DP Poland Plc ($DPP)

Good afternoon, and welcome to the DP Poland FY '25 Investor Webinar. We're delighted to have with us today Neil corner, the CEO; and Edward Kratz, CFO. Before I hand over to them, I'd ask you if you could just complete the poll on your screen. And if I could go through a few admin points, you're all currently on listen-only mode. But you would like to ask a question, please type it into the chat box. We've had a couple of questions sent in ahead of time, and we'll cover questions at the end of the presentation. Today's presentation will cover the FY '25 results and current trading, followed by Q&A. And then following the meeting, you'll be redirected to a short survey be really appreciated if you could send a few moments completing that. I think that's all the admin points addressed. So I'm now going to hand over to Neil to start today's presentation.

Hello, everybody. Welcome today. Thanks for your time. I'll share my screen, and we'll get this started. Someone else is sharing replace current share. There we go. How is that, Alex, it's all fine. Yes, that looks good. Thank you, Neils. Perfect. Excellent. Thank you very much, everybody. I'll turn my camera and we will start I don't know how to do that. Sorry, guys. I need to work out how this works. I'm just going to lay my camera on and I had a tenant of -- there we go. All right. Sorry about that, everybody. Thanks for your time today. So today, we have 2 of us on the call -- my name is Niels Gonal, I'm the Chief Executive Officer of DP Poland. And we also have Edwards, our CFO on Lines Day as well. So just quickly on myself. I've been working for Domino's my whole entire life since it was about 15 years old. So I'm 30-plus years in the business. I'm an Australian gentleman, as you can probably tell from the crazy accent. I was a rates in Australia. I owned over 20 stores franchised in Australia. And then over our -- some business in 2020, I moved to Croatia and opened up the market from scratch. And then 4 years ago, we sold our Croatian business to DP who we're talking about today. We sold it for shares and 100% of shares we still hold all those shares today, and I've been sitting in Warsaw for just over 4 years now. And then we have Edwards

Yes. So hello, everyone towards about me. I've been with the company for the last 4 years. Previously, I didn't have a contact with QSR business. However, I run different financial strategy and transformation roles in the FMCG and fashion industries. -- which has some -- something in common with the QSR, especially with the speed and complexity of the business Currently, I'm the role of the CFO, hopefully, helping a lot of News to drive this business forward.

Absolutely. Okay. So look, global brand ready to scale. DP Poland is a rapidly evolving business operating in a very attractive underpenetrated growth markets. We are supported by a globally recognized brand and have significant white space to grow into and a franchisee-led model positioned to deliver long-term growth. We are part of the world's largest PTT Tomono, and we hold the master franchise agreement in both Poland and an over incretion as well. Both markets remain relatively underpenetrated, especially compared to Western Europe and also U.K., creating a significant long-term expansion plan. Today, the group operates a growing network of over 200 stores across 2 markets and 2 brands. So we have 142 Dominnos locations, and we have 70 locations of our second brand, we call that P10. We continue to deliver strong growth across the entire business, driven by same-store sales growth, ongoing store expansion and a growing franchise mix. All of this is supporting our long-term ambition to take on market share, and we want to be #1 in Poland, which is our core market. Okay. So delivering on our strategies. Look, this slide really highlights why we believe DP Poland is now entering a very scalable phase of growth. We've built the operational foundations. We've proven the customer proposition, and now we're seeing the benefits of scale start to come through across the whole business. So value-led proposition. Look, we have multiple growth drivers, and we believe our momentum will continue through. I mean everyone on this call knows we've dramatically increased sales in the last 4 years, and we see no reason for that to stop. We have several multiple growth drivers all working together, our value equation, execution and store expansion and supply chain efficiency. Our value proposition remains central to our strategy, especially in the current concur environment. Customers are looking for quality, convenience is the big 1 these days and affordability. At the same time, store expansion is capturing market share, especially in untapped catchments. Over to the second section, a strong runway for growth, scalable store rollout opportunity. So we see significant white space opportunity across both markets, particularly in the major and secondary cities depicted 105 brand that we also own is very strong in the smaller towns and a couple of main cities and where we are strong and they're not is the cities that we dominate. Look, based on as far as penetration based on the Domino's U.K. penetration in the U.K. This is how many millions of people per Domino's store. We can have over 700 stores in Poland. So there's some serious growth to be had. Growth driving profitability. As the current network grows, the economics of the system improved materially, our buying power improves, our advertising fund becomes larger and sales continue to rise. This drives stronger store economics, which encourages further franchisee expansion and more stores. This becomes a self-reinforcing flywheel and will drive growth figures. And then the last section is our main strategy, and that is the franchisee let structure. So we are transitioning from a capital-intensive operator to a highly scalable franchise model. This improves returns on capital enhances our free cash flow generation. And additionally, a higher franchise mix creates a much more efficient growth model. and much lower capital intensity for head office and supporting franchises. The sale of corporate-owned stores to franchisees also unlocked capital while improving our overall long-term margin profile. Edward, do you want to go through the -- this is the May 2025 results. And then towards the end of the presentation is the main information about last year's financials.

