DPC Dash Ltd (1405.HK) Announces 2023 Interim Financial Results with 51.5% YoY Revenue Growth

Delivered record half year results with total revenue of RMB1.38 Billion, a 51.5% YoY growth

Store-level operating profit grew 123.6%; Adjusted Group EBITDA increased 128.6%

Added 84 net new stores in the 1H2023; Operating 672 stores across 20 cities, as of June 30

Six newly opened stores in newly entered cities broke Domino's Pizza global First-30-Day-Sales Record, demonstrating strong brand recognition and brand momentum

HONG KONG, Aug. 29, 2023 /PRNewswire/ -- DPC Dash Ltd ("DPC Dash" or the "Company", together with its subsidiaries, the "Group") (1405.HK), the exclusive master franchisee of Domino's Pizza (NYSE: DPZ) in Mainland China, Hong Kong Special Administrative Region of China and Macau Special Administrative Region of China, today announced its unaudited consolidated interim results for the six months ended June 30, 2023 (the "Interim Results") (the "Announcement").

FIRST HALF OF 2023 HIGHLIGHTS^[1]

All comparisons were made on a year-over-year ("YoY") basis.

• Revenues were RMB1.38 billion, representing an increase of 51.5% from RMB908.8 million for the corresponding period in 2022.
• 84 Net new stores in the first half 2023, entered into 4 new cities in the same period with total store count at 672 across 20 cities, as of June 30, 2023.
• Average daily sales per store was RMB12,275 for the six months ended June 30, a 7.1% increase YoY. Average daily sales per store in New growth markets^[2] were RMB11,316, a 30.0% increase YoY.
• Same-store sales growth (SSSG) was 8.8%, compared to 13.9% for the corresponding period in 2022 and 14.4% for the full year of 2022, continuing the trend of 24 consecutive positive quarterly SSSG since 3Q2017, a healthy and strong sales growth path.
• Store-level EBITDA was RMB257.4 million, representing an increase of 86.1% from RMB138.3 million for the corresponding period in 2022. Store-level EBITDA margin was 18.7%, compared to 15.2% for the corresponding period in 2022.
• Store-level operating profit was RMB186.3 million, representing an increase of 123.6% from RMB83.3 million for the corresponding period in 2022. Store-level operating profit margin was 13.5%, compared to 9.2% for the corresponding period in 2022.
• Adjusted EBITDA was RMB127.0 million, representing an increase of 128.6% from RMB55.6 million for the corresponding period in 2022. Adjusted EBITDA margin was 9.2%, compared 6.1% for the corresponding period in 2022.
• Adjusted Net Loss narrowed by 74.7% to negative RMB17.4 million, compared to negative RMB68.9 million for the corresponding period in 2022.
• Total Loyalty Members was 10.9 million, compared to 7.0 million for the corresponding period in 2022, a 55.7% increase.

COMPANY STATEMENT

Ms. Aileen Wang, CEO & Executive Director of DPC Dash commented, "We are pleased to deliver record-setting results in the first half of 2023, with total revenues of RMB1.38 billion, combined with 13.5% store-level operating margin."  Ms. Wang added, "These strong results are a true reflection of years of hard work and dedication from every single one of our employees." 

Ms. Wang continued, "We would also like to sincerely thank our loyal customers who have supported us throughout the years. Their continuous support motivates us in our efforts to continue to deliver our innovative product while maximizing convenience.  We will continue to expand our footprint into new cities across China and the greater region, in what we believe represents an underserved market." 

Ms. Helen Wu, CFO of DPC Dash, commented, "We grew our topline revenue 51.5% YoY relative to this period last year while our store level EBITDA grew 86.1% YoY, which positions us as one of the fast growing companies within the consumer discretionary sector in the greater China region." Ms. Wu further stated, "Our new stores in Wuhan, Jinan, Chengdu, Wenzhen and Qingdao successively broke Domino's global First 30-Day-Sales Record, demonstrating Domino's strong brand recognition in China, as well as our ability to expand and replicate."

Ms. Wu continued, "We have achieved both strong revenue growth and good margin improvements during the first half of 2023, accelerating our pace to group overall profitability. Going forward, we will look to continue building upon this strong foundation to further grow our topline revenue, improve operating efficiency and create greater economies of scale. We are well on track to achieve the overall profitability of the business for the Group."

FIRST HALF 2023 FINANCIAL OVERVIEW 

Revenue was RMB1.38 billion for the six months ended June 30, 2023, that represents an increase of 51.5% from RMB908.8 million in the same period 2022. Revenue growth was mainly attributable to (a) the increase in the average daily sales per store and (b) the increased number of stores in operation during the respective periods.

Store-level EBITDA was RMB257.4 million, representing an increase of 86.1% from RMB138.3 million for the corresponding period in 2022. Store-level EBITDA margin was 18.7%, compared to 15.2% for the corresponding period in 2022.

