DPC Dash Ltd Announces Full Year 2023 Financial Results

Revenues increased to RMB3.05 billion, representing 51.0% year-over-year growth

Adjusted net profit reached RMB8.8 million, from an adjusted net loss of RMB113.8 million in 2022

Store-level operating profit grew by 105.1%; Adjusted group EBITDA increased by 117.7%

Added 180 net new stores in 2023; 768 stores in operation across 29 cities as of December 31, 2023

HONG KONG, March 27, 2024 /PRNewswire/ -- DPC Dash Ltd ("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 audited consolidated financial results for the year ended December 31, 2023 ("FY2023").

FY2023 Highlights^[1]

• Revenues were RMB3.05 billion, representing an increase of 51.0% from RMB2.02 billion in the year ended December 31, 2022 ("FY2022").
  
  
• Opened 180 net new stores and entered into 13 new cities in FY2023. Total stores reached 768, across 29 cities, as of December 31, 2023.
  
  
• Average daily sales per store was RMB12,580 in FY2023, representing a 9.9% year-over-year increase. Average daily sales per store in new growth markets^[2] was RMB12,285, representing a 36.4% year-over-year increase.
  
  
• Same-store sales growth (SSSG) was 8.9%, compared to 14.4% for FY2022 and 8.8% in the first six months of 2023.
  
  
• Store-level EBITDA was RMB576.6 million, representing an increase of 80.1% from RMB320.2 million in FY2022. Store-level EBITDA margin was 18.9%, compared to 15.8% for FY2022.
  
  
• Store-level operating profit was RMB419.7 million, representing an increase of 105.1% from RMB204.7 million in FY2022. Store-level operating profit margin was 13.8%, compared to 10.1% for FY2022.
  
  
• Adjusted EBITDA was RMB301.7 million, representing an increase of 117.7% from RMB138.6 million in FY2022. Adjusted EBITDA margin was 9.9%, compared to 6.9% for FY2022.
  
  
• Adjusted net profit was RMB8.8 million, compared to adjusted net loss of RMB113.8 million in FY2022.
  
  
• Total loyalty program membership was 14.6 million, representing an increase of 69.8% from 8.6 million in FY2022.

Ms. Aileen Wang, CEO & Executive Director of DPC Dash commented, "We are proud to have delivered solid results in 2023, increasing our total revenues to RMB3.05 billion and generating a store-level operating profit margin of 13.8%. Our performance was driven by robust contributions from both our established and new growth markets, the strategic expansion of our store network, and our focus on enhancing efficiencies. Looking ahead, we will continue to execute on our 'go deeper, go broader' strategy as we expand our footprint in China's underserved pizza market. At the same time, we will leverage our competitive differentiators and improve operational efficiencies on a larger scale to further enhance our overall profitability."

Ms. Helen Wu, CFO of DPC Dash, added, "We delivered significant year-over-year revenue growth of 51.0% in 2023. In addition to our robust topline performance, our relentless focus on cost management initiatives drove store- and corporate-level margin improvements throughout the year. Importantly, we successfully generated an adjusted net profit of RMB8.8 million for FY2023. Looking ahead, we remain committed to further optimizing our cost efficiencies and leveraging the advantages of our growing scale to create long-term shareholder value."

FY2023 Financial Results

Revenues were RMB3.05 billion, representing an increase of 51.0% from RMB2.02 billion in FY2022.

Store-level EBITDA was RMB576.6 million, representing an increase of 80.1% from RMB320.2 million in FY2022. Store-level EBITDA margin was 18.9%, compared to 15.8% for FY2022.

Store-level operating profit was RMB419.7 million, representing an increase of 105.1% from RMB204.7 million in FY2022. Store-level operating profit margin was 13.8%, compared to 10.1% for FY2022.

Net loss was RMB26.6 million, compared to RMB222.6 million in FY2022.

Adjusted EBITDA was RMB301.7 million, representing an increase of 117.7% from RMB138.6 million in FY2022. Adjusted EBITDA margin was 9.9%, compared to 6.9% for FY2022.

Adjusted net profit was RMB8.8 million, compared to an adjusted net loss of RMB113.8 million in FY2022.

Basic and diluted net loss per share were both RMB0.22, compared to RMB2.34 and RMB2.34, respectively, in FY2022.

As of December 31, 2023, the Group held RMB1,019.2 million in cash and bank balances, as compared to RMB544.5 million as of December 31, 2022.

Operational Highlights

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.

The Group intends to open a central kitchen in Wuhan in the fourth quarter of 2024 with an estimated capital expenditure of RMB20-25 million. In addition, the Group plans to relocate and upgrade its central kitchen in the northern region, with an estimated capital expenditure of RMB20-25 million.   

Recent Developments

On December 14, 2023, the Company announced its inclusion in the 2023 Kincentric China Best Employers. DPC Dash was recognized among a diverse group of organizations for continuously demonstrating workplace excellence. That is to say employees are highly satisfied with their employment experience, specifically on aspects that are crucial for organization to excel: employee engagement, agility, engaging leadership and talent focus.

On December 27, 2023, the Company announced the grand opening of 10 new stores across eight new cities in the previous week. This strategic expansion marks a significant milestone for DPC Dash as it brings its delectable offerings to new customers in mainland China cities of Tangshan, Xi'an, Xiamen, Fuzhou, Changsha, Nantong, Yangzhou and Hefei. All of the stores opened between December 23rd and 24th.

On January 25, 2024, the Company announced that it had set new Domino's global system record for sales in the first 30 days as it opened 10 new stores in eight new cities during December 2023. The recent expansion by DPC Dash marks a significant milestone for the company as it continues to stretch its footprint in China. The 10 new stores, all of which rank among the top-15 globally for first 30-day sales, are located in the mainland cities of Tangshan, Xi'an, Xiamen, Fuzhou, Changsha, Nantong, Yangzhou, and Hefei.

On February 1, 2024, the Company announced the opening of its 800^th store in China. The momentous occasion took place in the city of Jinan, in Shandong province, on January 31, 2024, marking another significant milestone in the company's remarkable growth.

As of March 22, 2024, the Company has a total of 823 stores in 29 cities in China. Between January 1, 2024 and March 22, 2024, the Company had a net opening of 55 new stores, with 35 stores under construction, and 88 stores signed or approved, accounting for over 74% of the total targeted store opening plan for the full year.

As of March 22, 2024, DPC Dash held the top 19 positions in the global records of Domino's Pizza for the first 30-day sales of new stores.

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-level 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 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), income tax expense and interest income and expenses, net.

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 year 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 year. "Adjusted Net Profit/(Loss)" is defined as profit/(loss) for the year 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 year and adding back depreciation and amortization (excluding depreciation of right-of-use assets), income tax expense and interest income and expenses, net. "Adjusted EBITDA margin" is calculated by dividing Adjusted EBITDA by revenue for the same year.

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), 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) 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, March 27, 2024, at 7:00 pm Hong Kong Time (or Wednesday, March 27, 2024, 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 April 3, 2024, 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 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.

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
IR@dominos.com.cn

ICR, LLC
dpcdashIR@icrinc.com 

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