Yes. Thank you, Nils. So 1 thing is to talk about the strategy. Second thing is to deliver the results. And here is the slide about the key metrics that we would like to share with you and which we are very proud of. So first thing is the group system sales that grew more than 10% over the last year on a reported basis and close to double digit on the fixed cost on the constant price basis. and we crossed GBP 61 million, which is a good step forward for approaching GBP 100 million and 100 stores. At the same time, we delivered the prior IFRS EBITDA of GBP 2.6 million, which is exactly to the market expectations and it's 1.5% higher than a year ago that shows a very strong positive trend, which we continue to deliver over the last 4 years. At the same time, the Domino's network has expanded in 2 parameters. The first 1 is the total number of the stores. We crossed 130 stores by the end of 2025. We grew by 14%. But at the same time, the most important thing is that we transform the business massively towards the franchise led organization. And over a year, we added additional 20 percentage points to the franchise network reaching 1/3 of total network. At the same time, the group like-for-like system sale. So the top line that proves the healthy condition of the business also grew. And on a reported basis, that was 5%, whereas on a constant basis that was above 2%, and we reached GBP 54 million. Post IFRS, EBITDA followed the same pattern as the pre-IFRS, we crossed GBP 6 million, and that number was achieved also with the help of our franchisees. The franchisees generated above 7% of EBITDA margin for their stores. Over the year, we added also the stores that were well performing, but not as good as the first source that we sold to the franchisees, so there was a slight drop on the percentage margin performance. But at the same time, the most important thing is that in absolute terms in Polymatech rechange stayed stable, which gives us also the good position for 2026 and forward.

Yes. So the percentage went did slightly go down because we have been selling breakeven stores. Okay. So current group current trading. Look, the group had an excellent start to the year, both in Croatia and in Poland delivering double-digit sales growth and our strongest like-for-like sales quarter in more than a year. So right 4 years ago, and we're having the double-digit like-for-like sales growth last year, as you can see, the double-digit stock. So this is our biggest quarter in over a year. So we're pretty proud of those results. 9% is a pretty impressive number, positioned us well for the rest of the year and especially with what's sort of happening around the world, and we're really quite happy with that growth. Q1 was a very tough for delivery companies in -- especially in Poland. The weather was the coldest and the snowiest in years. And I'm very proud to say that my team absolutely delivered. Average the retirements didn't exceed 30 minutes while other delivery companies blew out to well over an hour. So you can imagine how much traffic we took. And look, hopefully, we converted some of those customers to regular new customers. if you want to take on the slide, you've been man, you can give us a bit of an update on the Poland economy.

