Revenues increased to RMB2.04 billion,representing 48.3% year-over-year growth
Adjusted net profit reached RMB50.9 million,from an adjusted net loss of RMB17.4 million in the same period of 2023
Store-level operating profit grew by 59.0%; Adjusted group EBITDA increased by 83.7%
Added 146 net new stores in the first half of 2024; 914 stores in operation across 33 cities as of June 30,2024
HONG KONG,Aug. 28,2024 -- DPC Dash Ltd - Domino's Pizza China ("DPC Dash" or the "Company",together with its subsidiaries,the "Group") (1405.HK),Domino's Pizza's exclusive master franchisee in the China Mainland,the Hong Kong Special Administrative Region of China,and the Macau Special Administrative Region of China,today announced its unaudited consolidated interim financial results for the six months ended June 30,2024 (the "Interim Results").
FIRST HALF OF 2024 HIGHLIGHTS[1]
Revenues reached RMB2.04 billion,representing an increase of 48.3% from RMB1.38 billion in the same period of 2023.
Opened 146 net new stores and entered into 4 new cities in the first half of 2024. Total stores reached 914,across 33 cities,as of June 30,2024.
Average daily sales per store was RMB13,515 for the six months ended June 30,representing a 10.1% year-over-year increase.
Same-store sales growth (SSSG) was 3.6%,compared to 8.8% in the same period of 2023 and 8.9% in FY2023.
Store-level EBITDAwas RMB393.9 million,representing an increase of 53.0% from RMB257.4million in the same period of 2023. Store-level EBITDA margin was 19.3%,compared to 18.7% in the same period of 2023.
Store-level operating profitwas RMB296.2 million,representing an increase of 59.0% from RMB186.3 million in the same period of 2023. Store-level operating profit marginwas 14.5%,compared to 13.5% in the same period of 2023.
Adjusted EBITDAwas RMB233.4 million,representing an increase of 83.7% from RMB127.0 million in the same period of 2023. Adjusted EBITDA margin was 11.4%,compared to 9.2% in the same period of 2023.
Adjusted net profitwas RMB50.9 million,compared to adjusted net loss of RMB17.4 million in the same period of 2023.
Total loyalty program membershipwas 19.4 million,representing an increase of 78.0% from 10.9 million in the same period of 2023.
[1] Please refer to the section "KEY DEFINITIONS" below for detailed definitions on certain terms used.
Ms. Aileen Wang,CEO & Executive Director of DPC Dash commented,"Our robust results for the first half of 2024 underscore the effectiveness of our 4D strategy—Development,Delicious Pizza at Value,Delivery,and Digital—in driving growth and profitability in the underserved Chinese pizza market. With 28 consecutive quarters of positive same-store sales growth and our continued expansion efforts,we are well-positioned to deliver sustainable growth. Our commitment to operational excellence is reflected in our improvements in profitability metrics,and we remain focused on executing our expansion plans to capitalize on the vast opportunities ahead."
Ms. Helen Wu,CFO of DPC Dash,added,"We are pleased to report solid financial results for the first half of 2024,with a 48.3% year-over-year increase in revenues. In parallel with our top-line expansion,our consistent efforts to optimize efficiencies drove improvements in profitability at both store and corporate levels. Notably,we achieved an adjusted net profit of RMB50.9 million for the period. Going forward,we will continue to capitalize on our increasing economies of scale and further streamline our operations to generate long-term growth and sustainable value for our shareholders."
First Half 2024 Financial Results
Revenues were RMB2.04 billion,representing an increase of 48.3% from RMB1.38 billion in the same period of 2023.
Store-level EBITDAwas RMB393.9 million,representing an increase of 53.0% from RMB257.4 million in the same period of 2023. Store-level EBITDA margin was 19.3%,compared to 18.7% in the same period of 2023.
Store-level operating profit was RMB296.2 million,representing an increase of 59.0% from RMB186.3 million in the same period of 2023. Store-level operating profit margin was 14.5%,compared to 13.5% in the same period of 2023.
Net profit was RMB10.9 million,compared to RMB8.8 million in the same period of 2023.
Adjusted EBITDA was RMB233.4 million,compared to 9.2% in the same period of 2023.
Adjusted net profit was RMB50.9 million,compared to an adjusted net loss of RMB17.4 million in the same period of 2023.
Basic and diluted net profit per share were both RMB0.08,compared to RMB0.08and RMB0.07,respectively,in the same period of 2023.
As of June 30,2024,the Group held RMB1,089.3 million in cash and bank balances,ascompared to RMB1,019.2 million as of December 31,2023.
