Good morning, and thank you for joining the Domino's Pizza Enterprises Limited FY '26 full year results investor call. I'm Nathan Sholes, the Chief Communications and Investor Relations Officer.

This morning you'll be hearing from Chairman Jack Cowin, Group CEO and Managing Director Andrew Gregory, and Groups Group COO and CFO George Saoud. 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 Cowin.

Good morning, and thank you for joining us. Uh 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 FY '26, 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 FY '26. 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 32.5 cents per share. Now to the next task, which is rebuilding profitable sales growth in FY '27.

We have simplified pricing, reduced voucher dependency, and moved towards smarter offers, and built a leaner cost base. That has strengthened store economics, but it has also lowered order counts where customers had been responding mainly to discounting.

We became the king of discounts. On some orders, we were selling product and not making enough for 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 have built for FY '27. 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 is second to none. I want to thank our Group Chief Operating Officer and Chief CFO George Saoud, 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 8 years, and most recently spent 3 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 FY '27 is about building profitable orders.

The test from here is simple: rebuild order momentum without giving back the store economics we've 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 FY '26 reset that George 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. 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, and uncertainty and challenging consumer environments are not within our control.

However, our decisions and the 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 FY '27 priorities, but my direction is clear.

We need to turn stronger foundations into profitable customer growth and better outcomes for Domino's stakeholders.

Thank you, Andrew. Good morning, everyone, and thank you for joining us.

FY '26 was a year of necessary reset for DPE. We made deliberate decisions to simplify the business, reduce costs, strengthen the balance sheet, and restore franchise partner economics.

Some of those decisions had a visible impact on sales and order volumes during the year. However, I've also created a more sustainable operating and financial base from which we can rebuild profitable growth.

At a high level, there are four messages I would like you to take from today. First, the financial reset has been delivered.

Second, franchise partner profitability is improving. Third, our balance sheet, liquidity, and cash generation has strengthened materially.

Fourth, the focus for FY '27 is clear: rebuilding profitable sales and order growth without giving back the economic gains achieved through the reset. Turning to the FY '26 financial results on slide 6.

Network sales were $3.87 billion, down 6.8%, while same store sales declined 4.1%. This reflected the reduction in store numbers and our deliberate move away from broad, high discount promotional activity, particularly in Australia, New Zealand, and Japan.

Despite those sales pressures, underlying EBIT increased 1% to $200.1 million and underlying NPAT increased 4% to $121.6 million. This demonstrates the impact of our cost actions taken across the group, the stronger contributions from Europe and Asia, and improved portfolio margins.

It is also important to note that the EBIT result was achieved while cycling approximately $10 million less profit from store sales than in the prior year. Free cash flow, excluding divestment proceeds, increased $116.6 million to $164.1 million.

Net debt reduced by $227.8 million from $724.8 million to $497 million, and net leverage reduced from 2.57 times to 1.86 times. The Board has declared a final dividend of 32.5 cents per share, an increase of 51.2% on the FY '25 final dividend.

The dividend represents a 50% payout ratio on the second half underlying NPAT and reflects a balanced approach to shareholder returns, continued deleveraging, and appropriate reinvestment back into the business. The statutory result includes a post-tax impact of $255.7 million from balance sheet write-downs and other non-recurring items.

These items principally relate to revised carrying values for France and Taiwan goodwill and intangible assets, technology assets that no longer align with our enterprise IT strategy, underperforming stores, and other balance sheet adjustments. While significant from an accounting perspective, these write-downs are largely non-cash.

They do not change the underlying operating performance, cash generation, or the covenant position of the group. They represent a more realistic alignment of our carrying values with current performance expectations and our strategic priorities.

Turning to slide 7, geographic summary. Looking across the regions, the portfolio showed improved earnings resilience despite softer sales.

In ANZ, EBIT declined 5.9% to $122.9 million. Sales were affected by the pricing and promotional reset, particularly the decision to reduce broad discounting.

Order volumes moderated, but improvements in ticket, food costs, and cost control supported stronger franchise partner economics. Europe delivered EBIT growth of 2.6% to $74.9 million.

A stronger performance in Benelux offset softer trading in France and also in Germany in the second half. Asia delivered EBIT growth of 19.9% to $34.7 million despite lower revenue.

This improvement primarily reflected the closure of underperforming stores in Japan, menu simplification, and cost discipline. Japan's corporate store network network returned to positive EBITDA, while Malaysia and Singapore continue to improve from a profitable base.

Global overheads also improved. This reflects the tighter cost control, disciplined headcount management, and lower discretionary expenditure.

The key point is that the group delivered modest EBIT growth and margin expense- expansion despite lower sales volumes. Lower revenue did not flow through to lower profit.

That gives us confidence that the reset has created greater operating leverage as sales momentum improves. Turning to slide 8, free cash flow.

Free cash flow was one of the most important outcomes of FY '26. Free cash flow before divestments increased from $47.4 million to $164.1 million.