Store-level operating profit was RMB186.3 million, representing an increase of 123.6% from RMB83.3 million for the corresponding period in 2022. Store-level operating profit margin was 13.5%, compared to 9.2% for the corresponding period in 2022.

Net profit was RMB8.8 million for the six months ended June 30, 2023, compared to a net loss of RMB95.5 million for the six months ended June 30, 2022.

Adjusted EBITDA was RMB127.0 million, representing an increase of 128.6% from RMB55.6 million for the corresponding period in 2022. Adjusted EBITDA margin was 9.2%, as compared 6.1% for the corresponding period in 2022.

Adjusted Net profit (loss) was negative RMB17.4 million, compared to negative RMB68.9 million for the corresponding period in 2022.

Basic and diluted net profit per share was RMB0.08 and RMB0.07 for the six months ended June 30, 2023, respectively, compared to basic and diluted net loss per share of RMB1.00 and RMB1.00 for the six months ended June 30, 2022, respectively.

Cash, cash equivalents and restricted cash were RMB1,029.1 million as of June 30, 2023, compared to RMB544.5 million as of December 31, 2022. The increase primarily resulted from the net proceeds raised from the Global Offering in March 2023 and cash inflow generated from operating activities.

KEY OPERATING DATA

Outlook/Guidance

Building on a net opening of 84 new stores in the first half of 2023, the Company has newly opened 20 additional stores, with 28 other stores under construction and 25 stores signed or approved as of 20 August 2023. This progress puts the Company well on track to achieve its 2023 full-year opening target of approximately 180 stores.

The Company further plans to open an additional 240 stores in 2024.

KEY DEFINITIONS

• Store-level operating profit represents 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 margin is calculated by dividing store-level operating profit by revenue for the same period.
• 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 EBITDA by revenue for the same period.
• 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). The percentage difference in sales generated by same stores across two consecutive periods, where same stores are those stores that have been open for at least 18 months as of the end of latter period, provided that for a given same store in a given period, only the sales it generates after it qualifies as a same store are included in the calculation of SSSG and such sales are compared against the sales generated by the store in the comparable days of the prior period.
• Average Daily Sales per Store is 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.
• Average orders per store per day is calculated by dividing the aggregate number of orders placed by total customers in the store for a particular period by the aggregate number of days of operation for such store in the same period.
• Adjusted Net 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 Loss for the period and adding back depreciation and amortization (excluding depreciation of right-of-use assets), income tax expense and finance cost, net (excluding net foreign exchange losses on financing activities).

Non-IFRS Measures

To supplement the Group's consolidated financial statements that are presented in accordance with the International Financial Reporting Standards ("IFRS"), we also use Adjusted Net Loss (non-IFRS measure), Adjusted EBITDA (non-IFRS measure) and Store-level EBITDA (non-IFRS measure) as additional financial measures, which are not required by, or presented in accordance with, IFRS. We believe that these non-IFRS measures facilitate comparisons of operating performance from period to period and company to company. We believe that these measures provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as they help our management. However, our presentation of Adjusted Net Loss (non-IFRS measure), Adjusted EBITDA (non-IFRS measure) and Store-level EBITDA (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 you should not consider them in isolation from, or as substitute for analysis of, our results of operations or financial condition as reported under IFRS.

CONFERENCE CALL

The Company will host a conference call today, Tuesday, August 29, 2023, at 7:00 pm Hong Kong Time (or Tuesday, August 29, 2023, at 7:00 am Eastern Time) to discuss the financial results.

Participants may access the call by dialing the following numbers:

The replay will be accessible through September 5, 2023, by dialing the following numbers:

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 and which are difficult to predict. 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.

Since actual results or outcomes could differ materially from those expressed in any forward-looking statements, the Company strongly cautions investors against placing undue reliance on any such forward-looking statements. 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. Statements of, or references to, the Company's intentions or those of any of its Directors are made as of the date of this document and/or the Announcement (as applicable). Any such intentions may change in light of future developments.

The Company's shareholders and potential investors are advised not to place undue reliance on the Interim Results and to exercise caution in dealing in securities in the Company.

About DPC Dash Ltd

DPC Dash Ltd 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 Ltd'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 Ltd 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 Ltd directly operates 692 stores across 20 cities in China mainland as of August 20, 2023. The Company is the fastest growing among China's top-five pizza brands, as well as the third-largest in terms of 2022 revenue, according to a report by Frost & Sullivan in March 2023.

For more information, please visit www.dpcdash.com

For official company announcements, please visit www.hkexnews.hk

CONTACTS

DPC Dash Ltd Investor Relations:
ICR, LLC
dpcdashIR@icrinc.com

DPC Dash Ltd Media Relations:
ICR, LLC
dpcdashPR@icrinc.com