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ASF Conference

January 2012
DOMINOS PIZZA
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Forward Looking Statements
THIS PRESENTATION AND OUR ACCOMPANYING COMMENTS INCLUDE FORWARD-LOOKING STATEMENTS.
THESE STATEMENTS RELATE TO FUTURE EVENTS OR OUR FUTURE FINANCIAL PERFORMANCE AND ARE SUBJECT TO KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE OUR ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS TO
DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. THIS PRESENTATION AND OUR
ACCOMPANYING COMMENTS DO NOT PURPORT TO IDENTIFY THE RISKS INHERENT IN AN INVESTMENT IN DOMINOS PIZZA AND FACTORS THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN THE FORWARD-LOOKING STATEMENTS, INCLUDE
BUT ARE NOT LIMITED TO THOSE RISK FACTORS IDENTIFIED IN DOMINOS PIZZA, INC.S ANNUAL REPORT ON FORM10-K FOR THE FISCAL YEAR ENDED
JANUARY 2, 2011, AS WELL AS OTHER SEC REPORTS FILED BY DOMINOS PIZZA, INC. FROM TIME TO TIME. ALTHOUGH WE BELIEVE THAT THE
EXPECTATIONS REFLECTED IN THE FORWARD-LOOKING STATEMENTS ARE BASED UPON REASONABLE ESTIMATES AND ASSUMPTIONS, WE CANNOT
GUARANTEE FUTURE RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS. WE CAUTION YOU NOT TO PLACE UNDUE RELIANCE ON
FORWARD-LOOKING STATEMENTS, WHICH REFLECT OUR ESTIMATES AND ASSUMPTIONS AND SPEAK ONLY AS OF THE DATE OF THIS PRESENTATION.
WE UNDERTAKE NO OBLIGATION TO UPDATE THE FORWARD-LOOKING STATEMENTS TO REFLECT SUBSEQUENT EVENTS OR CIRCUMSTANCES. IN
LIGHT OF THE ABOVE, YOU ARE URGED TO REVIEW THE DISCLOSURES CONTAINED IN THE DOMINOS PIZZA, INC. SEC REPORTS, INCLUDING THE RISK
FACTORS CONTAINED THEREIN.
THIS PRESENTATION CONTAINS TRADE NAMES, TRADEMARKS AND SERVICE MARKS OF OTHER COMPANIES. WE DO NOT INTEND OUR USE OR
DISPLAY OF OTHER PARTIES TRADE NAMES, TRADEMARKS AND SERVICE MARKS TO IMPLY A RELATIONSHIP WITH, OR ENDORSEMENT OR
SPONSORSHIP OF, THESE OTHER PARTIES.
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Domestic Business
#1 pizza delivery chain in the U.S.
(1)
Highly diversified franchisee base with near exclusive focus on the Dominos brand
National brand known for its service, delivery and carryout
Value-added Supply Chain
U.S. marketing efforts have materially improved perception of food quality
International Business
International presence with stores in over 70 markets
71 consecutive quarters of positive same-store sales
Master franchisee model is highly profitable, requires low capex and generates stable cash flows
Financials
Primarily franchised business model (~96%) results in strong, consistent cash flows
Robust cash flows expected to strengthen balance sheet
Profitable Supply Chain system provides an additional source of revenue and cash flows
Key Highlights of the Dominos Story
(1) Source: The NPD Group/CREST - Year-Ending November 2010.
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Over 9,500 Units Worldwide
50% of Global Retail Sales 50% of Global Retail Sales
4,496 Franchised Stores
395 Company-Owned Stores
19 Company-Owned Supply
Chain Facilities
Domestic International
4,650 Franchised Stores
Currently No Company-Owned Stores
6 Company-Owned Supply Chain
Facilities
As of Q3 2011
Total Units 9,541
Total Units 9,541
International
49%
Domestic
51%
Franchise
96%
Company-Owned
4%
LTM Global Retail Sales $6.8 billion
LTM Global Retail Sales $6.8 billion
International
50%
Domestic
50%
Franchise
95%
Company-Owned
5%
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Outlook does not constitute specific earnings guidance. Dominos does not provide quarterly or annual earnings estimates.