Operating cash flow before interest and tax increased by $10.5 million to $312.6 million, supported by favorable working capital movements. Net operating cash flow increased by $59.5 million to $226.7 million, which also benefited from $44.9 million of lower tax payments, primarily reflecting the timing of payments across jurisdictions.

We recognize that tax timing was a meaningful contributor. However, the improvement was not solely related to tax.

It also reflected better working capital management, lower interest payments, and a substantial reduction in capital expenditure. Capital expenditure reduced by $48.1 million to $38.7 million, reflecting greater investment discipline that contributed to a reduction in net investing cash outflows to $5.7 million.

The focus on cash is structural. We have strengthened working capital disciplines, reduced investment in lower-priority activities, and introduced a more rigorous returns-based approach to capital allocation.

We said we would improve cash generation, and we did. Turning to slide 9, investing activities.

Within capital expenditure, digital investment reduced to $21.5 million from $44.8 million, a decline of $23.3 million. This does not mean we are stepping away from technology.

It means we are moving to a more disciplined enterprise IT model with clearer prioritization, stronger commercial accountability, and explicit investment cases. Our digital priorities will focus on reducing friction in the customer journey, strengthening our CRM and personalization, and supporting store productivity and franchise partner execution.

Looking forward, we currently anticipate digital investment in the range of $30 to $45 million with expenditure subject to clear business cases and alignment with the group's strategic priorities. Slide 10, debt and capital management.

The stronger cash performance has translated directly into a stronger balance sheet. Net debt reduced by $227.8 million.

Of this, $138.9 million related to cash repayments and $88.9 million related to favorable foreign exchange translation, predominantly associated with the Japanese yen. Net leverage reduced to 1.86 times, achieving our target of below two times.

Interest coverage improved to 20.6 times. During FY '26, we also completed the refinancing of $1.05 billion of debt facilities.

The refinancing delivered improved pricing, staggered maturities, and a weighted average tenure of approximately 4 years. At year end, the group has $467.5 million of cash and undrawn committed facilities, providing substantial liquidity and strategic flexibility.

We are therefore entering FY '27 with a stronger financial position, improved liquidity, and greater capacity to invest selectively behind initiatives that can generate substantial returns. We said we would strengthen the balance sheet, and we did.

Turn to slide 12, Western Australia. I will now turn to the operational reset starting with Western Australia.

WA provides an important example of both the opportunity and the execution lessons from FY '26. In September, we removed broad, high-percentage discounting.

That improved average ticket and store economics, but it also reduced orders more than intended. From February, the market progressively reintroduced sharper, targeted carry-out offers and began testing lower delivery fees.

The objective was to rebuild orders while preserving the stronger economics achieved through the initial reset. The results are encouraging.

WA delivered 5 months of record franchise partner EBITDA. Carry-out comparative sales became positive and delivery sales improved, and WA same store sales outperformed the rest of Australia relative to the prior year.

Note that we introduced a delivery fee in WA at $8.95 when we be- when we began the trial. We are now in market with a $5.95 delivery fee across WA as of 2 weeks ago, and we're seeing improved conversion.

The lesson is not simply that lower prices generate volume. The lesson is that different customer occasions require a more deliberate value architecture.

For FY '27, we intend to apply these learnings through clearer menu pricing, targeted carry-out value, more disciplined delivery fee settings, and lower reliance on broad voucher-led discounting. WA is not a copy-and-paste answer for every market.

It is a playbook for how we test value, volume, and margin together. The principle is simple: clear value, targeted offers, and profitable sales.

Moving to slide 13, franchise partner economics. Strengthening franchise partner profitability has been central to the reset.

Average rolling quarter 3 12-month franchise store EBITDA increased 11.3% to $105,700, while the average store EBITDA margin increased from 7.1% to 7.9%. The improvement was driven by higher average ticket, clearer pricing, lower food and packaging costs, tighter cost control, and operational simplification.

Franchise partner profitability increased across the major markets and particularly stronger outcomes in Australia, New Zealand, and Japan, and continued growth in the Netherlands and Germany. The target is $130,000.

We are not there yet, but the direction is right. The business only scales properly when franchise partners have the confidence and the returns to invest.

Slide 14, the roadmap to sustainable growth. We are targeting average global franchise partner EBITDA of $130,000 over time.

Reaching that level will require contributions from three areas: renewed customer growth, further procurement savings, and improved store productivity and store execution. Importantly, this is a shared agenda with franchisees.

Domino's must provide a stronger customer proposition, better technology, procurement benefits, and simpler operating systems. Franchise partners must convert those initiatives into consistent execution, customer service, and local growth.

This page shows the levers to get from today's average franchise EBITDA of $105.7 thousand towards the $130,000. The important point is that there is no single lever, and these initiatives are not sequential.

They can move together. One lever is profitable customer growth, the right volume at the right margin, supported by clearer pricing and smarter offers.

