Domino’s Pizza Enterprises Limited 1/485 Kingsford Smith Drive Hamilton, QLD, Australia 4007 ACN: 010 489 326 www.dominos.com.au 21 August 2024 The Manager Market Announcements Office Australian Securities Exchange 4th Floor, 20 Bridge Street SYDNEY NSW 2000 Dear Sir Appendix 4E and financial statements for the year ended 30 June 2024 Please find attached for immediate release to the market the following documents in respect of the year ended 30 June 2024: (a) Appendix 4E (b) 2024 Annual Report For further information, contact Nathan Scholz, Head of Investor Relations at investor.relations@dominos.com.au or on +61-419-243-517. Authorised for lodgement by the Board. Craig Ryan Company Secretary END Appendix 4E DOMINO’S PIZZA ENTERPRISES LIMITED Current Reporting Period: Financial Year Ended 30 June 2024 Previous Corresponding Period: Financial Year Ended 02 July 2023 SECTION A: RESULTS FOR ANNOUNCEMENT TO THE MARKET PERCENTAGE CHANGE % AMOUNT $’MILLION Revenue and net profit Revenue from ordinary activities Up 2.7% to 2,376.7 Profit from ordinary activities after tax from continuing operations Up 33.8% to 92.3 Profit from ordinary activities after tax attributable to members Up 136.5% to 96.0 Dividends AMOUNT PER SECURITY (CENTS) FRANKED PERCENTAGE PER SECURITY Dividends Final dividend in respect of full year ended 30 June 2024 Payable 25 September 2024 50.4 Nil Record date for determining entitlements to the final dividend: 28 August 2024 Interim dividend in respect of half-year ended 31 December 2023 55.5 Nil 30 JUNE 2024 02 JULY 2023 Net tangible assets per security Net tangible assets per security (6.13) (7.52) SECTION B: COMMENTARY ON RESULTS Brief explanation of revenue, net profit and dividends (distributions) For comments on trading performance during the year, refer to the media release. The final unfranked dividend of 50.4 cents per share was approved by the Board of Directors on 21 August 2024. In complying with accounting standards, as the dividend was not approved prior to period end, no provision has been taken up for this dividend in the full year consolidated financial statements. ADDITIONAL INFORMATION This report is based on accounts which have been audited. The audit report, which was unqualified, is included within the Annual Financial Report which accompanies this Appendix 4E. Additional Appendix 4E disclosure requirements can be found in the Annual Financial Report. ANNUALREPORT 2024 DOMINO’S PIZZA ENTERPRISES LIMITED WELCOME WELCOME TO THE DOMINO’S PIZZA ENTERPRISES LTD ANNUAL REPORT FOR 2023–24 ACKNOWLEDGEMENTS EDITORIAL 2024 Erica Thompson and Amanda Harper (ANZ) Kathrin Rezac (Germany) Manon Stoutjesdijk (Netherlands, Belgium, Luxembourg) Michael Villenave and Clarisse Allheilig (France) Chrissie Robyn Chong (Malaysia, Cambodia, Singapore) Iris Lin (Taiwan) DESIGNERS Dieter Fisch Stacey deWet Anderson Carloni We are an Australian-headquartered company of pizza people. In 2023/24, we owned and operated the master franchise for Domino’s in Australia, New Zealand, Belgium, France, the Netherlands, Japan, Germany, Luxembourg, Cambodia, Taiwan, Malaysia and Singapore. CHAIRMAN’S REPORT 3 GROUP CEO & MANAGING DIRECTOR REPORT 5 WHO ARE WE 7 OUR PURPOSE, VALUES, MISSION & STRATEGY OUR SOCIAL AND ECONOMIC LANDSCAPE 9 DPE HALL OF FAME 11 ANZ CEO REPORT 13 40 YEARS OF DOMINO’S IN ANZ 15 ANZ HIGHLIGHTS 19 EUROPEAN CEO REPORT 27 EUROPEAN HIGHLIGHTS GERMANY 30 FRANCE 35 NETHERLANDS 41 BELGIUM & LUXEMBOURG 47 ASIA CEO REPORT 51 ASIA HIGHLIGHTS JAPAN 54 MALAYSIA, SINGAPORE & CAMBODIA 59 TAIWAN 63 BOARD OF DIRECTORS 75 DIRECTORS’ REPORT 80 FINANCIAL REPORT 108 TABLE TABLE OF CONTENTS 2 ANNUAL REPORT 2024 CHAIRMAN’S REPORT In my updates to shareholders in the pages of our previous annual reports, I have consistently returned to the importance of investing in our long-term future, one in which our franchise partners and shareholders enjoy the rewards of this long-term focus. With any QSR brand there will be moments in which a particular promotion, menu offering, or pricing approach, may not resonate as anticipated with our customers. But a long-term approach, in which the brand builds customer loyalty through product quality, customer service and delivering value, will win out in the end. You can see the rewards of that approach outlined in this report, from all of our markets. Australia/New Zealand, where the Domino’s Pizza Enterprises Ltd story began, has exemplified this approach. The launch of inspired new products such as Meltzz has played a key role in growing sales this year, by allowing Domino’s to reach more customers, on more occasions. Equally important has been the focus on product quality in stores, faster customer feedback, and building ‘promoters’ who share the joy of their Domino’s experience with their friends and family; combined these have seen the ANZ business record its fastest growth in the past six years. Domino’s Pizza Enterprises Ltd faces some short-term headwinds. Some outside our control, such as geopolitical tensions affecting our Malaysian business. Some are within our control, including implementing a turnaround program in Japan to lift average weekly order counts; a program that does include some targeted store closures designed to improve the overall health of the Japanese business. Our management team are working at pace to implement this plan and intend to deliver an improved performance in this Financial Year. I have spent countless days spanned across my years of involvement in Domino’s (as a shareholder first, and then the Chair) visiting our international markets and meeting team members and franchise partners. I can confidently say there are more similarities between these markets than differences. And while it’s important to drape Domino’s in the national clothing of each market, what must never change is our focus on customers, on customer service and on execution. As important is the investment in our franchise partners – those who invest their capital alongside Domino’s in the expectation their hard work will be rewarded together with shareholders. In my previous report I outlined the reinvestment in our franchise partners (the largest in our Company’s history), by returning 1/3rd of a Group-wide savings program. I am pleased the benefits of this reinvestment are becoming clear, not only because of an improvement in franchise partner profitability but also because of the re-engagement of these partners in the long-term potential of our business. This is a clear example of long-term focus, that will establish a stronger foundation for their future growth, and ours. Central to that focus will be our team members working hard in our stores each day to meet and exceed our customers’ expectations. On behalf of the board, I thank them for their efforts and look forward to recognising their achievements over the months and years ahead. JACK COWIN CHAIRMAN A LONG-TERM APPROACH, IN WHICH THE BRAND BUILDS CUSTOMER LOYALTY THROUGH PRODUCT QUALITY, CUSTOMER SERVICE AND DELIVERING VALUE, WILL WIN OUT IN THE END. „ „ 4 DOMINO’S PIZZA ENTERPRISES LTD ANNUAL REPORT 2024 GROUP CEO & MANAGING DIRECTOR REPORT I noted in this report three years ago that it was unknown what the world’s ‘business as usual’ would look like after the extraordinary changes brought by the pandemic. What we did know is that our success then, as now, depended on listening to our customers. Even as we navigate the ongoing challenges of the world’s ‘new normal’, particularly inflationary costs, we remain committed to delivering inspired products and services to our customers, no matter where they live. While there are of course differences between countries, and even cities, our global strategy, with local nuance, allows us to reach more customers, on more occasions. We love that we can bring joy by offering satay pizzas in Malaysia, lamb pizza in Australia, doner kebab pizzas in Germany, and a bento-style pizza offerings in Japan – just to name a few. Putting our customers’ preferences first has helped our franchise partners grow and delivered returns for our shareholders. This year Domino’s Pizza Enterprises Ltd served $4.19 billion in meals to customers in 12 markets (sales +4.6% on FY23), with Same Store Sales 1.5% higher. This delivered Underlying EBIT of $207.7 million, 3.0% higher than the prior year. We delivered earnings improvement in ANZ (Underlying EBIT $124.1m +10.4%) and Europe (Underlying EBIT $70.7m +33.8% ), although this was partly offset by a decline in Asia (Underlying EBIT $42.9m -28.7%) as we work through some challenges from our expansion in Japan, as well as external factors in Malaysia and Taiwan. Nonetheless, through growing sales and a significant cost reduction program throughout our business, we have reinvested in our store network to help our franchise partners build meaningfully stronger businesses for the years ahead. ANZ In Australia we celebrated four decades of operations and delivered our best performance in six years. Our focus on product differentiation, capturing more eating occasions, and strengthening our presence on digital platforms, especially aggregators such as Uber Eats, saw Domino’s recognised as the fastest-growing pizza company in Australia in FY24. Asia In Asia, we continued to refine our strategy in Japan following our rapid expansion during, and in the lead-up to, COVID-19. With a larger percentage of immature stores, we made the decision to further optimise the network. The solution to delivering growth in Japan remains in delivering value for our customers, and extensive testing in FY24 is anticipated to deliver improved results in the coming financial year. In Malaysia, despite geopolitical challenges, we launched incredible products like the Cheese Volcano Pizza and expanded into new regions of this market. Singapore saw great success following the debut of DPE’s online ordering platform, significantly increasing sales conversions. In Taiwan, inflation and supply chain issues were addressed with new leadership and proven strategies, leading to confidence in future growth. Europe Despite the lingering effects of inflation, including cautious consumer spending and higher labour costs, our teams rose to these challenges with renewed focus and determination. Germany was a standout as the Group’s top-performing delivery market for FY24 and the Netherlands, Belgium, and Luxembourg led the way in furthering our ambitious sustainability goals with initiatives like Project Golf. In France, our priority is on rebuilding and effectively re-engaging our franchise partners to implement proven strategies. With a full French leadership team now in place, we have already seen encouraging signs of improvement. Looking forward, we are confident the substantial progress being made across all markets, underpinned by our commitment to delivering inspired products and services, will continue to drive future success. DON MEIJ GROUP CEO & MANAGING DIRECTOR OUR GLOBAL STRATEGY, WITH LOCAL NUANCE, ALLOWS US TO REACH MORE CUSTOMERS, ON MORE OCCASIONS. „ „ 6 DOMINO’S PIZZA ENTERPRISES LTD ANNUAL REPORT 2024 WHO ARE WE INSPIRED PRODUCTS & SERVICES DESIGNED FOR DELIVERY FOR ALL MEAL OCCASIONS ACHIEVED THROUGH THAT ARE HIGH QUALITY AND DELIVERED QUICKLY FOR AN AFFORDABLE PRICE DESIGNED TO BE DELIVERED SUSTAINABILITY THE DOMINO’S X-FACTOR DOMINO’S DELIVERED (PREMIUM) DIFFERENTIATION IS THE CUSTODIAN OF PROFIT CUSTOMER DELIVERED (PICK UP) VALUE = (PRODUCT + SERVICE + IMAGE) / PRICE DELIVERY: 18 MINS SNACKING AM/PM LATE NIGHT PEOPLE POWERED PIZZA NET PROMOTER SCORE 45 LUNCH DRINKS PRODUCT QUALITY: 4.5 BREAKFAST DINNER OUR PURPOSE & VALUES THE DOMINANT SUSTAINABLE DELIVERY QSR IN EVERY MARKET BY 2030. OUR MISSION OUR STRATEGY CRUSH CONVENTION PIZZA OUR CLOSER BRINGS PEOPLE RIGHT RIGHT THING THING TO DO DO THE BECAUSE IT’S THE HELP PEOPLE GROW & PROSPER TO INVEST DEVOTION TO CREATE JOYFUL GENEROUS EXPERIENCES BE & PROVIDE FOOD BRAND PEOPLE MENU INNOVATION DELIVERING THE FUTURE DIGITAL FOOD COURT DOMINO’S FOR GOOD OPTIMUM ORDERING A love of food unites us at DPE and gives us a powerful capacity to bring shared dining experiences to our customers all over the world, even with different ingredients. This year the My Domino’s Box, Meltzz and Cheese Volcano could be found on the menus of multiple markets with local variations. They successfully reached new customer segments, while collaborative product development enhanced cost-efficiency. Our obsession with delivering hotter and fresher meals took another bold step forward with the unveiling of the dXb e-bike. It features a fan-forced oven that keeps pizzas piping hot at 68°C and an advanced suspension system that reduces g-forces by 67% for maximum stability. Due to roll out in select DPE markets, the dXb brings the Domino’s pizza oven experience right to the customer’s door. This report highlights how each of our markets is applying our global strategy to resonate with local customers. In FY24, we also implemented several global-wide initiatives including: In FY24, all markets lifted engagement on food delivery platforms - the digital food court for customers ready to eat NOW. In July 2023, Domino’s Pizza Inc (DPZ) signed a global partnership with Uber, which has helped expand our reach to new and incremental customers, while still using Domino’s Delivery Experts. We have also successfully integrated Uber orders directly into Domino’s ordering system for several markets, including ANZ, with more to follow. In 2024, we took Domino’s for Good Day (February 9) global for the first time. This special one-day fundraising initiative, held on World Pizza Day, sees a portion of the proceeds from each pizza sold donated to local charities. Together, we raised a record $592,000 (AUD) across all our participating markets! This year we launched the World Class Address (WCA) predictive address search for app and web ordering. This optimised address search for delivery means more customers than ever can successfully order Domino’s online, with all addresses within a geo-mapped address territory now accepted. This also means increased location accuracy for our stores to be able to deliver orders quickly and safely. WE ARE IN THE BUSINESS OF DELIVERING INSPIRED PRODUCTS AND SERVICES TO OUR CUSTOMERS WITH A FOCUS ON THREE KEY AREAS TO HELP US ACHIEVE OUR GOALS. DOMINO’S PIZZA ENTERPRISES LTD ANNUAL REPORT 2024 COMPETITION DPE operates in a competitive market. DPE’s financial performance or operating margin could be adversely affected if the actions of competitors or potential competitors become more effective, or if new competitors enter the market. DPE addresses this risk by closely monitoring the market in which it operates so that we can respond quickly to new competitors entering the market. REPUTATION AND BRAND DPE’s performance is reliant on its reputation and branding. Unforeseen issues or events which place DPE’s reputation at risk may impact on its future growth and profitability. DPE aims to mitigate this risk by nurturing mutually-beneficial relationships with key stakeholders and continuing to support local and regional community initiatives and fundraising events that align to DPE’s values. CONSUMER PREFERENCE AND PERCEPTIONS Like all food service businesses and quick service restaurants, DPE needs to respond to changes in customer tastes and preferences, and demographic trends. There could be a material adverse effect on DPE’s business and operating results if consumer preferences change. DPE addresses this risk through active customer engagement via social media, consumer data and research, innovative product development and updates to its menu offerings in each region. ONLINE ORDERING PLATFORMS Increasingly, the vast majority of DPE sales are conducted through online ordering platforms. DPE relies on third‑party data centres and expert Information Technology teams for developing and hosting these online platforms. Loss of platform or application availability or integrity would result in a short-term impact on DPE’s growth and profitability, including poor customer experience, revenue loss and potentially negatively impacting Franchisee Partner relationships. DPE mitigates this risk through controls and processes designed to protect the availability and functionality of these platforms – including data centre replication and other redundancy methods. CYBER SECURITY The ongoing and growing risk of a sophisticated cyberattack continues to threaten DPE’s operations. A cyber incident, including ransomware or a data breach, could negatively impact DPE by causing a disruption to operations, a compromise or corruption of confidential information, or damage to our employee and business relationships, any of which could subject DPE to loss or damage to the brand. DPE continues to invest in risk mitigation activities designed to prevent and detect cyber events and respond to and recover from any operational impacts. The 2023–24 financial year saw an extension of many of the social and economic challenges, and associated risks, experienced during the previous years. Information in respect to DPE’s assessment of the principal economic risks that could have a material impact on the company, and the company’s mitigation strategies for those risks is outlined below. OUR SOCIAL AND ECONOMIC LANDSCAPE SAFETY DPE employs people to run and operate stores, in a safe working environment, that provide food products to the public. A health or safety incident as part of store operations or a health incident of a supplier involving the input of the products it uses, could impact DPE’s financial results. DPE aims to address this risk through comprehensive internal food safety and quality practices, occupational health and safety practices, audit programs, customer complaints responses and supplier selection protocols. SUPPLY CHAIN Disruption to DPE’s supply chain caused by an interruption to the availability of key components and raw materials or environmental and social wrongdoings in its supply chain, may adversely affect sales and/or customer relations, resulting in unexpected costs. DPE aims to mitigate this risk by implementing a multi-sourcing strategy for the supply of raw materials, building long term relations with its suppliers, conducting supplier due diligence and risk management and entering into contacts that provide for the regular and timely procurement of raw materials. INFLATIONARY AND ECONOMIC CONDITIONS An economic environment characterised by high unemployment, increasing labour costs, rising interest rates, ongoing inflation, cautious consumer spending or changes in consumer practices due to a possible recession could impact the Group’s results. Most of these factors are beyond the Group’s control; however, the Group engages in a competitive bidding process for its ingredients and utility services, where possible, to reduce this risk over the medium-term. For customers, DPE has a range of pricing strategies that balance the need to deliver sustainable unit economics for our Franchisee Partners, while delivering fantastic value to our customers. We are proud of our ability to learn from what works and adapt quickly when it doesn’t. Our digital ordering solutions including app-only deals, extensive owned media channels, and community-focused marketing campaigns give us the opportunity to win new customers and repeat orders from our existing fans. FRANCHISE RISK DPE’s right to operate Domino’s Pizza stores and grant franchises in Australia, New Zealand, Europe, Japan and Taiwan is conferred by separate Master Franchise Agreements (MFAs). These MFAs may be terminated in certain circumstances, such as breach by DPE, its insolvency and failure to achieve growth targets. If a MFA in respect of a territory is terminated, DPE will lose the right to operate Domino’s Pizza stores in that territory and this will fundamentally impact on its business. DPE addresses this risk by maintaining a close working relationship with its Master Franchisor, and by actively monitoring compliance with obligations and operational standards. There is also a risk of DPE’s franchisees not operating their franchise in accordance with the terms and conditions of their respective franchise agreements. The consequences of non-compliance may include damage to the brand, fines or other sanctions from regulators, and/or a reduction in franchise fees received from the franchises. DPE mitigates this risk by continually monitoring and evaluating the financial and operating performance of each franchisee to actively assess compliance with executed franchise agreements and conducting random audits. FINDING AND KEEPING GOOD STAFF In every country, labour availability is challenged. Domino’s stores need to rise to this challenge, to retain and recruit team members. DPE has used locally-relevant approaches to attract people to the Domino’s family who may not have previously considered Domino’s as a job for them, or even a longer career. Using social media, partnering with other companies, and making the application process simpler, we targeted new groups through our recruitment campaigns. Internally, we are focused on providing genuine career‑building opportunities for our staff with easy‑access training programs and professional development workshops. “WE ARE FOCUSED ON PROVIDING GENUINE CAREER‑BUILDING OPPORTUNITIES FOR OUR STAFF.” 10 ANNUAL REPORT 2024 DPE HALL OF FAME THESE EXCEPTIONAL LEADERS HAVE BEEN RELENTLESS IN THEIR PURSUIT OF EXCELLENCE, DEFINED GENERATIONS OF DOMINOIDS, AND HELPED TO SHAPE OUR BUSINESS INTO WHAT IT IS TODAY. QUITE SIMPLY, THEY ARE DOMINO’S LEGENDS. CONGRATULATIONS TO OUR 2024 HALL OF FAME INDUCTEES! ANDRÉ TEN WOLDE - 2005 André has shown exemplary leadership in shaping Domino’s Europe, serving as CEO of Domino’s Netherlands and Belgium, Chief Operating Officer, Europe and, since 2020, CEO, Europe. He is dedicated to making Domino’s number one across the region, fostering innovation, collaboration, and continuous improvement within our business. JOSH KILIMNIK - 1992 Josh’s strategic vision and dedication has played a pivotal role in Domino’s success across multiple markets. Beginning as a Delivery Expert and rising to store manager, he briefly left Domino’s before returning in 2003 to serve as Franchise Consultant, National Procurement Manager, and General Manager of New Zealand. He later oversaw operations in Russia, Turkey, Ukraine, MENAP, and Sub-Saharan Africa for Domino’s Pizza Inc in Dubai. After four years as CEO & President of Japan, he now leads teams across the Asian region as Domino’s CEO, Asia. MICHAEL GILLESPIE - 2006 Michael has been instrumental in transforming Domino’s into one of Australia’s foremost online and digital retailers. In his roles as Group Chief Digital Officer and Group Chief Commercial Officer, he helped develop DPE’s online ordering platform from its infancy into an advanced global ordering system that now handles more than $3 billion in sales. His passion for innovation also resulted in many industry firsts, including Australia’s first mobile pizza ordering app and the world’s first pizza delivery by drone. DAVID BURNESS - 1991 Dave’s journey with Domino’s is a story of passion, resilience, and a genuine love for what he does. He is one of our most awarded franchise partners, including Franchise Partner of the Year, five Domino’s Leadership Eagle awards and a DPE Global Golden Eagle. As Group Culture Coach and former ANZ CEO, he has not only shaped the way we work, but also inspired countless others to reach greater heights. KELLIE TAYLOR - 1993 Kellie exemplifies Domino’s core values of teamwork, dedication, and customer focus. She has held various roles in her 30 years with the business including working in Training and Compliance (OER) for two decades before moving to Denmark in 2019 to take on the role of Country Manager. In her current role as Domino’s Group Head of Operations Compliance based in EU, her wealth of knowledge and experience truly sets the gold standard for five-star operations. STOFFEL THIJS - 1997 Stoffel played a defining role in in the success of our European operations with his deep understanding of Domino’s, boundless energy, and record-breaking mentality. Starting as a Delivery Expert at age 16, he progressed to regional manager and eventually into franchise ownership. His leadership was pivotal in establishing our corporate store system in the Netherlands and in the acquisition of Joey’s Pizza in Germany. His six-year tenure as CEO of Germany drove exceptional results for our business and franchise partners, and has positioned the country as one of DPE’s top performing markets. ANNUAL REPORT 2024 ANNUAL REPORT 2024 DOMINO’S PIZZA ENTERPRISES LTD 12 Q C S ANZ CEO REPORT More specifically, I invited franchise partners, team members and leaders from across the ANZ business to join me for dinner at my home in Brisbane. Just as our pizza brings people closer, these shared meals provided an opportunity to listen and learn, reflect on all we had achieved together in a remarkable four decades of operations, and, most excitingly, forge our vision for the future. It has been an immense pleasure to be part of the journey that followed, and I am thrilled to report Domino’s ANZ has delivered its best performance in six years. Despite fewer store openings, reflective of wider external challenges like inflation, Same Store Sales grew +7.94% in Australia/New Zealand. Our focus on product differentiation, capturing more eating occasions, and strengthening our presence on digital platforms, especially aggregators such as Uber Eats, has yielded great success. Domino’s was the fastest-growing pizza company in Australia in FY24 in terms of spend and customer count, with 51 per cent of all pizza purchased in Australia being a Domino’s pizza. We demonstrated our commitment to offering more choice and value with our hugely One of the first things I did after it was announced 12 months ago that I would be ‘double hatting’ as both DPE Group CEO and Domino’s Australia and New Zealand CEO was to eat. successful MORE campaign, which has inspired Domino’s markets worldwide. We delighted customers with eatertainment like the Cheesy Volcano, introduced an affordable on-the-go snacking solution, Meltzz, and saw great adoption of the My Domino’s Box across all parts of the day. We further solved one of the greatest crimes of the QSR industry – being delivered soggy chips – by innovating to create Australia and New Zealand’s first Crispy Chips with Pizza Salt that stay hot and crunchy all the way to the customer’s door. Our new pizza boxes are also crafted from tougher, 100 per cent recycled corrugated cardboard, ensuring product quality and freshness are maintained throughout the entire delivery process. Under our Project Care initiative, we enhanced the customer experience with faster, more effective responses to customer feedback. This has contributed to a boost in overall customer satisfaction. We also continued to help our people grow and prosper, including launching the inaugural Women in Domino’s Grants, and in making positive contributions to our communities. Most notably, we rebranded our charity to Minds & Meals, focusing on youth mental health and disaster relief, and raised a record $373,000 on World Pizza Day (9 February). Additionally, our Feed the Knead program delivered more than 130,000 free pizzas to those doing it tough and reached a milestone of more than 200,000 pizza donations since inception. I am immensely proud of the substantial progress we have achieved in ANZ this year, benefiting both our customers and franchise partners. I eagerly anticipate even bigger wins to come! DON MEIJ CEO, ANZ DOMINO’S WAS THE FASTEST GROWING PIZZA COMPANY IN AUSTRALIA IN FY24 „ „ ANZ ANZ QUICK BITES STORES 898 NETWORK SALES: $1,457M EBIT $124.1M (+10.4%) 41 MANAGERS BECAME FRANCHISE PARTNERS BIGGEST MENU REFRESH SINCE 2020 NATIONAL CHARITY REBRANDED TO MINDS & MEALS 7 WOMEN IN DOMINO’S GRANTS AWARDED AUSTRALIA & NEW ZEALAND 14 ANNUAL REPORT 2024 40 YEARS OF DOMINO’S IN ANZ 2023 was a milestone year for Domino’s in ANZ with the Australian business celebrating 40 years’ of operations and New Zealand celebrating 20 years. Here’s a few highlights of the journey so far! PIZZA, PEOPLE & POSSIBILITY 1983 Domino’s opened its first store outside North America in Springwood, Queensland, on December 27, 1983. 1987 Domino’s future Group CEO and Managing Director Don Meij joined Silvio’s Dial-A-Pizza as a delivery driver in Redcliffe, Queensland. 1994 Silvio’s took management control of Domino’s, even- tually re-branding as Domino’s Pizza Australia Pty Ltd (later DPE), All Silvio’s Dial-A-Pizza outlets are conver- ted to Domino’s in 1995. 1996 The debut of our iconic slogan – ‘I’ve got the hots for what’s in the box with the dots!’. 2000 Domino’s introduces the Hot Cell – Australia’s first electronic hot bag! 2002 Following the merger of franchise partners Don Meij and Grant Bourke’s 25 stores in exchange for a shareholding in the company, Don Meij became Domino’s Pizza Australia Chief Executive Officer (CEO). 2003 Kia ora New Zealand! We expanded to our first market outside Australia, opening four new stores in the capital of Wellington – Johnsonville, Petone, Upper Hutt and Porirua.d Porirua. 2005 Domino’s listed on the Australian Securities Exchange (ASX) becoming the country’s first publicly listed pizza company. Mobile phone and internet ordering also arrives. Just 0.1% of sales were delivered through the online platform back then. Today more than 80% of our orders are digital. 2006 The debut of our most popular pizza crust EVER – Puff Pastry Crust! We were so excited we decorated a whole plane to promote it. 2007 The Meat Pie Pizza makes headlines in Australia. 2009 Developed our first mobile ordering app and launched the Chocolate Lava Cake. 2012 Domino’s Bundaberg in Queensland broke the Guinness World Record for the most pizzas made in one hour. In just 60 minutes, the team made a whopping 837 pizzas! 2013 Completed the world’s first pizza delivery by bungee in Queenstown, New Zealand, to celebrate the opening of ANZ’s 600th store. 16 ANNUAL REPORT 2024 ANNUAL REPORT 2024 DOMINO’S PIZZA ENTERPRISES LTD 2015 Launched GPS Driver Tracker and rolled out e-bikes. 2016 Completed the world’s first pizza delivery by drone from Domino’s Whangaparaoa in Auckland, New Zealand, and introduced DRU (Domino’s Robotic Unit) - a world first in commercial autonomous delivery. 2018 Opened our 700th store in Australia at Flagstone in Queensland. 2019 Launched DOM Pizza Checker - a smart scanner located above the cut bench that uses artificial intelligence to check the quality of every pizza. Also held a nationwide search for a Chief Garlic Bread Taste Tester. 2020 DPE stores donated more than 220,000 pizzas to frontline workers during the Covid-19 pandemic and ANZ stores launched the Feed the Knead program to provide support with free pizza to those doing it tough. We also gave one lucky customer a diamond en-crust- ed pizza slice engagement ring! 2021 Australia released the iconic Sausage Sizzle Pizza and Cheesy Vegemite Pizza. 2022 The first Domino’s for Good Day was held on February 9, New Zealand opened its 150th store in Orewa, and the Mobile Pizza Kitchen (MPK) made its debut. 2023 ANZ introduced Crispy Chips with Pizza Salt designed to be delivered and the My Domino’s Box. O O G We were incredibly honoured to welcome Domino’s founder Mr Tom Monaghan to our Domino’s ANZ Rally on the Gold Coast in March. In 1960 Tom, and his brother James, borrowed $500 to purchase a small pizzeria in Michigan, USA. A year later Tom bought James’ share of the business for a Volkswagen Beetle and would go on to build the leading pizza company in the world, Domino’s Pizza, with more than 20,000 stores in over 90 countries! Every pizza slice has Mr Monaghan’s legacy baked into it. His obsession with ‘Handling the Rush’ and always taking pride in Product, Service and Image remain cornerstones of Domino’s success today. Thank you for generously sharing your story Mr Monaghan and for continuing to inspire generations of Dominoids! 1995 ANNUAL REPORT 2024 ANNUAL REPORT 2024 TOM MONAGHAN 18 DOMINO’S PIZZA ENTERPRISES LTD ANZ HIGHLIGHTS FOOD MORE RANGE THE LOT PIZZA This year was all about giving our customers MORE when the rising cost of living was giving them less. More choices, more toppings, more value, more eatertainment. The MORE Campaign was our biggest menu refresh since 2020 with 15+ new pizzas, pastas and sides. Utilising mostly existing menu ingredients, these products offered excellent value for our customers while also keeping food costs lower for our franchise partners. Together with a fun, high energy promotional campaign featuring Billy Idol’s iconic song Rebel Yell - that has since been adopted by other markets - Domino’s truly answered the call to deliver More! More! More! Our most topped pizza ever – a whopping 15 toppings! Customers who could recite The Lot Recipe Rhyme were rewarded with a free pizza during launch week. 29 DOMINO’S PIZZA ENTERPRISES LTD 18 ANNUAL REPORT 2024 MY DOMINO’S BOX & MELTZZ By expanding our menu to cater for more meal occasions, we have been able to reach more customers throughout more parts of the day. In fact, Domino’s was the fastest growing lunch QSR in Australia for the past two quarters* following the introduction of the My Domino’s Box and Meltzz. The My Domino’s Box, where customers can select a mini pizza and two sides (sweet or savoury), offers great value and variety, especially for single eaters. We further enhanced our Box range this year with the pre-selected convenience of the Mega Box, Value Box and Dessert Box. For on-the-go snacking needs, our new Meltzz offered a satisfying solution: indulgent pizza toppings wrapped in a thin and crispy pizza base and baked to perfection. Both Meltzz and My Domino’s Box can be aligned with all new menu flavours, making them cost-efficient while also increasing customer appeal. *Source: CREST®, Australia, Quarter End Mar 2024 DOMINO’S CRISPY CHIPS WITH PIZZA SALT Australia and New Zealand’s first Crispy Chips designed to be delivered. We developed a special chip batter to prevent sogginess and maintain optimal temperature and crispiness from our super-hot ovens all the way to the customer’s door. Finished with a dusting of Domino’s very own Pizza Salt, these really cracked the code on crunch and deliciousness. SMOKEHOUSE MEATS Slow cooked to perfection over sustainably sourced Australian wood chips, our succulent Smokehouse Meats range, including the Smokehouse Meatlovers Pizza and Smokehouse BBQ Pork Belly Pizza, showcased Domino’s ability to offer high-quality products at great value price points. 