SP-14 Yes. So on this slide because that shows a couple of perspectives to the Polish economy, but also to the pizza sector in Poland and our position in this sector. So starting from the left-hand side, over the 3 decades was 1 of the fastest developing country in the world and definitely in Europe and Central Eastern Europe. We grew more than 200% over this period based on the real GDP growth. But this is not the end. We see for the last year that Polish GDP, again grew more than 3%, having the European Union behind us because they delivered only 0.9%. And the strong domestic growth option boosted by a big scale of immigrants from Ukraine, the stain in Poland, and contribute to the Polish GDP that gives us also the possibility to expand, grow the ticket value and also penetrate the market further. When we look into the pizza sector in Poland, again, this is a very interesting pattern because the Polish market grew much faster than the European one, over 10% since the 2019. But when we look forward for the period of '26 to '29, we see that it slows down a bit, but it still keeps about 6% year-on-year growth. whereas the European average for the pizza sector is about 1%. So from that perspective, that positions us also on the market that has a potential to to deliver higher top line, but also higher return from the investment. Going to the right-hand side, this is the parameter that shows the penetration of the population with the number of stores available for the community. And by using the parameter from the U.K. market, we see that we still have about 3.6x lower number, lower density of the outlets versus the population in our country. So something that all up together, we see it on the market with a big potential because of the market expansion and growth because of the local domestic consumption that is available for the sector because of the sector of growth massively faster than Western European countries and under penetration of the store network versus the Western countries. So therefore, we believe that the forecast for coming years is deliverable, and we have a big trend to turn around this market.

Awesome. Thanks, Edward. Okay. So next slide, store network and the Polish sector market. So a growing portfolio with 212 stores and many white space expansion opportunities. So this is as of April 2026. So Ed would produce the '25 number. So this is the numbers updated as of the end of April. So we've got 212 stores 12 of those are the Domino's and the 70s, the Pizza Re. So in Poland, now we have 135 outlets franchise. In Croatia, we finally got our 7 store opening split, so that's been operating for about 1.5 months now. Our first franchise store as well. It's going tremendously well. So we're really quite proud and hopefully, our new franchisee expand in the country. And then we have Pizza Ria 105. Obviously, the outlets have dropped as we've converted some. So 2027 target, are we going for over 200 stores, and we want to be over 50% franchise. So the Polish pizza market. So as you can see, Domino's is not #1 in Poland. So while we continue to close the gap with Pizza Hut in terms of store numbers, the real opportunity and what's really exciting lies in the store volumes and the market share. So Pizza Hut continues to hold a significant share of the Polish market. And our focus and my job is to capture this market share. So we believe there remains substantial headroom for both like-for-like sales growth and market share gains giving us a long runway for growth in Poland. So Pizza Hut's market share is substantial compared to our side. That's where the opportunity is, not just in store count, but we also believe our same-store sales have got a lot of opportunity to grow over the long term.