Another is procurement, continuing to lower food, packaging, and other input costs where we can and sharing those benefits appropriately through the system. The third is productivity and execution, better labor scheduling, simpler processes, improved store efficiency, and stronger in-store execution.

The model only works when both sides execute and when growth shows up in stronger store economics. This is where management's attention is, because a more profitable franchisee is the engine of our business.

It's better for our network growth, our customer service, and shareholder returns. Slide 15, cost savings initiatives.

The cost program delivered in line with our expectations. We've actioned $67 million of annualized savings across technology, central support, procurement, logistics, marketing, and G&A expenses.

Of that amount, $35.3 million was realized in FY '26. Two points matter.

First, a meaningful share of the savings supported franchise partners through lower input costs and better store economics. Second, the savings retained by DPE helped protect earnings while we moved away from lower-margin volume.

That is the balance. Franchisees have to eat first and DPE also needs the right cost base.

We've also identified a further $15 to $25 million of opportunities across food and packaging and procurement, and that's subject to implementation and timing. The intent is for the additional savings to be shared between franchise partners and DPE, the benefits support both the store economics and the group resilience.

This next phase is not simply about reducing costs. It is about creating capacity to reinvest in customer growth while continuing to improve franchise partner economics.

Slide 17, trading update. As we enter FY '27, the immediate task is to restore order frequency and profitable volume.

The reset has produced healthier store economics, but also lowered order counts. We must now convert stronger unit economics into sustainable sales growth.

Group same store sales declined 2.5% in half one and 5.7% in half two, with the first 7 weeks of FY '27 broadly consistent with the second half run rate at -5.8%. In ANZ, we'll progressively apply the lessons learned from WA with a disciplined approach to pricing, promotions, and delivery fees.

In Europe, the focus is on recovering transactions while preserving the benefits of our cost control. In Asia, it is to convert the healthier economics created through store rationalization and operational simplification into sustainable growth.

Across the group, our approach will be evidence-based. We will test initiatives market by market, measure customer response and store profitability, and scale only those initiatives that deliver both.

We're not providing forward earnings commentary on FY '27. To conclude, FY '26 was a year in which we made difficult but necessary choices.

Sales and volumes declined, and we're not satisfied with that outcome. However, underlying earnings were resilient, franchise partner profitability improved, free cash flow strengthened materially, debt reduced, and the balance sheet was reset.

We now have a leaner operating base, stronger liquidity, and better store economics. The challenge for FY '27 is to turn those foundation into profitable sales growth.

With that, I'll hand over to Andrew to take you through his initial observations and the priorities for profitable growth. Thank you.

Thanks, George. I've come into a business that has done a lot of hard work through FY '26, and the platform is stronger because of it.

In my first 3 weeks, I've seen stores, franchisees, and met with market leadership. The strongest impression is the pride and passion people have for this brand.

Franchisee partners want to grow and our teams are committed to give customers a great experience. I've also heard and seen practical opportunities to improve.

We can make the customer experience easier, store execution simpler, and local decisions more focused on the consumer. Our momentum is not strong enough, and both comp store sales and comp average weekly order count is below where it needs to be.

We do need to do two things at once: we need to rebuild sales and maintain discipline on costs and capital. We must work towards providing better, more consistent, and reliable value to our customers.

We have to help our franchisees by making their stores easier to run, by being simpler and more focused in our menu, and to provide great service, whichever way the customer orders, through the Domino's app or in-store interacting with our team. Our '27 priorities are clear: grow sales by turning the tide on order count, delivering a frictionless customer experience, and maintaining our cost discipline to support both franchisee and DPE profitability alike.

This slide sets out my priorities for my team in FY '27. First, grow the baseline in average weekly order count.

Delivering profitable growth is the operating metric I will track and be accountable for. A stronger business relies on more customers choosing Domino's more often.

We will leverage from the successful and ongoing trial in Western Australia. That trial is based on a simpler and more predictable value proposition to our customers.

As a result, our stores in Western Australia are running better. They're making more money because the franchisees can more easily project sales and schedule their teams.

Our marketing will become more focused on customer experience and sharing occasions with family and friends, large groups. From next month, our marketing in Australia will be more focused on that occasion and the experience of enjoying great pizza from Domino's.

We'll feature our great product and a stronger brand presence in our creative. As we've already announced, next month, all of our stores will transition and our customers will have the opportunity to choose beverages from their favorite brands here in Australia as Coca-Cola becomes our exclusive supplier.

Second, improving franchisee profitability sustainably. Growth has to work for franchisee partners.

The $130,000 average franchisee EBITDA ambition remains an important global benchmark. It's a multi-year objective and a focus for my team and the business.

The target is a benchmark for the level of profitability needed to support franchisee confidence in sustainable new store growth over time. Franchisee profitability will not come from one lever.

Primarily, however, it'll come from profitable sales growth. It will also come from store execution and better store productivity and smart decisions to lower input costs responsibly.