20 A celebration of everyone’s favourite pizza topping: cheese! The star of the show, the Cheese Volcano, was this year’s top eatertainment. Inspired by Domino’s Japan, we successfully adapted the Volcano – fresh dough topped with molten-hot, liquid cheese – for the Australian and New Zealand markets. With a focus on exceptional taste and indulgence, this campaign also saw the return of the cult-favourite Double Decadence Crust: a rich and gooey cheese sauce made from cheddar and parmesan, layered between two crispy bases and topped with our new stretchier, tastier signature Mozzarella. MORE CHEESE BRAND In July, Domino’s Pizza Inc (the franchisor parent of DPE) signed a global agreement with Uber that allowed Uber One subscribers in Australia and New Zealand to use their membership to unlock free delivery on every Domino’s order (commencing from October 2023). This meant even greater value for local customers when ordering their favourite Domino’s pizzas, while also giving our stores exposure to Uber’s high-frequency customers. Together with an increase in targeted promotional activity, this has helped drive a massive 44 per cent increase in Uber sales in Australia versus last year. Additionally, we began trialling third-party delivery using Uber drivers to deliver orders received through the Uber Eats platform in non-core times (such as late night). This enables stores to offer extended trading hours whilst optimising labour costs. Some stores now open as early as 9.30am (compared to the standard opening time of 11am) and close later, increasing their ability to reach more customers. Our own Domino’s delivery fleet got a fresh new look with the bold One Face design, and we road-tested the delivery bike of the not-too-distant future, the dXb, with its own built-in oven. We also launched an exciting new style of box in Mini, Large and Extra-Large sizing that has been engineered to better protect our pizzas when on the move. The ‘D box’ is unique to Domino’s, carrying the iconic ‘D’ shape on the outer side, and is made from 100 per cent recycled materials and uses 5% less cardboard than our previous packaging. In store we began trialling Digital Ordering Kiosks, based on proven models from our European markets, which allow customers to browse and order products via touch screen. In August we launched Project Care with the goal of reducing the customer feedback response time. Using a mix of human responses and artificial intelligence we were able to slash the average response time from more than 50 hours to less than 12 hours. A faster response time not only increased the likelihood of repurchase, but the overall customer satisfaction score increased by 36 per cent. More widely, Domino’s achieved positive feedback for several fun campaigns including our ‘Pepperoni Budgy Smugglers’ and ‘Pepperoni Scented Air Fresheners’ giveaways, our April Fools’ pizza breakfast cereal ‘Domin-O’s’, and a Pizza Hand Model Search that made headlines around the world. We were also excited to partner with Aussie ‘Lambassador’ Sam Kekovich for our Lamb Campaign, and skateboarding legend Tony Hawk – who delivered a pizza in Domino’s uniform on his famous wheels - to celebrate the 25th anniversary of his Pro Skater game. In October, Kerri Hayman, one of the brand’s trailblazing Australian pioneers and most experienced leaders with 35+ years in the business globally, officially commenced in the role of Domino’s ANZ Chief Operating Officer. In December, New Zealand also welcomed a tenured Domino’s operations leader, Ross Kruger, as General Manager. PEOPLE Kerri Hayman ANZ Chief Operating Officer In March, we proudly launched the Women in Domino’s Grant as part of our commitment to promoting greater female representation within our business. Seven exceptional female store managers from across ANZ (including New Zealand’s Jashanpreet Kaur, featured on page 25) were awarded a $50,000 grant. This grant supports their aspirations to franchise their own store, along with providing a 12-month mentorship by experienced franchise partners and Domino’s business leaders. We were also thrilled to see 41 managers or regional leaders across ANZ become franchise partners this year, as well as 115 frontline team members complete DPE’s Emerging Leaders Program and 90 future franchise partners take part in the intensive Franchise Academy course. A year on from launch, DPE’s custom learning app, Path to Excellence, has successfully established itself as an essential part of the Domino’s training toolbox with the release of 40 new eLearning modules and 293,380 course completions by team members across ANZ. In February we rebranded our registered charity from Give for Good to Minds & Meals to focus our giving efforts on two key areas our people and customers are passionate about: youth mental health and disaster relief. We have partnered with headspace in Australia and Youthline in New Zealand to help best deliver this support. Additionally, we donated $10,000 to Disaster Relief Australia following severe weather events in Queensland, and $5,000 to support communities affected by the Port Hills Fire in New Zealand. Together with our franchise partners, we delivered more than 130,000 free pizzas through our Feed the Knead program and reached a milestone of more than 200,000 donations since the program’s inception in 2020. Our annual Domino’s for Good Day on February 9 (World Pizza Day) was our most successful fundraising event to date – raising $373,000 for Minds & Meals, which was a massive 137 per cent increase on the previous year! This was also the first time we held Domino’s for Good Day across other global markets, enabling us to raise $592,000 (AUD) overall. Our extraordinary customers also generously rounded up 1.1 million orders for charity over the past 12 months with an average of 55c each donation. In total for FY24, we raised $575,000 across ANZ for Minds & Meals. Our internal trust, The Partners Foundation, also proudly assisted 47 Dominoids and their families experiencing personal or financial hardship this year. DOMINO’S PIZZA ENTERPRISES LTD IT REALLY WAS A CASE OF SINK OR SWIM FOR FRANCHISE PARTNERS VRUJAL PATEL AND SARANG PATEL. Their St Lucia store was impacted first by the pandemic, which forced the closure of the university campus it serviced, followed by one of the country’s most devastating floods. “We certainly had a tough time, but we knew it was not going to last forever,” Sarang says. Incredibly, they have already more than doubled their sales from their Covid low, set four new sales records last year, and even expanded to a fifth store. They credit Domino’s High Volume Mentality (HVM), as well as a relentless focus on providing the best possible customer experience, for helping them get back on track. “One thing we always tell our team members to remember is: great product and service is key for customer satisfaction. “As long as you have customer growth, you will have positive sales.” The pair first franchised in 2014 at The Gap, adding the St Lucia store the following year, and later partnering with their store manager Virendrasinh Rathod to take on Beenleigh and Windaroo in 2021. While they liked the idea of “being our own boss” by franchising, they say the real highlight has been the people and helping others become their own pizza-prenuers. “Last year we got an opportunity to bring in Beenleigh store manager Ashrut Mehta as a business partner in the Kingscliff store. It was so satisfying to see Ashrut become a business partner as he started his Domino’s career as a Delivery Expert at St Lucia!” NAME Sarang Patel and Vrujal Patel POSITION Franchise Partners STORES The Gap, St Lucia, Beenleigh, Windaroo, Kingscliff LOCATION Brisbane, Queensland, Australia AUSTRALIA SPOTLIGHT SARANG PATEL Chemnitz Markersdorf, Chemnitz Siegmar, Glauchau, Freiberg 24 ANNUAL REPORT 2024 SARANG PATEL & VRUJAL PATEL STORE MANAGER JASHANPREET KAUR CERTAINLY DID HER HOMEWORK BEFORE JOINING DOMINO’S. “During my studies in 2018, I got the opportunity to complete my research internship at Domino’s Massey. This enabled me to really understand the Domino’s environment and culture and from that time, I thought, ‘I have to work for Domino’s!’” She says she was impressed by the investment in training and development, strong focus on customer satisfaction and use of innovative technology to continually improve the ordering experience. “The other thing I personally believe makes Domino’s different is its commitment to the community, engaging in local charity initiatives and fundraising efforts. All these factors set Domino’s apart and why it’s a great choice.” Now as one of the first recipients of the Women in Domino’s Grants – an initiative supporting female store managers to become franchise partners – Jashanpreet is poised to lead her own masterclass in success. “I feel empowered, inspired and grateful. It’s a celebratory moment for me. This is the first step towards opening my first store. I am excited to become a franchise partner and make a positive impact.” To others looking to turn their business ownership dreams into reality, she says: “Never give up, believe in yourself. Define your goals and make a plan to get there and be willing to put in the effort. Find the role models who can guide and encourage you, celebrate your wins - and always make pizzas with passion and love!” NAME Jashanpreet Kaur POSITION Store Manager and Women in Domino’s Grant Recipient STORE Morrinsville LOCATION North Island, New Zealand NEW ZEALAND SPOTLIGHT JASHANPREET 26 ANNUAL REPORT 2024 JASHANPREET KAUR EUROPEAN CEO REPORT Reaching new customers has been a key focus in France, following a sharp decline in customer counts after the market attempted to offset inflation and wage pressures with inconsistent, and, in some cases, prohibitive, pricing adjustments. Our priority now is on rebuilding and effectively engaging our French franchise partners to implement proven strategies, especially around pricing and execution. While some store rationalisation is expected, we have already seen encouraging signs of improvement. France’s Burger Pizza range resonated strongly with local consumers and the overall customer satisfaction rating increasing 37 per cent on last year. France also introduced an innovative new ordering experience, the 24-hour Domino’s Vending Machine. In the Netherlands, Belgium and Luxembourg, we took notable steps towards achieving our sustainability goals with initiatives such as Project Golf. Based on learnings from France, this reduced the number of deliveries required to 500 Domino’s stores in the Benelux region by fitting 80% more dough balls per tray. DPE also announced a strategic partnership with Netherlands-based ImpactBuying, to further support our responsible sourcing efforts. Both Domino’s Netherlands and Belgium celebrated significant milestones this year – marking 35 years and 30 years of operations, respectively. The Netherlands was also recognised with a Gold Franny Award by Domino’s American brand owner for outstanding market performance. Such longevity and achievements are a reminder that Europe has faced, and overcome, numerous obstacles. I am confident the same resilience, and unwavering commitment to excellence will continue to carry us forward. ANDRÉ TEN WOLDE CEO, EUROPE WITH FOOD AT THE HEART OF EVERYTHING WE DO, WE HAVE WORKED HARD TO OFFER OUR CUSTOMERS MORE INSPIRED MENU CHOICES FOR MORE DINING OCCASIONS WHILE ALSO DELIVERING MARGIN FOR OUR FRANCHISE PARTNERS.„ „ 28 The effects of inflation continued to persist across Europe this year, with cautious consumer spending and higher labour costs proving challenging. An ongoing war on our doorstep and the lingering impacts of COVID-19 have also made these far from easy times. I am immensely proud of the way our teams have risen to these challenges, and committed to reigniting growth with renewed focus and determination. I am pleased to report in FY24 we delivered an Underlying EBIT of $70.7m up +33.8% compared to last year. This result was driven primarily by earnings improvements in Germany - which welcomed new CEO Alex Taur in December - after significant inflation the year prior. Additionally, one-third of the savings from our group restructuring program has been reinvested back into our franchise partner network. With food at the heart of everything we do, we have worked hard to offer our customers more inspired menu choices for more dining occasions while also delivering margin for our franchise partners. New products like the My Domino’s Box and Meltzz have bolstered our menu with affordable entry points for customers, while our eatertainment offerings, such as Germany’s Chicken Döner Pizza and the Netherlands Orange Tompouce Thick Shake, have given us an edge in a very competitive QSR (Quick Service Restaurant) marketplace. This year Germany also successfully launched Europe’s first Mobile Pizza Kitchen (MPK), and we increased our visibility on aggregator food delivery platforms across all markets to drive valuable incremental sales. DOMINO’S PIZZA ENTERPRISES LTD ANNUAL REPORT 2024 EU EU QUICK BITES STORES 1,380 NETWORK SALES: $1,703M EBIT $70.7M (+33.8%) NETHERLANDS DELIVERS A RECORD 4,500 PIZZAS IN THREE HOURS GERMANY ROLLS OUT EUROPE’S FIRST MOBILE PIZZA KITCHEN FRANCE INTRODUCES 24-HOUR PIZZA VENDING MACHINES BELGIUM CELEBRATES 30 YEARS OF OPERATIONS EUROPE GERMANY HIGHLIGHTS PRIME BURGER PIZZA Featuring high-quality ground beef and classic burger ingredients such as tomato ketchup, pickled cucumbers and creamy mayonnaise, this was another fun reinvention of a consumer favourite with added pizzaness. The name ‘hamburger’ itself even originates from the city of Hamburg, which is home to Domino’s Germany! FOOD CHICKEN DÓNER PIZZA DOMINO’S BOX The döner kebab ranks among Germany’s top-selling dishes, with approximately 2.5 million kebabs sold daily nationwide. The Chicken Döner Pizza was our most successful product launch to date - even out-performing traditional favourites like the Margherita and Salami pizzas during the promotional period. With its fusion of fresh Domino’s pizza dough and full kebab flavor (creamy garlic sauce, red onions, spicy chicken kebab meat and topped with crispy fresh romaine lettuce and spicy cocktail sauce) we transformed this loved street food into an even better, made-to-be-delivered experience at home! In September we launched the Domino’s Box to make our menu more accessible for solo diners, particularly at lunch, and those wanting to enjoy multiple items without breaking the budget. The versatility of the Domino’s Box means our customers have a great value snacking solution available to order anytime, day or night, contributing to more incremental sales opportunities for our franchise partners. GERMANY HIGHLIGHTS ANNUAL REPORT 2024 30 BRAND In April we rolled out Europe’s first Mobile Pizza Kitchen (MPK), which allows us to reach more customers in even more locations across Germany. With a fully operational Domino’s store onboard, the MPK is operated by a local franchise partner and offers both convenience and eatertainment for pizza lovers to watch their meals being freshly prepared. The MPK was developed by ROKA-Werk, Germany’s leading manufacturer for the mobile catering industry, who said the distinctive 12-tonne pizza truck had set new standards in the mobile kitchen sector. Domino’s ‘out of the box’ thinking also inspired a multi-channel brand refresh led by creative agency Jung von Matt. The “Domino’s Iss nich normal” (is not normal) campaign aims to highlight Domino’s innovative legacy and dedication to providing the ultimate customer experience. Inflation continues to affect consumer purchasing behaviour, especially in Germany - one of Europe’s hardest-hit economies. However, Domino’s Germany was proud to be recognised as one of the country’s most popular online food delivery services in 2023 and was also DPE’s top-performing delivery market for FY24. Recognising a substantial opportunity to also grow our carry- out business,, we introduced a new ‘always on’ offer of a 20% discount on all carry-out orders to further entice customers to our stores. THE DISTINCTIVE 12-TONNE PIZZA TRUCK SET NEW STANDARDS IN THE MOBILE KITCHEN SECTOR. „ „ In December, Alexander Tauer was appointed CEO of Domino’s Pizza Germany. Alex brings significant leadership experience, having previously been Head of Franchise Operations, Development Director and most recently Chief Operating Officer. PEOPLE Alexander Tauer CEO of Domino’s Pizza Germany This year we were also excited to launch our first Azubi Pizza Competition. Azubis (short for Auszubildende) refer to those undertaking vocational traineeships in Germany. Twenty trainees from across the country entered the competition to create their own pizza from existing ingredients, meet all Domino’s product guidelines, and present their pitch to a panel of experts. The winner, Udai from the Domino’s Pizza Berlin Wedding store, wowed the judges with his ‘Chicken Cheese’ pizza with cream sauce, chicken, fresh mushrooms, sweetcorn and fried onions. The pizza was later sold 45,000 times during a limited edition run on the national menu! The spotlight once again shone on Berlin in November, with the Charlottenburg Nord store setting a new delivery time record of 7.8 minutes. We also successfully onboarded team members to the Path to Excellence training platform and celebrated our first Franchise Partner Appreciation Week, where members of the Support Office visited stores to offer hands-on help. DOMINO’S PIZZA ENTERPRISES LTD 32 ANNUAL REPORT 2024 WHAT’S THE REAL SECRET SAUCE OF THE PIZZA BUSINESS? “WE ARE SELLING ONE OF THE MOST LOVED PRODUCTS IN THE WORLD,” SAYS FRANCHISE PARTNER ALEX FAUST. “MAKING PEOPLE HAPPY IS OUR MISSION.” It’s something Alex learned first-hand after joining Domino’s as a Delivery Expert in 2015. “I liked driving and I liked pizza! What I did not expect was for it to be that much fun. “We focus on customer satisfaction, we deliver quickly, and we do it always with a smile. “I especially love being part of the community in my town. We do special events, both for our marketing goals, but also to have a fun time as a team. Many things have become a tradition over the years.” Prior to franchising, Alex served as store manager, marketing manager and area manager in both the franchised and corporate areas of the business. “I moved to different cities and had many experiences that shaped my journey with Domino’s,” she says. “I challenged myself to learn, grow sales, be creative, and how to be a team leader. I opened new stores and helped develop the business with great help and support from my- then franchise partners. I learned to set and focus on personal goals, with the biggest highlight so far being when I became a franchise partner in 2023.” Not surprisingly, Alex has embraced store ownership with equal passion and determination, already achieving multiple record sales weeks. “This was an overwhelming feeling, because I had just started my new path as a franchise partner. “I can’t wait for what’s next. We are hungry for more sales, more pizzas, more innovations. I also plan to be multi-unit owner in the future.” NAME Alex Faust POSITION Franchise Partner STORE Zwickau Innenstadt LOCATION Zwickau, Saxony, Germany GERMANY SPOTLIGHT ALEXANDRA Chemnitz Markersdorf, Chemnitz Siegmar, Glauchau, Freiberg 34 ANNUAL REPORT 2024 ALEXANDRA FAUST FOOD MORE CANNIBAL BURGER PIZZAS SWEET, SAVOURY & SAUCY SNACKS MY DOMINO’S BOX We delivered MORE of what our customers love this year by launching three new versions of our best- selling Cannibal pizza: the Mega Cannibal with extra meat and cheese, the Crispy Cannibal with crispy fried onions, and the Harissa Cannibal for a spicy kick. We also added two new flavours to our Cal’z range - BBQ & Meats, and Spicy & Meats, with double the meat and sauce. A hit for pizza and burger lovers alike! Available in three options – original burger, bacon BBQ, and crispy chicken, the quirky fusion of two favourite foods quickly became a national ‘trending topic’ when launched in February, while social media activations amplified customer engagement. With snacking one of the fastest growing opportunities in the QSR industry, we expanded our snacking range this year to satisfy even more customer cravings. This included four new flavours of chicken wings, generously coated with sauce or spices, new ‘Cheeky Fries’ topping options, such as Harissa and Burger, and sweet treats like Hot Cookiminos, ice creams (glacés) and frappés. The French My Domino’s Box offers a small pizza or a Cal’z and two sides (sweet or savory) from more than 500 possible combinations. With the aim of appealing to new customers for more occasions, without relying on discounting, the My Domino’s Box has helped reinvent the lunch break with a complete and customisable meal for one at an attractive price point. FRANCE HIGHLIGHTS BRAND Work continued this year to improve collaboration with franchise partners to develop effective pricing strategies and growth initiatives to capitalise on France’s lucrative position as one of the largest consumers of pizza on the planet. France was particularly proud to be the first Domino’s in the world to launch the 24-hour Domino’s Pizza Vending Machine. Following a successful trial, several pizza vending machines were installed in seven locations around the country. After the customer confirms the order with the push of a button, the pizza is cooked hot and fresh in less than four minutes. The Domino’s Pizza Vending Machine has helped revolutionise convenience for pizza lovers and created additional sales opportunities for stores – even when they are closed. We have also stepped-up engagement on aggregator platforms, including being the first DPE market to trial third-party deliveries by Uber Eats. We have seen a 40 per cent increase in Uber orders calendar year to date. The integration of Uber orders directly into Domino’s store ordering system - eliminating the need for manual input from a tablet - has made the ordering process even more seamless for both customers and stores alike. Another area where we are harnessing technology to elevate the customer experience is through feedback management. The average time for a customer to receive a response from a store after leaving feedback is now less than a day. Together with improvements in operations, our customer satisfaction rating has jumped 37 per cent on last year. We were also proud to support young people in our communities through various national fundraising efforts for the Fondation Domino’s, which promotes equal access to education, 71 260 € in FY24. We additionally welcomed participants from raising the “Sport dans la Ville” program into our Lille Ronchin and Lille Belfort stores to learn about Domino’s career opportunities. We had some fun this year with our special “Triominos” (triangular dominoes pieces) promotion in collaboration with Goliath Games and our Spooky Halloween Pizza featuring a deliciously terrifying black garlic sauce by Heinz. We were also thrilled to be named “Best Pizza Brand” for the eighth consecutive year in an annual French consumer survey. DOMINO’S PIZZA ENTERPRISES LTD ANNUAL REPORT 2024 36 Effective franchisee engagement, particularly in aligning marketing strategies and pricing, remains a priority in France. Increased costs due to inflation and minimum wage rises have been challenging, but we were proud to open 14 new stores in FY24 and another 10 future franchise partners completed our Emerging Leaders program. PEOPLE We also saw the highest attendance at our French Rally in recent years (600+ attendees) where store manager (and soon-to-be franchise partner) Noman Abdullah Al from the Paris 12 store set a new record of 51 seconds for making three perfect pizzas in the Fastest Pizza Maker competition. WE ALSO SAW THE HIGHEST ATTENDANCE AT OUR FRENCH RALLY IN RECENT YEARS „ „ DOMINO’S PIZZA ENTERPRISES LTD ANNUAL REPORT 2024 38 THERE’S SOMETHING UNIQUELY SPECIAL ABOUT BECOMING THE OWNER OF THE FIRST DOMINO’S STORE YOU LEARNED TO MAKE PIZZAS IN. For Romain Drode, this proud moment occurred just six years after he began working part-time at Domino’s Cambrai in northern France. In 2015 he became franchise partner of the store, and 12 months later franchised nearby Saint Quentin, where he had previously been promoted to store manager. In 2022 he successfully opened his third store at Caudry. “The power of the brand is so strong, if we respect the processes… we have the opportunity to grow,” he says. “Even without studies or diplomas, if you really want to and are passionate - you can achieve it. “We have the best product, fresh dough and ingredients, and our operational processes and knowledge make success possible.” Romain says Domino’s entrepreneurial culture has unlocked plenty of pizza-bilities during his 15-year career, both for himself and his team members. “The highlight for me is definitely seeing my people grow in a professional aspect, becoming team or store leads, but having personal wins thanks to their job as well.” It’s fair to say that Romain’s flourishing pizza empire is also a significant personal triumph, with his brother, Sébastien, managing the Cambrai store, his sister, Marie, overseeing the Caudry store, and his wife, Pauline, and nephew Léo also actively involved in the business. “I’m really proud to work with my family and I can’t wait to see what’s coming to Domino’s next to reinforce our number one rank in France and everywhere around the world!” NAME Romain Drode POSITION Franchise Partner STORES Cambrai, Saint-Quentin, Caudry LOCATION Cambrai, Haut de France FRANCE SPOTLIGHT ROMAIN DRODE Chemnitz Markersdorf, Chemnitz Siegmar, Glauchau, Freiberg 40 ANNUAL REPORT 2024 ROMAIN DRODE FOOD THIN & CRISPY AND MELTZZ ORANGE TOMPOUCE THICK SHAKE MY DOMINO’S BOX Refreshing and improving our core menu is a key strategy for appealing to more customers and this year that included introducing a brand-new crust option for the Dutch market: the Thin & Crispy base. This also enabled us to add another snacktastic product to the menu – Meltzz. The deliciously crispy pizza base is folded and filled with sauce, melted cheese and five topping flavours ranging from Pepperoni to Tuna. To celebrate our national holiday ‘Kingsday’ on April 27 – one of our busiest days of the year, with 36 stores achieving record sales – we introduced a limited-edition Thick Shake inspired by the beloved Dutch pastry tompouce (thick cream sandwiched between two thin layers of puff pastry and topped with icing). For extra eatertainment, we turned the thick shake our national colour – bright orange! The My Domino’s Box has proven extremely popular since being introduced in February, with one in seven orders now including a box option. We also capitalised on the excitement of the European Championship in June by using the My Domino’s Box to create shareable ‘Snack Boxes’ conveniently packed with tasty sides or desserts to support hungry football fans at home while they supported their teams! NETHERLANDS HIGHLIGHTS BRAND In 1989, Domino’s opened its first store in the Netherlands in Breda. As we mark our 35th anniversary of operations in 2024, we are incredibly proud to be the number one pizza delivery company in the country and the largest QSR (Quick Service Restaurant) by store count. This achievement is notable given the rise (and fall) of many ‘flitsbezorgers’ (flash food delivery services) in recent years and the unprecedented demand in the retail delivery sector overall. We continued to pursue additional opportunities to expand our reach and connect with even more customers this year, including boosting our presence on aggregator platforms to drive incremental sales. We increased the number of stores on Uber Eats from 35 in January to 220 by June. We also introduced convenient new payment methods like Apple Pay and Google Pay. To say thank you to our customers and celebrate our 35th birthday, we launched a special G.O.A.T (Greatest Of All Time) campaign where people could vote to put their favourite Domino’s pizza from the past back on the menu. We received more than 10,000 votes with the classic Frikan’Dutchman pizza being named the winner. We also made national news for our cheeky April Fools’ Day menu item – “Just Crusts”: pizza crusts served with a special ‘Domino’s After Dinner Dip’. In October, we trialled a new concept to make our e-bike riders safer and more visible at night by using an interactive lighting system on the rider’s jacket designed by students from the University of Twente. We were also recognised in the Top 10 best companies to work for in the Netherlands for part-time jobs – a jump of 42 places since 2022! In addition to Project Golf and our new partnership with ImpactBuying (see page 28), we continued to prioritise sustainable initiatives. This included donating our entire ‘plastic fee’ (a mandatory tax on takeaway plastic cups and containers) to the Plastic Soup Foundation to help combat plastic pollution globally. Ninety-five per cent of our packaging is already plastic-free and we are actively sourcing alternatives for the remaining five per cent. DOMINO’S PIZZA ENTERPRISES LTD ANNUAL REPORT 2024 42 Despite challenges from a rise in national labour costs, it was a remarkable year of achievements for our people – culminating in Team Netherlands being awarded the prestigious Gold Franny by Domino’s International. This award recognises outstanding performance in sales, product quality, service, operational standards, community involvement, and food safety. PEOPLE We had additional wins on the world stage with supervisor Natascha Hoogerheide representing the Netherlands at the Fastest Pizza Maker finals in Las Vegas (see page 45), Makaya Koomans receiving the Store Manager of the Year 2023 Award for Europe, and Jesper van Oorschot honoured with the DPE Global Support Team Member of the Year 2023 Award. In September, Domino’s Netherlands again demonstrated its market-leading delivery expertise by completing the largest single delivery ever within DPE, successfully delivering 4,500 pizzas in just three hours from seven stores to the University of Amsterdam. Learning and development was also a focus for our team members with the introduction of the new Path to Excellence training tool. We also proudly collaborated with the JINC Foundation to contribute to a society where someone’s background doesn’t determine their future through initiatives like internships, job training, and participating in the “Tomorrow’s Boss” program where two young people took over the jobs of Domino’s Netherland CEO Misja Vroom and Domino’s Belgium CEO Anneke de Groot for a day. It was also a milestone year for Misja – celebrating 30 years with Domino’s! EVEN MORE STORES FROM THE NETHERLANDS JOINED CLUB 1845 THIS YEAR. DOMINO’S NETHERLANDS AGAIN DEMONSTRATED ITS MARKET-LEADING DELIVERY EXPERTISE BY COMPLETING THE LARGEST SINGLE DELIVERY EVER WITHIN DPE, SUCCESSFULLY DELIVERING 4,500 PIZZAS IN JUST THREE HOURS „ „ DOMINO’S PIZZA ENTERPRISES LTD ANNUAL REPORT 2024 44 COULD YOU MAKE THREE PERFECT PIZZAS IN 66 SECONDS? NATASCHA HOOGERHEIDE DID. What began as a bit of fun ended up taking Natascha all the way to Las Vegas this year as a finalist in the World’s Fastest Pizza Maker competition. Qualifiers must prepare three large pizzas – one pepperoni, one mushroom and one cheese – by hand-stretching dough, saucing, and placing toppings as quickly and as accurately as possible. Natascha says being invited to compete alongside the best of the best at Domino’s premier event, the World Wide Rally, has only increased her appetite for more. “Domino’s offers work that is not only super fun and varied, but you also have opportunities like this to meet and be inspired by so many other Dominoids.” Natascha’s career journey is no less inspiring, having joined Domino’s as a teenager and successfully risen through the ranks to her current position supervising 14 managers and approximately 150 staff across five stores. She says she particularly loves “the Domino’s drive” that encourages anyone willing to put in the hard work to achieve the extraordinary. This year that goal was to make perfect pizzas in the fastest time with no penalties at the Dutch Fastest Pizza Making Contest after previously entering the competition “with no expectations”. “This time I started with training, training and more training and making sure I knew exactly how many ingredients to put on the pizza and what it took to get them perfect.” She subsequently won the overall European final with a time of 1 minute, 11 seconds, and earned a place at the international competition in Las Vegas. Despite her need for speed, she ensures her team are always slow where it matters. “When you are starting as a pizza maker, it is very important to take your time to make the perfect pizza,” she says. NAME Natascha Hoogerheide POSITION Supervisor STORES Domino’s Maassluis, Naaldwijk, Gravezande, Hoorn and Heerhugowaard LOCATION The Netherlands NETHERLANDS SPOTLIGHT NATASCHA HOOGERHEIDE Chemnitz Markersdorf, Chemnitz Siegmar, Glauchau, Freiberg 46 ANNUAL REPORT 2024 NATASCHA HOOGERHEIDE FOOD THICK SHAKE SPECULOOS (BISCOFF) MY DOMINO’S BOX & MELTZZ SHOARMA From a beloved 92-year-old biscuit to one of the hottest food trends in the world – Biscoff is certainly the flavour on everyone’s lips! Where better to showcase this caramelised taste sensation than its proud home country of Belgium? In collaboration with Lotus Biscoff®, we created an exclusive new thick shake flavour Speculoos (the original Belgian name) featuring crumbled Biscoff mixed with our deliciously creamy Domino’s Thick Shake. As in other markets, the My Domino’s Box and Meltzz have been game-changers for lunch and one-person households. We have worked hard to expand our menu offerings, now ranging from pizza to chicken to fries, to give our customers high-quality, affordable meals, snacks and desserts, both when and how they want them. This has elevated Domino’s Belgium and Luxembourg’s reach as a ‘one-stop-shop’ for all eating occasions. We introduced more products that resonate with local customers, including this succulent new topping. Consisting of thin slices of seasoned, spit-roasted meat, shoarma (or shawarma) is a very popular street food in the Middle East and Europe. It also tastes delicious on a fresh Domino’s pizza base with mozzarella and a swirl of garlic sauce. To further appeal to customers for more meal occasions, we offered an inspiring take on Belgium’s favourite food – frites (fries) – with the super satisfying Loaded Fries Shoarma Supreme. BELGIUM & LUXEMBOURG HIGHLIGHTS BRAND PEOPLE The first Domino’s store opened in Belgium in Brussels, Jette, 30 years ago. However, it was not until DPE acquired the market in 2006 that the real growth success story began: from just three stores to more than 130 today. As we mark this milestone, we are also actively pursuing new opportunities to expand our customer base and increase order volumes. In fact, there were several exciting ‘firsts’ this year. We did our first influencer campaign for the My Domino’s Box and, also for the first time, initiated multiple Local Store Marketing campaigns to provide even better marketing support to our franchise partners, with almost 100 stores signing up to participate. We focused on onboarding more stores to Uber Eats in Belgium, with aggregators proving to be a valuable marketplace for additional customers. In April we also partnered with food delivery company Wolt in Luxembourg, resulting in spectacular order growth within the first two weeks. We found additional ways to reach more customers via the Edenred card. This card allows holders to order meals from affiliated partners, and is given to almost every employee in Belgium This year we had, as always, a high focus on product quality and lowering delivery times. We’re proud that more stores became part of Club 1845 (a store must maintain an Average Delivery Time (ADT) of less than 18 minutes and a Product Quality (PQ) score of at least 4.5 out of 5 for three sequential months). We continued to invest in inspiring training programs that help our people grow and prosper, as well as provide fun opportunities to share and connect. This year that has included our national awards, our second Managers Rally, and a new franchise partner bootcamp. Additionally, we helped raise funds for Bednet, which helps keep sick young people connected through virtual education, and participated in our first Domino’s for Good Day on February 9. DOMINO’S PIZZA ENTERPRISES LTD ANNUAL REPORT 2024 48 OF ALL THE CHANGES MATHIEU PARENT HAS WITNESSED IN HIS 24 YEARS IN THE PIZZA INDUSTRY, HE BELIEVES ONE OF THE MOST SIGNIFICANT IS OCCURRING RIGHT NOW: “THE WORLD OF DELIVERY IS EXPLODING” It’s both a challenge and an opportunity he believes Domino’s is well placed to meet. “We are number one in pizza delivery worldwide. We are always focused on the quality of the product and services we offer our customers. This vision, and our culture, makes me immensely passionate, and inspires me on