Long Range Outlook
+350 to +450
+350 to +450
Global Net Units
Global Net Units
+5% to +8%
+5% to +8%
Global Retail Sales
Global Retail Sales
+1% to +3%
+1% to +3%
Domestic Same Store Sales
Domestic Same Store Sales
+3% to +6%
+3% to +6%
International Same Store Sales
International Same Store Sales
Long range outlook reflects higher expected global unit growth and retail sales
$25 - $35 million
$25 - $35 million
CapEx
CapEx
38% - 39%
38% - 39%
Tax Rate
Tax Rate
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(1) Source: The NPD Group/CREST - Year-Ending November 2010.
(2) As of Q3 2011.
Domino's
20%
Other 2
Largest
National
Competitors
27%
Regional
Chains &
Independents
53%
Invested approximately $1.4 billion in advertising
over the last five years the vast majority of which
was funded by franchisees
Online ordering comprises nearly 30% of sales
#1 Pizza Delivery Company in the U.S.
Pizza Delivery Dollar Share
(1)
Pizza Delivery Dollar Share
(1)
Highlights
Highlights
National Footprint
(2)
National Footprint
(2)
Franchise Stores
Team USA (Company-owned) Stores
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Pizza Unit Economics
(1) As of FY 2010.
Domestic franchise model generates sustainable returns
Focused and efficient operating model
Delivery and carryout
Low cost to open / operate
$150,000 to $250,000 average cost range for new store
Small store footprint / low real estate costs
Makeline + oven + POS system
Strong cash-on-cash returns
Average reported annual EBITDA per domestic franchise between $50,000 and $75,000
(1)
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Domestic Supply Chain
Supply chain supports a strong domestic business
Sells and delivers food & equipment to U.S. franchisees
Provides consistency
Produces fresh dough
System-wide ingredients & equipment
Franchise partnership
Profit-sharing agreement
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Magnitude of Commodity Costs
Input Commodities
Input Commodities
Pricing pass-through on most items
Provides stable dollar operating profit margin
for Supply Chain
Multi-year pricing arrangement for cheese
Lower volatility and improved budget
planning
Expect 1% - 2% increase in food basket for
2012
(1)
Sauce
Wheat
Boxes
Meat
Cheese
Key Points
Key Points
(1) Source: Derived from Companys internal and industry estimates.
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Q3 YTD Domestic Recap
YTD Q3 2011 SSS were +2.1% rolling over +11.6%
in 2010, for a 2-year comp of +13.7%
Sold 56 company-owned stores to franchisees in
Georgia and Minnesota
Recent News
Recent News
Introduced Dominos Artisan Pizza
Gourmet pizzas
Operationally friendly
Create good profit at the store level
Introduced Stuffed Cheesy Bread
Offered in three flavors
Highlights
Highlights
Dominos Artisan Pizza
Dominos Artisan Pizza
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2,159
2,259
2,382
2,523
2,987
3,223
3,469
3,726
4,072
4,422
2,749
4,650
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3.7%
6.4%
4.1%
4.0%
6.1%
4.0%
6.7%
6.2%
4.3%
6.9%
7.9%
5.9%
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1
International profits driven by franchise royalties
90% of 2010 International operating income
Limited Dominos Pizza investment through master franchisee model
Five-year international retail sales CAGR of 12%
(1)
International Store Growth
International Store Growth
International Same-Store Sales Growth
(2)
International Same-Store Sales Growth
(2)
(1) From 2005 to 2010.
(2) International same store sales are calculated on a constant dollar basis, which reflects changes in international local currency sales, for stores
that have been open for at least a year.