It is a shared responsibility of both the franchisor and the franchisee and requires us to work together on this objective. Third, leading with urgency and accountability.

Accountability will be fundamental to our success for my team and our market leaders who own the execution of their strategy. The purpose and objective of our market leader leadership teams is to intimately intimately know their industry, their customers, and then, importantly, lead and work shoulder-to-shoulder with the franchisees to make compelling consumer-based plans and then deliver so that our customers experience those plans in real life.

Many of the solutions to our challenges across the market will be consistent, and we can learn more quickly and faster to share great ideas and learn from our mistakes. Importantly, local consumer tastes and segments, industry economics, and competitive dynamics in the different markets mean there will be nuanced local solutions solutions that also need to be implemented.

Overall, my accountability is to lead a team to understand and listen to customers and lead and work with franchisees to deliver better outcomes and profitable growth for all of Domino's stakeholders. Thank you.

George and I are now happy to take your questions. Uh

thank you, Andrew. Uh the first question comes from Sean Cousins from UBS.

Um Sean, you can unmute and ask your question.

Great. Uh thanks.

Thanks, Nathan. Can you hear me now?

We can indeed.

Fantastic. Thank you.

Uh good morning, um uh Jack, Andrew, George, and Nathan. I've got some questions regarding cost savings.

That was a big tailwind of support for '26. Will the remainder of the $100 million savings announced at the AGM, the uh you realized 35 uh $35 million in '26, there's uh 65 to go, will that be realized in fiscal '27, please?

George here. Thank you, uh Sean.

Um it will be realized in '27 and '28. It's over the 3 years, the $100 million.

Um so, you'll see you've seen what's come through in '26. '27 is got a material component to it, and then in '28.

Great. Um and my second question is just around D&A.

That was quite low in the second half, and I think you've called out amortization. I think it was $55 million in the second half.

Uh consensus estimates are around 137 um 138. Should we annualize that second half D&A?

It's just there's been a lot of change in your CapEx and your broader asset base. Um any assistance on that number would be great.

Yeah. Very good question.

Um if you go to note 6 of our accounts, you'll see D&A has come down significantly, as you've said. Um and if you go through the components of that, store closures was a big component, both in terms of D&A around property, plant and equipment, and leases, but also with intangible assets.

Uh that's come down uh considerably. In addition to that So annualizing second half would be closer to the mark.

Uh in addition to that, what you will start to see and part of going forward, we will be expensing a lot more than capitalizing when it comes to a lot of the software development costs that we've got into in the program. You'll see a lot less in in D&A going forward.

Gotcha. Great.

Um thank you very much. I'll let someone else jump.

Thank you, Sean. Uh the next question comes from Tom Kierath from Barrenjoey, and um thank you to Barrenjoey for hosting us this week.

Tom, you can go ahead.

Oh, thanks, guys. Um can I just get some um color on order count versus ticket?

Your your sales are tracking like-for-like down about 5. I assume orders could be down 20% or 30%, and ticket um maybe up 10% or 20% and something in that range.

Can you maybe just give us a bit of color to to understand what's exactly happened in that in that like-for-like, or that same store sales number, please?

No problem, Tom. Um order counts more like 10 10% to 11%, no different to what Jack had spoken to historically.

Um and then ticket up 5.

Okay. Cool.

Then, in WA, that's obviously like the I guess the the test case for for what you're doing. Are you back into positive comp growth there?

Like what gives you the confidence that this is the right, thing to do, or what evidence do you have to show that, yeah, you're on the right path with the strategy?

When we compare WA to the rest of Australia, it is uh in carry-out, it is comping positive. When we tested that market So, the we introduced a $8.95 delivery fee and um that is the channel that we need to get positive.

Carry-out is positive, $8.95 delivery fee was knocking us positive. We ran a trial across um six doors at a lower delivery fee and we had double-digit volume growth when we did that.

We're in market at the moment at $5.99 as a delivery fee and we're and it's only 2 weeks, it's early days, and we're getting positive uh conversion rates on our on our order system. If we can continue to track positive on carry-out and through the reduction in our delivery fees, the volumes are going up, we think that is the right direction.

Just just to clarify, but WA is still negative, though, in terms of the overall the overall um state or business?

That's right, at this point in time, yes.

Yep. Clear.

Thanks. Just just

just to chip in on WA, um ending June, franchisee profitability's up 30-odd percent, so that's that's a very significant change. Yes, we're down on order count, we're down on sales, but uh product product quality is up, the PSQ, those numbers are all very positive.

The franchisee uh income is up substantially, and uh now we have to try and figure out how do we get the order count and the sales to respond accordingly.

Yep. Great.

Thanks, guys.

Thanks, Tom. Uh the next person uh up is uh Michael Simotas.

Um Michael, you should be able to um unmute now. Uh

good morning, everyone. Um so, look, you've done a very good job on stabilizing earnings.

I think earnings at a group level have been stable for about six halves now. Also, a very good job on cash flow and balance sheet.