a daily basis.” Mathieu first became a franchise partner for a Belgian pizza company when he was just 20 years old. That company’s eight stores later rebranded to Domino’s after DPE became the master franchise owner for the Belgium market. “Domino’s offered a lot of training opportunities, which allowed me to develop myself, and as a franchise partner, the opportunity to become even more successful,” Mathieu recalls. “The number of customers, orders and sales only increased after my store became a Domino’s store in 2007.” Mathieu would also go on to win Belgium’s Fastest Pizza Maker Contest multiple times and compete in the finals of the European Fastest Pizza Maker Championships. “Our store has a competitive spirit, and we try to take on several challenges each year, which is rewarding,” he says. “I’m really proud that after all these years in the pizza business, I am still passionate about this work. I try to pass it on to my team members every day. I’m looking forward to many more years with this brand!” NAME Mathieu Parent POSITION Franchise Partner STORE Domino’s Mouscron LOCATION Belgium BELGIUM SPOTLIGHT MATHIEU PARENT Chemnitz Markersdorf, Chemnitz Siegmar, Glauchau, Freiberg 50 ANNUAL REPORT 2024 MATHIEU PARENT ASIA CEO REPORT REPORT In our most established market, Japan, we faced short-term hurdles stemming from rapid expansion during the COVID-19 pandemic and inflation. While proactive measures have been taken to address these challenges, including refining our store footprint, optimising market penetration and strengthening unit economics, our primary focus remains on driving order count growth. We are aiming to increase Average Weekly Order Count (AWOC) per store from ~500 to ~600 per week. Achieving this target will require a multifaceted approach, including expanding our customer base and offering inspired products and services that resonate with customers across various occasions. Inspired products like the Cheese Volcano and Cheese Twist, alongside refreshed Quattro offerings and value-driven options priced below ¥1000, exemplify our commitment to delivering exceptional value to our customers. Moreover, we’re exploring new avenues to reach customers, such as Grab & Go carry-out and partnerships with platforms like Uber and Demae-can. Collaboration with our franchise partners is pivotal in accelerating store maturity and enhancing profitability. We’re actively reviewing and optimising operations in prefectures with sub-optimal AWOC to maximise store performance. While early results are promising, we acknowledge that more time is needed to fully realise the potential of these efforts. Nevertheless, our long-term vision for Domino’s Japan remains the same and we are committed to navigating through these challenges to achieve sustained growth and success. This year our Asian markets encountered various challenges, spanning from those within our sphere of influence to those beyond it. In Malaysia, we’ve encountered challenges stemming from geopolitical conflicts beyond our control. Despite this, we have launched some incredible products including the Cheese Volcano Sate Pizza and expanded into new regions like Kuching in Sarawak where we have been welcomed by local pizza lovers. We have just commenced franchising with seasoned internal candidates eager to become pizza-preneurs and plan to expand our store footprint in areas where there is an appetite for western food. In Taiwan, inflation presented a number of challenges in addition to an unexpected supply chain issue. However, with engaged new leadership applying our proven strategies, including successes from other markets, and our recent brand re-launch “Domino’s WOW”, we are confident in our ability to grow order counts and franchise partner profitability in the year ahead. And finally, in Singapore we have seen some incredible success following the launch of our online ordering platform, which considerably increased sales conversions. Singapore is now leading the way in both sales and customer counts in the Asia region, which is a testament to our inspired product development and global technology capabilities. I’m proud to lead our franchise partners and teams across the Asia region and want to take this opportunity to thank everyone for their continued dedication, hard work and support. Although this year has been one of our most challenging, we are optimistic about the future. We have identified the way forward, equipped ourselves with the right people, products, and services, and are now ready to execute our plans. I am confident in our strategy and look forward to seeing the fruits of our labour in the weeks and months ahead. JOSH KILIMNIK CEO, ASIA WE HAVE IDENTIFIED THE WAY FORWARD, EQUIPPED OURSELVES WITH THE RIGHT PEOPLE, PRODUCTS, AND SERVICES, AND ARE NOW READY TO EXECUTE OUR PLANS. „ „ 52 DOMINO’S PIZZA ENTERPRISES LTD ANNUAL REPORT 2024 ASIA ASIA QUICK BITES ASIA STORES 1,517 NETWORK SALES: $1,030M EBIT $42.9M (-28.7%) JAPAN OPENS ITS 1,000TH STORE, KOTO FURUISHIBA, IN TOKYO TAIWAN’S CHANG YING-ZHI NAMED DPE GLOBAL STORE MANAGER OF THE YEAR SINGAPORE LAUNCHES ITS FIRST DOMINO’S ORDERING APP MALAYSIA BREAKS NATIONAL RECORD FOR MOST PEPPERONI SLICES ON A SINGLE PIZZA JAPAN HIGHLIGHTS FOOD CHEESE VOLCANO CHEESE’N ROLL TWISTS TSUKIMI QUATTRO Domino’s Japan once again set new benchmarks in product innovation, not only within DPE, but across the entire Domino’s brand. As a promotion-driven market, eatertainment is essential for engaging local consumers and this year the team excelled with the incredible Cheese Volcano. Its success was fuelled not only by its delicious taste, but also by its innovative appearance, uniqueness, and fun factor, which made it a hit on social media. Achieving Japan’s highest consumer awareness rate for a Domino’s product in four years, the Volcano was also adopted in other DPE markets including Australia and Malaysia. Take one pizza ear and twist! In Japanese, edges are referred to as “mimi” or “ears”. Therefore, our pizza crusts are also known as ‘pizza ears’ in Japan. To create a deliciously indulgent pizza crust, we filled pizza ears with cheese and other toppings. We also offered a limited edition Tropical Twist – a Cheese’n Roll Twist crust topped with pineapple sauce! After a two year break, we brought back this popular limited edition pizza for Tsukimi, or “moon viewing”, a Japanese festival honouring the full moon in autumn. In addition to its signature ingredient – sliced egg as the ‘moon’ – we offered four different egg-inspired flavours on the Tsukimi Quattro. Sales far surpassed forecasts, with the pizza selling out within just 10 days. This strong demand was testament to our ability to create products that truly resonate with local preferences. JAPAN HIGHLIGHTS 54 DOMINO’S PIZZA ENTERPRISES LTD ANNUAL REPORT 2024 BRAND In March Domino’s Japan was featured in a 3-hour program on Japanese TV showcasing 10 of our products. Top pizza artisans judged the products, with Domino’s receiving the highest ratings and contributing to a surge in customer numbers the day after the program aired. Also in March, the Chatan Kokutai Road store celebrated its 10th anniversary in Okinawa with a “Buy 1, Get Another for 10 Yen” campaign over four days at all Domino’s locations in Okinawa. This promotion was a way to thank the local community for their support during the past decade. Customers responded enthusiastically, resulting in a 160 per cent increase in sales. Nationally, we lifted aggregator engagement with a new partnership with Wolt, and trialled third-party delivery with Uber Eats in non-peak times, such as late night. We also took big steps towards our sustainability goals, including holding a workshop to introduce Domino’s Pizza’s ESG (Environmental, Social and Governance) strategy with 32 of our suppliers and optimising the number of deliveries between our distribution centres and stores. We further had the opportunity to demonstrate to the Ministry of Environment our commitment to reducing carbon emissions with the debut of our new Koto Furuishiba store, in Tokyo. The store, the 1,000th to open in Japan, features environmentally friendlier design including solar panels for lighting and e-bike charging, and a customer area built entirely from recycled or upcycled materials. Additionally, six successful applicants received grants totalling 3.5 million yen through the Sanchoku Domino’s Fund, which supports Japanese primary producers, and we raised more than 1 million yen on World Pizza Day (February 9) for a number of local charities specialising in youth mental health. Despite the hurdles of the past year, Team Japan has risen to the occasion with remarkable resilience and dedication to operational excellence. PEOPLE More than 80 stores qualified for Club 1845, in which a store must maintain an Average Delivery Time (ADT) of less than 18 minutes and a Product Quality (PQ) score of at least 4.5 out of 5 for three sequential months. New daily sales records were set by 331 stores on the all- important Christmas holiday, and Kazuki Takai, from the Itoman Shiohira store in Okinawa, achieved Asia Pacific’s best time (01.004) in the Fastest Pizza Making Competition finals. Additionally, almost 20,000 team members commenced training through DPE’s frontline learning app, Path to Excellence (P2E), and we hosted 12,000 young people nationwide for free pizza- making classes as part of our popular Pizza Academy program. To support our recruitment efforts, we trialled the “Mercari Hello” on-demand work service, which allows users to search for flexible part-time jobs without a resume or interview. This service attracted approximately 700 people and will hopefully lead to direct employment with our stores. Finally, our “Go Gemba” program was rebranded to “My Store” this year, aimed at strengthening collaboration between our store and support teams. Every support team member, including the leadership team, are assigned a store and visit several times a year to lend a hand. DOMINO’S PIZZA ENTERPRISES LTD ANNUAL REPORT 2024 56 DOMINO’S KOSAI MAY HAVE BEEN HIS THIRD STORE, BUT FRANCHISE PARTNER NOBUHARU KIKUCHI-SAN QUICKLY MADE IT JAPAN’S NUMBER ONE. In its first week of operations in April 2024, the Kosai store achieved the highest sales across the entire country. “We had been strategically planning and preparing since the previous year, which allowed us to open the new store at the right time,” Kikuchi-san says. “There is high potential that Domino’s can dominate the pizza market in this region.” With more than two decades of Domino’s experience, Kikuchi- san has proudly taken the lead in other areas of the business as well. He serves as a member of the Franchise Advisory Council (FAC), supporting fellow franchise partners and working with DPE to drive success. “I feel incredibly fortunate for the connections I’ve made with people during my career,” he says. “We have about 70 employees, and every individual is important to me. I ensure they receive proper guidance and training to develop into valuable team members, but I also make an effort to be aware of their current situation or circumstances, including the companies or schools they attend. “One of the most exciting prospects is the emergence of team members who express a desire to become franchise partners in the future. My goal is to support these aspiring franchise partners and grow the business together, fostering a new generation of leaders within Domino’s.” Kikuchi-san began working part-time at Domino’s in 2002, moving to full-time in 2011 with the goal of becoming a franchise partner. After managing several stores, he became a franchise partner in 2014 and opened the Hamamatsu Terajima-cho store. “I take great pride in creating beautiful pizzas. We have a strict policy that if a pizza is not up to standard, it must be remade,” he says. “I firmly believe that Domino’s Pizza stands out as the pioneer that introduced the first delivery pizza service in Japan nearly 40 years ago. This pioneering spirit, coupled with the brand’s strength and reputation, particularly over the past decade, gives me great confidence in our high-quality products and services. NAME Nobuharu Kikuchi POSITION Franchise Partner STORES Terajima-cho, Hamakita Komatsu and Kosai LOCATION Shizuoka Prefecture, Hamamatsu city, Japan JAPAN SPOTLIGHT NOBUHARU KIKUCHI Chemnitz Markersdorf, Chemnitz Siegmar, Glauchau, Freiberg 58 ANNUAL REPORT 2024 NOBUHARU KIKUCHI FOOD SSAMJEANG PIZZA CHEESE VOLCANO PEPPERONI-RONI PIZZA MENTAIKO PIZZA FOLDS This year we really turned up the heat with the return of the Ssamjeang Pizza. Inspired by Malaysians’ love for spicy food, the Ssamjeang Pizza has consistently been a top seller, especially the Ssamjeang Beef. The secret? A unique Korean sauce blending spiciness and sweetness. For an additional fiery kick, we also brought back the Ayam-Haseyo Chicken Wings coated in Ssamjeang sauce and topped with sesame seeds and parsley. Customers loved this fun, interactive pizza experience so much we created multiple varieties: the Volcano Cheese Pepperoni, Volcano Cheese Aloha Chicken, Cheese Volcano Sate and Cheese Bowl-Cano. With its molten cheese centrepiece crafted from a golden pizza crust, each Volcano was perfect for dipping pizza slices or sides into the rich gooey sauce. The success of the Cheese Volcano campaign highlighted how inspired products can drive exceptional results. Topped with 150% more pepperoni slices, this indulgent feast was a hit across the region – and even earned a spot in the Malaysia Book of Records for having the Most Pepperoni Slices on a Single Pizza! In Singapore, we relaunched the much loved Mentaiko pizzas with a new and improved recipe. Available in either chicken or prawn flavours, each pizza features rich mentaiko sauce and is topped with bonito (fish) flakes. An inspired taste experience that truly captures the essence of local cuisine! Like Meltzz in other DPE markets, our Pizza Folds have broadened our menu appeal by offering a great-value, convenient snack on-the-go or complement to the main meal. Best of all, they are fully customisable to local taste preferences. The Sambal Tuna Blaze blends chunky tuna with spicy sambal tumis, celebrating Malaysian flavours, while the sweetness of the Banana Kaya Fold is popular for dessert in Cambodia. MALAYSIA, SINGAPORE & CAMBODIA HIGHLIGHTS BRAND We certainly brought an eruption of flavour and fun across the region to mark the launch of our Cheese Volcano pizzas. This included digitally covering iconic landmarks in Singapore with cheesy lava and releasing an AR (augmented reality) filter that allowed customers to “see” the world of the Cheese Volcano Pizza. Domino’s Malaysia kept the fun going throughout the year with several creative initiatives, including a nationwide search for a “Chief Spicy Officer” and hosting a Pizza Fold Challenge dance-off at Segi University. Additionally, the team rolled out the BoxKu Surprise Truck for special events around Kuala Lumpur. Designed to showcase Domino’s diverse and affordable meal combos from the BoxKu (My Box) range, the truck also transformed into a pop-up store for the enormously popular SneakerLah convention. Malaysia achieved a further retail win with its first Express model store, designed to fit within a compact space of under 500 square feet, significantly reducing building costs. In the online retail sector, Singapore debuted its first Domino’s Ordering App, featuring real-time order tracking and exclusive app deals. A special $5 regular pizza pick-up offer, which could only be redeemed online or via app, subsequently drove a substantial lift in carry-out sales. Together with our customers, we proudly raised RM25,069 ($8,288 AUD) on World Pizza Day (February 9) for Mercy Malaysia to support flood relief efforts. During the month of Ramadan, we also invited members of the local community to share iftar (the meal eaten to break the fast after sunset) at Domino’s Buka Puasa Open House and be among the first to try the new Cheese Volcano Sate and Sate pizzas. DOMINO’S PIZZA ENTERPRISES LTD ANNUAL REPORT 2024 60 We successfully opened 24 new Domino’s stores across Malaysia this year, including our much anticipated first stores in the state of Sarawak. PEOPLE Linda Hassan, Chief Marketing Officer for Malaysia, Singapore and Cambodia, was awarded the prestigious Malaysian CMO Award of the Year 2023, and experienced Domino’s leader Peter Jones was appointed Cambodia Country Manager (commencing 1 July 2024). Along with many companies in Malaysia, we were not immune to the challenges caused by the on-going Israeli-Palestinian conflict and brand boycott. Our commitment to our people remains our highest priority and we worked hard to support our teams during this period, including negotiating rental reductions for stores affected. Our purpose at DPE is to bring people closer through our pizza, and we are incredibly proud of Team Malaysia for embracing this more than ever in FY24 and continuing to bring joy to each and every customer. AT DOMINO’S, OUR PURPOSE IS TO BRING PEOPLE CLOSER THROUGH PIZZA.” „ DOMINO’S PIZZA ENTERPRISES LTD ANNUAL REPORT 2024 62 FOOD WOW, IT’S DOMINO’S! SUPERSTAR PIZZA CHEESE VOLCANO We launched a major menu refresh mid-March 2024 as part of the “WOW, It’s Domino’s!” campaign. This consisted of 25 new pizzas and side items with an emphasis on fresh, local and high- quality ingredients. Our Phase 1 hero products were the Premium Scallop Seafood Pizza and Golden Hawaiian Pizza, which used fresh pineapple and mushrooms rather than canned. Customers loved the upgrade and both pizzas sold exceptionally well. To capture more dining opportunities, we launched exclusive products tailored for festive occasions like Christmas, New Year, and Lunar New Year. One standout was the Superstar Pizza, featuring premium ingredients such as steak and shrimp. We embraced eatertainment with the Cheese Volcano, leveraging the popular fondue concept to give consumers a fun new way to experience pizza. TAIWAN HIGHLIGHTS BRAND With consumer research indicating limited differentiation among pizza brands in Taiwan, defining our identity and elevating our products has been our key focus this year. The “WOW, It’s Domino’s!” brand relaunch aimed to modernise our image and highlight our commitment to fresh, high‑quality products. An extensive menu update was supported by enhanced product photography and design, along with increased social media and digital engagement. This included telling the story of some of the local farmers we have partnered with to bring fresh, never canned, Taiwanese #19 Gold Diamond pineapple to our customers on our new pizzas. We have seen positive early results from this new approach, with our teaser campaign alone generating AUD7.3M in earned media exposure, as well as increased Google search trends, higher website traffic, and improved brand awareness. Domino’s Taiwan went live on Uber Eats for the first time in November, 2023, which has generated significant incremental sales. We also unveiled a contemporary new store design featuring warmer tones and images of local landmarks to create a more inviting space for our customers. Additionally, 28 stores optimised their store layouts using the Cutting Edge system that has successfully been applied in other markets. This streamlines store operations and enables us to serve customers more efficiently. We have strengthened our inspection protocols for our suppliers and implemented an internal self-inspection process. We have also upgraded to a high-standard vegetable processing factory with ISO22000 and FFS certifications, batch-by-batch pesticide residue checks, and low-temperature cold chain processing. Our distribution centre was also relocated from Taoyuan to Jiayi, in southern Taiwan, in April 2024. This will improve ordering, delivery, and quality reporting for stores, as well as reduce travel distances between suppliers, resulting in greater environmental benefits. DOMINO’S PIZZA ENTERPRISES LTD ANNUAL REPORT 2024 64 We were thrilled to have not one, but two finalists from Domino’s Taiwan in the Fastest Pizza Maker Competition Top 10 this year: Liao Yi-Ju, store manager of Tai Ping Shu Xiao, ranked third with a time of 01:03.2, and Tony Zeng, district manager, was eighth overall with a time of 01:05.2. PEOPLE Chang Ying-Zhi, store manager of Qian Zhen Rei Lung, also proudly earned global recognition as DPE Global Store Manager of the Year 2023 (see page 73). In January we introduced the Pizza Master Program, which covers all aspects of store operations, including pizza making, topping, product management, and dough preparation. More than 300 team members have now qualified as ‘Pizza Masters’. In April, our stores in Hualien, on the east coast of Taiwan, supported their communities following the magnitude 7.4 earthquake by delivering free, hot pizzas to emergency service workers during the recovery operation. DOMINO’S PIZZA ENTERPRISES LTD ANNUAL REPORT 2024 66 CRUSHING CONVENTION IS A CORE VALUE AT DOMINO’S, AND CHE HANIS EXCELS AT IT. Having risen quickly through the ranks after joining the brand in 2016, she was more recently tasked with managing one of Malaysia’s busiest and most demanding stores. “I faced a significant challenge assuming responsibility for the Yam Tuan store,” she admits. “It was a bustling environment with high turnover that tested my ability to thrive under pressure.” She recognised that the path to a more united and resilient team began by fully embracing the Domino’s culture that had inspired her own career journey. “Domino’s reputation for creating a supportive workplace, the strong sense of camaraderie and commitment to continuous improvement make it an appealing environment where I believe I can grow and contribute. “I focused on re-building the team by promoting open communication and quickly addressing any staff concerns. These efforts helped us work better together and improved our overall performance.” The Yam Tuan store, which will celebrate its 20th anniversary next year, now consistently earns top marks in operational excellence and food safety compliance. “This success, I believe, owes much to the exceptional dedication and initiative of my team,” says Hanis, who also aspires to owning her own Domino’s franchise in the future. “At the heart of making great pizzas and products lies a simple truth: It’s all about passion and the love for pizza. Each pizza made with care, as if it were for my own family. “Domino’s commitment goes beyond just great products. It’s also about creating memorable experiences that make you want to come back.” NAME Che Hanis POSITION Store Manager STORES Yam Tuan LOCATION Negeri Sembilan, Malaysi MALAYSIA SPOTLIGHT CHE HANIS 68 ANNUAL REPORT 2024 CHE HANIS NURUL HIDAYAH KNOWS YOU CAN’T CONTROL EVERYTHING THAT’S HAPPENING IN THE WORLD, BUT YOU CAN MAKE SOMEONE’S DAY BETTER WITH A GREAT TASTING PIZZA AND A SMILE. The award-winning store manager has faced several external hurdles in recent years, including Covid-19 restrictions and a major brand boycott in Malaysia sparked by the Israeli- Palestinian conflict. Her steadfast commitment to creating an exceptional customer experience and prioritising the well-being of her team has helped her navigate such challenges. “The family-like culture at Domino’s has profoundly resonated with me,” Nurul says. “I believe in fostering a positive atmosphere where having fun while working isn’t just encouraged, but celebrated. Smiling at customers is also important as it helps create a warm and inviting environment. “Amidst the boycott’s impact on sales, I took the lead in fostering community engagement efforts, urging my team to respond with positivity and resilience.” Along the way they also achieved a near-perfect score (97%) for operational excellence and Nurul helped contribute to the successful opening of a new store in Sarawak. “It was a rewarding experience to train and support the new team during a busy sales period.” Nurul’s dedication to improving team performance and enhancing the customer experience has seen her shine in multiple stores across Malaysia since joining Domino’s in 2009. This includes earning a prestigious Rolex award in 2019 at Jalan Hamzah. This award recognises Domino’s top stores around the world who exceed set sales targets for four consecutive weeks. “For me, Domino’s is more than just a job,” Nurul says. “The dynamic and active environment, combined with a team that feels like family, make it an ideal place for me to thrive.” NAME Nurul Hidayah POSITION Store Manager STORES Jalan Hamzah LOCATION Kota Bahru, Malaysia MALAYSIA SPOTLIGHT NURUL HIDAYAH Chemnitz Markersdorf, Chemnitz Siegmar, Glauchau, Freiberg 70 ANNUAL REPORT 2024 NURUL HIDAYAH SUCH IS WIRA’S PASSION FOR PIZZA THAT HE READILY COMMUTES TO WORK IN ANOTHER COUNTRY. “I travel from Johor Bahru, Malaysia, to Singapore daily,” he says of his one hour trip across the border. “My career at Domino’s has been incredibly fulfilling and I was humbled to take on the role of Store in Charge (manager) at Sumang Walk in Singapore.” Under Wira’s leadership, Domino’s Sumang Walk achieved the highest AWUS (Average Weekly Unit Sales) for the entire Singapore region in 2023, not to mention five-star ratings for operational excellence (OER). “In reflecting on the past year, I find myself most proud of the top sales and outstanding OER scores achieved across Singapore,” he says. “It’s been very rewarding to see my store consistently ranked among the top five.” He credits the dedication and support of his team for this success, but also believes customers can “taste the difference” when choosing Domino’s because of the brand’s obsession with high quality products and service. “Our pizzas start with fresh, made-from-scratch dough and are crafted with care to deliver a consistently delicious experience. Every pizza is served with pride.” Wira, 27, says the potential for personal and professional growth was a key reason he first applied for a position at Domino’s four years ago. “Hearing from friends about the opportunities for career advancement sparked genuine excitement in me,” he says. “The company’s commitment to nurturing its employees’ ambitions and fostering a supportive environment was very appealing. “I hope to one day fulfill my dream of becoming a Domino’s franchise partner and I look forward to continuing to strive for excellence.” NAME Alhapisazwira (Wira) Bin Mesekan POSITION Store Manager STORES Sumang Walk LOCATION Singapore SINGAPORE SPOTLIGHT WIRA BIN MESEKAN 72 ANNUAL REPORT 2024 WIRA BIN MESEKAN CHANG YING-ZHI COULDN’T BELIEVE IT. She had gone to buy pizza from her local Domino’s store and discovered a former classmate working there. “In my memory, he was shy and introverted,” she recalls. “But in the store, he was proactive and energetic - completely different as I knew him. At that moment, I felt Domino’s must have incredible magic to make this kind of transformation. That’s what attracted me to the job.” In her subsequent Domino’s journey, including the past seven as store manager at Qian Zheng, Chang Ying-Zhi has made just as magical an impact on those around her. In 2023 she was selected from more than 3,500 candidates to be crowned DPE Global Store Manager of the Year. This award recognises an outstanding manager who excels in multiple areas of the business including customer service, financial control, sales growth, customer feedback and operational standards. “Domino’s has given me many opportunities to develop and build my career,” she says. “I love helping other people grow by training them and sharing my experience.” She says creating a positive work environment and providing flexible hours have been crucial factors in boosting team spirit and productivity, especially given the recruitment challenges posed by a lack of nearby universities or colleges to the store. “My team and I help each other, grow together, and share our achievements as well as happiness.” Chang Ying-Zhi is also well known for getting out into her community, building sales and brand loyalty through exceptional product, image and service. “We are 100 per cent proud of our products. If a customer is not satisfied, we will refund them. That’s the difference between us and our competitors.” NAME Chang Ying-Zhi (Sammy) POSITION Store Manager STORES Qian Zheng Rei Lung LOCATION Kaohsiung City, Taiwan SINGAPORE SPOTLIGHT CHANG YING ZHI 74 ANNUAL REPORT 2024 CHANG YING-ZHI DPE DPE BOARD OF DIRECTORS JACK COWIN AM CHAIRMAN APPOINTED: March 2014 DON MEIJ GROUP CEO & MANAGING DIRECTOR APPOINTED: August 2001 PROFESSIONAL BACKGROUND: More than five decades experience in the quick service restaurant industry. Founder and Executive Chairman of Competitive Foods Australia Pty Ltd, the owner and operator of more than 350 Hungry Jack’s restaurants in Australia and several food manufacturing plants. OTHER BOARDS: Competitive Foods Australia Pty Ltd, v2 Foods, Apache Industrial Service (USA). Former directorships: Fairfax Media Limited, Ten Network Holdings, Chandler Macleod Group. QUALIFICATIONS: Bachelor of Arts – University of Western Ontario, Canada; Doctor of Laws, honoris causa – University of Western Ontario, Canada. PROFESSIONAL BACKGROUND: Award-winning multi-unit Franchisee Partner and internationally recognised pizza executive. Mr Meij started as a delivery driver in 1987 and held various management positions with Silvio’s Dial-a-Pizza and Domino’s Pizza until 1996. Mr Meij then became a Domino’s Pizza Franchisee Partner, owning and operating 17 stores before selling them to Domino’s Pizza in 2001. Multiple-award winner, including Chairman’s Award for outstanding leadership and Ernst & Young Australian Young Entrepreneur of the Year. In 2018, under Don’s leadership, Domino’s was inducted into Queensland Business Leaders Hall of Fame. Group CEO & Managing Director since 2002, leading the Company to become Australia’s first publicly-listed pizza chain on the ASX (2005). In 2022, Don celebrated 35 years with Domino’s. BACKGROUND & EXPERIENCE Member of the Audit and Risk Committee and Nomination, Culture and Remuneration Committee. PROFESSIONAL BACKGROUND: Experienced food industry executive with extensive experience as an award-winning Domino’s Franchisee Partner and executive. Prior to joining Domino’s Mr Bourke was an international executive with Masterfoods (Mars Inc.). He was awarded Domino’s Golden Franchisee Partner award (1995), Franchisee Partner of the Year (1997 and 1998), Golden Eagle winner (1999) for his contribution to the Company and global Chairman’s Award winner for outstanding leadership. Former Director of Corporate Store Operations, Managing Director Europe, and Non-Executive Director since 2007. FORMER DIRECTORSHIPS: Pacific Smiles Group Ltd. QUALIFICATIONS: Bachelor of Science (Food Technology) – University of New South Wales; MBA – the University of Newcastle. BACKGROUND & EXPERIENCE Member of the Audit and Risk Committee and Nomination, Culture and Remuneration Committee. PROFESSIONAL BACKGROUND: Extensive career with senior executive experience in IT, telecommunications and media organisations. Former Executive Director and Chief of Product of Telstra, Commercial Director of Australian Consolidated Press, the publishing division of Publishing and Broadcasting Limited, and General Manager of Alcatel Australia. Other boards: Director of Rubicon Water Limited, Non- Executive Director AVANT Mutual Ltd, Non-Executive Director Wagner Holdings Ltd, Member of the Advisory Board of Jamieson Coote Bonds, and Council of Southern Cross University and Director of Musica Viva. FORMER DIRECTORSHIPS: Council of Bond University, Boards of the Aged Care Financing Authority (Chair), National Electronic Health Transition Authority (NEHTA), Screen Queensland and TAB Queensland, and the IT&T Board of Advisors to the New South Wales Treasurer. QUALIFICATIONS: Bachelor of Commerce (Hons) – University of Queensland, Fellow of the Australian Institute of Company Directors. GRANT BOURKE NON-EXECUTIVE DIRECTOR APPOINTED: August 2001 LYNDA O’GRADY NON-EXECUTIVE DIRECTOR APPOINTED: April 2015 ANNUAL REPORT 2024 DOMINO’S PIZZA ENTERPRISES LTD 76 USCHI SCHREIBER AM NON-EXECUTIVE DIRECTOR APPOINTED: November 2018 TONY PEAKE OAM NON-EXECUTIVE DIRECTOR APPOINTED: May 2021 BACKGROUND & EXPERIENCE Chair of the Nomination, Culture and Remuneration Committee and Member of the Audit and Risk Committee. PROFESSIONAL BACKGROUND: Experienced global strategy and operations executive in the private and public sectors, including in countries in which the company is expanding its operations. Chair, Health Care, APM, a leading global health and human services organisation. Former EY Chair, Global Accounts Committee; Global Vice Chair Markets; member of the EY Global Executive Management Board and EY Fellow, Digital Society and Innovation. Former Director-General, Queensland Health; Deputy Director General, Department of the Premier and Cabinet and Cabinet Secretary, Queensland Government. Consultant, executive coach and diversity advocate. OTHER BOARDS: Global Chair, Health Care, APM, an ASX listed global health and human services organisation. Non-executive Director and Board Chair of Everyday Independence, a subsidiary of APM. QUALIFICATIONS: Master of Arts – Griffith University; Australia, Graduate Certificate in Management – University of Western Sydney, Australia; Bachelor of Social Work and Special Education – University of Braunschweig/Wolfenbüttel, Germany. BACKGROUND & EXPERIENCE Chair of the Audit and Risk Committee and Member of Nomination, Culture and Remuneration Committee. PROFESSIONAL BACKGROUND: Chartered Accountant with more than three decades’ of board-level experience across the public, commercial and not-for-profit sectors. Former Senior Partner at PwC, serving as an Audit and Consulting Partner, Chief Operating Officer, and Executive Director, with particular experience in Retail & Consumer, Education, and Government. Was the lead audit partner at PwC for major international brands, and led financial due diligence for large scale, multinational client acquisitions. OTHER BOARDS: Bakers Delight, Country Fire Authority, Central Highlands Water, PeopleIn Limited, The Australian Ballet, Museum of Australian Photography. Former directorships: Melbourne Fashion Festival, Methodist Ladies College and the University of Melbourne. QUALIFICATIONS: Bachelor of Business (Distinction) – RMIT, Fellow of Chartered Accountants Australia & New Zealand, FAICD. 