Okay. So higher volumes driving improved profitability. So operational excellence and a strong value proposition continue to drive sales. So 2025 saw the group improved EBITDA by over another GBP 1 million. This is the fourth year in a row with similar EBITDA gross results. So the sales results are clearly flowing to the bottom line and improving store economics. Sales -- network sales are still growing and profits are still growing as well. So the multiple growth drivers, I mentioned this before, compelling customer value proposition, operational excellence, which is what we're very, very good at -- the marketing flywheel, which I'll speak a little bit about later and improving store economics, which is obviously important because we want to make more money, and we need our franchisees to be profitable because that is going to be growing our business in the future. Building a strong brand. Our growth is not only being driven by new store openings, but increasingly the strength of the customer proposition and improving brand engagement. So new customers. We continue to see strong engagement from value-led campaigns through our own digital platforms and aggregator platforms as well. So new product launches, especially continue to drive traffic and attract new customers. At the moment, we've got the latest trend going around the world, the Hot Honey Pepperoni, and it absolutely makes the phone Regal. It gets the orders ordering. So a new product development -- it gives our marketing new things to talk about and the consumer another reason to come and visit you and just try and make sure that they're visiting Domino's the right amount of times per year. Customer satisfaction. At the same time, customer satisfaction continues to improve with our NPS increasing score for the fourth consecutive year in a row. So every single year since I've got here, our NPS score is getting higher and higher and higher. Our brand perception is clearly growing and operational excellence and consistency is creating customer loyalty. Digital ordering. So digital ordering continues to become an increasingly important part of both the business and the consumer experience. driving greater convenience, engagement and operational efficiency across the business. There is no debt or the new generation at convenience, everything is online, and that's obviously the direction we're going in. And being a pizza company, we can absolutely -- I mean we can go close to 100% online. Digital ordering continues to grow in now 70% -- 77% of our sales are placed online. And importantly, the Domino's a mobile lab remains our fastest-growing sales channel. So last year, it was -- 2024 was our fastest growing sales category. And again, last year, delivered 29% year-on-year sales growth. The act continues to strengthen customer loyalty and engagement and remains a key piece of strategic focus in driving profitable sales for the future. Store economics, increasing average ticket while maintaining order frequency. So this requires careful balance with value at the center of the strategy. Importantly, value is not just about price, product quality, customer service, convenience, and Kevin talking about convenience and brand perception all play a part in the consumers' purchasing decisions. Our strong digital presence also provides a significant advantage, allowing us to continuously test and optimize pricing initiatives through real-time A/B testing because we're digital, we can test in 1 market, we can even test 2 stores right next to each other in the same market and see what the different results are. So we're quite lucky to have that advantage. In addition, menu innovation continues to support ticket growth with customers demonstrating the willingness to trade up to premium products and add-ons. So we just -- I just spoke about the hot honey. We have a hot honey with replotted cheese and a few other things. It's a very premium pizza and customers are just upselling themselves. So we've put the special on our entry-level pizzas consumer guests to the online sees the amazing product and then upsells themselves. As a result, we have increased average ticket by nearly 5%, while order frequency has remain consistent with 2024 levels. So higher spend without impacting customer engagement is always only the thing. So I think that's a big win for us. Delivery times over delivery times, look, this remains 1 of Domino's strongest competitive advantages. It always has, and it will continue to average delivery times in Poland. 2025 remains steady to the 27 minutes consistent with 2024. So consistency is the key there. However, the competitive advantage for us isn't just about speed. All of our deliveries and completed by Domino's guys in uniforms on branded e-bikes and on branded scooters. So we basically have moving billboards flying around the community. So that combined with our heat bag technology, which helps ensure that customers receive a hotter pizza. So we're delivering in branded bikes, and we actually put the pieces inside and other hot banks. They're just getting a hotter product. So there's quite a few advantages to our system. Okay. So built to scale. So this slide really illustrates what we call our growth flywheel. So as the market expands, each component of the business reinforces the next, creating a cycle of growth profitability and reinvestment. So we'll start with #1 at the top mills. Expanding store network. Look, everything starts with network growth in the last 4 years, I'm proud to say that we've absolutely delivered growth. As we add stores, either through new openings, franchising or conversions, our market presence and customer reach growth as well. Importantly, our franchise model allows existing franchisees to reinvest into additional stores. Our business is streamlined and franchisees can operate multiple locations. So there is a big incentive to get the franchisee profitability up because that's who's growing our business. The more profits the franchisees can make the faster they're going to grow this business. And because we already have the trading operational and supply chain infrastructure already in place, new stores can be added efficiently and at scale. Okay. So number two, increasing market share. A larger network drives grown market share. And trustfully we have lots of market share to take. This strengthens brand visibility, making consumer acquisition, even more efficient and cheaper. And then the more stores also improved delivery coverage reduces delivery times and increases convenience. The third one, improving store economics, and this is super important. So as scale increases, store economics improve as well. you get benefits from your purchasing scale, stronger marketing leverage and more efficient delivery operations. This, in turn, improved store profitability, franchisee returns and encourages reinvestment for more growth. So down to the bottom there, number 4, marketing, the more stores, the larger the advertising fund and the more powerful the brand becomes. So a larger network also allows more effective national and digital campaigns. So we're still not sponsoring national sports teams or going on national radio or TV. It's just no point when we don't have presence all over the country. So this is exactly why the Pizza 105 conversions are so important to us. Number five, our tank. And so mostly, our tech back forms and support potions fixed cost investments, so as more stores come into the system, these costs are spread over a larger base, improving operational leverage and overall efficiency. Number six, really obvious, the outcome, more stores, more sales, more profits and successful franchisees. So scale matters. Every new store does more than generate its own sales. It strengthens the entire system. Growth drives scale, scale improves economics and the stronger economics fund the next phase of growth. Commissary, even if you want to take this slide for you.