Um but if same store sales don't improve from this level through '27, do you have enough in there to maintain earnings at the current base, or would that be reliant on getting same store sales growth during FY '27?

I think it does. Uh it's Andrew here.

I think the the short answer to that is our plan and our objective is we need to return to group positive sales comp over the course of the year. We've got every market with actions in place, and I think to share the way I'm thinking about what we will see as we progress to lower and lower negatives over time, there's two things that we're focused on: firstly is a simple average seasonally adjusted week sales trend that will help us really understand and confirm that our baseline sales are moving in the right direction.

There'll be noise because we're tracking over 12-month anniversary of different comp levels and things like that, but we have to focus on average weekly store sales and order count to drive the plan and the assumptions that we've got in the plan. Um no,

I think that's a good way to look at it. When you look at where that metric's sitting right now, is it stable, improving, or still deteriorating?

Uh

in most of our large markets, it's it's stable or slightly improving, but we're not in the position to say that it's changed trajectory from a longer-term, sustainable position.

Okay. Um uh thank you.

Can I just confirm something on the on the cost savings, maybe just ask Sean's question a a slightly different way? Um so, you realized 35-odd million of cost savings in FY '26.

If we look at what will actually hit the system in '27, based on what you've said, it'll look like it'll be a fairly similar number, is it? Is that Is that the right way to think about it?

Directionally, that is the right way to think of it, and and just remember, it's system profit, it's for us and--

No, no, totally. Yep.

Yep.

All right. Thank you.

Thanks, Michael. Uh next up is uh Bryan Raymond from J.P.

Morgan. Bryan, you can um unmute and go ahead now.

Thank you. Um uh good morning, all.

Um first one's just on on the trading update. I I just want to check if there's any sort of FIFA World Cup impact there, um particularly given the time zone in Europe was not too bad, I would have thought, for the dinner occasion or late-night occasion.

Just just wanting to understand if that was a help at all in in the period.

There there was. The markets have told us, and it obviously depends which teams are playing and and which markets we're talking about.

Some of the markets, or the teams from those markets, were exited relatively early from the World Cup as well. There was some benefit, but it was it was relatively short short-term and not material.

Great. Then, just on the um the Coca-Cola transition, um is that something that is expected to drive uh ticket, or um like in terms or or items?

Is there any way to sort of quantify what that might do for the overall business?

Yeah. Uh the simple metric we track on beverage incidence in terms of orders.

Uh we think we've got significant headroom. Currently, we run about 34% incidence uh where a customer orders that they also order a beverage in that transaction, and if we only regain uh back to where we were previously, we've got 6% or 7% incidence improvement from our customers ordering uh at that normal level, and we think there's significant upside.

It's clear Coca-Cola is Australia's customers' favorite choice for beverages.

Makes sense. Then, just a final one just, Andrew, a big big big-picture question.

Like, you from the McDonald's background you've got there, um a lot of focus on product and and um daypart, et cetera. Uh obviously, daypart's a little bit different in a pizza business, but how how are you thinking about product?

That doesn't seem to feature a lot in the commentary today as a lot about pricing and procurement and cost-out, et cetera, but the actual product itself, like that doesn't seem to get a lot of focus. I just wonder if that's something you've got any observations on that you might like to make any changes to, et cetera.

It it it is too early to be definitive, but I think one opportunity we have There is a tendency in this business, which exists a lot of across a lot of QSR, to focus on limited-time offers and new news and things like that. What this business needs, not only in the area of product quality, but across many of the different initiatives, are things that go into the stores that have longer-term platform-like impact in a positive sense.

We can do a great 6-week promotion and get a short-term sugar hit, and we should still continue to do those where they make sense. What I am working with on the team is to try and understand how we can put in platform-wide improvements to our core offers.

It actually also makes it easier for our um stores to run if we're not chopping and changing all the time. Next month, one of the other things we're doing is launching a new range of pizza as a permanent menu edition, it's not an LTO, but a new permanent menu um addition that uh hits the target of family and group occasions, large group family occasion, and we're going to relaunch the New Yorker range uh into the market in Australia.

We're really confident on the quality messaging that we can take into that uh launch. Also, as I said, it becomes a permanent addition to the menu versus a short-term limited-time offer.

Interesting. Thank you.

Thanks, Bryan. Next up is um Elijah Mayr.

Um Elijah, go ahead.

Apologies. Can you hear me now?

We can indeed.

Too easy. Thanks, guys.

Um just firstly on the franchisee profitability. Uh you noted earlier just for WA, you had the data up to the end of June and strong profitability growth there.

Do you have the data up to the end of June uh for the wider group, or at least maybe ANZ, uh just to give us a little bit of a trend in that profitability uh in that last quarter?

Um it is the same trajectory, Elijah. Uh we did have a uh a challenge with our FinTool system, which down for in the in Europe.

Um but since we've got the data coming through, um it is the same trajectory as quarter 3.