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 78 REPORT DIRECTORS’ Group Highlights CONTINUING OPERATIONS FY23 UNDERLYING $ MIL FY24 UNDERLYING $ MIL +/(-) FY23 % FY24 STATUTORY $ MIL Network Sales 4,005.6 4,189.6 4.6% 4,189.6 Revenue 2,314.3 2,376.7 2.7% 2,376.7 EBITDA 355.2 362.8 2.1% 318.6 Depreciation and Amortisation (141.7) (155.0) 9.4% (155.0) EBIT 213.5 207.8 -2.7% 163.6 EBIT Margin 9.2% 8.7% 6.9% Interest (22.4) (35.1) 56.7% (35.1) NPBT 191.1 172.7 -9.6% 128.5 Tax Expense (58.3) (52.3) -10.3% (36.1) NPAT before Minority Interest 132.8 120.4 -9.3% 92.4 Minority Interest (2.0) – -100.0% – NPAT 130.8 120.4 -8.0% 92.4 PERFORMANCE INDICATORS EPS (Basic) 150.9 cps 133.8 cps -12.8% 102.7 Dividend paid per share 135.5 98.1 -28% 98.1 Same Store Sales % -0.20% +1.50% 79 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 80 The directors of Domino’s Pizza Enterprises Limited (“DPE Limited”, or the “Company”) submit herewith the annual financial report of the Company and its controlled entities (“the Group”) for the financial year ended 30 June 2024. In order to comply with the provisions of the Corporations Act 2001, the Directors’ Report as follows: INFORMATION ABOUT THE DIRECTORS AND SENIOR MANAGEMENT The names and particulars of the directors of the Company during or since the end of the financial year are: NAME POSITION Jack Cowin Non-Executive Director Appointed 20 March 2014 Grant Bourke Independent Non-Executive Director Appointed 24 August 2001 Lynda O’Grady Independent Non-Executive Director Appointed 16 April 2015 Ursula Schreiber Independent Non-Executive Director Appointed 30 November 2018 Tony Peake Independent Non-Executive Director Appointed 14 May 2021 Don Meij Managing Director/Group Chief Executive Officer Appointed 24 August 2001 Doreen Huber Independent Non-Executive Director Appointed 21 February 2020 Retired 01 November 2023 DIRECTORSHIPS OF OTHER LISTED COMPANIES Lynda O’Grady was appointed a director of Wagners Holding Company Limited on 08 November 2017 and was appointed a director of Rubicon Water Limited which was admitted to the Official List of the ASX on 31 August 2021. Doreen Huber was appointed a non-executive director of Ceconomy AG on 09 February 2022. Tony Peake was appointed a director of Peopleln Limited on 07 June 2024. There were no other directorships of other listed companies held by directors in the 3 years immediately before the end of the financial year. DIRECTORS’ SHAREHOLDINGS The following table sets out each director’s relevant interest in shares, debentures, and rights or options in shares or debentures of the Company as at the date of this report. DIRECTORS DOMINO’S PIZZA ENTERPRISES LIMITED FULLY PAID ORDINARY SHARES NUMBER SHARE OPTIONS NUMBER CONVERTIBLE NOTES NUMBER Jack Cowin 23,354,591 – – Grant Bourke 1,628,344 – – Lynda O'Grady 2,624 – – Ursula Schreiber 3,000 – – Tony Peake 4,080 – – Don Meij 1,667,969 221,809 – REMUNERATION OF DIRECTORS AND SENIOR MANAGEMENT Information about the remuneration of directors and senior management is set out in the Remuneration Report of this Directors’ Report on pages 89 to 104. Directors’ Report 81 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. Directors’ Report continued SHARE OPTIONS GRANTED TO DIRECTORS AND SENIOR MANAGEMENT During and since the end of the financial year, an aggregate 136,906 share options were granted to the following directors and senior management of the Company as part of their remuneration. DIRECTORS AND SENIOR MANAGEMENT NUMBER OF OPTIONS GRANTED ISSUING ENTITY NUMBER OF ORDINARY SHARES UNDER OPTION Don Meij 62,426 DPE Limited 221,809 Richard Coney 11,819 DPE Limited 56,118 Josh Kilimnik 24,943 DPE Limited 81,746 Andre ten Wolde 25,323 DPE Limited 63,321 Michael Gillespie 12,395 DPE Limited 57,831 COMPANY SECRETARY Craig Ryan: General Counsel & Company Secretary Craig is a solicitor of the Supreme Court of Queensland, Australian Capital Territory and New South Wales and a Solicitor of the High Court of Australia with over 25 years’ experience. Craig joined the Company as General Counsel on 8 August 2006 and was appointed to the position of Company Secretary on 18 September 2006. Craig holds a Bachelor of Arts and a Bachelor of Laws from the University of Queensland and a Masters of Laws from the University of New South Wales. Craig is also a Chartered Secretary with the Governance Institute Australia. PRINCIPAL ACTIVITIES The Group’s principal activities in the course of the financial year were the operation of retail food outlets and the operation of franchise services. During the financial year there were no significant changes in the nature of those activities. REVIEW OF OPERATIONS The activities and financial performance of the Group and each of its operating segments for the financial year are set out on page 6. EXPLANATION OF STATUTORY PROFIT TO UNDERLYING PROFIT Statutory profit after tax for continuing operations is prepared in accordance with the Corporations Act 2001 and Australian Accounting Standards, which comply with IFRS Accounting Standards. Statutory profit after tax for continuing operations of $92.3 million includes expenditures of $28.0 million after tax treated as significant items. Excluding these items, the Underlying Profit after tax from continuing operations was $120.4 million, 9.3% down on the prior corresponding period. Underlying profit after tax from continuing operations is reported to give information to shareholders that provides a greater understanding of the performance of the Group’s operations. DPE believes Underlying Profit after tax from continuing operations is useful as it removes significant items thereby facilitating a more representative comparison of financial performance between financial periods. Underlying Profit is a non-IFRS measure which is not subject to audit or review. INFORMATION ABOUT THE DIRECTORS AND SENIOR MANAGEMENT (continued) 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 82 Directors’ Report continued The below provides a reconciliation of Statutory Profit from continuing operations to Underlying Profit from continuing operations including earnings before interest and tax from continuing operations (EBIT), and earnings before interest, tax, depreciation and amortisation (EBITDA): FOR THE YEAR ENDED 30 JUNE 2024 STATUTORY $’000 SIGNIFICANT ITEMS $’000 UNDERLYING $’000 UNDERLYING ANZ $’000 EUROPE $’000 ASIA $’000 UNALLOCATED $’000 Revenue 2,376,699 – 2,376,699 795,293 762,702 818,704 – EBITDA 318,552 44,198 362,750 163,334 111,400 111,838 (23,822) Depreciation & amortisation (155,044) – (155,044) (39,206) (40,655) (68,904) (6,279) EBIT 163,508 44,198 207,706 124,128 70,745 42,934 (30,101) Net finance costs (35,085) – (35,085) Net profit before tax 128,423 44,198 172,621 Income tax expense (36,076) (16,189) (52,265) Net Profit after tax 92,347 28,009 120,356 Profit attributable to: Owners of the parent 92,347 28,009 120,356 Non-controlling interest – – – 92,347 28,009 120,356 YEAR ENDED 02 JULY 2023 STATUTORY $’000 SIGNIFICANT ITEMS $’000 UNDERLYING $’000 UNDERLYING ANZ $’000 EUROPE $’000 ASIA $’000 UNALLOCATED $’000 Revenue 2,314,307 – 2,314,307 763,475 735,709 815,123 – EBITDA 273,931 81,234 355,165 149,970 103,470 122,295 (20,570) Depreciation & amortisation (150,923) 9,176 (141,747) (37,561) (38,904) (62,081) (3,201) EBIT 123,008 90,410 213,418 112,409 64,566 60,214 (23,771) Net finance costs (22,370) – (22,370) Net profit before tax 100,638 90,410 191,048 Income tax expense (31,603) (26,698) (58,301) Net Profit after tax 69,035 63,712 132,747 Profit attributable to: Owners of the parent 67,009 63,712 130,721 Non-controlling interest 2,026 – 2,026 69,035 63,712 132,747 REVIEW OF OPERATIONS (continued) 83 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. SIGNIFICANT ITEMS During FY23 and FY24 the Group has undertaken the closure of a number of under-performing corporate stores. On 17 July 2024 the Group announced that it will close up to 80 additional stores in Japan, which consists of a combination of franchised and corporate stores and an additional 20 to 30 corporate stores in France. It is anticipated that the delivery orders of these stores will be serviced by neighbouring stores. The costs associated with the corporate store closures include the write-down in the value of property, plant and equipment, the write-down of Goodwill allocated to the Corporate stores, the impairment of right of use assets associated with the lease of the location of the store or operation. In addition, the Group incurred costs in relation to centralising some support office functions in shared services centres. These costs incurred included employee termination benefits and transition costs for transferring functions to the shared service centres. Statutory profit before tax from continuing operations was $128.4 million, this included the following significant costs excluded from Underlying Profit after tax as outlined below: CURRENT PERIOD SIGNIFICANT ITEMS • Streamlining operations costs of $23.1 million including employee termination costs and transition costs to a share services centres model. • Impairments, write-downs, net proceeds of disposals of assets and other associated costs relating to the closure of corporate stores and operations of $29.6 million. • $2.4 million of costs associated with the closure of distribution centres. • One off marketing contributions to Advertising Funds in Japan and France of $5.3 million. • Gain in the changes in fair value of contingent consideration in relation to the acquisition of Domino’s Malaysia, Singapore and Cambodia ($18.8) million. • External costs of $2.6 million in relation to Pizza Sprint and Speed Rabbit Pizza legal proceedings. PRIOR PERIOD SIGNIFICANT ITEMS • Impairments, write-downs and disposals of property, plant and equipment, goodwill, right of use assets and inventories in relation to corporate stores and operations of $69.6 million. • Accelerated amortisation of legacy intangible assets of $9.2 million. • External costs of $5.9 million pertaining to the Fast Food Industry Award class action. • External costs of $3.6 million related to the acquisition and integration costs incurred in relation to Domino’s Malaysia, Singapore and Cambodia. • External costs of $3.6 million in relation to Pizza Sprint legal proceedings. • Other items including changes in the fair value of contingent consideration in relation to the acquisition of Domino’s Malaysia, Singapore and Cambodia ($1.5) million. CHANGES IN STATE OF AFFAIRS There have been no significant changes in the state of affairs of the Group that occurred during the financial year. SUBSEQUENT EVENTS There has not been any matter or circumstance occurring subsequent to the end of the financial year that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years other than the matters disclosed in note 31. ENVIRONMENTAL AND SOCIAL SUSTAINABILITY RISKS The Group is currently not subject to any significant environmental and/or social sustainability risks that have an immediate impact on its operations. However, the directors understand the Group operates in a rapidly changing global landscape with increasing demands from its stakeholders regarding environmental and social responsibility, risk management and associated reporting. In response, the Group will release its fourth consecutive Annual Sustainability Report this year, with the aim of communicating to shareholders in a transparent manner its activities to address its environmental, social and governance efforts. This year’s Sustainability Report will build on from last year’s report, and report with reference to the Global Reporting Initiative (GRI) framework and SASB (Sustainability Accounting Standards Board), which are broadly accepted existing global ESG frameworks. An ESG update has been provided in the Annual Report and the 2024 Sustainability Report is anticipated to be released before the end of calendar year 2024. To the best of the directors’ knowledge, the Group complies with its current obligations under environmental regulations and holds all licenses required to undertake its business activities. Directors’ Report continued 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 84 Directors’ Report continued CORPORATE GOVERNANCE A copy of Domino’s Pizza Enterprises full 2024 Corporate Governance Statement, which provides detailed information about governance, and a copy of Domino’s Pizza Enterprises’ Appendix 4G which sets out the Group’s compliance with the recommendations in the third edition of the ASX Corporate Governance Council’s Principles and Recommendations (ASX Principles) is available on the corporate governance section of the Group’s website at https://investors.dominos.com.au/corporate-governance. DIVIDENDS In respect of the financial year ended 30 June 2024, an unfranked interim dividend of 55.5 cents per share was paid to the holders of fully paid ordinary shares on 27 March 2024. On the 21 August 2024, the Company declared an unfranked final dividend for FY24 of 50.4 cents per share. The dividend will have a record date of 28 August 2024 and a payment date of 25 September 2024. The Dividend Reinvestment Plan will operate for eligible shareholders residing in Australia or New Zealand for the FY24 final dividend which will be fully underwritten by Morgan Stanley. SHARES UNDER OPTION OR ISSUED ON EXERCISE OF OPTIONS Details of unissued shares or interests under option as at the date of this report are: ISSUING ENTITY SERIES NUMBER OF SHARES UNDER OPTION CLASS OF SHARES EXERCISE PRICE OF OPTIONS EXPIRY DATE OF OPTIONS DPE Limited 36 1,581 Ordinary Nil 20 Aug 29 DPE Limited 37 996 Ordinary Nil 18 Aug 30 DPE Limited 39 33,341 Ordinary $84.28 01 Sep 24 DPE Limited 40 1,420 Ordinary Nil 07 Jun 31 DPE Limited 41 2,966 Ordinary Nil 28 May 31 DPE Limited 42 95,975 Ordinary $127.09 31 Aug 25 DPE Limited 43 7,441 Ordinary Nil 31 Oct 31 DPE Limited 44 315,825 Ordinary $69.58 31 Aug 25 DPE Limited 45 12,491 Ordinary Nil 23 Aug 32 DPE Limited 46 782 Ordinary Nil 21 Nov 32 DPE Limited 47 54,265 Ordinary Nil 30 Jun 25 DPE Limited 48 81,096 Ordinary Nil 30 Jun 25 DPE Limited 49 3,416 Ordinary Nil 23 Aug 33 DPE Limited 50 4,883 Ordinary Nil 08 Sep 33 DPE Limited 51 62,426 Ordinary Nil 31 Aug 31 DPE Limited 52 23,374 Ordinary Nil 22 Jan 29 DPE Limited 53 71,671 Ordinary Nil 22 Jan 29 DPE Limited 54 65,278 Ordinary Nil 22 Jan 29 DPE Limited 55 17,916 Ordinary Nil 30 Apr 31 The holders of these options do not have the right, by virtue of the option, to participate in any share issue or interest issue of the Company or of any other body corporate or registered scheme. Details of shares or interests issued during or since the end of the financial year as a result of exercise of an option are: ISSUING ENTITY SERIES NUMBER OF SHARES UNDER OPTION CLASS OF SHARES GRANT DATE FAIR VALUE AMOUNT UNPAID ON SHARES DPE Limited 35 3,985 Ordinary 11.79 $nil DPE Limited 36 797 Ordinary 42.41 $nil DPE Limited 37 1,537 Ordinary 81.37 $nil DPE Limited 43 2,322 Ordinary 135.75 $nil DPE Limited 45 928 Ordinary 67.51 $nil DPE Limited 49 1,933 Ordinary 51.20 $nil 85 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. INDEMNIFICATION OF OFFICERS AND AUDITORS The Company has entered into deeds of indemnity, insurance and access with each director. To the extent permitted by law and subject to the restrictions in s.199A of the Corporations Act 2001, the Company must continuously indemnify each director against liability (including liability for costs and expenses) for an act or omission in the capacity of director. However, this does not apply in respect of any of the following: • a liability to the Company or a related body corporate; • a liability to some other person that arises from conduct involving a lack of good faith; • a liability for costs and expenses incurred by the director in defending civil or criminal proceedings in which judgement is given against the officer or in which the officer is not acquitted; or • a liability for costs and expenses incurred by the director regarding an unsuccessful application for relief under the Corporations Act 2001 in connection with the proceedings referred to above. The Company has also agreed to provide the directors with access to Board documents circulated during the directors’ term in office. During the financial year, the Company paid a premium in respect of a contract insuring the directors of the Company, the Company Secretary and all senior management of the Company and of any related body corporate against a liability incurred as such a director, secretary or senior management to the extent permitted by the Corporations Act 2001. The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor. The directors have not included details of the nature of the liabilities covered or the amount of the premium paid in respect of the directors’ and officers’ liability and legal expenses insurance contract as such disclosure is prohibited under the terms of the contract. DIRECTORS’ MEETINGS The following table sets out the number of directors’ meetings (including meetings of committees of directors) held during the financial year and the number of meetings attended by each director (while they were a director or committee member). During the financial year, fifteen (15) Board meetings, eight (8) Nomination, Culture and Remuneration Committee meetings and four (4) Audit and Risk Committee meetings were held. BOARD OF DIRECTORS NOMINATION, CULTURE AND REMUNERATION COMMITTEE AUDIT AND RISK COMMITTEE HELD ATTENDED HELD ATTENDED HELD ATTENDED Jack Cowin 15 15 – – – – Grant Bourke 15 15 8 8 4 4 Lynda O'Grady 15 15 8 8 4 4 Ursula Schreiber 15 14 8 8 4 4 Tony Peake 15 15 8 8 4 4 Doreen Huber (i) 4 3 2 2 – – Don Meij 15 15 – – – – (i) Doreen Huber retired and ceased being a director as of 01 November 2023. DPE directors have been on the boards of Domino’s Pizza Japan and Domino’s Pizza Germany since DPE started operating in those markets. DPE also has more informal “Advisory Boards” for Australia/NZ, Benelux, France, Taiwan and Malaysia, Singapore & Cambodia. At least two of the DPE directors sit on each of the seven boards. The boards meet on a quarterly basis. The meetings are mutually beneficial, providing DPE directors with a better understanding of local management and business issues, while also allowing DPE directors the opportunity to provide guidance to local management more directly. It is proposed to rotate the DPE directors onto different advisory boards every two years so that: (a) DPE directors receive in-depth exposure to different parts of the group over time, and; (b) local management receive the benefit of engagement with different DPE Board Members. Directors’ Report continued 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 86 Directors’ Report continued NON-AUDIT SERVICES The directors are of the opinion that the services as disclosed in note 35 to the financial statements do not compromise the external auditor’s independence, based on the advice received from the Audit and Risk Committee, for the following reasons: • all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and • none of the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional & Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards. Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in note 35 to the financial statements. The directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another person or firm on the auditor’s behalf) is compatible with the general standard of independence of auditors imposed by the Corporations Act 2001. The auditor’s independence declaration is included on page 109 of the Annual Report. ROUNDING OF AMOUNTS The Company is a company of the kind referred to in ASIC Corporations Legislative Instrument 2016/191 (Rounding in Financial/Directors’ Report), dated 24 March 2016, and in accordance with that Corporations Instrument amounts in the financial report are rounded off to the nearest thousand dollars, unless otherwise indicated. 87 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. Directors’ Report continued LETTER FROM THE CHAIR OF THE NOMINATION, CULTURE AND REMUNERATION COMMITTEE Dear Fellow Shareholders, On behalf of the Board, I am pleased to present our 2024 Remuneration Report. Organisational context 2024 was a year of restructuring the business to achieve efficiencies and a better foundation for future growth. At the 2023 AGM, the Board Chair outlined the key objectives of the restructuring program. This program was designed to deliver near-term material cost savings, improve efficiency, allow reinvestment, reduce the corporate store network, accelerate refranchising, and streamline our core operations, including the implementation of shared services. Performance across the diverse markets of ANZ, Asia, and Europe varied considerably due to a range of factors, including global economic challenges, rising inflation and geopolitical conflicts. Amid these challenges, Network Sales grew by 4.6% to AU$4.19 billion. This resulted in a 3% underlying EBIT increase to AU$207.7 million over FY23. Role of the Nomination, Culture and Remuneration Committee The Nomination, Culture and Remuneration Committee has a broad charter covering remuneration, succession planning, employee engagement, and culture and diversity. Over the course of the year, the Committee has focused on all elements of its remit, particularly the risks associated with implementing the most significant restructure in the business’s history, and ensuring leadership consistency and succession planning. Remuneration Framework and FY24 Outcomes The Board is committed to delivering a clear link between performance and reward through its Key Management Personnel (KMP) remuneration framework. This is designed to drive balanced financial and non‑financial performance outcomes, creating both short-term and long-term shareholder value. The Board is satisfied that the decisions made regarding remuneration outcomes reflect the intent of the KMP remuneration framework, business performance, and the impact of the restructure. The key remuneration decisions made are shown below, with full details provided in this report: • Fixed remuneration increases were limited to 4% for the Group CEO, CEO Asia, and CEO Europe. This reflects wage inflation conditions. Increases for the Group CFO and Group Chief Commercial Officer (Group CCO) recognised growth in the scope of their roles and market benchmarking. • The Short-Term Incentive (STI) measures and targets were applied to the Group CEO and Executive KMP. For specific KMPs, the maximum STI opportunity was increased to provide a chance for greater equity holding, subsequently adjusting the remuneration mix. • In FY24, the STI measures and targets were achievement of: - Group EBIT 60% (below threshold), - Group Franchisee Profitability 30% (Board determined that payment was not warranted), and - Project Foundation Savings 10% (strong performance). • The Board reviewed the outcome of the Group Franchisee Profitability achievement for FY24 and determined that the payment of this KPI was not warranted given the overall business performance and individual country performance in this metric. As a result, STI was awarded only against the target of Foundation Savings with 89.5% of STI potential forfeited. The 10.5% were applied consistently for the Group CEO and Executive KMP. • The Long-Term Incentive (LTI) granted in 2022 and tested at the end of the 2024 financial year had performance targets of EPS growth and EBIT. These targets were not achieved, and as a result, LTI did not vest. • Special Acquisition Incentives for the Group CEO and CEO Asia, approved by shareholders in 2022 to integrate the businesses in Malaysia, Singapore, and Cambodia, were not awarded. • The restructuring of the business during FY24, while delivering savings and reinvestment in the business, resulted in some loss of talent, including at the executive level. In this context, the Board chose to implement limited retention arrangements for three Key Management Personnel to ensure ongoing leadership in key regions. Details of these arrangements are shared in the report. 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 88 Global Leadership Team Changes Mr. Michael Gillespie resigned as Group CCO effective 9 September 2024. Mr. Gillespie played a pivotal role in positioning Domino’s as a sophisticated digital retailer. The Board would like to thank Mr. Gillespie for his exceptional leadership and dedicated service to Domino’s over the past 16 years. The role of Group CCO will not be replaced; consequently, Matthias Hansen (Chief Technology Officer) and Jeff Garton (Chief Digital Officer) were appointed to the Global Leadership Team. Non-Executive Director Fees Non-Executive Director fees were unchanged in FY24. Looking Ahead Domino’s has made meaningful progress in its restructuring and streamlining of operations. The Board recognises the challenging nature of these changes, but believes they will result in a stronger, more sustainable business. I would like to acknowledge the contributions of my Committee colleagues, the Leadership team, Franchise Partners, and members of Domino’s Support Teams. Finally, I would like to thank you for your continued support and look forward to your attendance at our Annual General Meeting on 6 November 2024. Uschi Schreiber Chair, Nomination, Culture and Remuneration Committee Directors’ Report continued 89 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. Directors’ Report continued REMUNERATION REPORT 2024 This Remuneration Report (Audited), which forms part of the Directors’ Report, sets out information about the remuneration of Domino’s Key Management Personnel (KMP) for the financial year ended 30 June 2024. CONTENTS 1. FY24 FACTS AT A GLANCE 90 2. KEY MANAGEMENT PERSONNEL 90 3. OUR REMUNERATION FRAMEWORK 91 4. OUR REMUNERATION FRAMEWORK FOR EXECUTIVE KMP 92 5. FY24 PERFORMANCE AND REMUNERATION OUTCOMES 95 6. REMUNERATION GOVERNANCE 98 7. OUR NON-EXECUTIVE DIRECTOR FEES 99 8. STATUTORY TABLES 100 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 90 Directors’ Report continued 1 FY24 FACTS AT A GLANCE In FY24, we made moderate increases to fixed remuneration to reflect general wage increases in market. The STI and LTI outcomes, as outlined below, reflect the overall performance of the business during the relevant performance periods. All figures in the Remuneration Report are presented in Australian dollars. EXECUTIVE KMP TOTAL FR (i) $ TOTAL STI AWARD (ii) $ STI AWARDED AS A PERCENTAGE OF MAXIMUM % TOTAL LTI VESTED (iii) $ LTI VESTED AS A PERCENTAGE OF MAXIMUM % Don Meij 1,781,522 173,250 10.5% – 0% Richard Coney 681,654 75,705 10.5% – 0% Josh Kilimnik 794,916 97,650 10.5% – 0% Andre ten Wolde 790,160 97,272 10.5% – 0% Michael Gillespie 790,580 97,650 10.5% – 0% (i) Total Fixed Remuneration (FR) reflects salaries, Fringe Benefits Tax (FBT) charges (related to employee benefits), and superannuation. (ii) The value earned in cash during the year ended 30 June 2024 and paid in FY25, and the value earned in deferred STI for rights of grants to be issued in FY25 which are both in relation to the performance targets achieved for FY24. (iii) LTI vested is determined based on the amount vested during the year, valued on the intrinsic value being the share price at the first exercise date less the exercise price, then multiplied by the number of options vested. 2 KEY MANAGEMENT PERSONNEL Our Remuneration Report provides remuneration information for Domino’s KMP as set out in the table below. NAME POSITION TERM AS KMP NON-EXECUTIVE KMP Jack Cowin Non-Executive Chairman Full year Grant Bourke Independent Non-Executive Director Full year Lynda O’Grady Independent Non-Executive Director Full year Ursula Schreiber Independent Non-Executive Director Full year Doreen Huber Independent Non-Executive Director Part year (i) Tony Peake Independent Non-Executive Director Full year EXECUTIVE KMP Don Meij Managing Director/Group Chief Executive Officer (Group CEO) Full year Richard Coney Group Chief Financial Officer (Group CFO) Full year Josh Kilimnik Chief Executive Officer Asia (CEO Asia) Full year Andre ten Wolde Chief Executive Officer Europe (CEO Europe) Full year Michael Gillespie Group Chief Commercial Officer (Group CCO) Full year (ii) (i) Doreen Huber retired from the Board on 1 November 2023. (ii) Michael Gillespie has resigned from the role of Group CCO effective 9 September 2024. There have been no other changes to KMP since the end of FY24 and the release of this Report. Remuneration Report (continued) 91 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. Directors’ Report continued 3 OUR REMUNERATION FRAMEWORK Our remuneration policy ensures executive remuneration is aligned to our values and purpose. Remuneration is designed to reflect individual duties, accountabilities and level of performance; and to be market competitive in the relevant location to attract, retain and motivate our people. Outlined below are our values and purpose, and how they align to our remuneration principles and executive remuneration structure. SUPPORTED BY APPROPRIATE REWARD GOVERNANCE MECHANISMS AND BOARD OVERSIGHT Crush convention Help people grow and prosper Do the right thing because it’s the right thing to do Invest to create devotion Be generous and provide joyful experiences LEAD BY OUR VALUES Attract, motivate and retain highly skilled executives across diverse geographies Reward capability and experience and provide recognition for contributions to the Company’s objectives Achieve an appropriate balance between fixed and variable remuneration Align to shareholder interests through equity components GUIDED BY OUR EXECUTIVE REMUNERATION PRINCIPLES OUR REMUNERATION STRUCTURE CONSISTS OF Local market competitive fixed remuneration Financially focused short-term incentive and strategic initiatives Shareholder aligned long-term incentives At our best We smash the prevailing wisdom which says you can’t have quality, speed and low price… enabling us to put the world’s most delicious and versatile bonding food within reach of every person DRIVEN BY OUR PURPOSE OUR PIZZA BRINGS PEOPLE CLOSER Why do we exist? The hard-wired human need for social connection, seemingly better enabled than ever before, is breaking down. People crave belonging, while they assert their right to be different Remuneration Report (continued) 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 92 Directors’ Report continued 4 OUR REMUNERATION FRAMEWORK FOR EXECUTIVE KMP Our performance is significantly influenced by the quality of our people. To prosper, we must attract, motivate and retain highly skilled Executive KMP. The remuneration structure is designed to strike an appropriate balance between fixed and variable pay, rewarding capability and experience while providing recognition for smashing individual and Company goals. ELEMENT OF REWARD PURPOSE LINK TO PERFORMANCE FIXED REMUNERATION (FR) Base salary calculated on a total cost basis plus FBT charges (related to employee benefits) plus employer contributions to superannuation or pension equivalents. · Set at a level to attract and retain experienced people. · Benchmarked against ASX listed companies, with similar revenue and market capitalisation, and Quick Service Restaurant (QSR) comparators overseas and within Australia. · Considers performance in role, experience, accountability, and Domino’s performance based on market capitalisation and revenue. SHORT-TERM INCENTIVE (STI) Annual incentive based on Domino’s and individual performance delivered as cash and/or rights. · Designed to recognise when we achieve Board approved targets for the Group. · Payable subject to Key Performance Indicators (KPIs) set each year by the Board. KPIs are reflective of Group and geographically relevant financial and individual performance targets aligned to the Domino’s business strategy. LONG-TERM INCENTIVE (LTI) Three-year incentive linked to Group performance delivered through performance rights. · Reward executives for sustainable long-term growth aligned to shareholder value creation. · Awards only vest on achievement of predetermined EPS and net new store opening targets. LTI related to the net new store opening target only vests if a positive total shareholder return (TSR) is achieved over the term of the performance period. PAY MIX (MAXIMUM OPPORTUNITY) The pay mix at maximum opportunity is reviewed annually to ensure it remains competitive and promotes alignment to our shareholders’ interests. 35.6% 32.6% 17.9% 20.7% 17.9% 20.7% 28.6% 26.0% 27.0% 12.4% 12.4% 48.2% Group CEO Group CFO Other Executive KMP n FR n STI Cash n STI Equity n LTI Equity FIXED REMUNERATION FIXED REMUNERATION FIXED REMUNERATION AT RISK REMUNERATION AT RISK REMUNERATION AT RISK REMUNERATION TOTAL REMUNERATION The Nomination, Culture and Remuneration Committee (NCRC) undertakes extensive benchmarking of the Group CEO and Executive KMP to ensure remuneration packages attract the right people for Domino’s, they are geographically appropriate, consider internal relativities and meet ASX market expectations. The benchmarking data used is a combination of ASX listed remuneration data from similar sized companies (using revenue and market capitalisation), and data from QSR comparator groups overseas and within Australia. This data feeds into a hybrid data set from which fixed remuneration, STI, LTI and total remuneration packages are determined. Remuneration Report (continued) 93 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. Directors’ Report continued SHORT-TERM INCENTIVE Our STI is ‘at risk’ and is provided only based on achievement of annual targets set by the Board in line with the Company plan. The table below outlines the key design features of the executive FY24 STI plan. DESIGN FEATURE APPROACH STI OPPORTUNITY The STI maximum opportunity awarded to each executive is outlined in the table below. ROLE FY24 MAXIMUM STI (% OF FR) Group CEO 92% Group CFO 100% Other Executive KMP 127% PERFORMANCE MEASURES & ASSESSMENT STI outcomes are assessed against a scorecard of our strategic priorities and focus on the financial performance across our operating markets. The relevant performance criteria and weightings for FY24 are outlined below. KEY PERFORMANCE INDICATOR WEIGHTING GROUP CEO GROUP CFO CEO ASIA CEO EUROPE GROUP CCO Group EBIT 60% 60% 60% 60% 60% Group Franchisee Profitability 30% 30% 30% 30% 30% Project Foundation Savings 10% 10% 10% 10% 10% DEFERRAL For the Group CEO, and other Executive KMP located in Australia, 50% of the STI outcome is deferred in share rights for 12 months. In recognition of local market practices and legal/tax implications, executives outside Australia do not participate in STI deferral. The number of rights granted to participants is equal to the deferral opportunity divided by the volume weighted average price (VWAP) of a share over ten trading days. CESSATION OF EMPLOYMENT Where employment ceases as a “good leaver” (i.e., for reasons including redundancy, retirement, death or total permanent disability or as otherwise agreed), rights will continue to be held on the same terms at the discretion of the Board. If a participant ceases for any other reason, rights will immediately lapse. The Board retains discretion to determine a different treatment of rights on cessation of employment. SPECIAL ACQUISITION INCENTIVE The Group CEO and the CEO Asia’s STI opportunities were temporarily increased to provide an additional award aligned to the successful integration of our acquired businesses in Malaysia, Singapore and Cambodia. The Special Acquisition Incentive reflects an important opportunity for us to increase our footprint in Asia. The award reflects a temporary additional opportunity for key roles involved in the initial integration for FY23, FY24 and FY25. The maximum opportunity is $750,000 for the Group CEO and $400,000 for the CEO Asia. Performance is measured against calendar year 2023 and 2024 (given the timing of the acquisition) and tested post the release of respective Half 1 results in each year. Performance is assessed against EBITDA of the acquired organisations. Based on the 2023 calendar year performance, the Group CEO and CEO Asia received 0% of their Special Acquisition Incentive in FY24. Remuneration Report (continued) 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 94 Directors’ Report continued Special Retention Arrangements The NCRC approved a one-off equity grant each for Josh Kilimnik and Andre ten Wolde to encourage ongoing engagement during a time of significant business change and in recognition of their criticality to the delivery of the Company’s performance. The equity grant is in the form of performance rights over a 3-year vesting period (2024, 2025 and 2026) with a value of $600,000 equally apportioned across the 3 years. The grant is contingent on continued service with the Company. The NCRC approved a one-off special performance payment for Richard Coney to encourage ongoing engagement during a time of significant business change. This is in the form of a $200,000 cash payment payable after 31 December 2024. The payment is contingent on continued service with the Company. LONG-TERM INCENTIVE The NCRC considers this equity performance-linked remuneration structure to appropriately award our executive team for contributing to shareholder outcomes over the longer term. DESIGN FEATURE APPROACH LTI OPPORTUNITY The LTI opportunity awarded to each executive is outlined in the table below. ROLE FY24 MAXIMUM LTI (% OF FR) Group CEO 179% Other Executive KMP 80% PERFORMANCE PERIOD Three-year performance period PERFORMANCE MEASURES & ASSESSMENT The below measures have been chosen based on relevance to our business strategy and direct alignment to shareholder return. The measures balance the backward looking performance indicator in basic EPS and the forward looking net new store growth, which is our primary indicator of future shareholder return. Vesting of the LTI is subject to: · 80% basic EPS growth: reflects the company’s net profit after tax divided by the total number of shares on issue. EPS is calculated on a ‘constant currency’ basis; and · 20% organic net new store openings: reflects the number of new stores opened across the Group, excluding those acquired as a result of acquisition activity. · TSR gateway: No performance rights subject to the organic net new store openings measure will vest under the net new store growth portion unless a positive TSR gateway is achieved. These performance conditions will vest in accordance with the schedule shown in the tables below: EPS COMPOUND ANNUAL GROWTH RATE PORTION VESTING NET NEW STORE ANNUAL GROWTH RATE PORTION VESTING Less than 8% 0% Less than 5% 0% At 8% 30% At 5% 25% Between 8% and 15% Straight line vesting Between 5% and 8% Straight line vesting At or above 15% 100% At or above 8% 100% Vesting of performance rights under the net new store growth hurdle are subject to meeting a positive TSR gateway over the performance period. Remuneration Report (continued) 95 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. Directors’ Report continued DESIGN FEATURE APPROACH INSTRUMENT Each performance right is an entitlement to receive one share (or a cash payment of equivalent value at the Board’s discretion). A participant will be allocated a number of shares calculated by reference to their LTI opportunity divided by VWAP of a share over ten trading days. CESSATION OF EMPLOYMENT Where employment ceases for a “good leaver” reason, all vested and unvested performance rights will continue on the same terms. For unvested performance rights, the number of performance rights that vest will be pro-rated to reflect the period of time that has elapsed from the grant date to the date of cessation. At the Board’s discretion, if a participant ceases for any other reason, performance rights will immediately lapse, and any shares held subject to a trading restriction will immediately be forfeited. 