Operational Highlights
As of
Jun 30,
Dec 31,
Jun 30,
2023
2023
2024
Total stores
672
768
914
Number of cities entered
20
29
33
Loyalty membership numbers
10.9 million
14.6 million
19.4 million
6-Months
Ending
Jun 30,
Full Year
Ending
Dec 31,
6-Months
Ending
Jun 30,
2023
2023
2024
Same-store sales growth (SSSG) (%)
8.8%
8.9%
3.6%
Average Daily Sales per Store
12,275
12,580
13,515
Delivery as % of Revenue (%)
63.6%
59.2%
46.4%
Outlook
The Group expects to open approximately 240 stores in 2024,and anticipates reaching the 1,000-store milestone during the fourth quarter of 2024.
Recent Developments
On January 31,DPC Dash opened its 800th store in China in Jinan,Shandong,marking another significant milestone in the company's remarkable growth.
On March 23,the Company entered one new city: Jiangmen,Guangdong. Long queues in front of the Domino's Pizza new store in China have become a common occurrence.
On May 8,the Company released its second Environmental,Social and Governance (ESG) Report for the fiscal year 2023. The report provided a comprehensive overview of DPC Dash's commitment to sustainable business practices,stakeholder engagement and responsible governance.
On May 13,the Company entered three new cities: Taizhou,Huizhou,and Jinhua in one week. The first stores in Huizhou and Jinhua both broke the DPC Dash record for daily sales.
On May 29,the Company and its talented team were presented with several coveted awards at Domino's Worldwide Rally 2024 in Las Vegas,highlighting the company's success in the fiercely competitive pizza market.
On June 28,the Company celebrated the grand opening of its 900th store in Chengdu,China. This milestone marks a significant achievement in the company's ambitious growth strategy.
As of July 31,DPC Dash held 28 out of the top 30 positions in the global records of Domino's Pizza for the first 30-day sales of new stores.
As of June 30,we operate 914 stores across 33 cities in China,including our milestone 900th store which opened in the same month. During the first half of 2024,we added a net of 146 new stores. As of August 20,we have opened an additional 31 stores,with 29 stores under construction,and 21 stores signed,keeping us on track to meet our full-year target of approximately 240 new stores in 2024.
Key Definitions
Store-level operating profitrepresents revenue less operational costs incurred at the store level,comprising salary-based expense,raw materials and consumables cost,depreciation of right-of-use assets,depreciation of plant and equipment,amortization of intangible assets,variable lease rental payment and short-term rental expenses,utilities expenses,advertising and promotion expenses,store operating and maintenance expenses and other expenses.
Store-level operating profit marginis calculated by dividing store-level operating profit by revenue for the same period.
Store-level EBITDAis defined as store-level operating profit for the period and adding back depreciation of plant and equipment and amortization of intangible assets in store-level.
Store-level EBITDA marginis calculated by dividing Store-level EBITDA by revenue for the same period.
Adjusted EBITDAis defined as Adjusted Net Profit/(Loss) for the period and adding back depreciation and amortization (excluding depreciation of right-of-use assets),income tax expense and interest income and expenses,net.
Adjusted EBITDA marginis calculated by dividing Adjusted EBITDA by revenue for the same period.
Adjusted Net Profit/(Loss)is defined as profit/(loss) for the period and adding back fair value change of financial liabilities at fair value through profit or loss,share-based compensation and listing expenses.
Net new store openings.The number of gross new stores opened during the period minus the number of stores closed during the period.
Same-store sales growth (SSSG).SSSG compares the sales generated by same stores during the relevant period year-on-year: the SSSG for thesix months ended June 30,2024 compares the same-store sales of the six months ended June 30,2024 andthat of the six months ended June 30,2023. The SSSG for the six months ended June 30,2023 compares thesame-store sales of the six months ended June 30,2023 and that of the six months ended June 30,2022.
Average Daily Sales per Storeis calculated by dividing revenues generated from relevant store in a particular period by the aggregate number of days of operation for such store in the same period.
Non-IFRS Measures
To supplement the Group's consolidated financial statements that are presented in accordance with the IFRS,the Group also uses Adjusted Net Profit/(Loss) (non-IFRS measure),Adjusted EBITDA (non-IFRS measure),Adjusted EBITDA margin (non-IFRS measure),Store-level EBITDA (non-IFRS measure) and Store-level EBITDA margin (non-IFRS measure) as additional financial measures,which are not required by,or presented in accordance with,IFRS.