2000 Q3 2011 Growth: 2,491 Stores
International: 35% of Income from Operations
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International Opportunity
Potential for nearly 3,000 additional restaurants in Dominos top 10 International markets
830 1 191 lrance
300 1 203 1urkey
630 1 442 AusLralla
1op 10 Markets 3 2011 Store Count De||very Market os|t|on otent|a| Store Count
unlLed klngdom 641 1 1,100
Mexlco 378 1 700
lndla 409 1 1,000
SouLh korea 333 2 400
Canada 349 3 400
!apan 191 3 700
1alwan 138 2 130
1ota| 3,497 6,4S0
Source: Company estimates.
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31
140
100
87
69
209
249
104
175
82
236
246
346
350
228
90
147
257
0
50
100
150
200
250
300
350
400
2006 2007 2008 2009 2010 YTD Q3 2011
Pizza Hut: +966 Dominos: +1,663 Papa Johns: +517
Stronger International Unit Growth Than Peers
Store Growth 2006 YTD Q3 2011
Store Growth 2006 YTD Q3 2011
Source: Public filings.
Dominos added more stores between 2006 and Q3 2011 than its two largest competitors combined
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Large Public Master Franchisees
841
694
410
599
2,106
JUBI
India
Sri Lanka
DMP
Australia
New Zealand
Netherlands
France
Belgium
Alsea
Mexico
Colombia
DOM
United Kingdom
Ireland
Germany
Rest of International
As of Q3 2011.
Four publicly traded Dominos Pizza Master Franchisees make up more
than half of the total international store count
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Q3 YTD International Recap
YTD Q3 2011 SSS were +7.9% rolling over +5.8% in 2010, for a 2-year comp of +13.7%
71 consecutive quarters of positive same store sales growth nearly 18 years
2011 net store growth through Q3 2011: 228 stores
Highlights
Highlights
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(1) Free cash flow defined as cash flows from operating activities less capital expenditures.
Significant
Free Cash Flow
Generation
Dominos has a history of operating a strong and healthy business with consistent
global retail sales growth
The Company generates significant free cash flow that allows for de-leveraging of
the balance sheet
Generated $109 million of free cash flow in LTM Q3 2011
(1)
Sustainability of
Royalty Stream
Dominos highly franchised business model leads to a predictable and less volatile
free cash flow stream than other less franchised chains
Dominos royalty stream has remained strong throughout the recent economic
downturn
Minimal Capex
Requirements
Highly franchised model requires minimal capex requirements to be funded by the
Company
Lower initial capital investment and ongoing maintenance capex relative to other
QSR concepts
Key Financial Considerations
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-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD Q3 2011
Domestic International
Impressive Record of Same-Store Sales Performance
Same Store Sales 2000 to Q3 2011
Same Store Sales 2000 to Q3 2011
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Total Debt to Adjusted EBITDA
(1)
Total Debt to Adjusted EBITDA
(1)
Dominos Has Proven its Ability to Manage Leverage
(1) Adjusted EBITDA excludes non-cash compensation expense, losses/(gains) on asset disposals, losses/(gains) on debt retirements and certain other
items that affect comparability. Adjusted EBITDA data prior to 2006 derived from publicly available numbers using the same methodology (adding
back depreciation and amortization, non-cash compensation expense and loss/(gain) from asset sales to income from operations).
5.5x
4.7x
4.1x
3.2x
4.8x
3.7x
3.0x
7.2x
7.7x
6.7x
5.5x
5.1x
3.1x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 LTM Q3
2011
Q3 2011 total debt / EBITDA: 5.1x
Interest only
Whole-business securitization secured with most cash flows of the company
5-year initial term with two possible 1-year extensions starting
in April 2012, based on meeting a key measurement, ending in April 2014
$1.45 billion debt 5.9% blended cash interest rate
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Powerful Global Brand with more than 50 Years of:
Proven Business Model
Strong Product Demand
Strong Product Demand
Strong Unit Economics
Strong Unit Economics
Consistent Cash Flow from Franchise Model
Consistent Cash Flow from Franchise Model
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THANK YOU