5 FY24 PERFORMANCE AND REMUNERATION OUTCOMES The Group CEO received a 4% fixed remuneration increase, other Executive KMP received fixed remuneration increases averaging 7% which reflected a change in role or increase in responsibility. Where an executive was significantly outside the market competitive ranges, the NCRC determined that it would be appropriate to transition those executives to the new remuneration levels over a number of years. The performance across the Group during FY24 reflects decisions made to deliver a stronger long-term business while balancing short-term inflationary pressures. This is reflected in our financial performance including Network Sales of $4.19 billion, growth of +4.6% (vs FY23) and network expansion of +12 stores (+0.3%). The results of the STI reflected the overall performance of the business in each market and the individual strategic performance objectives of Executive KMP. The options granted under our FY21 LTI plan were eligible to vest during FY24. LINK BETWEEN PAY AND PERFORMANCE The remuneration outcomes for our KMP are aligned to our short and long-term performance outcomes. The table below sets out summary information about the Group’s earnings and movements in shareholder wealth for the five years to 30 June 2024: 30 JUNE 2024 $’000 02 JULY 2023 $’000 03 JULY 2022 $’000 (i) 27 JUNE 2021 $’000 (ii) 28 JUNE 2020 $’000 Group continuing operations EBIT 163,508 123,008 265,976 287,378 217,940 Basic earnings per share (cents) from continuing operations (iii) 133.8 139.4 190.6 218.1 169.1 Organic net new store openings 116 205 (iv) 294 (iv) 285 (iv) 163 (iv) Annual total shareholder return (%) (20)% (31)% (41)% 77% 83% Total annual dividend per share (cents) 105.9 110.0 156.5 173.5 119.3 Group CEO STI outcome as % of maximum 10.5% 0.0% 23.2% 96.6% 15.0% Group CEO LTI outcome as % of maximum 0.0% 0.0% 0.0% 0.0% 0.0% (i) Results for the year ending 03 July 2022 have been restated to reflect continuing operations, with Denmark Market’s operations being classified as a discontinued operation. (ii) Results for the year ending 27 June 2021 have been restated to reflect the implementation of an International Financial Reporting Interpretations Committee agenda decision clarifying the accounting treatment of Software as a Service arrangements. (iii) Performance is measured on underlying earnings per share. (iv) This number represents organic new store openings in the financial year. Remuneration Report (continued) 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 96 Directors’ Report continued FY24 STI OUTCOMES The following table outlines performance against the STI scorecard for the Group CEO in FY24. KEY PERFORMANCE INDICATOR WEIGHTING BELOW THRESHOLD THRESHOLD TARGET STRONG PERFORMANCE FY24 RESULT Group EBIT 60% 5% worse than budget or more <5% worse than budget or more Achieve budget >5% growth than budget Below threshold Group Franchisee Profitability 30% 5% worse than target or more <5% worse than target or more Achieve target >5% growth than target Not met Project Foundation Savings 10% 5% worse than savings or more <5% worse than savings or more Achieve savings >5% better than savings Strong performance Remuneration outcomes for FY24 reflect the financial performance of the business. All Executive KMP were measured on the same KPIs as the Group CEO in FY24. This alignment was to facilitate collective focus on budget, delivering an ambitious restructuring program and driving profitability for our franchise partners. The table below shows the STI outcomes for each Executive KMP as approved by the Board based on a recommendation by the NCRC. The Board reviewed the outcome of the Group Franchisee Profitability achievement for FY24 and determined that the payment of this KPI was not warranted given the overall business performance and individual country performance in this metric. As a result, STI was awarded only against the target of Foundation Savings with 89.5% of STI potential forfeited. The 10.5% were applied consistently for the Group CEO and Executive KMP. The Board believes the outcomes for each executive fairly reflect their contribution against the STI outcomes sought and appropriately align with our key stakeholders. EXECUTIVE KMP TOTAL STI AWARD $ CASH COMPONENT $ DEFERRED COMPONENT $ MAXIMUM STI $ STI AWARDED AS A PERCENTAGE OF MAXIMUM % STI FOREFEITED IN YEAR AS A PERCENTAGE OF MAXIMUM % Don Meij 173,250 86,625 86,625 1,650,000 10.5% 89.5% Richard Coney 75,705 37,853 37,852 721,000 10.5% 89.5% Josh Kilimnik 97,650 48,825 48,825 930,000 10.5% 89.5% Andre ten Wolde 97,272 48,636 48,636 926,404 10.5% 89.5% Michael Gillespie 97,650 48,825 48,825 930,000 10.5% 89.5% FY24 LTI VESTING OUTCOMES The options granted under our FY21 LTI plan were eligible to vest during FY24. The following performance measures were applied for each Executive KMP: PERFORMANCE MEASURE RESULT PROPORTION OF OPTIONS VESTING CAN BE EXERCISED UNTIL Group EPS percentage growth over the relevant performance period < 6% EPS growth 0% N/A ANZ EBIT > 90% and < 105% Straight line vesting 1 Sep 24 Europe EBIT < 90% of target 0% N/A Japan EBIT > 105% of target 100% 1 Sep 24 Remuneration Report (continued) 97 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. Directors’ Report continued GROUP CEO INCENTIVE OUTCOMES OVER TIME The Board considers both STI and LTI to be true ‘at risk’ elements of the executive’s remuneration. Over the past five years, the Group CEO’s STI and LTI outcomes have varied significantly based on what we have achieved as a team. The following chart shows the outcomes of the Group CEO’s STI and LTI plans in the year ended 30 June 2024, and the four prior financial years. VESTED AWARD (%) EPS (CENTS) 100% 75% 50% 25% 0% 300 200 100 0 FY20 FY21 FY22 FINANCIAL YEAR ■ STI ■ LTI — EPS FY23 FY24 15.0% 96.6% 0% 0% 0% 0% 0% 0% 10.5% 23.2% FY24 REALISED REMUNERATION Executive KMP remuneration outcomes are aligned to short and long-term performance outcomes. EXECUTIVE KMP TOTAL FR $ (i) CASH STI $ (ii) DEFERRED STI $ (iii) LTI VESTED $ (iv) TOTAL $ Group CEO 1,781,522 – – – 1,781,522 Group CFO 681,654 35,475 29,030 – 746,159 CEO Asia 794,916 115,500 94,515 – 1,004,931 CEO Europe 790,160 117,413 98,970 – 1,006,543 Group CCO 790,580 62,788 51,354 – 904,722 (i) Total FR reflects salaries, FBT charges (related to employee benefits), and superannuation. (ii) The value of STI paid in cash during the year ended 30 June 2024 which is in relation to the performance targets achieved for FY23. (iii) The value of deferred STI is determined based on the number of rights granted during the year ended 30 June 2024, for performance targets achieved for FY23, multiplied by the share price at the date of grant. (iv) LTI vested is determined based on amount vested during the year, valued on the intrinsic value being the share price at the first exercise date less the exercise price, then multiplied by the number of options vested. Remuneration Report (continued) 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 98 Directors’ Report continued 6 REMUNERATION GOVERNANCE ROLE OF THE NOMINATION, CULTURE AND REMUNERATION COMMITTEE The following chart outlines the key stakeholders in the governance of remuneration at Domino’s: NOMINATION, CULTURE AND REMUNERATION COMMITTEE Responsible for: • Making recommendations to the Board on remuneration policies and packages applicable to the Board members and Group CEO. • Review and approve remuneration packages applicable to other KMPs of the Company. MANAGEMENT Responsible for: • Preparing recommendations on remuneration packages for other KMP. • Obtaining remuneration information from external advisors/independent consultants to assist the NCRC. REMUNERATION CONSULTANTS • Provide independent advice, information and if requested, recommendations relevant to remuneration decisions. BOARD Responsible for: • Approving Domino’s remuneration strategy. • Approving performance objectives and measures for the Group CEO and providing input into the evaluation of performance against them. The Board has overarching discretion with respect to any awards made under the Company’s incentive plans. AUDIT AND RISK COMMITTEE • Supports the NCRC by reviewing figures which form the basis for incentive awards. SHAREHOLDERS AND ADVISORY BODIES • Includes consultation, engagement at the Annual General Meeting and investor meetings. COMPONENT APPROACH BOARD DISCRETION Our Board retains the discretion to alter the treatment of awards to ensure there is appropriate alignment between executive pay outcomes and Company performance. MALUS AND CLAWBACK Our Board has the ability to apply malus and/or clawback, lapse awards and forfeit shares subject to a trading restriction in certain circumstances, including fraud, gross misconduct and material reputational damage to the Company. CHANGE OF CONTROL Our Board retains the discretion to determine the treatment of awards in the event of a change of control. A change in control occurs when any shareholder (either alone or together with its associates) having a relevant interest in less than 50% of the issued shares in the Company acquires a relevant interest in 50% or more of the shares on issue at any time. USE OF INDEPENDENT CONSULTANTS During the year an independent remuneration consultant was engaged by the NCRC to provide advice and guidance in relation to market practice and Domino’s remuneration matters. No remuneration recommendation was sought from or provided by the remuneration consultant. Remuneration Report (continued) 99 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. Directors’ Report continued OUR EXECUTIVE SERVICE AGREEMENTS The table below sets out the main terms and conditions of the employment contracts of Executive KMP. NAME TERM OF CONTRACT CONTRACT COMMENCEMENT NOTICE TERMINATION – BY COMPANY NOTICE TERMINATION – BY EXECUTIVE Don Meij Ongoing 02 November 2022 12 months 12 months Richard Coney Ongoing 16 May 2005 6 months 6 months Josh Kilimnik Ongoing 06 December 2021 6 months 6 months Andre ten Wolde Ongoing 27 June 2020 12 months 6 months Michael Gillespie (i) Ongoing 15 September 2017 3 months 3 months (i) Michael Gillespie has resigned from the role of Group CCO effective 9 September 2024. 7 OUR NON-EXECUTIVE DIRECTOR FEES Non-executive directors are remunerated by way of cash fees and superannuation. The level of directors’ fees reflects their time commitment and responsibilities in accordance with market standards. Non-executive directors did not receive any performance-based remuneration or equity-based remuneration and are not entitled to any termination payments on ceasing to be a director. The maximum aggregate non-executive directors’ fee pool as approved by shareholders is $1,800,000 per annum. Details of the fees associated for the non-executive director roles are set out in the following table and include superannuation. BOARD AND COMMITTEE CHAIR FEES $ MEMBER FEES $ Board 313,947 150,000 Audit and Risk Committee 30,000 15,000 Nomination, Culture and Remuneration Committee 30,000 15,000 Remuneration Report (continued) 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 100 Directors’ Report continued 8 STATUTORY TABLES The table below sets out the remuneration of Domino’s executives and the amounts represent payments relating to the period individuals were KMP. SHORT-TERM BENEFITS LONG-TERM BENEFITS POST- EMPLOYMENT BENEFITS SHARE BASED-PAYMENTS BASE SALARY $ CASH INCENTIVE $ OTHER (i) $ LONG SERVICE LEAVE (ii) $ SUPER- ANNUATION $ DEFERRED STI COMPONENT $ OPTIONS (LTI) $ TOTAL $ PERFORMANCE RELATED % EXECUTIVE DIRECTOR Don Meij 2024 1,754,074 86,625 – 35,744 27,448 87,955 10,311 2,002,157 9.2% 2023 1,656,410 – – 64,019 25,333 297,119 (966,112) 1,076,769 (62.1)% EXECUTIVE OFFICERS Richard Coney 2024 654,265 37,853 113,615 (24,658) 27,389 37,910 1,727 848,101 9.1% 2023 598,776 35,475 – 18,677 25,391 90,469 (130,224) 638,564 (0.7)% Josh Kilimnik 2024 714,163 48,825 113,415 – 27,448 48,749 285,610 1,238,210 30.9% 2023 702,779 115,500 102,102 – 25,333 97,009 (1,795) 1,040,928 20.2% Andre ten Wolde 2024 730,719 48,636 59,600 – 59,441 48,366 264,399 1,211,161 29.8% 2023 635,585 117,413 41,311 – 48,013 50,448 (93,522) 799,248 9.3% Michael Gillespie (iii) 2024 763,092 48,825 – 24,099 27,488 48,899 – 912,403 10.7% 2023 611,756 62,788 – 24,315 25,292 255,925 (136,842) 843,234 21.6% Total 2024 4,616,313 270,764 286,630 35,185 169,214 271,879 562,047 6,212,032 17.8% 2023 4,205,306 331,176 143,413 107,011 149,362 790,970 (1,328,495) 4,398,743 (4.7)% (i) Amounts relate to allowances including but not limited to housing, vehicles, schooling and healthcare and accrual of Richard Coney’s one-off special retention payment. (ii) Long service leave includes the movement in the leave balance during the year. The accounting value of long service leave may be negative, for example where an executive’s leave balance decreases as a result of taking more leave than they accrue. (iii) Michael Gillespie has resigned from the role of Group CCO effective 9 September 2024. Remuneration Report (continued) 101 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. NON-EXECUTIVE DIRECTOR REMUNERATION FOR FY24 The table below sets out the remuneration of Domino’s non-executive directors, amounts represent payments relating to the period individuals were KMP. SHORT-TERM BENEFITS – FEES $ POST-EMPLOYMENT BENEFITS – SUPERANNUATION $ TOTAL $ NON-EXECUTIVE DIRECTORS Jack Cowin 2024 286,499 27,448 313,947 2023 288,614 25,333 313,947 Grant Bourke 2024 162,896 17,104 180,000 2023 165,322 17,260 182,582 Lynda O’Grady 2024 162,148 17,852 180,000 2023 179,657 343 180,000 Ursula Schreiber 2024 175,661 19,339 195,000 2023 176,456 18,545 195,001 Tony Peake 2024 175,661 19,339 195,000 2023 173,949 18,282 192,231 FORMER NON-EXECUTIVE DIRECTORS Doreen Huber (i) 2024 55,846 – 55,846 2023 165,000 – 165,000 Total 2024 1,018,711 101,082 1,119,793 2023 1,148,998 79,763 1,228,761 (i) Doreen Huber retired from the Board on 1 November 2023. Directors’ Report continued Remuneration Report (continued) 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 102 EXECUTIVE SHARE AND OPTION PLAN (ESOP) MOVEMENTS Equity based remuneration on-foot during the financial year are outlined in the table below. NAME GRANT TYPE GRANT DATE FAIR VALUE AT GRANT ($) BALANCE AT START OF YEAR (NO.) GRANTED DURING THE YEAR (NUMBER) FORFEITED (NO.) VESTED (NO.) EXERCISED (NO.) BALANCE AT END OF THE YEAR (NO.) Don Meij Series 38 4/11/2020 16.72 156,937 – (156,937) – – – Series 42 3/11/2021 32.30 95,975 – – – – 95,975 Series 43 1/10/2021 135.75 2,957 – – – – 2,957 Series 45 23/08/2022 67.51 6,186 – – – – 6,186 Series 47 20/12/2022 58.97 54,265 – – – – 54,265 Series 51 11/12/2023 51.26 – 62,426 – – – 62,426 Richard Coney Series 36 20/08/2019 42.41 1,581 – – – – 1,581 Series 37 18/08/2020 81.37 312 – – – – 312 Series 39 25/11/2020 10.92 39,215 – (39,215) – – – Series 43 1/10/2021 135.75 953 – – – – 953 Series 44 19/05/2022 15.00 32,000 – – – – 32,000 Series 45 23/08/2022 67.51 703 – – – – 703 Series 48 20/12/2022 58.97 8,750 – – – – 8,750 Series 49 23/08/2023 51.20 – 567 – – – 567 Series 53 22/01/2024 51.26 – 11,252 – – – 11,252 Josh Kilimnik Series 35 26/11/2019 11.79 21,995 – (21,995) – – – Series 39 25/11/2020 10.92 40,605 – (28,424) – – 12,181 Series 43 1/10/2021 135.75 1,011 – – – – 1,011 Series 44 19/05/2022 15.00 33,066 – – – – 33,066 Series 45 23/08/2022 67.51 1,049 – – – – 1,049 Series 48 20/12/2022 58.97 9,496 – – – – 9,496 Series 49 23/08/2023 51.20 – 1,846 – – – 1,846 Series 52 1/12/2023 51.26 – 11,705 – – – 11,705 Series 53 22/01/2024 51.26 – 11,392 – – – 11,392 Andre ten Wolde Series 39 25/11/2020 10.92 40,249 – (40,249) – – – Series 44 19/08/2022 15.00 30,811 – – – – 30,811 Series 48 20/12/2022 58.97 9,120 – – – – 9,120 Series 49 23/08/2023 51.20 – 1,933 – – (1,933) – Series 52 1/12/2023 51.26 – 11,669 – – – 11,669 Series 54 22/01/2024 51.26 – 11,721 – – – 11,721 Michael Gillespie Series 37 18/08/2020 81.37 508 – – – – 508 Series 39 25/11/2020 10.92 41,208 – (41,208) – – – Series 41 28/05/2021 84.28 2,966 – – – – 2,966 Series 43 1/10/2021 135.75 927 – – – – 927 Series 44 19/05/2022 15.00 30,750 – – – – 30,750 Series 45 23/08/2022 67.51 1,107 – – – – 1,107 Series 48 20/12/2022 58.97 9,178 – – – – 9,178 Series 49 23/08/2023 51.20 – 1,003 – – – 1,003 Series 53 22/01/2024 51.26 – 11,392 – – – 11,392 Directors’ Report continued Remuneration Report (continued) 103 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. FULLY PAID ORDINARY SHARES OF DOMINO’S PIZZA ENTERPRISES LIMITED The numbers of Company shares held by KMP during the financial year, including their personally related parties, are set out below. BALANCE AT BEGINNING OF FINANCIAL YEAR NO. GRANTED AS COMPENSATION NO. RECEIVED ON EXERCISE OF OPTIONS NO. NET OTHER CHANGE NO. BALANCE AT THE END OF THE FINANCIAL YEAR NO. Jack Cowin 23,066,390 – – 288,201 23,354,591 Grant Bourke 1,628,344 – – – 1,628,344 Lynda O’Grady 2,600 – – 24 2,624 Ursula Schreiber 3,000 – – – 3,000 Tony Peake 4,000 – – 80 4,080 Don Meij 1,667,969 – – – 1,667,969 Richard Coney 18,219 – – (17,500) 719 Josh Kilimnik 12,925 – – – 12,925 Andre ten Wolde 703 – 1,933 (933) 1,703 Michael Gillespie 430 – – – 430 HISTORIC LONG-TERM INCENTIVE (EXECUTIVE SHARE AND OPTION PLAN) The LTI for the Group CEO previously approved by shareholders has resulted in the granting of options over three-year performance periods. The options were granted under the terms and conditions of the Company’s Executive Share and Option Plan. Options are subject to performance conditions, including continuous employment, which must be achieved, and have an exercise price set at grant. The value the Group CEO derives is subject to achievement of performance conditions, as well as share price following vesting. The number of options granted and on-foot under each tranche, and the relevant exercise prices, are outlined in the table below. The first exercise date is shown, and the exercise period is one year from the first exercise date for options with an exercise price and five years from the first date of exercise for zero priced options, after which any options not exercised will lapse. SERIES NUMBER GRANTED EXERCISE PRICE $ FAIR VALUE $ GRANT DATE FIRST EXERCISE DATE Series 38 156,937 84.28 16.72 4 Nov 2020 1 Sep 2023 Series 42 95,975 127.09 32.30 3 Nov 2021 1 Sep 2024 Series 47 54,265 Nil 58.97 20 Dec 2022 1 Sep 2025 Series 51 62,426 Nil 51.26 11 Dec 2023 1 Sep 2026 OTHER TRANSACTIONS WITH DIRECTORS OF THE GROUP During the year the Group engaged the services of Mr Michael Cowin, a related party of Mr Jack Cowin, as a Board Member of DPE Japan Co. Ltd. Services rendered were based on market rates for such services and were due and payable under normal payment terms. A total of $27,750 was paid or payable to Mr Michael Cowin during the year ended 30 June 2024. TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL OF DOMINO’S PIZZA ENTERPRISES LIMITED Comgroup Supplies Pty Ltd, Comgroup NZ Limited (T/A Franklin Foods), Markwell Pacific Marketing Pty Ltd and Shore Mariner Ltd are entities associated with Mr Jack Cowin, which supply food products to the Group on commercial arm’s length terms. The entities were selected as the preferred suppliers after competitive tender processes in which Mr Cowin had no involvement. Directors’ Report continued Remuneration Report (continued) 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 104 During the year the Group made purchases and had outstanding balances as at 30 June 2024 as follows: ENTITY PURCHASES (EXCLUDING GST) $ OUTSTANDING BALANCE $ ComGroup Supplies Pty Ltd and ComGroup NZ Limited (T/A Franklin Foods) 26,450,470 4,476,858 Markwell Pacific Marketing Pty Ltd – – Shore Mariner Ltd 304,921 61,497 In addition, the Group received sponsorship contributions at the Company’s annual franchising rally to the value of $50,000 from ComGroup Supplies Pty Ltd (excluding GST) and to the value of $5,000 (excluding GST) from Markwell Pacific Marketing Pty Ltd. The Group did not recognise any bad or doubtful debts associated with the above purchases and sponsorship contributions. The Group and Competitive Foods Australia Pty Ltd (CFAL), an entity associated with Mr Jack Cowin, acquire television media services from unrelated third party service providers under a joint venture arrangement and receive volume pricing benefits. The Group does not receive or provide any other benefits to CFAL under the joint venture. Signed in accordance with a resolution of the directors made pursuant to s.298(2) of the Corporations Act 2001. On behalf of the directors Jack Cowin Non-Executive Chairman 21 August 2024 Don Meij Managing Director/Group Chief Executive Officer 21 August 2024 Directors’ Report continued Remuneration Report (continued) 105 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. FINANCIAL REPORT 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 106 2024 107 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. Contents DIRECTORS' DECLARATION 108 AUDITOR’S INDEPENDENCE DECLARATION 109 AUDITOR’S INDEPENDENCE REPORT 110 CONSOLIDATED STATEMENT OF PROFIT OR LOSS 114 CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME 115 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 116 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 117 CONSOLIDATED STATEMENT OF CASH FLOWS 118 NOTES TO THE FINANCIAL STATEMENTS 120 CONSOLIDATED ENTITY DISCLOSURE STATEMENT 185 ADDITIONAL SECURITIES EXCHANGE INFORMATION 186 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 108 The directors declare that: (a) in the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; (b) in the directors’ opinion, the attached financial statements are in compliance with IFRS Accounting Standards, as stated in the basis of preparation note to the financial statements; (c) in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the Group; (d) the directors have been given the declarations required by s.295A of the Corporations Act 2001; and (e) in the directors’ opinion, the attached consolidated entity disclosure statement is true and correct. Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations Act 2001. On behalf of the directors Jack Cowin Non-Executive Chairman 21 August 2024 Don Meij Managing Director/Group Chief Executive Officer 21 August 2024 Directors’ Declaration 109 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. Auditor’s Independence Declaration Deloitte Touche Tohmatsu ABN 74 490 121 060 Riverside Centre 123 Eagle Street Brisbane QLD 4000 GPO Box 1463 Brisbane QLD 4001 Australia Tel: +61 (0) 7 3308 7000 Fax: +61 (0) 2 9322 7001 www.deloitte.com.au Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte organisation. 21 August 2024 The Directors Domino’s Pizza Enterprises Limited Level 1, KSD1 HAMILTON QLD 4007 Dear Directors Auditor’s Independence Declaration to Domino’s Pizza Enterprises Limited In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the Directors of Domino’s Pizza Enterprises Limited. As lead audit partner for the audit of the financial report of Domino’s Pizza Enterprises Limited for the year ended 30 June 2024, I declare that to the best of my knowledge and belief, there have been no contraventions of: • The auditor independence requirements of the Corporations Act 2001 in relation to the audit; and • Any applicable code of professional conduct in relation to the audit. Yours faithfully DELOITTE TOUCHE TOHMATSU Jacques Strydom Partner Chartered Accountants 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 110 Independent Auditor’s Report Deloitte Touche Tohmatsu ABN 74 490 121 060 Riverside Centre 123 Eagle Street Brisbane QLD 4000 GPO Box 1463 Brisbane QLD 4001 Australia Tel: +61 (0) 7 3308 7000 Fax: +61 (0) 2 9322 7001 www.deloitte.com.au Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte organisation. Independent Auditor’s Report to the Members of Domino’s Pizza Enterprises Limited Report on the Audit of the Financial Report Opinion We have audited the financial report of Domino’s Pizza Enterprises Limited (the “Entity”) and its subsidiaries (the “Group”) which comprises the consolidated statement of financial position as at 30 June 2024, the consolidated statement of profit or loss, the consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policy information and other explanatory information, the directors’ declaration and the Consolidated Entity Disclosure Statement. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: • Giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its financial performance for the year then ended; and • Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 111 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. Key Audit Matter How the scope of our audit responded to the Key Audit Matter Recoverability of the carrying value of goodwill and Indefinite life Intangible assets As disclosed in Note 13, goodwill and indefinite life intangible assets totaling $1,023 million are included in the consolidated statement of financial position at 30 June 2024. Management conducts annual impairment tests (or more frequently if an impairment indicator exists) for goodwill and indefinite life intangible assets to assess the recoverability of the carrying amounts of cash generating units or groups of cash generating units (CGUs). The annual impairment assessment for the year ended 30 June 2024 resulted in no impairment being recognised. We have identified recoverability of goodwill and indefinite life intangible assets for the Malaysia, Singapore, Cambodia and Taiwan CGUs as a key audit matter. The estimation of the recoverable amounts of the CGUs required significant judgement due to assumptions in estimating future cash flows including growth rates and discount rates over the forecast period. Our procedures performed, in conjunction with our internal valuation specialists, included, but were not limited to: • Understanding management’s process for determining the recoverable amounts of the CGUs; • Challenging management on its determination of CGUs and the level at which goodwill is monitored; • Evaluating the appropriateness of the methodology applied by management in calculating the recoverable amounts of the CGUs; • Challenging the assumptions used to calculate the discount rates and developing an independent expectation of these rates; • Cross checking the long-term growth rates used to project cash flows to available industry forecasts; • Challenging the basis for the short-term forecasts used in the models by performing the following: - Agreeing store growth forecasts to board approved plans - Assessing the revenue growth rates with reference to historical growth rates and available third party evidence of expected growth rates in the industry - Understanding the basis for estimating capital expenditure forecasts and consistency with business plans - Reviewing management’s historical accuracy of forecasting; • Testing the mathematical accuracy of the impairment models used to calculate the recoverable amounts of the CGUs; • Performing sensitivity analysis on the recoverable amounts of the CGUs in relation to the assumed growth rates during the forecast period, terminal growth rates and discount rates; and • Assessing the appropriateness of the disclosures included in Note 13 to the financial statements. Other Information The directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2024, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report, or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Independent Auditor’s Report continued 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 112 Responsibilities of the Directors for the Financial Report The directors of the Company are responsible: • For the preparation of the financial report in accordance with the Corporations Act 2001, including giving a true and fair view of the financial position and performance of the Group in accordance with Australian Accounting Standards; and • For such internal control as the directors determine is necessary to enable the preparation of the financial report in accordance with the Corporations Act 2001, including giving a true and fair view of the financial position and performance of the Group, and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. • Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion. Independent Auditor’s Report continued 113 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 89 to 104 of the Directors’ Report for the year ended 30 June 2024. In our opinion, the Remuneration Report of Domino’s Pizza Enterprises Limited, for the year ended 30 June 2024, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. DELOITTE TOUCHE TOHMATSU Jacques Strydom Partner Chartered Accountants Brisbane, 21 August 2024 Independent Auditor’s Report continued 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 114 For the year ended 30 June 2024 Consolidated Statement of Profit or Loss NOTE 2024 $’000 2023 $’000 Continuing operations Revenue 2 2,376,699 2,314,307 Other gains and losses 3 38,686 17,875 Finance income 4 6,664 5,840 Food, equipment and packaging expenses (1,040,985) (1,007,429) Employee benefits expense 5 (410,514) (415,297) Plant and equipment costs 5 (28,301) (31,569) Depreciation and amortisation expense 5 (155,044) (150,923) Occupancy expenses 5 (6,081) (7,817) Finance costs 5 (41,749) (28,210) Marketing expenses (219,207) (209,167) Royalties expense (112,704) (107,289) Store related expenses (39,928) (39,741) Communication expenses (53,004) (48,404) Closure costs associated with corporate stores and operations 6 (55,045) (69,759) Acquisition, integration, legal settlement and advertising contributions (7,917) (11,475) Other expenses (123,147) (110,304) Profit before tax 128,423 100,638 Income tax expense 8 (36,076) (31,603) Profit from continuing operations 92,347 69,035 Discontinued operations Profit/(loss) from discontinued operations after tax 10 3,612 (26,439) Profit for the period from operations 95,959 42,596 Profit is attributable to: Owners of the parent 95,959 40,570 Non-controlling interests – 2,026 Total profit for the period 95,959 42,596 CENTS CENTS Earnings per share from continuing operations Basic (cents per share) 21 102.7 76.1 Diluted (cents per share) 21 102.6 76.1 Earnings per share Basic (cents per share) 21 106.7 46.1 Diluted (cents per share) 21 106.6 46.0 The above Statement should be read in conjunction with the accompanying notes. 115 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. For the year ended 30 June 2024 Consolidated Statement of Other Comprehensive Income 2024 $’000 2023 $’000 Profit for the period 95,959 42,596 Other comprehensive income Items that may be reclassified subsequently to profit or loss Gain/(loss) on net investment hedge taken to equity 6,427 (11,221) Exchange differences arising on translation of foreign operations (11,792) 18,361 Gain/(loss) on cash flow hedges taken to equity (1,575) (5,702) Income tax relating to components of other comprehensive income (1,302) 5,184 Other comprehensive gain/(loss) for the period, net of tax (8,242) 6,622 Total comprehensive income for the period 87,717 49,218 Items not to be reclassified to profit or loss Remeasurement of defined benefit obligation 288 (364) Income tax relating to components of other comprehensive income (78) 134 Net other comprehensive income not to be reclassified to profit or loss in subsequent periods for the period 210 (230) Other comprehensive income/(loss) for the year, net of tax (8,032) 6,392 Total comprehensive income for the year 87,927 48,988 Total comprehensive income for the period is attributable to: Owners of the parent 87,927 45,451 Non-controlling interests – 3,537 Total comprehensive income for the year 87,927 48,988 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 116 Consolidated Statement of Financial Position As at 30 June 2024 NOTE 2024 $’000 2023 $’000 Assets Current assets Cash and cash equivalents 7 87,651 159,891 Trade and other receivables 14 132,570 155,135 Other financial assets 24 36,916 36,642 Inventories 17 51,020 59,948 Current tax assets 8 18,959 43,370 Other assets 14 55,741 52,640 Investment in lease assets 12 78,121 78,179 Total current assets 460,978 585,805 Non-current assets Other financial assets 24 90,023 108,934 Investment in joint venture 1,525 1,742 Property, plant and equipment 11 277,151 324,658 Deferred tax assets 8 1,698 498 Goodwill 13 534,459 551,644 Intangible assets 13 632,066 638,911 Right-of-use assets 12 250,667 297,077 Investment in lease assets 12 344,222 365,934 Total non-current assets 2,131,811 2,289,398 Total assets 2,592,789 2,875,203 Liabilities Current liabilities Trade and other payables 15 325,991 366,473 Contract liabilities 2 6,526 4,883 Lease liabilities 12 149,763 141,408 Borrowings 23 916 – Other financial liabilities 25 13,738 14,503 Provisions 16 31,320 31,444 Current tax liabilities 8 16,514 24,241 Total current liabilities 544,768 582,952 Non-current liabilities Borrowings 23 761,488 978,591 Contract liabilities 2 20,698 19,325 Lease liabilities 12 532,108 619,937 Other financial liabilities 25 4 18,327 Provisions 16 11,832 16,759 Deferred tax liabilities 8 112,343 118,795 Total non-current liabilities 1,438,473 1,771,734 Total liabilities 1,983,241 2,354,686 Net assets 609,548 520,517 Equity Issued capital 18 518,699 430,476 Reserves 18 (133,460) (126,109) Retained earnings 18 224,309 216,150 Total equity 609,548 520,517 The above Statement should be read in conjunction with the accompanying notes. 