08 June 2016
Domino's Pizza Group plc
Acquisition of interest in Domino's Iceland, Norway and Sweden
Key Highlights
· Strategic investment of £24 million to
acquire significant minority interests in Domino's Iceland, Norway and Sweden and retain existing strong local
management
· Agreed route to future majority ownership
and control
· Domino's Pizza Group brings skills and
experience in franchising, marketing, e-commerce and supply chain
· Exciting opportunity in attractive growth
markets to grow the Domino's brand
Domino's Pizza Group plc ("Domino's" or "the Group"), the UK's number one pizza company, today
announces the investment of £24 million to acquire significant minority interests in the master franchisees for Domino's Pizza in
Iceland, Norway and Sweden from Birgir Bieltvedt, the Chairman and founder of Domino's Iceland, and certain other investors.
Following the investment, Domino's will hold 49 per cent in Iceland and an effective interest of 45 per cent in both the
Norwegian and Swedish businesses. Birgir Bieltvedt and the current management team will remain with the business and retain a
significant stake in each country.
Iceland, Norway, and Sweden have an aggregate population of 15 million with fragmented
competition, stable economies, low unemployment and high digital adoption. These markets offer attractive growth prospects for
the Domino's brand. The existing strong management teams will remain in place allowing us to combine their operating strength
with our skills in franchising, marketing, e-commerce and supply chain. The combination of proven local management in addition to
our expertise and financial strength means we are well positioned to take full advantage of the growth opportunity.
Domino's Iceland was established in 1993 and currently operates 19 stores, generating EBITDA of £3
million in 2015. Iceland has a population of over 300,000 people and is one of the most successful Domino's operations on a per
capita basis of the 81 countries in which the brand operates. Trading in Iceland is strong with sales ahead by nearly 20% over
the past year. There is the potential to increase stores by a modest number and continue to drive like-for-like sales.
Domino's Norway was established in 2014 and currently operates 10 stores, with the opportunity for
significant further roll out. Norway has a population of over five million people, of which around four million live in urban
areas. The Norwegian pizza market represents an attractive growth opportunity with considerable scope for further expansion of
the network. Domino's Norway is expected to be profitable in the second half of 2017.
Sweden represents a market offering substantial potential for the brand with a population of
almost 10 million and no major pizza operator with a significant presence. There are currently no Domino's stores in Sweden but
it is anticipated that the first units will open before the year end.
The transaction is expected to be earnings enhancing on an underlying basis for the Group in 2017
and subsequent years and realise significant shareholder value over time. We will fund our investment from cash and existing debt
facilities. We expect to report the cost of investment in the transaction as part of the Group's gross assets.
We have the right to appoint a director to the boards of Domino's in Iceland, Norway and Sweden,
and have entered into put and call option arrangements, linked to business performance and subject to independent valuation, to
acquire the remaining shares exercisable over the outstanding shareholdings between 2020 and 2023.
Commenting on the transaction, David Wild, CEO of Domino's Pizza Group, said:
"We are delighted to be investing in these exciting markets, which hold great potential for the
Group. Our skills in e-commerce, marketing and supply chain will complement the excellent local know-how of our partners in
Iceland, Norway and Sweden and help to grow the Domino's brand. This is a great deal for everyone concerned and we look forward
to welcoming our new colleagues and customers."
Birgir Bieltvedt, Chairman and founder of Domino's Iceland, said:
"The combination of two partners in these markets, with our own unique skills and knowledge,
combined with the financial strength which Domino's Pizza Group brings, will create a strong business in countries with
significant potential for future growth. We have a talented and motivated team and are excited to start working alongside our UK
partners in further developing the Domino's brand."
Domino's Pizza Group current trading remains in line with market expectations. The interim results
will be announced on 28 July.
For further information, please contact:
Domino's Pizza Group plc
David Wild, Chief Executive Officer
020 7379 5151
Maitland
James Devas, Robbie Hynes
020 7379 5151
Numis
Chris Wilkinson, Richard Thomas
020 7260 1000
Notes to Editors:
Domino's Pizza Group plc is the leading player in the fast-growing pizza market holding the
exclusive master franchise to own, operate and franchise Domino's Pizza stores in the UK, Republic of Ireland, Switzerland,
Liechtenstein and Luxembourg. Additionally it owns a strategic stake in the largest pizza delivery business in Germany. The first
UK store opened in Luton in 1985 and the first Irish store opened in 1991.