Sure. A couple of words on the commissary because that was 1 of the biggest investments for the company last year. So we spent about GBP 1 million for the SNE investments into the comissarith the payback period between 4 to 5 years depending on how many stores we convert and how and how big network we will be serving. General goals of this investment was to prepare the organization to set a minimum 300-plus stores from 1 location. Thanks to which we will be able to reduce the white collar cost to increase the productivity of the local teams and also have the possibility for the future to scale up the production with some additional automatization if needed. So what we did so far, we extended the warehouse by 1,200 square meters. We also rebuilt the freezer and cooler fully to the extend the size that's 1 thing, and we move from free on to CO2 as a parameter that creates the court then we entered into the blast chiller technology. We increased capacity on the silos on the mix divider, we added the automated tray washing machine, so lots of the activities were already finalized. We see a very nice improvement on the commissary profitability. So from that perspective, we are happy with these investments. We still see the potential to improve the profitability because we are still in the learning curve. But the longer processes, the better productivities, the higher profitability of this profit center.

Awesome thanks, Edward. Okay. So transition to a franchisee-led structure Okay. So Pitari15. So we've now converted 17 Pizza 105 stores to the Domino's brand, definitely short on my expectations. So the pace of conversions this year has been slower than expected. Look, it's not a reflection of the store performance. I think it's rather that the franchisees are being very cautious about changing brands, concerns lay mainly around transition complexity. So when the first transitioning, it's very overwhelming and it's a lot different to their current business, higher standards on service times and the store economics. So this is all their main concerns. The pilot stores are performing well, delivering growth of nearly 30% versus their previous performance under Pitari105. Pilot stores have been going for about 8 months now. So this is consistent over an 8-month period. There was 1 of those stores that were falling a little bit behind, and now we're seeing some real sales momentum in that store at the moment. So the opportunity remains absolutely compelling. The next steps for us is driving greater franchisee uptake. We are absolutely taking a step back. We're resetting. We're refining the conversion model and we want to prioritize sustainable unit economics, simplified conversion processes and the operational support. So what we're finding is that what they're good at is completely different to what we're good at. So there is differences in the business, and it's just taking us a lot longer to get their standards up to our Combo standards. As well the remaining conversions are becoming a lot more complex. So as we enter cities with very strong picture stores with high volumes. And at the same time, we have limited store presence with lower volumes. It takes a completely different approach. So we need -- unlike the initial conversions, we need market level conversion, and we need to convert the whole city at the same time. So these conversions are larger, more valuable and require multiple franchisees and multiple sort to transition at the same time to maximize the benefits of scale and allow a huge marketing campaign to ensure its success. So I mean, we've got 2 cities where we don't have a bad name. We just don't really have a name. So we are, by far, #1 in the biggest 2 cities in Poland. But in 2 of the large cities, we are absolutely not. So how this is going to work. We need all the franchisees to convert at the same time. And then we can go in were 13x as much marketing power. And we're doing market research now. We need to go in. We need to go in with a very strong strategy because we are not market leader in a couple of these towns and we need to address that. So look, I'm confident we can still realize the full conversion opportunity over time. But it's this next stage, it's really important and how many we're actually going to convert. So in the meantime, 105 continues to perform well as a business. It delivers strong returns and contributes to the group's growing profits. So I know everyone is going to be disappointed about the pace on the conversions, but let's not forget, we need to do this right. We need to make sure that the franchisees are successful. And in the background, this business is still humming along, are still making a nice profit. Okay. So franchisee partners. This is 1 side of the business that's making me smile and we're doing better than expected. So the 105 is a little bit slower and definitely some challenges there. the franchisee partner side is going really well. So we've done a lot in the year. And this year, we should see very similar results we're becoming a majority of franchisees. So this is and remains the most important strategy underway. Until we get to that 90-plus franchise proportion. So our strategy at the moment is to transition from a predominantly corporate-owned network to a more franchisee network. This is not simply about changing store ownership. It's about creating a more scalable business that can grow faster and deliver stronger and more predictable earnings over time. This transition continues to progress really well heading to 50% franchise much faster than anticipated. So it frees up capital to reinvest faster growth, leaner corporate structure and what really drives growth is the skin in the game. Last year, we sold 17 corporate stores to 10 franchisee partners. We've converted 13315 stores. And this year, in Q1, we only converted for. Okay. So the financials, good if you want to take these slides. Yes, of course. So let's concentrate for a while on the financials for the fiscal year 2025. A couple of numbers I would like to concentrate on, which is definitely revenue, group EBITDA and loss before taxation, so let's start from the top line. As you can see, system sales grew double digit, which is 11%. Don't get mistaken system sales here just refers to the Domino's sales. We do not report here 105 system sales as 105 does not track this number. So 61.4 million is the number of Domino's store sales. For the revenue, the revenue grew by 15%. We see here some growth combined with the network expansion. We see also the change in the revenue mix. higher contribution from royalties, franchise related income, but also here is the sale of the source. So 1/3 of this number of this growth comes from the store sale and profit of this growth of this 15% comes from the trade. When we go to the EBITDA, you can see 6.2% versus 4.8%. This is almost 30% increase and this is a higher increase than the revenue line. We see the operating cost growth, the accumulated operating cost of just 14%, which is lower than the revenue line and that also contributed to the group post IFRS EBITDA. But when we look into specific cost lines, it's worth mentioning that we were able to protect our energy prices by the fixed contracts signs in 2024 before the Middle East wars. So we were not affected by the fuel Norden increases, cost increases at the same time the external services mainly are connected with the additional investments into the marketing to boost the sales to prepare the network for the conversion and helping our new franchisees to run the businesses from the very beginning. There is also a portion of the royalty paid to the U.S.A. to the master franchisor based on the SFA terms. Even with this growth, it's about 50% year-on-year, we were able to deliver the group adjusted EBITDA. We are super happy with the payroll and social charges very well managed the inflation pressure on NEMA, which East. However, even with this, I think we did a very good drop on the proper productivity and efficiency improvement at the stores and also in the commission. And thanks to that, we were able to keep this line flat. On the cost of goods sold, slightly higher increase. There was at the beginning of the year a pressure on the cheese prices and some of the ingredients. So they added some of the pressure to the EBITDA line for 2026. Those pressures vanish. So we entered the year with a positive mood, and we see that the pattern for the future stay unchanged. Below the EBITDA, 1 line is worth mentioning, definitely, you pointed out on your side, this is impairment third line from the bottom, minus GBP 4 million. The main, and I will say the utmost driver of this line is the change of the auditor to the cash generating unit approach previously last year, we were calculated based on the CITIC cluster, whereas this year, the approach has changed and the whole impairment test was calculated to the store level. What does it mean? Some stores that were under the cluster like Warsaw 45 stores in 1 basket now have to be calculated on a line-by-line basis. And depending on the judgmental approach to the future, our versus the outlook of this is the outcome of this calculation and discussion with the potential to reverse this impairment for the future. For now, I believe that this is far view. However, this is very important to mention that this is a noncash item that is just for the reporting purpose. News?