117 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. ISSUED CAPITAL $’000 HEDGING RESERVE $’000 FOREIGN CURRENCY TRANSLATION RESERVE $’000 OTHER RESERVE $’000 RETAINED EARNINGS $’000 NON- CONTROLLING INTEREST $’000 TOTAL $’000 Balance at 03 July 2022 264,212 8,426 (18,632) (126,642) 294,593 – 421,957 Profit for the period – – – – 40,570 2,026 42,596 Other comprehensive income – (11,739) 16,850 (230) – 1,511 6,392 Total comprehensive income for the period – (11,739) 16,850 (230) 40,570 3,537 48,988 Share options trust – – – 293 – – 293 Dividends provided for or paid – – – – (119,013) – (119,013) Non-controlling interest put option – – – 6,593 – (3,537) 3,056 Recognition of share-based payments – – – (1,028) – – (1,028) Contributions of equity, net of transaction costs and tax 164,999 – – – – – 164,999 Employee share scheme 3,086 – – – – – 3,086 Share issue costs (1,821) – – – – – (1,821) Balance at 02 July 2023 430,476 (3,313) (1,782) (121,014) 216,150 – 520,517 ISSUED CAPITAL $’000 HEDGING RESERVE $’000 FOREIGN CURRENCY TRANSLATION RESERVE $’000 OTHER RESERVE $’000 RETAINED EARNINGS $’000 NON- CONTROLLING INTEREST $’000 TOTAL $’000 Balance at 02 July 2023 430,476 (3,313) (1,782) (121,014) 216,150 – 520,517 Profit for the period – – – – 95,959 – 95,959 Other comprehensive income – 3,550 (11,792) 210 – – (8,032) Total comprehensive income for the period – 3,550 (11,792) 210 95,959 – 87,927 Share options trust – – – (146) – – (146) Share issue costs (168) – – – – – (168) Employee share scheme 612 – – – – – 612 Underwritten dividend reinvestment plan 87,779 – – – – – 87,779 Recognition of share-based payments – – – 827 – – 827 Dividends – – – – (87,800) – (87,800) Balance at 30 June 2024 518,699 237 (13,574) (120,123) 224,309 – 609,548 Consolidated Statement of Changes in Equity For the year ended 30 June 2024 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 118 NOTE 2024 $’000 2023 $’000 Cash flows from operating activities Receipts from customers 2,635,816 2,569,180 Payments to suppliers and employees (2,370,611) (2,238,103) Interest received 13,355 12,624 Interest and other finance costs (40,170) (26,780) Income taxes paid (1,422) (56,128) Net cash generated from operating activities 7 236,968 260,793 Cash flows from investing activities Proceeds from franchisee loans 33,852 25,574 Payments for intangible assets (45,940) (49,469) Payments for property, plant and equipment (44,245) (108,195) Proceeds from sale of non-current assets 29,040 21,207 Acquisition of stores net of cash (34,626) (48,143) Acquisition of subsidiaries (3,741) (205,768) Acquisition of non-controlling interest – (123,116) Net cash inflow/(outflow) on investment in joint ventures (346) (27) Net cash (used in) investing activities (66,006) (487,937) Cash flows from financing activities Proceeds from borrowings 260,279 768,172 Repayment of borrowings (427,717) (434,958) Receipts from subleases 81,214 74,944 Proceeds from issues of equity securities 55,661 167,105 Dividends paid (55,461) (119,013) Payments for establishment of borrowings (1,056) (2,245) Share issue costs (168) (1,821) Lease principal payments (151,839) (138,064) Net cash (used in) generated from financing activities (239,087) 314,120 Net increase/(decrease) in cash and cash equivalents held (68,125) 86,976 Cash and cash equivalents at the beginning of the period 159,891 76,877 Effects of exchange rate changes on the balance of cash held in foreign currencies (4,115) (3,962) Cash and cash equivalents at the end of the period 7 87,651 159,891 The above Statement should be read in conjunction with the accompany notes. Consolidated Statement of Cash Flows For the year ended 30 June 2024 119 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. Notes to the Financial Statements BASIS OF PREPARATION 120 KEY NUMBERS 122 1 SEGMENT INFORMATION 122 2 REVENUE 123 3 OTHER GAINS AND LOSSES 125 4 FINANCE INCOME 125 5 EXPENSES 125 6 CLOSURE COSTS ASSOCIATED WITH CORPORATE STORES AND OPERATIONS 127 7 CASH AND CASH EQUIVALENTS 127 8 TAX 129 9 ACQUISITION OF BUSINESSES 133 10 DISCONTINUED OPERATION 136 11 PROPERTY, PLANT AND EQUIPMENT 137 12 LEASES 138 13 GOODWILL AND OTHER INTANGIBLES 141 14 TRADE, OTHER RECEIVABLES AND OTHER ASSETS 146 15 TRADE AND OTHER PAYABLES 147 16 PROVISIONS 148 17 INVENTORY 149 CAPITAL 150 18 EQUITY 150 19 NON-CONTROLLING INTERESTS 152 20 DIVIDENDS 152 21 EARNINGS PER SHARE 153 22 SHARE-BASED PAYMENTS 154 FINANCIAL MANAGEMENT 157 23 BORROWINGS 157 24 FINANCIAL ASSETS 157 25 FINANCIAL LIABILITIES 160 26 FINANCIAL RISK MANAGEMENT 162 GROUP STRUCTURE 174 27 SUBSIDIARIES 174 28 PARENT ENTITY INFORMATION 175 UNRECOGNISED ITEMS 176 29 COMMITMENTS 176 30 CONTINGENT LIABILITIES 176 31 SUBSEQUENT EVENTS 178 OTHER INFORMATION 179 32 RETIREMENT BENEFIT PLANS 179 33 KEY MANAGEMENT PERSONNEL COMPENSATION 181 34 RELATED PARTY TRANSACTIONS 181 35 REMUNERATION OF AUDITORS 183 36 OTHER ITEMS 183 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 120 BASIS OF PREPARATION Domino’s Pizza Enterprises Limited (Domino’s) is a for-profit public company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange and trading under the symbol ‘DMP’. The nature of the operations and principal activities of Domino’s and its subsidiaries (the Group) are described in the segment information. The consolidated general purpose financial report of the Group for the period ended 30 June 2024 comprised a 52-week period,the comparative year ended 02 July 2023 also comprised a 52-week period. The financial report was authorised for issue in accordance with a resolution of the directors on 21 August 2024. The directors have the power to amend and reissue the financial report. The financial report is a general purpose financial report which: • has been prepared on a going concern basis in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and also complies with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB); • has been prepared on a historical cost basis, except for certain financial instruments which have been measured at fair value (refer to note 26) and equity‑settled share-based payments (refer to note 22). The carrying values of recognised assets and liabilities that are the hedged items in fair value hedge relationships, which are otherwise carried at amortised costs, are adjusted to record changes in the fair values attributable to the risks that are being hedged; • is presented in Australian dollars with all values rounded to the nearest thousand dollars ($’000) unless otherwise stated which is in accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191; and • adopts all new and amended Accounting Standards and Interpretations issued by the AASB that are relevant to the Group and effective for reporting periods beginning on or before 03 July 2023 as listed in note 36; and • does not early adopt Accounting Standards and Interpretations that have been issued or amended but are not yet effective. GOING CONCERN The financial statements have been prepared on the basis that the Group will continue as a going concern. The Group has a net current liability position of $83.8 million at 30 June 2024 (02 July 2023: net current asset position $2.9 million). As at 30 June 2024, the Group had unrestricted cash and cash equivalents of $87.7 million. The Group’s capital structure is sustainable with sufficient liquidity, including undrawn committed facilities of $419.2 million. The Directors have concluded that there are reasonable grounds to believe that the going concern basis is appropriate, and that assets are likely to be realised, and liabilities are likely to be discharged, at the amounts recognised in the financial statements in the ordinary course of business. BASIS OF CONSOLIDATION The consolidated financial statements comprise the financial statements of the Group. A list of controlled entities (subsidiaries) at year-end is contained in note 27. Subsidiaries are entities over which the Group has control. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group using the acquisition method of accounting described in note 9. They are deconsolidated from the date that control ceases. The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist. In preparing the consolidated financial statements all inter-company balances and transactions, income and expenses and profits and losses resulting from intra-Group transactions have been eliminated. Notes to the Financial Statements continued Notes to the Financial Statements 121 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. FOREIGN CURRENCY The functional currency of Domino’s Pizza Enterprises Limited is Australian dollars (‘$’), the functional currencies of overseas subsidiaries are listed in note 27. As at the reporting date, the assets and liabilities of overseas subsidiaries are translated into Australian dollars at the rate of exchange ruling at the balance sheet date and the income statements are translated at the average exchange rates for the year. The exchange differences arising on the retranslation of overseas subsidiaries are taken directly to a separate component of equity. Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences arising from the application of these procedures are taken to the income statement, with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity, which are taken directly to equity until the disposal of the net investment and are then recognised in the income statement. Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity. GOODS AND SERVICES TAX Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except: (i) where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or (ii) for receivables and payables which are recognised inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables. Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified within operating cash flows. COMPARATIVE INFORMATION Comparative amounts have, where necessary and immaterial, been reclassified or adjusted so as to be consistent with current year disclosures. To align with the current period’s presentation, comparative information has been adjusted to reflect the elimination of revenue and corresponding expenses of $34.2 million, and reclassification of goods dispatched in relation to intergroup sales from trade and other receivables of $21.1 million, of which $16.8 million was reclassified to inventory and $4.3 million reclassified to trade and other payables to eliminate intergroup trade and other payables. The reclassification had no impact on profit for the period reported in 2023. OTHER ACCOUNTING POLICIES Significant and other accounting policies that summarise the measurement basis used and are relevant to the understanding of the financial statements are provided throughout the notes to the financial statements. KEY JUDGEMENTS AND ESTIMATES In applying the Group’s accounting policies, the directors are required to make estimates, judgements and assumptions that affect amounts reported in this Financial Report. The estimates, judgements and assumptions are based on historical experience, adjusted for current market conditions and other factors that are believed to be reasonable under the circumstances and are reviewed on a regular basis. Actual results may differ from these estimates. The estimates and judgements which involve a higher degree of complexity or that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next period are included in the following notes: NOTE KEY JUDGEMENTS AND ESTIMATES Note 13 Master Franchise Rights & Franchise Network Assets Note 13 Useful Lives of Other Intangible Assets Note 13 Recoverable Amount of Cash Generating Units Note 30 Legal and Regulatory Matters Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period; or in the period and future periods if the revision affects both current and future periods. continued 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 122 Notes to the Financial Statements KEY NUMBERS Key numbers provides a breakdown of individual line items in the financial statements that the directors consider most relevant and summarises the accounting policies, judgements and estimates relevant to understanding these items. 1 SEGMENT INFORMATION RECOGNITION AND MEASUREMENT The consolidated entity has identified its operating segments on the basis of internal reports about components of the consolidated entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and assess its performance. Information reported to the consolidated entity’s Chief Executive Officer for the purpose of resource allocation and assessment of performance is specifically focused on the geographical location the consolidated entity operates in. The consolidated entity’s reportable segments under AASB 8 are therefore as follows: • Australia / New Zealand (“ANZ”) • Europe • Asia The Unallocated segment represents corporate costs associated with the management and oversight of global functions which are shared by all jurisdictions in which the Group operates. The Group provides services to and derives revenue from a number of customers. The Group does not derive more than 10% of the total consolidated revenue from any one customer. UNDERSTANDING THE SEGMENT RESULT SEGMENT REVENUES AND RESULTS The following is an analysis of the Group’s revenue and results from continuing operations by reportable segment. YEAR ENDED 30 JUNE 2024 ANZ $’000 EUROPE $’000 ASIA $’000 UNALLOCATED $’000 TOTAL $’000 Continuing operations Revenue 795,293 762,702 818,704 – 2,376,699 EBITDA 150,534 87,048 104,792 (23,822) 318,552 Depreciation & amortisation (39,206) (40,655) (68,904) (6,279) (155,044) EBIT 111,328 46,393 35,888 (30,101) 163,508 Net finance costs (35,085) Net profit before tax 128,423 YEAR ENDED 02 JULY 2023 ANZ $’000 EUROPE $’000 ASIA $’000 UNALLOCATED $’000 TOTAL $’000 Continuing operations Revenue 763,475 735,709 815,123 – 2,314,307 EBITDA 115,018 68,050 111,433 (20,570) 273,931 Depreciation & amortisation (42,505) (40,567) (64,650) (3,201) (150,923) EBIT 72,513 27,483 46,783 (23,771) 123,008 Net finance costs – (22,370) Net profit before tax 100,638 Revenue reported above represents revenue generated from external customers and franchisees. There were no inter-segment sales during the period (2023: Nil). continued Notes to the Financial Statements 123 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. The accounting policies of the reportable segments are the same as the Group’s policies described throughout the financial report. Segment net profit before tax represents the profit earned by each segment using the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance. SEGMENT ASSETS AND LIABILITIES FROM CONTINUING OPERATIONS The amounts provided to the chief operating decision-makers in respect of total assets and liabilities are measured in a manner consistent with that of the financial statements. 2024 ASSETS $’000 LIABILITIES $’000 Continuing operations Australia/New Zealand 601,121 (829,092) Europe 816,561 (360,711) Asia 1,161,821 (789,220) Total segment assets/(liabilities) 2,579,503 (1,979,023) Unallocated 13,286 (4,218) Consolidated assets/(liabilities) 2,592,789 (1,983,241) 2023 ASSETS $’000 LIABILITIES $’000 Continuing operations Australia/New Zealand 641,339 (1,002,107) Europe 893,157 (377,786) Asia 1,320,775 (971,491) Total segment assets/(liabilities) 2,855,271 (2,351,384) Unallocated 19,932 (3,302) Consolidated assets/(liabilities) 2,875,203 (2,354,686) OTHER SEGMENT INFORMATION The non-current assets by geographical location are detailed below. DEPRECIATION AND AMORTISATION ADDITIONS TO NON‑CURRENT ASSETS NON-CURRENT ASSETS 2024 $’000 2023 $’000 2024 $’000 2023 $’000 2024 $’000 2023 $’000 Australia / New Zealand 39,206 42,505 59,012 87,626 971,075 1,052,873 Europe 40,655 40,567 23,799 70,420 333,165 306,759 Asia 68,904 64,650 71,563 386,264 814,285 909,834 Unallocated 6,279 3,201 559 11,105 13,286 19,932 155,044 150,923 154,933 555,415 2,131,811 2,289,398 2 REVENUE RECOGNITION AND MEASUREMENT Revenue is recognised when or as the performance obligation under the relevant customer contract is completed. Performance obligations may be completed at a point in time or over time. SALE OF GOODS The revenue from the sale of food and beverages is recognised when the performance obligation has been satisfied. The performance obligation is assessed to be satisfied when control of the goods is passed to the customer (at a point in time). FRANCHISE REVENUE Initial fees are recognised as revenue on a straight-line basis over the term of the respective franchise agreement. This is on the basis that the Group has determined that the services provided in exchange for the initial fees are highly interrelated with the franchise right and are not individually distinct from the ongoing services provided to the franchisees. 1 SEGMENT INFORMATION (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 124 Revenue associated with continuing sales-based royalties and marketing fund royalties is recognised when the related franchisee sale occurs. The Group considers there to be one performance obligation, being the franchise right. SERVICE REVENUE The Group provides services to franchisees and other third parties which are carried out in accordance with the contract. Service revenue is recognised on satisfaction of the performance obligation which is when the services are rendered. INTEREST INCOME ON FRANCHISEE LOANS AND CASH AND CASH EQUIVALENTS Interest is determined using the effective interest rate method, which accrues interest on a time basis, with reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition. YEAR ENDED 30 JUNE 2024 ANZ $’000 EUROPE $’000 ASIA $’000 TOTAL $’000 Revenue type Revenue from sale of goods 561,413 551,367 712,607 1,825,387 Revenue from franchise and rendering of services 231,043 211,124 102,454 544,621 Interest income 2,837 211 3,643 6,691 Total 795,293 762,702 818,704 2,376,699 Timing of revenue recognition At a point in time 578,885 561,900 721,349 1,862,134 Over time 216,408 200,802 97,355 514,565 Total 795,293 762,702 818,704 2,376,699 YEAR ENDED 02 JULY 2023 ANZ $’000 EUROPE $’000 ASIA $’000 TOTAL $’000 Revenue type Revenue from sale of goods 535,557 535,771 699,653 1,770,981 Revenue from rendering of services 224,970 199,733 111,839 536,542 Interest income 2,948 205 3,631 6,784 Total 763,475 735,709 815,123 2,314,307 Timing of revenue recognition At a point in time 555,848 554,426 709,423 1,819,697 Over time 207,627 181,283 105,700 494,610 Total 763,475 735,709 815,123 2,314,307 CONTRACT LIABILITIES Contract liabilities consist of deferred franchise fees. The Group’s franchise agreements typically require certain one-off fees. These fees include initial fees paid upon executing a franchise agreement, renewal of the franchise right and fees paid in the event the franchise agreement is transferred to another franchisee (collectively termed initial fees). The Group has determined that the initial fees are highly interrelated with the franchise right and are not individually distinct from the ongoing services provided to the franchisees. As a result, initial fees are recognised as revenue over the term of each respective franchise agreement; which generally ranges from a 2 to 10 year period. Revenue from these initial franchise fees are recognised over time on a straight-line basis which is determined with reference to the franchisee’s right to use and access and benefit from the intellectual property. 2 REVENUE (continued) continued Notes to the Financial Statements 125 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. The Group has recognised the following deferred franchise fees: 2024 $’000 2023 $’000 Contract liabilities Within one year 6,526 4,883 More than one year 20,698 19,325 Total 27,224 24,208 Contract liabilities at the beginning of the period was $24.2 million (2023: $18.9 million). The Group recognised $6.0 million (2023:$6.0 million) of revenue related to contract liabilities. The Group has applied the sales-based royalty exemption which permits exclusion of variable consideration in the form of sales-based royalties from the disclosure of remaining performance obligations. 3 OTHER GAINS AND LOSSES 2024 $’000 2023 $’000 Net gain on disposal of property, plant & equipment, goodwill and other non-current assets 18,510 17,464 Fair value adjustment of contingent consideration 18,764 – Net gain on disposal of leases 286 159 Other 1,126 252 Total other gains and losses 38,686 17,875 4 FINANCE INCOME 2024 $’000 2023 $’000 Finance income 6,664 5,840 Total finance income 6,664 5,840 Finance income relates to interest income on investment in lease assets. Refer to note 12. 5 EXPENSES RECOGNITION AND MEASUREMENT EMPLOYEE BENEFITS The Group’s accounting policy for liabilities associated with employee benefits is set out in note 16. The policy relating to share-based payments is set out in note 22. The majority of employees are party to defined contribution schemes and fixed contributions from Group companies and the Group’s legal or constructive obligation is limited to these contributions. Contributions to defined contribution funds are recognised as an expense as they become payable. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payment is available. OCCUPANCY EXPENSES Occupancy expenses relate to non-lease components of lease contracts and are recognised as an expense when they are incurred. 2 REVENUE (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 126 DEPRECIATION AND AMORTISATION Refer to notes 11, 12 and 13 for details on depreciation and amortisation. FINANCE COSTS Finance costs are recognised as an expense when they are incurred, except for interest charges attributable to major projects with substantial development and construction phases that are capitalised. Provisions and other payables are discounted to their present value when the effect of the time value of money is significant. The impact of the unwinding of these discounts and any changes to the discounting is shown as a discount rate adjustment in finance costs. PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS Profit for the year from continuing operations was arrived at after charging (crediting): NOTE 2024 $’000 2023 $’000 Remuneration, bonuses and on-costs 388,811 397,053 Defined contribution plans 19,395 17,138 Defined benefit plans 32 1,069 1,176 Share-based payments expense 1,239 (70) Employee benefits expenses 410,514 415,297 Equipment operating costs 24,703 27,711 Expenses relating to leases of low value assets 3,598 3,858 Plant and equipment costs 28,301 31,569 Depreciation of property, plant and equipment 52,736 50,207 Depreciation of right-of-use assets 63,267 61,037 Amortisation of intangible assets 38,371 30,113 Accelerated amortisation – 9,176 Amortisation of other assets 670 390 Depreciation and amortisation expense 155,044 150,923 Non-lease component occupancy expenses 6,081 7,817 Occupancy expenses 6,081 7,817 Interest on commercial bills and loans 28,392 16,672 Amortisation of borrowing costs 1,579 1,463 Interest expense on lease liabilities 11,778 10,075 Finance costs 41,749 28,210 5 EXPENSES (continued) continued Notes to the Financial Statements 127 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. 6 CLOSURE COSTS ASSOCIATED WITH CORPORATE STORES AND OPERATIONS During FY23 and FY24, the Group closed several corporate stores across its segments and has provisioned for the additional corporate store closures noted above. The costs associated with the closures include a write-down in the value of property, plant, and equipment, a write-down of goodwill allocated to the corporate stores, and the impairment of the right-of-use assets. In addition, during FY24, the Group incurred costs in relation to centralising some support office functions in shared services centres. These costs incurred included employee termination benefits and transition costs for transferring functions to the shared service centres. 2024 $’000 2023 $’000 Write down of corporate stores property plant and equipment 12,684 23,160 Write down of goodwill associated with corporate stores 3,587 28,001 Write down of other intangible assets associated with corporate stores 524 1,129 Impairment of right of use assets associated with corporate stores 1,709 8,268 Onerous contract provisions and make good provisions 13,792 7,728 Employee termination and transition costs 21,665 437 Inventory write downs 1,084 1,036 Closure costs associated with corporate stores and operations 55,045 69,759 7 CASH AND CASH EQUIVALENTS RECOGNITION AND MEASUREMENT Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value and have a maturity of three months or less from date of inception. Bank overdrafts are shown within borrowings in current liabilities in the consolidated statement of financial position. For the purpose of the statement of cash flows, cash and cash equivalents includes cash on hand, in banks and demand deposits, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the reporting period as shown in the statement of cash flows can be reconciled to the related items in the statement of financial position as follows: 2024 $’000 2023 $’000 Cash and cash equivalents 87,651 159,891 87,651 159,891 continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 128 RECONCILIATION OF PROFIT FOR THE PERIOD TO NET CASH FLOWS FROM OPERATING ACTIVITIES 2024 $’000 2023 $’000 Profit/(loss) for the period from continuing operations 92,347 69,035 Profit/(loss) from discontinued operations 3,612 (26,439) Profit on sale of non-current assets (21,274) (19,000) Equity settled share-based payments 1,239 (70) Depreciation and amortisation 155,044 154,641 Asset impairments, write-downs and fair value adjustments 1,719 68,464 Share of joint venture entities net (profit)/loss 506 593 Amortisation of loan establishment costs 1,579 1,463 Other 4,238 5,403 239,010 254,090 Movement in working capital (Increase)/decrease in assets: Trade and other receivables 17,867 (7,288) Inventory 7,765 (4,655) Other current assets (1,084) (2,660) Increase/(decrease) in liabilities: Trade and other payables (34,144) 51,089 Provisions (3,024) 14,854 Current tax assets and liabilities 17,486 (34,220) Deferred tax balances (6,908) (10,417) Net cash generated from operating activities 236,968 260,793 NET DEBT RECONCILIATION This section sets out an analysis of net debt and the movements in net debt for each of the periods presented. 2024 $’000 2023 $’000 Cash and cash equivalents 87,651 159,891 Borrowings – repayable within one year (916) – Borrowings – repayable after one year (765,359) (983,090) Net debt (678,624) (823,199) Cash and cash equivalents 87,651 159,891 Gross debt – fixed interest rates (394,191) (453,108) Gross debt – variable interest rates (372,084) (529,982) Net debt (678,624) (823,199) 7 CASH AND CASH EQUIVALENTS (continued) continued Notes to the Financial Statements 129 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. CASH $’000 LEASE LIABILITIES DUE WITHIN 1 YEAR $’000 LEASE LIABILITIES DUE AFTER 1 YEAR $’000 BORROWINGS DUE WITHIN 1 YEAR $’000 BORROWINGS DUE AFTER 1 YEAR $’000 TOTAL $’000 Balances as at 03 July 2022 76,877 (122,304) (646,714) (32,035) (615,824) (1,340,000) Cash flows 86,976 – 136,717 32,035 (365,249) (109,521) Lease liabilities additions – (18,619) (107,373) – – (125,992) Foreign exchange adjustments (3,962) (485) (2,567) – (2,017) (9,031) Balances as at 02 July 2023 159,891 (141,408) (619,937) – (983,090) (1,584,544) CASH $’000 LEASE LIABILITIES DUE WITHIN 1 YEAR $’000 LEASE LIABILITIES DUE AFTER 1 YEAR $’000 BORROWINGS DUE WITHIN 1 YEAR $’000 BORROWINGS DUE AFTER 1 YEAR $’000 TOTAL $’000 Balances as at 2 July 2023 159,891 (141,408) (619,937) – (983,090) (1,584,544) Cash flows (68,125) – 151,838 (916) 168,354 251,151 Lease liabilities additions – (13,966) (88,607) – – (102,573) Foreign exchange adjustments (4,115) 5,611 24,598 – 49,377 75,471 Balances as at 30 June 2024 87,651 (149,763) (532,108) (916) (765,359) (1,360,495) 8 TAX TAX RECOGNITION AND MEASUREMENT Income tax expense represents the sum of the tax currently payable and deferred tax. CURRENT TAXES Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to taxation authorities at the tax rates and tax laws enacted or substantively enacted by the balance sheet date in respective jurisdictions. DEFERRED TAXES Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences, carried forward unused tax assets and unused tax losses, to the extent that it is probable that taxable profits will be available to utilise them. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. Deferred income tax is provided on temporary differences at balance sheet date between accounting carrying amounts and the tax bases of assets and liabilities, other than for the following: • where they arise from the initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and detectable temporary differences; and • where taxable temporary differences relate to investments in subsidiaries, associates and interests in joint ventures: Deferred tax liabilities are not recognised if the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets are not recognised if it is not probable that the temporary differences will reverse in the foreseeable future and taxable profit will not be available to utilise the temporary differences. Deferred tax liabilities are not recognised on the recognition of goodwill. Income taxes relating to items recognised directly in equity are recognised in equity and not in the income statement. 7 CASH AND CASH EQUIVALENTS (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 130 PILLAR TWO TOP UP TAX The Group is within the scope of Base Erosion and Profit Sharing (BEPS) Pillar Two rules for income years beginning on or after 1 January 2024. The first period for which a Pillar Two return will be required is in the income year ending on 30 June 2025. The Group has applied the mandatory exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes. The Group has performed an analysis in preparation for complying with the Pillar Two model rules for the income year ending on 30 June 2025. Based on the analysis performed on the available information in respect of the financial year ended 30 June 2024, the Group does not expect any material exposure to Pillar Two top up taxes. OFFSETTING DEFERRED TAX BALANCES Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority. UNRECOGNISED TAXABLE TEMPORARY DIFFERENCES ASSOCIATED WITH INVESTMENTS AND INTERESTS At the end of the financial year, an aggregate deferred tax liability of $155,702 thousand (2023: $155,582 thousand) was not recognised in relation to investments in subsidiaries as the parent Company is able to control the timing of the reversal of the temporary differences and it is not probable that the temporary difference will reverse in the foreseeable future. INCOME TAX RECOGNISED IN THE PROFIT OR LOSS 2024 $’000 2023 $’000 Tax expense comprises: Current tax expense in respect of the current year 46,469 30,883 Adjustments recognised in the current year in relation to the current tax of prior years (1,295) (6,217) 45,174 24,666 Deferred tax expense/(income) relating to the origination and reversal of temporary differences (7,606) (3,735) Deferred tax expense/(income) relating to the change in tax rate in other jurisdictions 56 (910) Total tax expense 37,624 20,021 Income tax expense/(benefit) is attributable to: Profit from continuing operations 36,076 31,603 Profit/(Loss) from discontinued operation 1,548 (11,582) 37,624 20,021 8 TAX (continued) continued Notes to the Financial Statements 131 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. RECONCILIATION OF INCOME TAX EXPENSE TO PRIMA FACIE TAX RATE: 2024 $’000 2023 $’000 Profit before tax from continuing operations 128,423 100,638 Profit from discontinued operation before income tax expense 5,160 (38,021) 133,583 62,617 Income tax expense calculated at 30% 40,075 18,785 (Non-assessable)/non-deductible amounts 140 5,844 Effect of tax concessions (research and development and other allowances) (213) (171) Adjustments recognised in the current year in relation to the current tax of prior year (1,049) (6,154) Previously unrecognised tax losses and credits used to reduce deferred tax expense (893) 2,430 Effect of different tax rates of subsidiaries operating in other jurisdictions (492) 197 Effect of change in tax rate in other jurisdictions 56 (910) Income tax expense recognised in profit or loss 37,624 20,021 The tax rate used for the 2024 and 2023 reconciliation above is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits under Australian tax law. INCOME TAX RECOGNISED IN EQUITY Arising on income and expenses in other comprehensive income: 2024 $’000 2023 $’000 (Gain)/Loss on hedges taken to equity (1,302) 5,184 (Gain)/Loss on defined benefit plan taken to equity (78) 134 Share option trust (146) 293 (1,526) 5,611 CURRENT TAX ASSETS AND LIABILITIES 2024 $’000 2023 $’000 Current tax assets Income tax refund receivable 18,959 43,370 18,959 43,370 Current tax liabilities Income tax payable (16,514) (24,241) (16,514) (24,241) 8 TAX (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 132 DEFERRED TAX BALANCES 2024 OPENING BALANCE $’000 ACQUISITION $’000 CHARGED TO P&L $’000 CHARGED TO EQUITY $’000 EXCHANGE DIFFERENCE $’000 CLOSING BALANCE $’000 Temporary differences Property, plant & equipment (3,717) – 9,159 – 131 5,573 Intangible assets (134,964) – (9,535) – 2,945 (141,554) Provision for employee entitlements 9,099 – (939) (78) (376) 7,706 Doubtful debts 1,418 – 2,086 – (275) 3,229 Other financial liabilities 1,821 – 3,579 (1,302) (490) 3,608 Options reserve 552 – 177 (146) – 583 Unearned income 3,135 – 3,966 – (71) 7,030 Other 4,358 – (2,257) – (235) 1,866 (118,298) – 6,236 (1,526) 1,629 (111,959) Unused tax losses and credits Tax losses 1 – 1,314 – (1) 1,314 (118,297) – 7,550 (1,526) 1,628 (110,645) Deferred tax asset 1,698 Deferred tax liability (112,343) (110,645) 2023 OPENING BALANCE $’000 ACQUISITION $’000 CHARGED TO P&L $’000 CHARGED TO EQUITY $’000 EXCHANGE DIFFERENCE $’000 CLOSING BALANCE $’000 Temporary differences Property, plant & equipment (1,412) (3,189) 1,004 – (120) (3,717) Intangible assets (95,137) (37,631) 456 – (2,652) (134,964) Provision for employee entitlements 8,340 – 802 134 (177) 9,099 Doubtful debts 857 – 589 – (28) 1,418 Other financial liabilities (4,007) – 442 5,184 202 1,821 Options reserve 217 – 42 293 – 552 Unearned income 3,225 – (74) – (16) 3,135 Other 2,395 210 1,660 – 93 4,358 (85,522) (40,610) 4,921 5,611 (2,698) (118,298) Unused tax losses and credits Tax losses 273 – (276) – 4 1 (85,249) (40,610) 4,645 5,611 (2,694) (118,297) Deferred tax asset 498 Deferred tax liability (118,795) (118,297) 8 TAX (continued) continued Notes to the Financial Statements 133 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. 