Dominos Regulatory News (DOM)

27 March 2024 LEI: 213800Q6ZKHAOV48JL75

This announcement contains Inside Information

Domino's Pizza Group Plc

£11 million investment in DP Poland Plc to support growth opportunities

Domino's Pizza Group plc ("DPG" or the "Company") is pleased to announce that it has agreed to invest £11 million in DP Poland plc ("DPP") to support growth opportunities across DPP's business (the "Investment"). DPP, an AIM listed company, operates 111 Domino's Pizza stores and restaurants in Poland and a further five in Croatia.

The Investment will be executed via a primary issuance of ordinary shares by DPP. The Investment is one component of a broader fund raising to raise approximately £20.5 million that was announced by DPP today (the "Fundraise"). The Investment will be executed at a price of 9.92 pence per share, representing a 23.1% discount to DPP's closing price on 26 March 2024. Following completion of the Investment, and assuming the full £20.5 million is raised, the Company will own approximately 12.1% of DPP's issued share capital. The Investment is conditional on the approval of DPP shareholders and will be funded out of DPG's free cash flow at completion. Following completion, DPG will have the right to appoint one representative to the DPP Board.

The proceeds from the Fundraise will be used to further accelerate DPP's growth by leveraging its organic sales expansion with store rollouts and potential acquisition opportunities. The Board of DPP estimates the market potential of Poland to be approximately 500 Domino's stores by 2030.

Alongside the Investment, the Company has entered into an option agreement to have the ability to purchase additional ordinary shares at a future date from Malaccan Holdings Limited up to a maximum total position of 29.99% of DPP's issued share capital including ordinary shares held by DPG and DPG's concert parties[1].

Following DPG's recently announced growth framework, DPG has been working at pace, and with discipline, to assess select value enhancing opportunities to build a larger and more cash generative business. The Board has been clear that any investment in international markets must fall within rigorous and disciplined guardrails and have the potential to create meaningful long-term shareholder value.

DPG highlighted investing in international markets underpinned by strong and profitable growth drivers, such as the Investment, as an opportunity to create value. The current management of DPG has deep experience, with enhanced capability both within the team and at the Board level, of operating and delivering profitable, international growth. DPG's CEO Andrew Rennie has extensive international experience and a proven track record as CEO of Domino's Pizza Enterprises (DPE) France and Belgium from 2006 to 2010, and CEO of DPE's broader European business from 2014 to 2020, which included France, Germany and the Netherlands. In addition, prior to his appointment at DPG, Andrew was a non-executive Director of DPP where he played an important role in appointing DPP's current CEO Nils Gornall, which the Board considers highly beneficial to DPG. Andrew continues to hold shares in DPP which were acquired during his time as a Director of DPP. Nils Gornall is a veteran of Domino's with nearly 30 years of operating and management experience. Under Nils's leadership, DPP grew like-for-like System Sales in 2023 by 19.7% in Poland.

The Investment represents a unique opportunity to re-enter international markets in a disciplined, capital-light manner, and in partnership with a high-performing business, operated by an experienced management team. DPP's markets are high growth, and significantly underpenetrated. Stoffel Thijs[2], who recently joined DPG, will represent the Company on the Board of DPP. Stoffel has worked within the Domino's systems for 25 years and has a proven track record in Europe.

Andrew Rennie, DPG Chief Executive Officer, said:

"I'm delighted to be partnering with DPP as we continue to execute against our new growth plan. DPP is a fantastic business with a significant growth opportunity ahead of it. Whilst the Domino's brand is strong in Poland and Croatia, both markets are significantly underpenetrated with a unique store opening and profitability opportunity."

"We have strong guardrails in place as we re-enter international markets, and our investment in DPP is structured in a capital-light manner, with an initial investment of £11 million. Stoffel Thijs, who has deep experience operating in the European markets, will be our Board appointee to help accelerate growth and drive value for our shareholders. I look forward to working with DPP's CEO, Nils Gornall, a near 30-year Dominoid, who has done an outstanding job leading DPP since his arrival almost 2 years ago."

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 and was authorised for release by Adrian Bushnell, Company Secretary.

For further information, please contact:

Domino's Pizza Group plc:

Will MacLaren, Head of Investor Relations 07443 192 118

Brunswick:Tim Danaher, Abbie Sampson

020 7404 5959

About Domino's Pizza Group

Domino's Pizza Group plc is the UK's leading pizza brand and a major player in the Irish market. We hold the master franchise agreement to own, operate and franchise Domino's stores in the UK and the Republic of Ireland