Awesome. Thank you. On the balance sheet, a couple of things that were mentioning. The first 1 is goodwill in intangible assets. The main change is connected with the 105 takeover and recognition of this deal into the balance sheet, trade and other receivables on noncurrent items is connected with the loans that were offered to the sub-franchisees for the store takeovers. Going deeper, Cash and cash equivalents, the details, this is a drop because of the investments we -- we made over a year, you will see the details on the next slide. Covering liabilities, trade and other payables is connected with the network change we transport to more franchise organization. So and this is also in line with the purchases that the company is creating and the other lines, I would say, a bit of neglitable. So these are the main items I would like you to focus on. Thank you. Cash position. We entered the year with more than GBP 10 million on our bank accounts. The biggest investments over the year was definitely the acquisitions of Pizza via 105 and it cost us cash by GBP 6 million. Some of the transactions were also paid in shares. So therefore, you do not see the full value of the of the transaction. But also, there were some less capital-intensive or gas-intensive items that we have actions that we went through over the year that were definitely the strong conversions to date, the stores that we converted over the 2025 from 105 to Domino's. We definitely had also the upgrade of the commission. Some of the investments were done in 2024. So therefore, you do not see here a GBP 4 million, but just 0.67. And then the store rollout and renovations, we still build the stores over 2025. We still renovated the current network that we have for the better perception of our consumers and for the long-term development of the company. We ended the year with GBP 1.4 million in the bank account, and we keep this level over the 2026 more or less.

