Demand for digital Domino's ordering drives growth at DP Eurasia

DP Eurasia updated the market on its trading for the six months ended 30 June on Friday, reporting continued top-line growth amid “strong” digital engagement.

The London-listed company, which holds the Domino’s Pizza master franchise for Turkey, Russia, Azerbaijan and Georgia, said it expected full-year adjusted EBITDA for the year to be in line with expectations.

Total system sales rose 28.1% to TRY 510.4m.

It said 79 new stores were added over the last 12 months, bringing the total number to 672, while group system sales growth reached 28.1%, which was reportedly driven by strength in both the Russia and Turkey markets.

Turkish systems sales growth was 15.6%, while Russian system sales growth reached 68.8%, or 54.0% based on the performance of the rouble.

Group online system sales growth was 64.5%, with Turkish online systems sales growth at 46.9% and Russian online system sales growth of 106.9%, or a rouble-based 88.6%.

Turkey and Russia like-for-like growth was described as “strong”, leveraging the group's online ordering platforms, with online delivery system sales as a share of delivery system sales reaching 59.3% for the period, up from 49.7%.

Both Turkey and Russia were awarded the ‘Gold Franny Award’ - the annual award that Domino's Pizza presents to its master franchisees for operational excellence, growth rate and increase in revenue.

An agreement was signed during the year to refinance the euro-denominated Russia loans by a rouble-denominated loan, the board also highlighted.

“We are very pleased with our performance for the first half of 2018,” said chief executive officer Aslan Saranga.

“We were able to record double-digit like-for like growth in both of our main markets, despite the election period in Turkey.

“The growing franchisee base and pipeline are encouraging in both markets.”

Saranga noted that the first half of 2018, which was historically a slower period for store openings, saw 29 stores added - 21 in Russia, seven in Turkey and one in Azerbaijan, which was in line with its expectations.

He said the firm’s geographic expansion outside of Greater Moscow in Russia continued, where it added Voronezh, Kazan, and Nizhny Novgorod among other cities.

“We are happy to see that our advertising spend and capital expenditures on the digital front are paying off as the online portion of our business is continuing to increase.

“We are continuing with the deployment of the GPS tracker in Turkey to optimise delivery effectiveness and expect to finish it in the second half of the year.

“Our project to unify the online ordering back-end systems across the Group is also on track to finish by the end of 2018.”

DP Eurasia’s board said it expected full-year adjusted EBITDA for 2018 to be in line with expectations.