Same trajectory as in an improvement, or same trajectory

as

sort of in line?

As an improvement, yeah, in line.

Yeah. Then, maybe just secondly, at the first half result, you noted uh around 20 to 40 new stores gross over the next 12 to 18 months.

Uh you did about 18 in the second half. What What are your expectations currently?

Roughly the same. No material differences or movements for next year.

No problem. Thanks, guys.

Uh

thank you, Elijah. The next up to speak is uh Craig Woolford.

Uh Craig, you should be able to unmute.

Thanks, Nathan, and uh morning, all.

Uh

can I ask ask a question uh firstly about how you choose priorities here? Like, obviously, there's a focus on growing average weekly orders and franchisee profitability.

How do you, choose a trade-off there between that and and DPE profitability? Is is there a clear preference that growing order orders is the number one priority?

I

I think a balanced approach to both order count improvement will absolutely drive same store sales comps, and I think since we've reset the way that we do offers and the volatility of how we have been marketing in the past to our customers, as we've as we've reset that to be less volatile, less focused on individual days of the week, actually, it's it's more uh I won't say it's simple, but it's more possible that we can balance that order count growth with the right level of sales growth that will uh almost certainly uh drive an improved profitably profitability outcome for our customers. Uh one of the ways I've looked at what the work the team have done over the last 12 months, we are now a more financially fit organization for the future.

As a result, what that means is, as we grow the business both for us and the franchisees, we'll have a stronger contribution margin into the future.

Okay. Uh yeah, it's clear, but it's obviously a tricky issue to to navigate.

Um just in terms of the reset of offers, uh it's quite tricky to to just track that across each of the countries. Can I just get some clarity on, when roughly you you have reset those promotional offers?

The reason for this question is I noticed there was only a a change There was a change as recently as June in in how your uh discounts have shifted for um the market in Japan. Are there still discounts coming out of the base that that could adversely impact sales?

I think what we've learned in Western Australia, um it's clear moving to a more stable way of marketing to our consumers and being more consistent and predictable in value is going to benefit us in the long run. What we are working through in each of the markets, and we are at different stages in each of the markets, is how we minimize the time between taking away or or reducing all of those aggressive discounts.

How do we minimize the time between when we take them away and when we actually regain those customers and those occasions with more profitable transactions? Um the other thing to emphasize is we are uh investing and getting some uh really strong support from some outside uh experts and agencies to help us manage the dynamic between how do we balance order count growth, how do we balance price margin as well, and how do we drive the right product mix outcomes that can also not only make our customers happy, but also deliver strong margins through the P&L for our franchisees.

Um it it's not a specific answer because different markets are at very different stages, and we need to really work and think strategically about how we put those changes in.

Yeah. Albeit Australia's further ahead, correct, is--

Western Australia is much further ahead, and Australia is somewhat further ahead, yes.

Understood. Okay.

Last one, just on marketing costs. Um marketing expenses in the P&L fell 22% uh compared with network sales down 7.

Is that a cost item that needs to be rebuilt, or is this a new base? Obviously,

I think it's gone it's reduced closer to uh 50 million. Um it's a reflection of a couple of things.

One is the sales being down. Two, um just making sure that we're aligning um the spend of marketing with the sales activities across each of the markets, and that's that's really important.

Thirdly, um for us, it's it's make improving the working media. The allocation now is um moving more and more into the working media and removing a lot of those marketing costs that weren't as effective in the past.

It I mean

if I look at marketing to network sales, like it's typically been like sort of 5.5% and and now it's more like mid-4s. Like, is is that is that the new marketing to sales ratio, network sales?

In so In some markets, we've we've reduced the contribution from franchisees through the ad fund, um and so you've seen you've seen the the reflection of that in in that number. Um but I would say the right base would be closer to 5% going forward.

Yep. Thanks, George.

Thanks, Craig. Uh we'll next uh hand to uh Richard Barwick from CLSA.

Richard, go ahead.

Thanks, Nathan, and good morning, guys. Um Good

morning. Just I I

I thought the slide 14 was a really interesting one. It obviously demonstrates the the pathway to franchisee profitability improvement.

It and it highlights just the importance of franchisee execution in in getting to that 130 target. I think a question for Andrew, new into the business and obviously coming from a a background with with franchisees.

How would you rate the the quality and the capability of of the franchisees as you see it? Does it vary much by market, et cetera?

I guess where I'm going with this is, is do you see any requirements for investment in training or or additional systems or so on to help the franchisees actually deliver their execution side of the equation?

Got it. Thank you.

Um two things. I have spent time in Australia in the last couple of weeks, and will will have visited all 12 markets uh by the end of uh October.

Um my first-hand knowledge, let's assume it's about the Australian market. Firstly, one of the things that's a really strong message that I've already heard from the team internally and it's already clear in my experience as well, a great, well-run store that provides great service and great quality pizza is exactly the same store that is productive and makes more money than a poorly run store.