"Store-level EBITDA" is defined as store-level operating profit for the period and adding back depreciation of plant and equipment and amortization of intangible assets in store-level. "Store-level EBITDA margin" is calculated by dividing Store-level EBITDA by revenue for the same period. "Adjusted Net Profit/(Loss)" is defined as profit/(loss) for the period and adding back fair value change of financial liabilities at fair value through profit or loss,share-based compensation and listing expenses. "Adjusted EBITDA" is defined as Adjusted Net Profit/(Loss) for the period and adding back depreciation and amortization (excluding depreciation of right-of-use assets),net. "Adjusted EBITDA margin" is calculated by dividing Adjusted EBITDA by revenue for the same period.
The Group believes that these non-IFRS measures facilitate comparisons of operating performance from period to period and company to company. The Group believes that these measures provide useful information to investors and others in understanding and evaluating the Group's results of operations in the same manner as they help the Group's management. However,the Group's presentation of Adjusted Net Profit/(Loss) (non-IFRS measure),Store-level EBITDA (non-IFRS measure) and Store-level EBITDA margin (non-IFRS measure) may not be comparable to similarly titled measures presented by other companies. The use of such non-IFRS measures has limitations as an analytical tool,and shareholders and potential investors of the Company should not consider them in isolation from,or as substitute for analysis of,the Group's results of operations or financial condition as reported under IFRS.
Conference Call Information
The Company will host a conference call today,Wednesday,August 28,at 7:00 pm Hong Kong Time (or Wednesday,at 7:00 am Eastern Time) to discuss the financial results.
A live audio-only webcast of the call can be accessed directly at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=r2R1LYk4.
To participate by phone,participants are strongly encouraged to pre-register for the conference call,by using the link provided below. Upon registering,each participant will receive a set of participant dial-in numbers,the event passcode,and a unique access PIN,which can be used to join the conference call.
Pre-registration Link: https://dpregister.com/sreg/10191360/fd2fc71a00
An audio-only replay of the call will be accessible through September 4,by dialing the following numbers:
United States Toll Free:
+1-877-344-7529
International:
+1-412-317-0088
Access Code:
7705408
Forward-Looking Statements
Certain statements in this document and/or the Announcement are forward-looking statements that are,by their nature,subject to significant risks and uncertainties. Any statements that express,or involve discussions as to,expectations,beliefs,plans,objectives,assumptions,future events,or performance (often,but not always,through the use of words or phrases such as "will","expect","anticipate","estimate","believe","going forward","ought to","may","seek","should","intend","plan","projection","could","vision","goals","aim","aspire","objective","target","schedules",and "outlook") are not historical facts,are forward-looking and may involve estimates and assumptions and are subject to risks (including but not limited to the risk factors detailed in this document and/or the Announcement),uncertainties and other factors some of which are beyond the Company's control. Accordingly,these factors could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The Company's forward-looking statements have been based on assumptions and factors concerning future events that may prove to be inaccurate. Those assumptions and factors are based on information currently available to the Company about the businesses that it operates. The risks,uncertainties and other factors,many of which are beyond the Company's control,that could influence actual results include,but are not limited to: the Company's operations and business prospects; its business and operating strategies and ability to implement such strategies; its ability to develop and manage its operations and business; its ability to control costs and expenses; its ability to identify and satisfy customer demands and preferences; the actions and developments of its competitors; general economic,political and business conditions in the markets in which it operates; and changes to regulatory and operating conditions in the industry and geographical markets in which it operates.
Any forward-looking statement speaks only as of the date on which such statement is made,and,except as required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited or under applicable law,the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.
Since actual results or outcomes could differ materially from those expressed in any forward-looking statements,the Company's shareholders and potential investors are advised not to place undue reliance on the forward-looking statements and to exercise caution in dealing in securities in the Company.
About DPC Dash Ltd
DPC Dash is Domino's Pizza's exclusive master franchisee in the China mainland,the Hong Kong Special Administrative Region of China and the Macau Special Administrative Region of China. Domino's Pizza,Inc.,DPC Dash's global franchisor,is one of the most widely-recognized global consumer brands and the world's largest pizza company. Led by a seasoned and visionary management team,DPC Dash is a market leader that differentiates from competitors with,among others,a continually developed and localized pizza-focused menu,unique expertise and leadership in delivery,technology focus and scalable and replicable store economic model. DPC Dash operates more than 900 stores in 33 cities in China as of June 30,2024.