Okay. Thanks, Edward. Okay. So outlook for 2026. So looking ahead, our strategy remains focused on 3 key priorities: delivering profitable growth accelerating our franchise transformation and improving operational efficiency. So together, these initiatives position the group for another exciting year of growth and a highly promising long-term future. So number one, the profitable growth. So we expect EBITDA to remain in line with market expectations, supported by continued momentum across the business. Systems sales are expected to continue growing at double digit for the remainder of the year with our network growing and solid like-for-like sales, especially after Q1 is impressive 9% like-for-like growth, we're very confident on that. We're also continuing to grow our store network with double-digit increase in store numbers projected for the year, and we remain focused on our medium-term goal of exceeding 200 stores by the end of next year. So the second section franchise transition and network expansion. So our shift to franchise to a franchise-led business is progressing really well, as I mentioned. By the end of next year, our goal is is to have more than half of the Domino's network to be franchised. This transaction improves capital efficiency, improved margins and creates a more scalable business, which I've been talking a lot on today. So we'll continue to recycle our capital through the sale of our selected corporate stores, and at the same time, open new stores across both corporate and franchise. Most importantly, we're refining and resetting the Pizza 105 conversion program to improve store economics, increase frantic participation and accelerate long-term conversion opportunity. And then the third section over here, operational efficiency and margin improvement. So G&A costs have reduced as a percentage of sales as we continue to transition to a franchisee-focused business. Our recent supply chain consolidation allows us to leverage greater scale across the supply chain and continue to drive costs down and enhance operating margins. Digital remains an important driver of our future growth. Our dollar days app, especially continues to increase in usage strengthen engagement and improving the economics of each transaction. So our strategy is pretty straightforward, grow the store network, franchise of all stores, improve the margins and then convert that growth into higher profits. Okay. And that's our presentation for today. So I'll stop sharing my screen and then we can open that up for questions.

Great. Thank you, Neil. Thank you, Edward, for that presentation. And just while we're getting that presentation of the screen. I'll just remind you that we are going to take Q&A now. And if you'd like to ask a question, please type it into the box at the bottom of your screen. And Neil, your camera is off. As the -- I've stopped sharing have? Yes, you stop sharing Okay. So look, we've had a couple of questions coming ahead of time, but we've had a couple of questions during the webinar. So let's start with some of those. So the first question is on the peaker is the slower peak Sirio 105 conversions, a cultural difference, a competence difference confidence issues or something else, what are the levers to bring them along with you.

Look, I don't think it's a cultural difference. It's just -- it's a local pizza rea versus think of when you walk into a McDonald's and you can hear all the beeping and all the times, everything is time, everything is seeping and there's a lot of pressure. So we are very strict on high food safety high service times as well. So what we focus on is just not what their priorities are. It is a different business. And they want to keep their priorities as well, which is they're really skilled at the customer service and making sure that site is perfect. And now we're trying to add in all of the other components. So I think it's been more about being being overwhelmed. And so to stop that overwhelm, we need to do more training beforehand. We need to have more people in there while we're transitioning. We need to have more after care as well. So we know what to do. We just need to make it happen.

Next question also relates to PSR 105. What are the trends in customer satisfaction measures when a unit converts from PEER 105 to Domino's.

So obviously, we have a bigger offering. So I think the extra offering is going down well in the market. So that's been some positive feedback. The stores look really, really good and delivery pumps have come rocketing down. So it's quite a tough when we're speaking to the first group that converted. When they first were introduced to the business, they're like how do you deliver in under an hour. And then I look at the results of those stores now, and they're all in their 20 minutes. So the system works and the franchisees do learn. So it's just a matter of time.

Question here on the broader issues. What are the biggest challenge for the business currently? And how are you dealing with it?

It's probably exactly what we've been talking about. So that's the biggest opportunity. And at the moment, it's our biggest challenge. So like I was mentioning, the other transactions are getting quite complex. We've got 2 cities we have to get right. And if we can convert these stores and prove success, then I'm sure we'll get more successful all around the country. So it's really in these next few months. I would maybe say on top of what Justin said, that moving towards the franchise led organization. We try to do it in a year time, yes. And by the end of this year, -- our plan is to have half of our network being under the franchise. So having that in mind, even looking into the other countries, is a really fast speeds like trying to do so many things at once. And the 1 thing is that the franchisees need to learn how to run Domino's. We're also learning how to run the franchise business. So this is a bit of learning by the link. On both sides, we make mistakes. But on both sides, I think we have a moving step forward and step-by-step day by day. So we are very optimistic to the future. And we are also reorganizing the whole internal organization to support the franchise business because this is our the dominant goal that we want to achieve, but it takes time. So that is the opportunity, but at the same time, Metrolanch as well.