There is no trade-off between operations execution and profitability. That principle or framework is really alive and well, I think, in Domino's in Australia, both from the internal team and the small number of franchisees I've spoken to.

I I've been in a restaurant or a store on a Friday night. I've been really impressed and positively surprised about the execution, the impressively well-trained crew and team in the stores.

It's clear where we have engaged franchisees working in the stores, and this is where it's a combined effort to drive profitability with franchisees, there's got to be the right level of collaboration and focus on the right decisions, but franchisees absolutely play their own part in delivering on part of that roadmap. That's

I guess, well, from what you can see from Australia, obviously you're saying that the the the role is important. Is the quality um what you would hope it to be?

The the the other context here is um the vast majority of franchisees in the Australian network, and actually in all of our markets, the vast majority have grown up in their careers working in stores. They know the operations.

They know the challenge and chaos of what a what a Friday night looks like in a Domino's store, and they're actually all experts in operations. There's no question in their um ability.

They have to be engaged in the business. That's our role to lead and motivate the franchisees to be engaged in their stores.

As a result, I'm absolutely confident they can drive their end of the bargain from a profitability point of view.

Thank you. My second question's actually on that 130 target.

Like the the disclosure we get is is good. It's a real improvement on where it had been in in previous years, and obviously giving us a real sense of momentum in franchisee profitability.

When you're talking about an average number across, 12 markets, I I guess I'm cautious as to how instructive it is. Uh so, I guess my question is, does that 130 target, does that vary much across um individual markets?

Can you give us a a little bit of a reminder why 130? Why does that make it sort of the the magic number where the difference between, um I guess, success and and disappointment?

No problem. Um the 130 does vary significantly across markets.

The way we get to 130 is really the payback period, three to four times on on costs of store. That's the background to it, and so if you go to every market and you look at the cost to open up a store, we're looking at a three to four times payback.

We think that's the competitive um set that we need to have um when we're competing in the franchise world.

Remember, Jack--

Do you have any plans to um provide a bit more detail? As as things evolve, would you ever give a a more detailed breakdown of franchisee profitability across the markets?

I think we did. We did Uh Jack mentioned this morning about the Australian number being at 128.

Yes.

Our target Our target for Australia is higher because, as George mentioned, the cost of uh physically opening a store in Australia is also higher, and therefore, to generate the right three- to four-year payback, we need a higher number. We should be clear: 130 is our objective, it will take us time, it won't depend on one individual decision, and it will require us to work together with the franchisees.

We should not stop in terms of our opportunity to improve franchisee profitability as we grow the business into the future.

That's helpful. Thank you very much.

Thanks, Richard. The next up to speak is uh Caleb Wheatley.

Caleb, uh go ahead. Uh

morning, Jack, Andrew, George, and Nathan. Um my first question was just more specifically around France.

Um yeah, just keen if you could provide any additional detail on sort of your performance there and the broader market in France. Just sort of trying to tie up yeah, some of the commentary that is in the pack.

Obviously, the sort of impairment uh that was announced a couple or so weeks ago, and then any sort of additional comment you could make on the MFA renewal, um which I think is sort of coming up in a month or so's time, please.

No problem. Um with France, it's fair to say that EBITDA has been positive for France, and I've said in the past that the EBIT result is not materially different uh or materially It's um close to breakeven.

We are budgeting a positive result both in EBIT and EBITDA for France, it's very important. We are And we're seeing positive sales sales momentum.

I've said to Jack earlier today, we're seeing really good momentum coming through France. With the MFA, um we're uh finalizing the agreement on the MFA.

Um Russell and the team have, we're all working with the right spirit in the spirit of partnership. We should be concluding that in the next week or so.

Great. That's helpful.

Thank you. Then, um my second question, um I know you sort of commented on store openings on a go-forward basis, but just wanted to just come back I think it was at the AGM where you called out specifically Germany and Malaysia um as being sort of the more meaningful growth opportunities.

Um yeah, I don't think there's any sort of comments around timing there, but just sort of looking at your store count since that period, doesn't look like there's been any sort of meaningful change, just wanted to see um if there was any update on propensity for growth in in those markets in particular.

Absolutely. We still see both those markets as opportunities for significant growth.

Um Germany is a 1,000-store market, we we have significant growth potential in Germany. Um and same with Malaysia.

There's segments and areas of Malaysia that are untouched. That's the plan.

Our plan is to um deliver growth in those markets.

Okay.

Malaysia is largely a company operation and we can release $50 million of capital through the sale of company operations to franchisees. We just have completed one in the last month, George,

that's right.

That's the other opportunity that lies in front of us.

Okay. Has there been any sort of blocks in terms of I don't know, maybe where those initial plans were?

It just it sounded particularly upbeat, and so to not have had any movement so far like comes a bit of a surprise, or perhaps getting a bit ahead of ourselves. Just in terms of sort of actually hitting those sites, has there been any particular blockages, um or is it just a matter of time?

