Dp Poland Regulatory News (DPP)

The information contained within this announcement is deemed to constitute inside information for the purposes of article 7 of the market abuse regulation (EU) no. 596/2014

DP Poland PLC

("DP Poland" or the "Group")

Q1 2022 unaudited trading update

DP Poland, the operator of pizza stores and restaurants across Poland, announces a trading update for the first quarter of 2022.

DP Poland's Chief Executive Officer, Piotr Dzierżek, said:

"I am delighted to see the strong sales performance in Q1 2022, with LFL System Sales up 21% over 2021, benefitting from a strong management focus towards increased order volumes in our stores. At the end of March 2022, Poland lifted the majority of COVID-19 restrictions and we have seen a further acceleration in sales growth, with LFL System Sales up 29% in March 2022 compared to March 2021.

We have invested in marketing to drive enhanced customer acquisition, whilst maintaining a compelling value proposition for existing customers. This has continued the strong sales growth into early April 2022.

As previously announced, inflationary pressures have been high and persistent. We have been monitoring the situation closely and raised prices in early Q2 2022 to mitigate these pressures. As the business continues to strengthen, we have restarted our store opening programme, with two new store openings expected in Q2 2022.

We are also seeing an increase in M&A opportunities in our sector, however we remain disciplined in our approach to M&A and will only review potential opportunities that have a clear strategic rationale and value accretive metrics."

Financial Highlights

· Like-for-like (LFL) System Sales1 increased by 21.3% in Q1 2022 compared to Q1 2021

o LFL System Sales for March 2022 increased by 29.3% compared to March 2021

o Delivery LFL System Sales have continued to grow despite a resurgence of dine-in sales following the relaxation of COVID-19 restrictions

o Particularly strong growth in carry-out sales following increased promotional focus, up 84.6% compared to Q1 2021

· Total System Sales2 increased by 22.6% in Q1 2022 compared to Q1 2021

· Q1 2022 System Sales significantly above pre-COVID-19 levels

o LFL System Sales increased by 17.8% in Q1 2022 compared to Q1 2019

o Total System Sales increased by 11.4% in Q1 2022 compared to Q1 2019

· Higher sales have been affected by high inflationary cost pressures, which have persisted. Polish CPI inflation was reported as 10.9% in March 2022 vs 8.6% in December 2021

· Cash at bank of £1.55m as at 31 March 2022 (as at 31 December 2021: £1.80m)

1 Like-for-like System Sales growth in PLN, matching trading periods for the same stores between 1 January and 31 December 2019,1 January and 31 December 2020,1 January and 31 December 2021 and 1 January and 31 December 2022

2 System Sales - total retail sales including sales from corporate and sub-franchised stores, unaudited

Operational and strategic highlights

· COVID-19 restrictions in Poland substantially reduced at the end of March 2022

· Orders volume up by 22% March 2022 compared to March 2021 and up by 17.1% Q1 2022 compared to Q1 2021

· Introduction of reduced menu which is expected to improve operational efficiencies and drive cost reductions to help mitigate inflationary pressures

· Store opening program restarted, with two new stores expected to be opened in Q2 2022

o The Group operates 122 stores at the end of Q1 2022 (including two seasonal stores)

· Since the start of the war in Ukraine, DPP has hosted refugees in its offices and also rented apartments for people who have fled Ukraine, provided transport to and from the border, offered job opportunities to the refugees or providing free pizza to volunteers in refugee reception points

Trading performance

Q1 2022 delivered strong sales growth against the previous three years, with trends accelerating towards the end of the quarter and continuing into Q2 2022. COVID-19 restrictions were lifted on 28 March 2022, but by 14 February 2022 children had returned to school, which brought families back to large Polish cities.

The delivery business constitutes 72% of Total System Sales and it is encouraging that delivery sales have been maintained despite the strong resurgence of dine-in sales, up 520.5% vs Q1 2021. It is expected that dine in sales will continue to benefit from increasing tourist numbers, which have remained low relative to 2019, following the removal of COVID-19 restrictions in recent weeks.

The carry-out business has been a core focus for management in Q1 2022, helping to increase total order numbers and better leverage the large store network whilst lowering labour delivery costs. In response, carry-out sales grew by 84.6% compared to Q1 2022.

High inflationary costs have been persistent, particularly for food and labour. The Group's operating scale has helped to limit the impact relative to our competitors, while a new smaller menu has been introduced to all stores to improve operational excellence and reduce food costs.

DP Poland has continued to offer a compelling value proposition to customers to maintain higher order volumes, helping to mitigate higher labour costs. Sales have continued to grow strongly in early April 2022, despite the implementation of recent price increases to offset higher food costs.

The store opening program has restarted as the Group remains confident in the outlook for 2022. Two new stores are expected to open in Q2 2022, with the potential for more as the year progresses. In addition driving growth organically, there also remains the opportunity to consolidate the fragmented marketplace in Poland. We are seeing an increasing number of potential M&A opportunities, however, we remain disciplined in our approach to M&A and will only review potential opportunities that have a clear strategic rationale and value accretive metrics.

2021 full year results

The Group expects to announce its final results for the year ended 31 December 2021 early in the second half of June, which will include a webinar for investors. The management expects that full year EBITDA figures will be in line with market expectations.

The person responsible for arranging the release of this announcement on behalf of the Company is Przemysław Głębocki , Non-Executive Director.

Enquiries:

DP Poland plc

Przemysław Głębocki, Non-Executive Director

Tel: +48 (22) 654 64 15

Singer Capital Markets (Nominated Adviser and Broker)

Shaun Dobson / Will Goode / Amanda Gray

Tel: +44 (0) 20 7496 3000

Notes for editors

About DP Poland plc

DP Poland, through its wholly owned subsidiary DP Polska S.A., has the exclusive right to develop, operate and sub-franchise Domino's Pizza stores in Poland. Following its acquisition of Dominium S.A., which constituted a reverse takeover under the AIM Rules for Companies, the Group now operates over 100 stores and restaurants across a number of cities and towns in Poland.