DPC Dash Ltd Announces 2024 Interim Financial Results

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

[email protected]

ICR,LLC

[email protected]

DPC Dash Ltd Media Relations:

ICR,LLC

[email protected]

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)