9 ACQUISITION OF BUSINESSES CURRENT YEAR ACQUISITIONS ACQUISITION OF DOMINO’S PIZZA STORES AND OTHER BUSINESSES During the year the Group acquired a number of Domino’s Pizza branded stores from former and current franchisees. The below provides a summary of these acquisitions during the year by segment: 2024 ANZ EUROPE ASIA TOTAL Number of stores acquired 23 9 53 85 ANZ $’000 EUROPE $’000 ASIA $’000 TOTAL $’000 Fair value on acquisition Inventories 168 – 8 176 Property, plant & equipment 2,876 1,373 9,061 13,310 Total identifiable net assets 3,044 1,373 9,069 13,486 Cash consideration 13,415 3,847 17,364 34,626 Less fair value of net identifiable assets (3,044) (1,373) (9,069) (13,486) Goodwill 10,371 2,474 8,295 21,140 The cost of acquisitions comprise cash for all of the acquisitions. In each acquisition, the Group has paid a premium for the acquiree as it believes the acquisitions will introduce additional synergies to its existing operations. Goodwill arose in the business combination as the consideration paid included a premium. In addition, the consideration paid for the stores effectively included amounts in relation to benefits from expected synergies, revenue growth and future market development. These benefits are not recognised separately from goodwill as the future economic benefits arising from them cannot be reliably measured and do not meet the recognition criteria of identifiable intangible assets. PRIOR YEAR ACQUISITIONS ACQUISITION OF DOMINO’S PIZZA MALAYSIA, SINGAPORE AND CAMBODIA Dommal Food Services Sdn.Bhd (Domino’s Malaysia), Domino’s Pizza Singapore Pte (Domino’s Singapore) and D. Pizza Co., Ltd (Domino’s Cambodia) On 30 November 2022, the Group acquired through its 100% controlled subsidiary Domino’s Pizza Japan, Inc, 100% of the issued share capital of Dommal Foods Services Sdn. Bhd (“Domino’s Malaysia”) and Domino’s Pizza Singapore Pte. Ltd (“Domino’s Singapore”). On 02 May 2022, the Group acquired through its 100% subsidiary Domino’s Japan Inc., 100% of the issued capital of D. Pizza Co., Ltd (“Domino’s Cambodia”). Domino’s Malaysia, Domino’s Singapore and Domino’s Cambodia hold the franchise rights of Domino’s in Malaysia, Singapore and Cambodia and also operates corporate stores. The acquisition is expected to expand the Group’s markets across Asia. The acquisition in these regions was funded through debt raising. continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 134 The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are set out in the table below. FAIR VALUE $’000 Assets Cash and cash equivalents 19,484 Trade and other receivables 3,752 Inventories 6,899 Other assets 4,251 Property, plant and equipment 42,719 Other intangible assets 172,256 Right of use assets 28,809 Current tax assets 1,877 Total identifiable assets 280,047 Liabilities Trade and other payables (21,522) Lease liabilities (28,809) Provisions (2,091) Deferred tax liabilities (40,610) Total identifiable liabilities (93,032) Total identifiable net assets at fair value 187,015 Consideration paid or payable 228,993 Contingent consideration 26,932 Total consideration 255,925 Less identifiable net assets at fair value (187,015) Goodwill 68,910 Net cash outflow arising on acquisition Consideration paid or payable (i) 228,993 Less cash and cash equivalents (19,484) 209,509 (i) During the year ended 30 June 2024 the Group paid consideration of $3.7 million related to a working capital adjustment. Goodwill arose on acquisition because the cost of the combination included a control premium. In addition, the consideration paid for the combination effectively included amounts in relation to the benefits of expected synergies, revenue growth, future market developments and the assembled workforce. These benefits are not recognised separately from goodwill because they do not meet the recognition criteria of identifiable intangible assets. In determining the fair value of assets arising from the acquisition, judgments and estimates are required to be applied. Acquisition costs of $4.3 million were included as an expense in the consolidated statement of profit or loss and other comprehensive income. 9 ACQUISITION OF BUSINESSES (continued) continued Notes to the Financial Statements 135 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. ACQUISITION OF DOMINO’S PIZZA STORES AND OTHER BUSINESSES During the prior year the Group acquired a number of Domino’s Pizza branded stores from former and current franchisees. The below provides a summary of these acquisitions during the prior year by segment: 2023 ANZ EUROPE ASIA TOTAL Number of stores acquired 69 12 15 96 ANZ $’000 EUROPE $’000 JAPAN $’000 TOTAL $’000 Fair value on acquisition Inventories 503 – – 503 Property, plant & equipment 5,548 1,437 2,407 9,392 Total identifiable net assets 6,051 1,437 2,407 9,895 Cash consideration 40,523 4,597 3,023 48,143 Less fair value of net identifiable assets (6,051) (1,437) (2,407) (9,895) Goodwill 34,472 3,160 616 38,248 9 ACQUISITION OF BUSINESSES (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 136 10 DISCONTINUED OPERATION EXITING THE DANISH MARKET In the prior year, the Group announced the exit of the Danish market. All stores were closed and all operations ceased; therefore the operations of the Denmark market were classified as a discontinued operation. The Danish market was previously included in the Europe operating segment. With the Danish operations being classified as a discontinued operation, its results are no longer presented in the segment note. FINANCIAL PERFORMANCE AND CASH FLOW INFORMATION The financial performance and cash flow information for the year end 30 June 2024 are presented below. 2024 $’000 2023 $’000 Revenues – 15,280 Expenses – (25,405) Finance Costs – (113) Depreciation and amortisation expense – (3,718) Loss before income tax – (13,956) Proceeds from the disposal of assets and reversal of provision (i) 5,160 – Impairment loss recognised and associated closure cost provisions – (24,065) Income tax benefit/(expense) (1,548) 11,582 Profit/(Loss) from discontinued operation 3,612 (26,439) Net Cash Flows Net cash outflow from operating activities (5,505) (12,024) Net cash outflow from investing activities 2,045 (3,452) Net cash inflow from financing activities (1,015) (1,609) Net decrease in cash generated by the Danish Market (4,475) (17,085) (i) During the current year, the Group disposed of assets for values exceeding the previously recognised recoverable amounts and also satisfied its contractual obligations for amounts less than the provisions previously recognised. 2024 CENTS 2023 CENTS Earnings per share Basic, profit/(loss) for the year from discontinued operations 4.00 (30.00) Diluted, profit/(loss) for the year from discontinued operations 4.00 (30.00) continued Notes to the Financial Statements 137 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. 11 PROPERTY, PLANT AND EQUIPMENT RECOGNITION AND MEASUREMENT The carrying value of property, plant and equipment is stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of an item. DEPRECIATION AND AMORTISATION Items of property, plant and equipment are depreciated on a straight-line basis over their useful lives. The estimated useful life of plant and equipment is between 1 and 10 years and equipment under finance lease is between 3 and 10 years. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, with the effect of any changes recognised on a prospective basis. Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease. PLANT & EQUIPMENT AT COST $’000 FREEHOLD LAND AND BUILDINGS $’000 TOTAL $’000 Year ended 30 June 2024 Cost or fair value 472,115 17,259 489,374 Accumulated depreciation (211,661) (562) (212,223) Net carrying amount 260,454 16,697 277,151 Movement Opening net book amount 306,032 18,626 324,658 Additions 44,245 – 44,245 Acquisitions of Domino’s Pizza stores and other businesses 13,310 – 13,310 Disposals and write-offs (27,443) (1,848) (29,291) Impairment loss (12,684) – (12,684) Depreciation charge (51,454) (1,282) (52,736) Other including foreign exchange movements (11,552) 1,201 (10,351) Net carrying amount at the end of the year 260,454 16,697 277,151 Year ended 02 July 2023 Cost or fair value 493,495 19,380 512,875 Accumulated depreciation (187,463) (754) (188,217) Net carrying amount 306,032 18,626 324,658 Movement Opening net book amount 273,471 – 273,471 Additions 108,195 – 108,195 Acquisitions of Domino’s Pizza stores and other businesses 9,392 – 9,392 Acquisition of subsidiary 22,918 19,801 42,719 Disposals and write-offs (25,282) – (25,282) Depreciation charge (51,202) (754) (51,956) Impairment loss (33,303) – (33,303) Other including foreign exchange movements 1,843 (421) 1,422 Net carrying amount at the end of the year 306,032 18,626 324,658 There was no depreciation during the period that was capitalised as part of the cost of other assets. continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 138 12 LEASES GROUP AS A LESSEE The Group has lease contracts for various properties and equipment; including trucks and car equipment which is utilised in its operations. Leases of properties generally have lease terms of between 2 and 21 years, while operating equipment generally have lease terms between 1 and 7 years. The Group’s obligations under its leases are secured by the lessor’s title to the lease assets. The lease contracts include extension and termination options, which are further discussed below. For these properties, a right of use asset and associated liability is recognised. Leased trucks and cars are primarily Group branded vehicles utilised by Domino’s branded stores. The financial liability is measured at the net present value of future payments under the lease, including optional renewal periods, where the Group has assessed that the probability of exercising the renewal is reasonably certain. The right of use asset has been measured, at either: (a) the value of lease liability adjusted for any prepaid or accrued lease payments; or (b) present value of commitment lease payment since commencement of the lease term (this approach resulted in an adjustment to opening retained earnings.) The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the Group’s incremental borrowing rate is used, being the rate that the Group would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. The right of use assets are depreciated on a straight-line basis over the lease term; which is inclusive of extension option periods where the Group is reasonably certain the lease term will be extended. The Group also has certain leases of equipment with lease terms of 12 months or less and leases of office equipment with low value. The Group applies the ‘short-term lease’ and ‘lease of low value assets’ recognition exemptions for these leases. The costs associated with the lease exemption is disclosed in Note 5. At the end of each reporting period, the Group reviews the carrying amount of its right-of-use assets to determine whether there is any indication that those assets have suffered an impairment loss. Refer to Note 11 which outlines Group’s accounting policy in regard to impairment assessment. Set out below are the carrying amounts of the right-of-use assets recognised and movements during the year: PROPERTIES $’000 EQUIPMENT $’000 TOTAL $’000 As at 02 July 2023 273,727 23,350 297,077 Net additions (i) 25,802 7,907 33,709 Impairment loss (1,709) – (1,709) Depreciation expense (53,732) (9,535) (63,267) Other including foreign exchange movement (13,644) (1,499) (15,143) As at 30 June 2024 230,444 20,223 250,667 As at 03 July 2022 282,485 24,360 306,845 Acquisition of subsidiary – refer to note 9 28,809 – 28,809 Net additions (i) 32,353 5,346 37,699 Impairment loss (12,320) – (12,320) Depreciation expense (56,944) (5,712) (62,656) Other including foreign exchange movement (656) (644) (1,300) As at 02 July 2023 273,727 23,350 297,077 (i) Additions include net movement between right-of-use assets and investment in lease assets which arises due to the Company’s occupied-operated properties becoming franchised. continued Notes to the Financial Statements 139 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. Set out below are the carrying amounts of lease liabilities and the movements during the period: 2024 $’000 As at 02 July 2023 (761,345) Additions (102,573) Accretion of interest (11,778) Payments 163,617 Other including foreign exchange movement 30,208 As at 30 June 2024 (681,871) Current (149,763) Non-current (532,108) Total lease liabilities (681,871) 2023 $’000 As at 03 July 2022 (769,018) Acquisition of subsidiary (28,809) Additions (97,183) Accretion of interest (10,075) Payments 146,792 Other including foreign exchange movement (3,052) As at 02 July 2023 (761,345) Current (141,408) Non-current (619,937) Total lease liabilities (761,345) The maturity analysis of lease liabilities is disclosed in note 26. The amounts recognised in the profit and loss for the year are disclosed in note 4 and note 5. The future cash outflows relating to leases that have not yet commenced are disclosed in note 29. The average effective interest rate is approximately 1.65% (2023: 1.33%) per annum. The Group has not recognised any variable payments in its finance lease arrangements. The Group has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Group’s business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised. GROUP AS A LESSOR The Group has a portfolio of long-term (greater than one year) ‘back-to-back’ property leases which secure competitive store locations on behalf of franchisees. Cash flows under these arrangements substantially offset each other. These leases have terms of between 2 and 21 years. Leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. For back-to-back leases, a financial asset and financial liability is recognised, representing the present value of future cash flows receivable on the subleases and payable on the head lease respectively. Both categories of financial instruments generate interest income and expense, which materially offset within the income statement. The financial assets recognised in relation to back-to-back leases have been recognised as “Investment in lease assets” in the Statement of Financial Position. The receipts from these back-to-back leases are included in “Receipts from subleases” in the Statement of Cash Flows within the financing activities. 12 LEASES (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 140 Set out below are the carrying amounts of investment in lease assets and the movements during the period: 2024 $’000 As at 02 July 2023 444,113 Net additions 74,283 Accretion of interest 6,664 Receipts (87,878) Other including foreign exchange movement (14,839) As at 30 June 2024 422,343 Current 78,121 Non-current 344,222 Total investment in lease assets 422,343 2023 $’000 As at 03 July 2022 454,556 Net additions 59,156 Accretion of interest 5,840 Receipts (80,784) Other including foreign exchange movement 5,345 Total as at 02 July 2023 444,113 Current 78,179 Non-current 365,934 Total investment in lease assets 444,113 Future minimum rentals receivable under non-cancellable operating leases as at the end of the year are as follows: 2024 $’000 2023 $’000 Year 1 85,984 84,386 Year 2 79,771 77,856 Year 3 74,489 70,780 Year 4 62,407 63,577 Year 5 49,340 54,694 Onwards 96,152 116,580 Undiscounted lease payments 448,143 467,873 Less: unearned finance income (25,800) (23,760) Net investment in leases 422,343 444,113 Current 78,121 78,179 Non-Current 344,222 365,934 422,343 444,113 EXTENSION AND TERMINATION OPTIONS Extension and termination options are included in a number of property and equipment lease agreements across the Group. These options provide operational flexibility in managing the lease portfolio. The Group applies criteria to assess whether the exercise of extension options within lease contracts is reasonably certain, including consideration of tenure at existing location, the remaining useful life of the store, plant and equipment, remaining term of sub-franchise agreements (where applicable) and alignment to the assumptions used in the Group’s short to mid-term planning process. Future cash outflows in respect of leases may differ from leases liabilities recognised due to future decisions that may be taken by the Group that will determine whether the options are exercised in respect of the use of leased assets. There is no exposure to these potential additional payments in excess of the recognised lease liabilities until these decisions have been taken by the Group. The majority of the Group’s property leases have option periods or are able to be extended beyond the initial lease term which is at the Group’s (lessee) discretion. Lease option periods are typically for fixed terms of between 1 to 10 years. 12 LEASES (continued) continued Notes to the Financial Statements 141 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. 13 GOODWILL AND OTHER INTANGIBLES RECOGNITION AND MEASUREMENT GOODWILL Goodwill acquired in a business combination is initially measured at cost. Cost is measured as the cost of the business combination minus the net fair value of the acquired and identifiable assets, liabilities and contingent liabilities. Following initial recognition, Goodwill is measured at cost less any accumulated impairment losses. From time-to-time, the Group acquires stores from our Franchisee Partners. Goodwill from these acquisitions represents the excess of the cost of a business acquired over the net of the amounts assigned to assets acquired, including identifiable assets, and liabilities assumed. Goodwill is not amortised and has been assigned to cash generating units for the purposes of impairment testing. When the Group disposes of stores previously acquired, the Group includes goodwill in the carrying amount of the store disposal based on the proportion of the relative fair value retained. INTANGIBLE ASSETS Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less amortisation and any impairment losses. Intangible assets with finite lives are amortised on a straight-line basis over their useful lives and tested for impairment whenever there is an indication that they may be impaired. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimates being accounted for on a prospective basis. Expenditure on research activities is recognised as an expense in the period in which it is incurred. An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following have been demonstrated: • the technical feasibility of completing the intangible asset so that it will be available for use or sale; • the intention to complete the intangible asset and use or sell it; • the ability to use or sell the intangible asset; • how the intangible asset will generate probable future economic benefits; • the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and • the ability to measure reliably the expenditure attributable to the intangible asset during its development. The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognised, development expenditure is recognised in profit or loss in the period in which it is incurred. The following useful lives are used in the calculation of amortisation: • Capitalised development intangibles 2–10 years • Licenses and other 2–10 years Intangible assets with indefinite lives or not yet available for use are tested for impairment. Assets with an assumed indefinite useful life are reviewed at each reporting period to determine whether this assumption continues to be appropriate. If not, it is changed to a finite life intangible asset and amortised over its remaining useful life. continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 142 ESTIMATES AND JUDGEMENTS – OTHER INTANGIBLES MASTER FRANCHISE RIGHTS & FRANCHISE NETWORK ASSETS Master Franchise Rights (‘MFA’) and Franchise Network Assets (‘FNAs’) are treated as indefinite life intangible assets. This judgement is based on the sufficiency of available evidence supporting the ability of the Group to renew the underlying agreements beyond their initial terms without incurring significant cost. USEFUL LIVES OF OTHER INTANGIBLES Management uses their judgement to assess the useful lives of capitalised development intangibles and licenses. This is based on the estimated life of the asset and future economic benefits of the asset. The majority of these assets have a life of between 2–10 years. YEAR ENDED 30 JUNE 2024 GOODWILL $’000 Movement Opening Balance 551,644 Acquisitions of Domino’s Pizza stores and other businesses 21,140 Acquisitions through business combinations 282 Impairment charge (3,587) Disposals and write offs (9,284) Other including foreign exchange movement (25,736) Net carrying amount at the end of the year 534,459 YEAR ENDED 02 JULY 2023 GOODWILL $’000 Movement Opening Balance 485,707 Acquisitions of Domino’s Pizza stores and other businesses 38,248 Acquisitions through business combinations 68,628 Impairment charge (28,001) Disposals and write offs (12,507) Other including foreign exchange movement (431) Net carrying amount at the end of the year 551,644 13 GOODWILL AND OTHER INTANGIBLES (continued) continued Notes to the Financial Statements 143 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. FINITE LIFE INDEFINITE LIFE OTHER INTANGIBLE ASSETS TOTAL $’000 CAPITALISED DEVELOPMENT $’000 LICENSES AND OTHER $’000 MASTER FRANCHISE RIGHTS AND NETWORK ASSETS Year ended 30 June 2024 Cost 311,917 63,120 488,474 863,511 Accumulated amortisation and impairment (191,661) (39,784) – (231,445) Net carrying amount 120,256 23,336 488,474 632,066 Movement Net carrying amount 108,089 31,770 499,052 638,911 Additions 44,746 1,194 – 45,940 Impairment charge (101) (423) – (524) Amortisation for the year (31,339) (7,032) – (38,371) Disposals and write offs (215) (374) – (589) Other including foreign exchange movement (924) (1,799) (10,578) (13,301) Net carrying amount at the end of the year 120,256 23,336 488,474 632,066 Year ended 02 July 2023 Cost 267,639 67,891 499,052 834,582 Accumulated amortisation and impairment (159,550) (36,121) – (195,671) Net carrying amount 108,089 31,770 499,052 638,911 Movement Net carrying amount 102,429 28,233 319,690 450,352 Additions 37,767 11,702 – 49,469 Acquisitions through business combinations 360 – 171,896 172,256 Impairment charge (2,455) – (3,267) (5,722) Amortisation for the year (31,645) (7,994) – (39,639) Disposals and write offs (395) (467) – (862) Other including foreign exchange movement 2,028 296 10,733 13,057 Net carrying amount at the end of the year 108,089 31,770 499,052 638,911 13 GOODWILL AND OTHER INTANGIBLES (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 144 ALLOCATION OF GOODWILL AND INDEFINITE LIFE INTANGIBLE ASSETS TO CGUS Goodwill and indefinite life intangible assets have been allocated for impairment testing purposes to the following CGUs: • Australia and New Zealand markets • Europe market, which comprises: - The Netherlands (NL) - France & Belgium (FR) & (BE) - Germany (DE) • Asia market, which comprises: - Japan (JP) - Taiwan (TW) - Malaysia, Singapore, Cambodia (MSK) The carrying amount of goodwill and other indefinite life intangible assets is allocated to the following CGUs: GOODWILL GOODWILL IMPAIRMENT (i) 2024 $’000 2023 $’000 2024 $’000 2023 $’000 ANZ 95,861 92,479 (981) (11,650) FR & BE 36,912 37,083 (1,050) (13,533) NL 12,943 15,016 (354) (541) DE 88,668 88,035 – (1,926) JP 196,452 213,822 (1,202) (351) TW 36,124 37,648 – – MSK 67,499 67,561 – – Total 534,459 551,644 (3,587) (28,001) (i) The impairment of goodwill relates to the closure of corporate stores or where the corporate store’s carrying value exceeds the recoverable amount. Refer to note 6. INDEFINITE LIFE INTANGIBLE ASSETS INDEFINITE LIFE INTANGIBLE ASSETS IMPAIRMENT 2024 $’000 2023 $’000 2024 $’000 2023 $’000 ANZ 226 226 – – FR & BE 49,182 49,964 – – NL – – – (3,267) DE 187,291 190,184 – – JP 32,576 36,207 – – TW 51,287 53,477 – – MSK 167,912 168,994 – – Total 488,474 499,052 – (3,267) 13 GOODWILL AND OTHER INTANGIBLES (continued) continued Notes to the Financial Statements 145 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. ESTIMATES AND JUDGEMENTS IN DETERMINING THE RECOVERABLE AMOUNT OF THE CASH GENERATING UNITS Key assumptions used in determining the recoverable amount of assets include future cash flows, long-term growth rates and discount rates. In assessing the recoverable amount, estimated cash flows are based on the Group’s most recent Board approved business plan covering three year period. In forecasting the future cash flows changes in the macro-economic environment have been considered; including but not limited to the invasion of Ukraine by Russia, inflation and wage increases which have impacted on the Group’s trading performance. Long term growth rates are based on past experience, expectations of external market operating conditions, and other assumptions which take account of the specific features of each business unit. The recoverable amount has been determined using a value in use (VIU) or fair value less cost of disposal (FVLCOD) discounted cash flow model. In assessing the recoverable amount, the estimated future pre-tax cash flows are discounted to their present value using a discount rate that reflects the current market assessments of the time value of money and risk specific to the asset. Pre-tax discount rates used vary depending on country of operation. The rates used in determining the recoverable amount are set out below: DISCOUNT RATE (POST TAX) 2024 NOMINAL TERMINAL GROWTH RATES 2024 ANZ 9.15% 2.50% FR & BE 9.00% 2.00% NL 8.00% 2.00% DE 7.50% 2.00% JP 7.20% 2.00% TW 9.50% 2.00% MSK 9.75% –10.75% 2.00% The Group has reviewed sensitivity on the key assumptions on which the recoverable amounts are based and believes that any reasonable change would not cause the cash-generating units’ carrying amount to exceed its recoverable amount. The judgements and estimates used in assessing impairment are best estimates based on current and forecast market conditions and are subject to change in the event of shifting economic and operational conditions. Actual cash flows may therefore differ from forecasts. IMPAIRMENT The Group tests intangibles and goodwill for impairment: • at least annually for indefinite life intangibles and not yet ready for use and goodwill; and • where there is an indication that the asset may be impaired, which is assessed at least each reporting period; or • where there is an indication that previously recognised impairment, on assets other than goodwill, may have changed. If the asset does not generate independent cash inflows and its value in use cannot be estimated to be close to its fair value, the asset is tested for impairment as part of the cash generating unit (CGU) to which it belongs. Assets are impaired if their carrying value exceeds their recoverable amount. The recoverable amount of an asset or CGU is determined as the higher of its FVLCOD or VIU. An impairment loss recognised for goodwill is not reversed in subsequent periods. 13 GOODWILL AND OTHER INTANGIBLES (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 146 IMPAIRMENT CALCULATIONS In assessing VIU, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. In determining FVLCOD, a discounted cash flow model is used based on a methodology consistent with that applied by the Group in determining the value of potential acquisition targets, maximising the use of market observed inputs. These calculations, classified as Level 3 on the fair value hierarchy, are compared to valuation multiples or other fair value indicators where available to ensure reasonableness. INPUTS TO IMPAIRMENT CALCULATIONS For VIU calculations, cash flow projections are based on corporate plans and business forecasts prepared by management and approved by the Board. On determining FVLCOD, the valuation model incorporates the cash flows projected over the duration of the current corporate plan period. These projections are discounted using a risk adjusted discount rate commensurate with a typical market participant’s assessment of the risk associated with the projected cash flows. For both the VIU and FVLCOD models, cash flows beyond the corporate plan period are extrapolated using estimated growth rates, which are based on Group estimates, taking into consideration historical performance as well as expected long-term operating conditions. Growth rates do not exceed the consensus forecasts of the long-term average rate for the industry in which the CGU operates. Discount rates used in both calculations are based on the weighted average cost of capital determined by prevailing or benchmarked market inputs, risk adjusted where necessary. Other assumptions are determined with reference to external sources of information and use consistent, reasonable estimates for variables such as terminal cash flow multiples. Increases in discount rates or changes in other key assumptions, such as operating conditions or financial performance, may cause the recoverable amounts to reduce. RECOGNISED IMPAIRMENT There was no impairment recognised during the 2024 financial year (2023: nil), relating to impairment testing at a CGU level. 14 TRADE, OTHER RECEIVABLES AND OTHER ASSETS RECOGNITION AND MEASUREMENT TRADE RECEIVABLES At initial recognition, trade receivables and other debtors that do not have a significant financing component are recognised at their transaction price. Trade receivables generally have terms of up 30 days. They are recognised initially at fair value and subsequently at amortised cost using the effective interest method, less an allowance for impairment. Allowance for impairment is determined using an expected credit loss approach. Before accepting any new franchisees and business partners, the Group uses extensive credit verification procedures. Receivable balances are monitored on an ongoing basis and the Group’s exposure to bad debts is not significant. With respect to trade receivables there are no indications as of the reporting date that the debtors will not meet their payment obligations. INTEREST RATE RISK Trade receivables are non-interest bearing and are therefore not subject to interest rate risk. FAIR VALUE Due to the short-term nature of these receivables, their carrying amount is assumed to approximate their fair value. CREDIT RISK Credit risk arises from exposure to retail customers and franchisees, including outstanding receivables and committed transactions. Collectability and impairment are assess on an ongoing basis at a regional level. The Group applies the ‘simplified approach’ to measuring expected credit losses (“ECL”) which uses a lifetime expected loss allowance for all trade receivables. The ECL is estimated using a provision matrix based on the Group’s historical credit loss experiences. 13 GOODWILL AND OTHER INTANGIBLES (continued) continued Notes to the Financial Statements 147 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. The Group writes off trade receivables when there is information indicating the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed in liquidation or has entered bankruptcy proceedings. Trade receivables written off may still be subject to enforcement activities under the Group’s recovery processes, considering legal advice where appropriate. Any recoveries made are recognised in profit and loss. 2024 $’000 2023 $’000 Trade receivables 152,104 164,937 Allowance for expected credit loss (20,372) (12,132) Other receivables 838 2,330 Total trade and other receivables 132,570 155,135 2024 $’000 2023 $’000 Prepayments 25,957 24,474 Other – current 28,438 26,849 Work in progress – store builds 1,346 1,317 Total other assets 55,741 52,640 2024 $’000 2023 $’000 Movement in allowance for expected credit loss Balance at the beginning of the year 12,132 7,489 Provision for expected credit loss 14,515 8,016 Amounts written off as uncollectible (1,785) (3,047) Amounts recovered during the year (3,576) (737) Effect of foreign currency (914) 411 Balance at the end of the year 20,372 12,132 Included in the Group’s trade receivables balance are debtors with a carrying amount of $4,047 thousand (2023: $5,023 thousand), which are past due at the reporting date. 15 TRADE AND OTHER PAYABLES RECOGNITION AND MEASUREMENT These amounts represent liabilities for goods and services provided to the Group prior to the balance sheet date which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. 2024 $’000 2023 $’000 Current Trade payables 199,753 255,958 Other creditors and accruals 117,405 102,829 Goods and services tax (GST)/ Value added tax (VAT) payable 8,833 7,686 Total trade and other payables 325,991 366,473 14 TRADE, OTHER RECEIVABLES AND OTHER ASSETS (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 148 16 PROVISIONS RECOGNITION AND MEASUREMENT Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. EMPLOYEE BENEFITS The provision for employee benefits represents annual leave, long service leave entitlements and incentives accrued by employees. WAGES AND SALARIES Liabilities for wages and salaries including non-monetary benefits expected to be settled within 12 months of the reporting date are recognised in provisions and other payables in respect of employees’ services up to the balance sheet date. They are measured at the amounts expected to be paid when the liabilities are settled. ANNUAL AND LONG SERVICE LEAVE The liability for annual leave and long service leave is recognised in the provision for employee benefits. It is measured as the present value of expected future payments for the services provided by employees up to the reporting date. Expected future payments are discounted using market yields at the balance sheet date on terms to maturity and currencies that match as closely as possible to the estimated future cash outflows. MAKE GOOD OBLIGATIONS The Group is required to restore the leased premises of certain stores and buildings to their original condition when the premises are vacated. However, as leases are traditionally renewed or the make good obligation is waived, the Group recognises a provision for the leased premises where make good costs will result in a probable outflow of funds. Each reporting period a review of leased sites is conducted to determine the present value of the estimated expenditure required to return the leased premise to its original condition. OTHER PROVISIONS Other provisions relate to provision raised in relation to onerous contracts as a result of the Group’s closure of Corporate stores. Refer to note 6. NOTE 2024 $’000 2023 $’000 Employee benefits 19,612 21,088 Defined benefit plan 32 6,541 8,063 Make good 9,427 11,700 Legal provisions – – Other Provisions 7,572 7,352 Total provisions 43,152 48,203 Current 31,320 31,444 Non-current 11,832 16,759 Total provisions 43,152 48,203 continued Notes to the Financial Statements 149 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. Movements in each class of provision during the financial year are set out below: MAKE GOOD $’000 OTHER $’000 LEGAL PROVISIONS $’000 Balance at 03 July 2022 1,910 – 1,604 Provision recognised on acquisition of subsidiary 2,091 – – Recognised in profit or loss 5,811 7,147 – Reductions arising from payments – – (1,627) Movements resulting from remeasurement 1,888 205 23 Balance at 02 July 2023 11,700 7,352 – Recognised in profit or loss 3,163 9,986 – Movements resulting from remeasurement (3,762) (2,029) – Reductions arising from payments (1,674) (7,737) – Balance at 30 June 2024 9,427 7,572 – The make good provision has increased in the prior year to take account of planned store closures (see note 6) and the acquisition of Domino’s Pizza Singapore, Malaysia and Cambodia (see note 9) which considers the commercial lease arrangements. In addition, and In line with the Group’s accounting policy, the Group has remeasured the make good provision following a review of all leased sites taking account of events in the year including store closures. ESTIMATES AND JUDGEMENTS Management judgement is applied in determining the following key assumptions used in the calculation of long service leave and annual leave at balance date: • future increases in wages and salaries; • future on-cost rates; and • experience of employee departures and period of service. 