For more information,please visit www.dpcdash.com
For official company announcements,please visit www.hkexnews.hk
Contacts
DPC Dash Ltd Investor Relations:
DPC Dash Ltd
IR@dominos.com.cn
ICR,LLC
dpcdashIR@icrinc.com
DPC Dash Ltd Media Relations:
ICR,LLC
dpcdashPR@icrinc.com
CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended June 30,
2024
2023
RMB'000
RMB'000
(Unaudited)
(Unaudited)
Revenue
2,041,461
1,376,370
Raw materials and consumables cost
(557,811)
(380,446)
Staff compensation expenses
(711,912)
(545,772)
Depreciation of right-of-use assets
(145,686)
(108,385)
Depreciation of plant and equipment
(98,612)
(72,241)
Amortization of intangible assets
(26,920)
(25,541)
Utilities expenses
(71,931)
(49,272)
Advertising and promotion expenses
(109,318)
(81,077)
Store operation and maintenance expenses
(128,881)
(84,940)
Variable lease rental payment,short-term rental and other
related expenses
(56,054)
(30,993)
Other expenses
(66,935)
(67,772)
Fair value change of financial liabilities at fair value through
profit or loss ("FVPL")
-
119,331
Other income
9,036
12,716
Other losses,net
(7,646)
(4,584)
Finance costs,net
(27,897)
(29,298)
Profit before income tax
40,894
28,096
Income tax expense
(29,987)
(19,345)
Profit for the period attributable to equity holders of
the Company
10,907
8,751
Other comprehensive income:
Item that may be subsequently reclassified to profit or loss
Currency translation differences
(1,993)
(11,878)
Item that may not be subsequently reclassified to profit or loss
Currency translation differences
5,909
55,597
Other comprehensive income for the period,net of tax
3,916
43,719
Total comprehensive income for the period
attributable to equity holders of the Company
14,823
52,470
Earnings per share for profit attributable to equity
holders of the Company
- Basic earnings per share (RMB)
0.08
0.08
- Diluted earnings per share (RMB)
0.08
0.07
CONDENSED INTERIM CONSOLIDATED BALANCE SHEET
As at June 30,
As at December 31,
2024
2023
RMB'000
RMB'000
(Unaudited)
ASSETS
Non-current assets
Plant and equipment
717,850
625,547
Right-of-use assets
1,130,658
967,277
Intangible assets
1,216,260
1,228,638
Prepayment and deposits
66,349
56,320
Deferred income tax assets
77,812
52,972
3,208,929
2,930,754
Current assets
Inventories
76,893
73,331
Trade receivables
11,386
9,752
Prepayment,deposits and other receivables
135,337
112,675
Cash and bank balances
1,089,266
1,019,243
1,312,882
1,215,001
Total assets
4,521,811
4,145,755
EQUITY
Equity attributable to equity holders of
the Company
Share capital
881,739
879,043
Share premium
2,276,180
2,254,958
Other reserves
110,104
89,110
Accumulated losses
(1,111,342)
(1,122,249)
Shares held for restricted share units
("RSUs")
(497)
(1,731)
Total equity
2,156,184
2,099,131
LIABILITIES
Non-current liabilities
Borrowings
100,000
200,000
Lease liabilities
943,007
808,780
Other payables
28,273
20,757
1,071,280
1,029,537
Current liabilities
Borrowings
100,000
-
Lease liabilities
262,221
229,399
Trade payables
172,540
153,904
Contract liabilities
54,164
44,911
Accruals and other payables
675,087
571,107
Current income tax liabilities
30,335
17,766
1,294,347
1,017,087
Total liabilities
2,365,627
2,046,624
Total equity and liabilities
4,755
Net current assets
18,535
197,914
CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended June 30,
2024
2023
RMB'000
RMB'000
(Unaudited)
(Unaudited)
Cash flows from operating activities
Cash generated from operations
419,067
201,149
Income tax paid
(42,258)
(26,391)
Net cash generated from operating activities
376,809
174,758
Cash flows from investing activities
Purchase of plant and equipment
(126,574)
(96,069)
Purchase of intangible assets
(20,865)
(13,657)
Interest received
14,045
5,903
Proceeds from disposal of plant and equipment
20
-
Decrease in short-term time deposits with original
maturities over three months
432,444
-
Net cash generated from/(used in) investing
activities
299,070
(103,823)
Cash flows from financing activities
Rental deposit payment
(11,778)
(8,721)
Payment of principal element of lease liabilities
(128,762)
(96,906)
Payment of interest element of lease liabilities
(33,315)
(27,925)
Interests paid
(4,677)
(4,853)
Proceeds from issuance of new shares
-
548,921
Proceeds from exercise of share options
3,439
-
Payment of listing expense
-
(23,977)
Net cash (used in)/generated from financing
activities
(175,093)
386,539
Net increase in cash and cash equivalents
500,786
457,474
Cash and cash equivalents at beginning of the period
587,038
544,247
Exchange difference on cash and cash equivalents
1,242
27,170
Cash and cash equivalentsat end of the period
1,066
1,028,891
Cash at bank and in hand at end of the period
1,091
Less: restricted cash at end of the period
(200)
(200)