Exactly right. It's the fastest-growing department in our company.

Okay. Next question here. What does AWAC look like currently? And is there scope for any further improvement?

Yes. Look, we stopped sharing the AWAC in the market, and that was just purely -- we wanted to share at the start, so we could take our investors on the journey of growth, but it's just 2 sensitive information. So giving out way too much information to our competitors. Look, all I can say is I spoke briefly on the market share. So absolutely, there is massive amounts of same-store sales to be had. So we know what Pizza Hut sales are and they are long-- we've got lots to share. Try to answer slightly to this. Our volume growth, so automatically the growth, so this is the correlation between those 2 parameters is relatively high. And the second thing is that our 1 of 5 stores are growing more or less the same pattern as the Domino's grew over the last 4 years at the beginning, yes, because they start from the very low base. So we have 2 speeds of our growth, and this is exactly what we expected. The well mature stores cannot grow forever double digit, but the stores that we joined to the organizations definitely have a higher track on the growth.

Next question here. Given the fundamental shift in the underlying performance of the company, isn't it a timely for insiders to buy stock given that the share price has lagged the fundamentals from the 9.9 placing, the last purchase made was back in 2024, the CEO and the CFO have made no transactions in the open market.

News -- that's a funny 1 to answer, isn't it? -- yes, yes, you're probably right. We probably should be by I mean I can't speak for everybody else. I know my financial position. And my DP Poland stock is a very large proportion of my wealth and -- and that's where the risk is, yes. SP-37 I will say the answer differently. Over the last 2 years, believe us, we had so many projects that for different -- some of them succeeded, some of them don't didn't. -- but we were constantly in the close period. So that we couldn't even do anything with the investments if we were super firm with this. And look, I mean, we've got a stock option plan. The trigger prices I don't know whether I'm to say here. But anyway, there is a trick price. So there is definitely an incentive for us to get the share price up because the option plan is quite substantial for myself.

Okay. We've got a couple of last questions here. Do you use brand ambassadors to help the company?

In Croatia, we do just because our marketing pool is much smaller. So absolutely, that works in Croatia. In Poland, we haven't done too much of that. And look, just a reminder to people, if you do want to ask a question, please type it into your the chat box at the bottom of your screen, we still got a couple of minutes left. If people do have outstanding questions. I've got 1 open still. And it's a question about a store opening, any intention in opening in the city of listen. That pronunciation line? With got the stores in Ocean. We've got the stores in this Polish district like not east of Poland. There are cities where the Domino's is present. And we also had some of our 1 of partners that run the stores under 105 there. So right now, they are under the evaluations or verifications whether they are capable of transforming to Domino's stores. So definitely, this is a region which is not fully dense, yes. It has a capability to be scaled up with the network coverage, but it takes time. We simply need to teach the consumers what the Domino's is delivering there. And when they are pitched, then we will be cutting the regions to smaller and smaller areas for new stores openings.

Okay. Thank you. We have no further outstanding questions here. So Neil, I don't know if you want to just say a couple of words in conclusion before we leave today's webinar.

I think we've I think we've covered everything basically. We had a really good year last year. We've had a great start to this year. And our strategy remains very simple and straightforward. So grow the store network, take market share, franchise more stores, improve the margins and then convert -- improve the margins and convert that growth into higher profits. So yes, everything is going well. And yes, thank you very much for your time today. If you do have any more questions, please feel free to ask, and we can get back to you.

Great. Thank you. That brings to a conclusion today's webinar with DP Poland. And as you exit today, you'll be asked to complete the feedback form. It would be appreciated if you could spend a couple of minutes doing that. So thank you for attending, and we hope to see you soon.

Awesome. Thanks, Alex. Thank you.