Domino's Pizza Enterprises Limited

Good morning and thank you for joining the Domino's Pizza Enterprises Limited FY26 Full Year Results Investor Call. I'm Nathan Scholz, the Chief Communications and Investor Relations Officer. This morning you'll be hearing from Chairman Jack Cowan, Group CEO and Managing Director Andrew Gregory, and Group CEO and CFO George Sayoud. After the presentations, we will have a Q&A. Analysts will have the option to select raise hand, and then you'll be unmuted to ask a question and a follow-up. With that, I'll pass to Chairman Jack Cowan.

Good morning and thank you for joining us. 12 months ago, I said this business needed a reset. I want to start with what we said we would do and what we have done. We said we would rebuild franchisee profitability. Average franchisee EBITDA is up 11.3% to $105,700 a store globally in Q3 FY26. Store margin has moved from 7.1% to 7.9%. That is real money back in the hands of the people that run our stores. It's not where it needs to be, but our Australian stores are higher than the global average at 128,000. Our target is 130,000 globally, and we will keep working until we get there. I've said before that this business is only as good as a franchisee partner's ability to make a decent income. When our franchisee partners make money, they invest. They hire better people, they look after the customer, and the sales follow. What we have said, we said we would take cost out, We have actioned 67 million of annualized savings with 35.3 million of that realized in FY26. We said we'd strengthen the balance sheet. Free cash flow is up 116.6 million to 164.1 million. Net leverage is 1.86 times. Underlying net profit after tax is up 4% to $121.6 million, and the dividend is up 51.2% to $0.325 per share. Now to the next task, which is rebuilding profitable sales growth in FY2017. We have simplified pricing, reduced voucher dependency, and moved towards smarter offers and built a leaner cost base. That has strengthened store economics, but has also lowered order counts where customers have been responding mainly to discounting. We became the king of discounts. On some orders, we were selling product and not making enough for our stores. We have stopped a lot of that, and we knew when we did it that it would cost us volume. In Western Australia, where we have run our clearest test of simpler everyday pricing, we gave up top-line sales and improved store profitability substantially. A portion of the transactions were entirely dependent on too aggressive a discount. We've learned a lot through that test. Our mistake was not recognizing that we still have to promote great value. You have to grab people's attention. The work now is to promote great value profitability, simpler menus, stronger meal menu, better digital and CRM execution, and customer service improvement. that rebuilds frequency without giving back the economics the team had built for FY27. Western Australia continues to outperform the rest of the country on the key customer and profitable sales indicators we are watching. We've still got more to do, but the evidence is encouraging, and we'll adapt those lessons to apply them in a measured way across the country. I want to say something about the team, because in my experience, that is what determines the outcome. Over the past 12 months, we've put in place a management team, I believe, that's second to none. I want to thank our group chief operating officer and chief CFO, George Sahoud, who has taken on significant leadership responsibilities in the last year and helped lead the reset that brings us to where we are today. Andrew Gregory has joined us as Group CEO and Managing Director this month. Andrew started as a crew member in 1993, ran McDonald's in Australia and New Zealand for eight years, and most recently spent three years in the headquarters in Chicago. He understands the franchisee economics from both sides of the counter. As chairman, my job from here is to support Andrew, not to run the business for him, and I'm confident he is the right person for the job. We've also renewed the board with Judith Swales and Drew O'Malley joining this year, adding additional experience in retail and QSR. Let me finish where I started. We're in the franchise business, and we happen to sell pizza. The argument is not about who gets what slice of the pie. It's about making the pie bigger. The reset is delivered. Returns are improving. And FY27 is about building profitable orders. The test from here is simple. Rebuild order momentum without giving back the store economics we have just restored. I'd now like to hand over to Andrew to introduce himself and his team's plans.

Thanks Jack, good morning. I started on the 5th of August and I'm still early in this role but I'm not early to the QSR industry. I've already spent time listening in stores, meeting franchisees and talking and listening to leadership from across our 12 markets. What I've seen is a business with strong foundations, a strong brand, a committed team and passionate franchisee partners who want to grow and be successful. I'm more confident in the success of this business as a result. Having said that, sales momentum is not where it needs to be, and regaining momentum and growing our baseline of average weekly order count will be the operating measure that I focus on as an absolute priority. I am clear on the current strategy to create a more sustainable business based on more consistent value that grows franchisee profitability at the same time as growing sales. Our results in growing order count will be choppy in the short term. but it must be and is our longer term objective. It's the only way to sustainably grow income for both the franchisees and the company. The FY26 reset that Joy will outline has delivered a strong foundation to build upon for this business and it's my responsibility to continue the strong focus on costs and capital discipline and also to build and grow the Domino's brand and business from that foundation. We know our customers want us to be great value every day, not just at particular times or for particular days of the week or even for short periods on our calendar. We will grow this business and create profitability for our franchisees if we are able to offer predictable, compelling value to our customers. And of course, value is not just price. Value is great food, great pizza, great service and delivering joy with every pizza. In each of our markets, we have a strong leadership position against our direct pizza rivals. An uncertainty and challenging consumer environments are not within our control. However, our decisions and the way we show up for customers and our teams in the stores is within our control and it's our responsibility. We control how we price, how we execute world-class marketing and how we execute in our stores with our franchisees. In each of our markets, There are QSR brands successfully driving profitable growth for their franchisees and sustainably growing market share. I'll come back later to the FY27 priorities, but my direction is clear. We need to turn stronger foundations into profitable customer growth and better outcomes for Domino's stakeholders.