delivery distribution channel.
Appendices
Exchange Rates
For the period ended 30 April
--------------------------------------
2022 2021
------------------ ------------------
Period Period Period Period
Currency End Average End Average
------- --------- ------- ---------
EUR/TRY 15.545 15.698 9.909 9.100
RUB/TRY 0.202 0.167 0.109 0.100
EUR/RUB 74.559 93.460 90.151 89.983
Delivery - Take away / Eat in mix
For the period ended 30 April
--------------------------------------------------
2022 2021
------------------------ ------------------------
Turkey Russia Total Turkey Russia Total
Delivery 76.6% 77.9% 76.7% 82.8% 78.8% 81.5%
Take away /
Eat in 23.4% 22.1% 23.3% 17.2% 21.2% 18.5%
Total 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.
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