No, I think we should be clear around the sequencing. We need to fix and make sure the economics of the stores is right, and then what George referred to in terms of, for example, in Germany, that market clearly, on the population, the demographics, et cetera, has the potential for 1,000 stores in the future.

We sequence We need to sequence this correctly. We need to make sure franchisee economics is right, then we can look to um uh scale and grow the stores.

Yep. Okay.

That makes sense. Appreciate the color.

Okay. Thank you, Caleb.

Now we just have um a few more questions that have been submitted online. I'll go to the first one.

Um George, uh ANZ network sales were down 6.1%, but revenue was down 11.3%. Can you identify what the the delta is there?

Just in um savings that we've been able to deliver, the productivity both um through head office and um cost savings through um through the teams. A lot of our cost-out programs have been delivered through ANZ, so that's the difference there.

With revenue being lower there, I think we've also made some commentary in the pack that um we reinvested some of those savings ahead of

um

the savings being achieved? Correct.

We we went out to um

we gave a lot of the procurement savings to franchisees ahead of negotiating them with suppliers. Um so, there was a timing difference that had franchisees getting a lot of these savings ahead of the curve of when we realized them, and that's part of the gaps as well.

Thank you. Uh then a question: is the divestment of any of the group's operating regions being considered?

Um maybe to uh Andrew, fresh fresh into the building, and then to the Chairman. Um so

no, at the moment, we are uh if you look at uh uh France and Japan in particular, we are positive EBITDA in both of those markets, positive cash flow. We feel confident that we can grow those businesses in the same strategy and and and sequence of events that we've outlined today.

Comment, um

we have a very strong financial balance sheet and structure. Uh we don't need cash, which if you said, 'Okay, well maybe if we sell some of these markets, we'll get we'll get some cash and it'll help us do something.'

Um to me, the real challenge in front of us is get the unit economics correct starting in Australia. Get that correct.

Then if we get the unit economics, I'm relatively confident that we can apply that to other markets. We have a We have a business today which has EBITDA uh uh market capitalization about five times, six times of of, and if we can get the unit economics right, which we can apply across a bigger uh market, uh then that's how we will create value for the shareholders.

Uh that, to me, is what the the primary target should be rather than liquidating. The downside of that theory is, is it Is there too much uh disruption in the market that we can't do all these things, and there's an argument that says, maybe we should be more focused on doing what we're doing.

I think, we have in front of us a very experienced management team, and my view is let's have a go at seeing what we can do to get the unit economics right. If we can get them order count, the sales coming in in various markets, that can be applied to other places.

If we can't, if we cannot, then that that that answer will change.

Thank you. Um a question from Sam Teeger: 'Japan's been in turnaround mode for some time, yet profits remain very weak.

When do we see the benefits from those store closures, and what are the FY '27 growth drivers?'

I think I talked about Japan profits increasing 19% uh despite uh lower revenues. Um so Japan has delivered on profitability out of the store closures, and we continue to think uh believe that that will continue uh into '27 and into '28.

Um the re-

we've obviously talked about the reduction in uh in um net leverage today. The refinancing loosened our covenant cap to a temporary 3.5%, um with leverage now at 1.86.

What scenario were you buying headroom for?

Sorry, what was the question?

Why the need for an extension of the um covenant, that we had a temporary extension to 3.5 times?

Yeah. At the time, um the market felt that we needed to um needed to go back to the market and obtain more um cash, uh and so they were concerned around the balance sheet.

Um so, we went and put a temporary covenant in with the banks. We're not going to need that covenant.

Um it was a temporary measure. Uh we're not going to need cash.

You've seen the results of both our cash flow and our balance sheet. It was just a precaution uh at the time.

Um and I'm just going to wrap it up with just one more, which is a few questions in one, which are really on the same topic, and that is that obviously there's been a lot of work um in terms of fixing the balance sheet and, investors are now looking forward to when we're growing order counts. Um what is the reasonable trajectory people should look for in terms of a return to positive same store sales, and, should they consider FY '27 is that another transition year, or is that going to be a recovery year?

The expectation is that we will start to drive positive sales growth in '27. I'd be disappointed if this time next year we're not in positive sales growth.

That's the plan. You'll get positive sales growth first, followed by positive order count growth.

It would It won't be consistent across all markets. Our focus is Australia and our core markets, that's our focus.

Um but that will uh materially impact the group results as well.

Thank you, George. That has gone through those questions.

I'm just going to hand back now to Andrew for any closing remarks before we end today's call.

Thank you, everyone, for joining the call, and uh as George mentioned, uh I think from a prioritization point of view, it's really clear. We're focused on regaining momentum in our baseline, and then on top of that, we're prioritization prioritizing the work, the effort that we need to do to get Australia first and then our other large markets back into growth.

Thank you so much. Uh we appreciate everyone joining today and for your questions, and we will see you on uh our roadshow over the next few days.

Thank you.