17 INVENTORY RECOGNITION AND MEASUREMENT Inventories are valued at the lower of cost and net realisable value. Costs, including an appropriate portion of fixed and variable overhead expenses, are assigned to inventories by the method most appropriate to each particular class of inventory, with the majority being valued on a first in first out basis. Net realisable value is the estimated selling price in the ordinary course of business less estimated costs to sell. 2024 $’000 2023 $’000 Raw materials 11,391 13,590 Finished goods 39,629 46,358 Total inventory 51,020 59,948 There are no inventories (2023: $nil) expected to be recovered after more than 12 months. Expenses relating to inventories are recorded under Food, equipment and packaging expenses. During the year, there has been a write-down of corporate store inventory to net realisable value of $1,083 thousand (2023: $1,036 thousand) which was recognised in Closure costs associated with corporate stores and operations. Refer to note 6. 16 PROVISIONS (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 150 CAPITAL Capital provides information about the capital management practices of the Group. 18 EQUITY ISSUED CAPITAL 2024 $’000 2023 $’000 90,930,709 fully paid ordinary shares (02 July 2023: 89,090,402) 518,699 430,476 Changes to the Corporations Law abolished the authorised capital and par value concept in relation to share capital from 1 July 1998. Therefore, the Company does not have a limited amount of authorised capital and issued shares do not have a par value. FULLY PAID ORDINARY SHARES 2024 2023 NUMBER OF SHARES ‘000 SHARE CAPITAL $’000 NUMBER OF SHARES ‘000 SHARE CAPITAL $’000 Balance at beginning of financial period 89,090 430,476 86,554 264,212 Shares issued: Issue of shares under executive share option plan 12 612 44 3,086 Contributions of equity – – 2,492 164,999 Issue of shares under Dividend Reinvestment Plan 1,829 87,779 – – Share issue transaction costs – (168) – (1,821) Balance at end of financial year 90,931 518,699 89,090 430,476 Fully paid ordinary shares carry one vote per share and carry the right to dividends. OPTIONS The Company has an Executive Share and Option Plan (“ESOP”) to assist in the recruitment, reward and retention of its executives. The Company will not apply for quotation of the options on the ASX. Subject to any adjustment in the event of a bonus issue, rights issue or reconstruction of capital, each option is convertible into one ordinary share. Refer to note 22. TERMS AND CONDITIONS OF THE ESOP The Company must not issue any shares or grant any option under this plan if, immediately after the issue or grant, the sum of the total number of unissued shares over which options, rights or other options (which remain outstanding) have been granted under this plan and any other Group employee incentive scheme would exceed 7.5% of the total number of shares on issue on a fully diluted basis at the time of the proposed issue or grant. Fully diluted basis means the number of shares which would be on issue if all those securities of the Company which are capable of being converted into shares, were converted into shares. If the number of shares into which the securities are capable of being converted cannot be calculated at the relevant time, those shares will be disregarded. During the year 11,502 options were exercised (2023: 44,378). A total of $612,120 was received as consideration for 11,502 fully paid ordinary shares of Domino’s Pizza Enterprises Limited on exercise of the options in the current financial year (2023: $3,086,628). DIVIDEND REINVESTMENT PLAN On listing, the Board adopted but did not commence operation of a Dividend Reinvestment Plan (“DRP”). The DRP provides shareholders the choice of reinvesting some or all of their dividends in shares rather than receiving those dividends in cash. On 22 August 2023, the Board resolved to reactive the DRP and amend the terms of the DRP. Eligible Shareholders with registered addresses in Australia and New Zealand can elect to participate in the DRP and reinvest all or part of their cash dividends in additional shares in the capital of the Company. continued Notes to the Financial Statements 151 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. The DRP applied to the FY23 final dividend and FY24 interim dividend and will apply for the FY24 final dividend for Eligible Shareholders that elected to participate. The Company entered into an underwriting agreement with Morgan Stanley to fully underwrite the FY23 final dividend, FY24 interim dividend and FY24 final dividend. Shares allocated under the DRP rank equally with existing shares. Shares were/will be issued under the DRP at a price equal to the average of the daily volume weighted average market price of the Company’s shares (rounded to the nearest cent) traded on the ASX during a period of ten trading days commencing on the second business day following the relevant record date, discounted by an amount determined by the Board. RESERVES FOREIGN CURRENCY TRANSLATION Exchange differences relating to the translation of the net assets of the Group’s foreign operations from their functional currencies to the Group’s presentation currency, Australian dollars, are recognised directly in other comprehensive income and accumulated in the foreign currency translation reserve. HEDGING RESERVE The hedging reserve represents hedging gains and losses recognised on the effective portion of net investment and cash flow hedges. OTHER RESERVES Equity settled share-based benefits reserve The equity settled share-based benefits reserve arises on the grant of share options to executives under the Executive Share and Option Plan (ESOP). Further information about ESOP is made in note 22 to the financial statements. The Group established the Domino’s Pizza Enterprises Limited Employee Share Trust to manage the share option plan. Non-controlling Interests The non-controlling interest reserve arose on the recognition of put option liabilities over non-controlling interests. 2024 $’000 2023 $’000 Foreign currency translation (13,574) (1,782) Hedging 237 (3,313) Other (120,123) (121,014) Balance at the end of the year (133,460) (126,109) Foreign Currency Translation Reserve 2024 $’000 2023 $’000 Balance at the beginning of financial year (1,782) (18,632) Translation of foreign operations (11,792) 16,850 Balance at the end of the year (13,574) (1,782) Hedging reserve 2024 $’000 2023 $’000 Balance at the beginning of the financial year (3,313) 8,426 Net investment hedge 6,427 (11,221) Cash flow hedge (1,575) (5,702) Income tax related to gain/(loss) on hedging items (1,302) 5,184 Balance at the end of the year 237 (3,313) 18 EQUITY (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 152 Other Reserves 2024 $’000 2023 $’000 Balance at the beginning of the financial year (121,014) (126,642) Share-based payment 827 (1,028) Share option trust (146) 293 Movement in put option liability and non-controlling interest – 6,593 Remeasurement of defined benefit plans 210 (230) Balance at the end of the year (120,123) (121,014) RETAINED EARNINGS Retained Earnings NOTE 2024 $’000 2023 $’000 Balance at beginning of year 216,150 294,593 Net profit attributable to members of the Company 95,959 40,570 Payment of dividends 20 (87,800) (119,013) Balance at the end of the year 224,309 216,150 19 NON-CONTROLLING INTERESTS NOTE 2024 $’000 2023 $’000 Balance at beginning of year – – Share of profit/(loss) – 2,026 Foreign currency translation – 1,511 Non-controlling interest put option adjustment – (3,537) Balance at the end of the year – – 20 DIVIDENDS 2024 2023 CENTS PER SHARE TOTAL $’000 CENTS PER SHARE TOTAL $’000 Recognised amounts Fully paid ordinary shares Interim dividend for half-year ended (i) 55.5 49,847 67.4 60,047 Dividend for full year ended (ii) 42.6 37,953 68.1 58,966 98.1 87,800 135.5 119,013 Unrecognised amounts Fully paid ordinary shares Dividend for full year ended (iii) 50.4 45,829 42.6 37,953 (i) The interim dividend for half year ended was unfranked (2023: 60%) (ii) The dividend for full year ended was unfranked (2023: 70%) (iii) The declared dividend was unfranked (2023: unfranked) 18 EQUITY (continued) continued Notes to the Financial Statements 153 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. On the 21 August 2024, the Company declared an unfranked final dividend for FY24 of 50.4 cents per share. The dividend will have a record date of 27 August 2024 and a payment date of 25 September 2024. The Dividend Reinvestment Plan will operate for eligible shareholders residing in Australia or New Zealand for the FY24 final dividend which will be fully underwritten by Morgan Stanley. FRANKED DIVIDENDS 2024 $’000 2023 $’000 Franking credits available for subsequent financial years based on a tax rate of 30% – 1,993 The above amounts are calculated from the balance of the franking account as at the end of the reporting period, adjusted for franking credits and debits that will arise from the settlement of liabilities for income tax and dividends after the end of the year. 21 EARNINGS PER SHARE BASIC EARNINGS PER SHARE Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus element. 2024 CENTS 2023 CENTS Earnings per share from continuing operations attributable to shareholders 102.7 76.1 Earnings per share from operations attributable to shareholders 106.7 46.1 DILUTED EARNINGS PER SHARE Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for: • costs of servicing equity (other than dividends); • the after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and • other non-discretionary changes in revenues or expenses during the year that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element. The diluted earnings per share calculation takes into account all options issued under the ESOP, as in accordance with AASB 133 Earnings per Share, the average market price of ordinary shares during the period exceeds the exercise price of the options or warrants. 2024 CENTS 2023 CENTS From continuing operations attributable to the ordinary equity holders of the Company 102.6 76.1 Earnings per share from operations attributable to shareholders 106.6 46.0 EARNINGS USED IN CALCULATING EARNINGS PER SHARE 2024 $’000 2023 $’000 Profit from continuing operations attributable to shareholders 92,347 67,009 Profit/(Loss) from discontinued operations attributable to shareholders 3,612 (26,439) Profit attributable to the ordinary equity shareholders of the Company used in calculating basic and diluted earnings per share 95,959 40,570 20 DIVIDENDS (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 154 WEIGHTED AVERAGE NUMBER OF SHARES USED AS DENOMINATOR 2024 NO.’000 2023 NO.’000 Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share 89,932 87,996 Adjustments for calculation of diluted earnings per share: Options on issue 50 110 Weighted average number of ordinary and potential ordinary shares used as the denominator in calculating diluted earnings per share 89,982 88,106 22 SHARE-BASED PAYMENTS RECOGNITION AND MEASUREMENT Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instrument at the grant date. The fair value is measured by use of a Black Scholes model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest. At each reporting period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss over the remaining vesting period, with corresponding adjustment to the equity-settled employee benefits reserve. Equity-settled share-based payment transactions with other parties are measured at the fair value of the goods and services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service. EQUITY-SETTLED SHARE-BASED BENEFITS The Company has one share plan and one share and option plan available for employees and directors and executives of the Company: the Domino’s Pizza Exempt Employee Share Plan (“Plan”) and the Domino’s Pizza Executive Share and Option Plan (ESOP). Both plans were approved by a resolution of the Board of Directors on 11 April 2005. Fully paid ordinary shares issued under these plans rank equally with all other existing fully paid ordinary shares, in respect of voting and dividend rights and future bonus and rights issues. EXECUTIVE SHARE AND OPTION PLAN The Company established the ESOP to assist in the recruitment, reward, retention and motivation of directors and executives of the Company (“the participants”). In accordance with the provisions of the scheme, executives within the Company, to be determined by the Board, are granted options to purchase parcels of shares at various exercise prices. Each option confers an entitlement to subscribe for and be issued one share, credited as fully paid, at the exercise price. Options issued under the ESOP may not be transferred unless the Board determines otherwise. The Company has no obligation to apply for quotation of the options on the ASX. However, the Company must apply to the ASX for official quotation of shares issued on the exercise of the options. The Company must not issue any shares or grant any option under this plan if, immediately after the issue or grant, the sum of the total number of unissued shares over which options, rights or other options (which remain outstanding) have been granted under this plan and any other Group employee incentive scheme would exceed 7.5% of the total number of shares on issue on a fully diluted basis at the time of the proposed issue or grant. Fully diluted basis means the number of shares which would be on issue if all those securities of the Company which are capable of being converted into shares, were converted into shares. If the number of shares into which the securities are capable of being converted cannot be calculated at the relevant time, those shares will be disregarded. The following share-based payment arrangements were in existence during the current and comparative reporting period: 21 EARNINGS PER SHARE (continued) continued Notes to the Financial Statements 155 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. OPTIONS GRANTED UNDER THE INCENTIVE PLANS Set out below are summaries of the performance options and rights granted in respect of the 2024 and 2023 financial years under the incentive plans: 2024 OPTION SERIES ISSUE & GRANT DATE EXPIRY DATE BALANCE AT START OF THE YEAR NUMBER GRANTED DURING AND IN RESPECT OF THE YEAR NUMBER EXERCISED DURING THE YEAR NUMBER LAPSED/ FORFEITED DURING THE YEAR NUMBER BALANCE AT END OF THE YEAR NUMBER EXERCISABLE AT END OF THE YEAR NUMBER (35) 26 Nov 19 1 Sep 23 37,935 – (3,985) (33,950) – – (36) 20 Aug 19 20 Aug 29 2,378 – (797) – 1,581 1,581 (37) 18 Aug 20 18 Aug 30 2,533 – (1,537) – 996 996 (38) 4 Nov 20 1 Sep 24 156,937 – – (156,937) – – (39) 25 Nov 20 1 Sep 24 560,312 – – (526,971) 33,341 33,341 (40) 7 Jun 21 7 Jun 31 1,420 – – – 1,420 1,420 (41) 28 May 21 28 May 31 2,966 – – – 2,966 2,966 (42) 3 Nov 21 31 Aug 25 95,975 – – – 95,975 – (43) 1 Oct 21 31 Oct 31 9,702 61 (2,322) – 7,441 7,441 (44) 19 May 22 31 Aug 25 420,937 – – (105,112) 315,825 – (45) 23 Aug 22 23 Aug 32 13,419 – (928) – 12,491 12,491 (46) 21 Nov 22 21 Nov 32 782 – – – 782 782 (47) 20 Dec 22 30 Jun 25 54,265 – – – 54,265 – (48) 20 Dec 22 30 Jun 25 107,232 1,501 – (27,637) 81,096 – (49) 23 Aug 23 23 Aug 33 – 5,349 (1,933) – 3,416 3,416 (50) 8 Sep 23 8 Sep 33 – 4,883 – – 4,883 4,883 (51) 11 Dec 23 31 Aug 31 – 62,426 – – 62,426 – (52) 1 Dec 23 22 Jan 29 – 23,374 – – 23,374 23,374 (53) 22 Jan 24 22 Jan 29 – 74,799 – (3,128) 71,671 – (54) 22 Jan 24 22 Jan 29 – 65,278 – – 65,278 – (55) 16 May 24 30 Apr 21 – 17,916 – – 17,916 – TOTAL 1,466,793 255,587 (11,502) (853,735) 857,143 92,691 2023 OPTION SERIES ISSUE & GRANT DATE EXPIRY DATE BALANCE AT START OF THE YEAR NUMBER GRANTED DURING AND IN RESPECT OF THE YEAR NUMBER EXERCISED DURING THE YEAR NUMBER LAPSED/ FORFEITED DURING THE YEAR NUMBER BALANCE AT END OF THE YEAR NUMBER EXERCISABLE AT END OF THE YEAR NUMBER (32) 25 May 19 31 Aug 22 33,250 – (33,250) – – – (33) 26 Nov 19 1 Sep 23 297,000 – – (297,000) – – (34) 26 Nov 19 26 Nov 23 145,878 – – (145,878) – – (35) 26 Nov 19 1 Sep 23 265,345 – (7,970) (219,440) 37,935 37,935 (36) 20 Aug 19 20 Aug 29 2,378 – – – 2,378 2,378 (37) 18 Aug 20 18 Aug 30 3,038 – (505) – 2,533 2,533 (38) 4 Nov 20 1 Sep 24 156,937 – – – 156,937 – (39) 25 Nov 20 1 Sep 24 590,496 – – (30,184) 560,312 – (40) 7 Jun 21 7 Jun 31 1,420 – – – 1,420 1,420 (41) 28 May 21 28 May 31 2,966 – – – 2,966 2,966 (42) 3 Nov 21 31 Aug 25 95,975 – – – 95,975 – (43) 1 Oct 21 31 Oct 31 12,056 – (2,293) (61) 9,702 9,702 (44) 19 May 22 31 May 25 454,780 – – (33,843) 420,937 – (45) 23 Aug 22 23 Aug 32 – 13,779 (360) – 13,419 13,419 (46) 21 Nov 22 21 Nov 32 – 782 – – 782 782 (47) 20 Dec 22 30 Jun 25 – 54,265 – – 54,265 – (48) 20 Dec 22 30 Jun 25 – 111,071 – (3,839) 107,232 – TOTAL 2,061,519 179,897 (44,378) (730,245) 1,466,793 71,135 The weighted average exercise price at the date of the exercise of options during the 2024 financial year was $53.22 (2023: $69.55). The weighted average remaining contractual life of options outstanding at the end of the 2024 financial year was 2.6 years (2023: 1.6 years) 22 SHARE-BASED PAYMENTS (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 156 FAIR VALUE OF SHARE OPTIONS GRANTED IN THE YEAR The weighted average fair value of the options granted during the 2024 year is $50.45 (2023: $59.65). Series 49, 50, 51, 52, 53, 54 and 55 are zero exercise price options, therefore the options share price at date of grant approximates the options fair value. SHARE OPTIONS EXERCISED DURING THE YEAR The following share options granted under the ESOP were exercised during the year: 2024 OPTION SERIES NUMBER EXERCISED EXERCISE DATE SHARE PRICE AT EXERCISE DATE ($) (35) Issued 26 November 2019 3,985 31 August 2023 $54.05 (36) Issued 20 August 2019 797 17 November 2023 $52.22 (37) Issued 18 August 2020 545 25 August 2023 $51.73 (37) Issued 18 August 2020 992 17 November 2023 $52.22 (43) Issued 01 October 2021 1,186 25 August 2023 $51.73 (43) Issued 01 October 2021 378 31 August 2023 $54.05 (43) Issued 01 October 2021 758 17 November 2023 $52.22 (45) Issued 23 August 2022 928 17 November 2023 $52.22 (49) Issued 23 August 2023 1,933 13 December 2023 $54.47 2023 OPTION SERIES NUMBER EXERCISED EXERCISE DATE SHARE PRICE AT EXERCISE DATE ($) (32) Issued 25 May 2019 33,250 25 August 2022 $72.15 (35) Issued 26 November 2019 3,985 24 November 2022 $64.71 (35) Issued 26 November 2019 3,985 20 September 2022 $58.63 (37) Issued 18 August 2020 245 30 August 2022 $64.99 (37) Issued 18 August 2020 260 27 September 2022 $53.88 (43) Issued 01 October 2021 58 14 December 2022 $66.45 (43) Issued 01 October 2021 35 05 October 2022 $53.67 (43) Issued 01 October 2021 586 31 August 2022 $62.58 (43) Issued 01 October 2021 115 20 September 2022 $58.63 (43) Issued 01 October 2021 1,259 23 November 2022 $64.40 (43) Issued 01 October 2021 240 27 February 2023 $53.29 (45) Issued 23 August 2022 360 23 November 2022 $64.40 22 SHARE-BASED PAYMENTS (continued) continued Notes to the Financial Statements 157 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. FINANCIAL MANAGEMENT Financial management provides information about the debt management practices of the Group as well as the Group’s exposure to various financial risks, how these affect the Group’s financial position and performance and what the Group does to manage these risks. 23 BORROWINGS RECOGNITION AND MEASUREMENT Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates. Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. 2024 $’000 2023 $’000 Uncommitted Bank loans (i) 916 – Total uncommitted borrowings 916 – Committed Bank loans (i) 765,359 983,090 Capitalised borrowing costs (3,871) (4,499) Total committed borrowings 761,488 978,591 Current 916 – Non-current 761,488 978,591 Total borrowings 762,404 978,591 (i) The Group’s borrowings are unsecured. SUMMARY OF BORROWING ARRANGEMENTS: The unused facilities available on the Group’s bank overdraft are $5,745 thousand (2023: $5,756 thousand). For further information in respect of the Group’s borrowings, refer to note 26. 24 FINANCIAL ASSETS RECOGNITION AND MEASUREMENT All financial assets are recognised and derecognised on trade date where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the time frame established by the market concerned, and are initially measured at fair value, plus transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value. Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’ (FVPL) or through other comprehensive income (FVOCI) and those held at amortised cost. Classification depends on the business model for managing the financial assets and the contractual terms of the cash flows. Management determines the classification of financial assets at initial recognition. Generally, the Group does not acquire financial assets for the purpose of selling in the short-term. continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 158 When the Group enters into derivative contracts, these transactions are designed to reduce exposures relating to assets and liabilities, firm commitments or anticipated transactions. FINANCIAL ASSETS HELD AT AMORTISED COST This classification applies to debt instruments which are held under a hold to collect business model and which have cash flows that meet the ‘Solely payment of principal and interest’ (SPPI) criteria. Other financial assets are initially recognised at fair value plus related transaction costs; they are subsequently measured at amortised cost using the effective interest method. Any gain or loss on derecognition or modification of a financial asset held at amortised cost is recognised in the income statement. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or (where appropriate) a shorter period, to the net carrying amount on initial recognition. Income is recognised on an effective interest rate basis for financial assets held at amortised cost. FINANCIAL ASSETS HELD AT FVOCI This classification applies to the following financial assets: • Debt instruments that are held under a business model where they are held for the collection of contractual cash flows and also for sale (‘collect and sell’) and which have cash flows that meet the SPPI criteria. All movements in the fair value of these financial assets are taken through other comprehensive income, except for the recognition of impairment gains or losses, interest revenue (including transaction costs by applying the effective interest method), gains or losses arising on derecognition and foreign exchange gains and losses which are recognised in the income statement. When the financial assets are derecognised, the cumulative fair value gain or loss previously recognised in other comprehensive income is reclassified to the income statement. • Equity investment where the Group has irrevocably elected to present fair value gains and losses on revaluation in other comprehensive income. The election can be made for each individual investment however it is not applicable to equity investments held for trading. Fair value gains or losses on revaluation of such equity investments, including any foreign exchange components, are recognised in other comprehensive income. When the equity investment is derecognised, there is no reclassification of fair value gains or losses previously recognised in other comprehensive income to the income statement. Dividends are recognised in the income statement when the right to receive payment is established. FINANCIAL ASSETS AT FVPL This classification applies to the following financial assets, and in all cases, transaction costs are immediately expensed to the income statement: • Debt instruments that do not meet the criteria of amortised cost or fair value through other comprehensive income. Subsequent fair value gains or losses are taken to the income statement. • Equity investments which are held for trading or where the FVOCI election has not been applied. All fair value gains or losses are related dividend income are recognised in the income statement. • Derivatives which are not designated as a hedging instrument. All subsequent fair value gains or losses are recognised in the income statement. DERIVATIVE FINANCIAL INSTRUMENTS The Group enters into derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks. Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship. NON-CASH FINANCING AND INVESTING ACTIVITIES Included in the movement of other financial assets are non-cash transactions of $26.9 million (2023: $36.5 million) for loans to Franchisees. 24 FINANCIAL ASSETS (continued) continued Notes to the Financial Statements 159 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. IMPAIRMENT OF FINANCIAL ASSETS A forward looking ECL review is required for: debt instruments measured at amortised cost or held at fair value through other comprehensive income, loan commitments and financial guarantees not measured at fair value through profit or loss; lease receivables and trade receivables that give rise to an unconditional right to consideration. As permitted by AASB 9, the Group applies the ‘simplified approach’ to trade receivable balances and the ‘general approach’ to all other financial assets (refer to note 14). The general approach incorporates a review for any significant increase in counterparty credit risk since inception. The ECL reviews include assumptions about the risk of default and expected loss rates. DERECOGNITION OF FINANCIAL ASSETS The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received. 2024 $’000 2023 $’000 Financial Assets Current Loans to franchisees 35,220 31,708 Foreign exchange forward contracts 1,651 4,934 Interest rate swaps 45 – Total current financial assets 36,916 36,642 Non-current Loans to franchisees 60,761 77,937 Allowance for doubtful loans (1,664) (525) Interest rate swaps 3,375 912 Other 538 761 Long-term store rental security deposits 27,013 29,849 Total non-current financial assets 90,023 108,934 Current 36,916 36,642 Non-current 90,023 108,934 Total financial assets 126,939 145,576 IMPAIRMENT Before providing any new loans to franchisees, the Group reviews the potential franchisee’s credit quality, which is determined by reviewing a business plan and the projected future cash flows for that store, to ensure the franchisee is able to meet its interest repayments on the loan. On average, the interest charged was 7.3% (2023: 6.4%) in Australia and New Zealand, the average interest charged in France is 6.0% (2023: 6.0%), in the Netherlands is 8.0% (2023: 7.0%), in Germany is 5.0% (2023: 5.0%) and the average interest charged in Japan is 5.0% (2023: 5.0%). The Group applies the ‘general approach’ to measuring expected credit losses which uses a lifetime expected loss allowance if there has been no significant change in credit risk for the for franchisee loans where there has been a significant increase in credit risk. Otherwise it uses the 12-month expected credit loss. The general approach incorporates a review for any significant increase in counterparty credit risk since inception. The ECL review includes assumptions about the risk of default and expected credit loss rates. 24 FINANCIAL ASSETS (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 160 2024 $’000 2023 $’000 Franchisee loans 95,981 109,645 Allowance for doubtful loans (1,664) (525) 94,317 109,120 2024 $’000 2023 $’000 Ageing of Franchisee Loans Amounts not yet due 94,317 109,120 94,317 109,120 2024 $’000 2023 $’000 Movement in loss allowance Balance at the beginning of the year 525 490 Impairment losses recognised on loans 1,324 – Amounts written off as uncollectible (176) – Effect of foreign currency (9) 35 Balance at the end of the year 1,664 525 25 FINANCIAL LIABILITIES RECOGNITION AND MEASUREMENT FINANCIAL LIABILITY AND EQUITY INSTRUMENTS CLASSIFICATION AS DEBT AND EQUITY Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement. EQUITY INSTRUMENTS An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Consolidated entity are recorded at the proceeds received, net of direct issue costs. FINANCIAL LIABILITIES Financial liabilities are classified as either financial liabilities ‘at FVPL’ or ‘other financial liabilities’. FINANCIAL LIABILITIES AT FVPL Financial liabilities are classified as at FVPL when the financial liability is either held for trading or it is designated as at FVPL. A financial liability is classified as held for trading if: • it has been acquired principally for the purpose of repurchasing in the near term; or • on initial recognition it is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern of short‑term profit-taking; or • it is a derivative that is not designated and effective as a hedging instrument. 24 FINANCIAL ASSETS (continued) continued Notes to the Financial Statements 161 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. A financial liability other than a financial liability held for trading is designated as at FVPL upon initial recognition if: • such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or • the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance evaluated on a fair value basis, in accordance with the Consolidated entity’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or • it forms part of a contract containing one or more embedded derivatives, and AASB 9 ‘Financial Instruments’ permits the entire combined contract (asset or liability) to be designated as at FVPL. Financial liabilities at FVPL are stated at fair value, with any gains or losses arising on re-measurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the ‘other gains and losses’ line item in the statement of comprehensive income. FINANCIAL BORROWINGS Borrowing and other financial liabilities (including trade payables but excluding derivative liabilities) are recognised initially at fair value, net of transaction costs incurred, and are subsequently measured at amortised cost. DERECOGNITION OF FINANCIAL LIABILITIES The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss. ESTIMATES AND JUDGEMENTS FINANCIAL LIABILITIES 2024 $’000 2023 $’000 Current Interest rate swaps – 943 Foreign exchange contracts 789 – Security deposits 11,633 13,243 Other 1,316 317 Total current financial liabilities 13,738 14,503 Non-current Contingent consideration (i) – 17,336 Other 4 991 Total non-current financial liabilities 4 18,327 Current 13,738 14,503 Non-current 4 18,327 Total financial liabilities 13,742 32,830 (i) Contingent consideration arose upon the acquisition of Domino’s Pizza Malaysia, Singapore and Cambodia in the prior year. Under the sale and purchase agreements, additional consideration is payable to the previous owners, which is contingent on the achievement of an adjusted multiple of average EBITDA for the calendar years 2023 and 2024 or 2024 and 2025. Movements in the liability relate to the unwinding of the discount and changes to the estimated contingent consideration payable, which is highly sensitive to changes in forecasted EBITDA. Whilst management’s medium and long-term EBITDA expectations for the acquired business have not changed, the earnings growth profile has been updated. 25 FINANCIAL LIABILITIES (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 162 FAIR VALUE OF DERIVATIVES AND OTHER FINANCIAL INSTRUMENTS As described in note 26, management uses their judgement in selecting an appropriate valuation technique for financial instruments not quoted in an active market. Valuation techniques commonly used by market practitioners are applied. For derivative financial instruments, assumptions are made based on quoted market rates adjusted for specific features of the instrument. Other financial instruments are valued using a discounted cash flow analysis based on assumptions supported, where possible, by observable market prices or rates. Details of assumptions are provided in note 26. 26 FINANCIAL RISK MANAGEMENT CAPITAL RISK MANAGEMENT The Group manages its capital to ensure that it will be able to continue as a going concern, while maximising the return to stakeholders through optimisation of the debt and equity balances. The capital structure of the Group consists of net debt, which includes borrowings, cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves, retained earnings and non-controlling interest. The Group operates globally, primarily through subsidiary companies established in the markets in which the Group trades, these companies are not subject to externally imposed capital requirements. Operating cash flows are used to maintain and expand the Groups assets, as well as to make routine outflows of tax, dividends and repayment of maturing debt. The Group policy is to control borrowing centrally; using a variety of capital market issues and borrowing facilities, to meet anticipated funding requirements. The Group’s management and board of directors review the capital structure formally on an annual basis. The board of directors consider the cost of capital and associated risk. Based on recommendations from management and the board of directors, the Group will balance its overall capital structure through payment of dividends, new share issues and issue or redemption of debt. GEARING RATIO The gearing ratio at the end of the reporting period was as follows: 2024 $’000 2023 $’000 Debt (i) 766,275 983,090 Cash and cash equivalent (87,651) (159,891) Net debt 678,624 823,199 Equity (ii) 609,548 520,517 Net debt to equity ratio 111.3% 158.2% (i) Debt is defined as long-term and short-term borrowings, excluding capitalised borrowing costs, as detailed in note 23. (ii) Equity includes all capital and reserves that are managed as capital. 25 FINANCIAL LIABILITIES (continued) continued Notes to the Financial Statements 163 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. The categories of financial assets and liabilities are outlined below: 2024 2023 FINANCIAL ASSETS CLASSIFICATION NOTE INTEREST RATE %(i) $’000 INTEREST RATE %(i) $’000 Trade and other receivables Amortised cost 14 – 132,570 – 155,135 Loans receivable Amortised cost 24 5.81 94,317 5.98 109,120 Other financial assets Amortised cost 24 – 538 – 761 Deposits Amortised cost 24 – 27,013 – 29,849 Investment in lease assets Amortised cost 12 1.54 422,343 1.30 444,113 Interest rate swaps Derivative financial instrument 24 – 3,420 – 912 Forward exchange contracts Derivative financial instrument 24 – 1,651 – 4,934 2024 2023 FINANCIAL LIABILITIES CLASSIFICATION NOTE INTEREST RATE %(i) $’000 INTEREST RATE %(i) $’000 Trade and other payables Amortised cost 15 – 325,991 – 366,473 Other financial liabilities Amortised cost 25 – 12,953 – 14,551 Bank loans Amortised cost 23 3.18 766,275 2.08 983,090 Lease liabilities Amortised cost 12 1.65 681,871 1.30 761,345 Contingent consideration FVPL 25 – – – 17,336 Interest rates swaps Derivative financial instrument 25 – – – 943 Foreign Exchange Contract Derivative financial instrument 25 – 789 – – (i) Interest rates represent the weighted average effective interest rate. FINANCIAL RISK MANAGEMENT Group treasury co-ordinates access to financial markets, monitors and manages the financial risks relating to the operations of the Group in line with its policies. These risks include; • Liquidity risk • Market risk, including foreign currency, interest rate and commodity price risk; and • Credit risk The Group seeks to manage and minimise its exposure to these financial risks by using derivative financial instruments to hedge the risk, governed by the approved Group policies, which provides written principles on foreign exchange risk, interest rate risk, credit risk and the use of derivatives and investment of excess liquidity. Compliance with policies and exposure limits are reviewed by the board of directors. The Group does not enter into or trade financial instruments, including derivative instruments, for speculative purposes. LIQUIDITY RISK NATURE OF THE RISK The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, continuously monitoring forecast and actual cash flows, and matching the maturity profiles of financial assets and liabilities. Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity management framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements. 26 FINANCIAL RISK MANAGEMENT (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 164 FINANCING FACILITIES 2024 $’000 2023 $’000 Unsecured bank overdraft, reviewed annually and payable at call: Amount used – – Amount unused 5,745 5,756 5,745 5,756 Committed commercial bill facility: Amount used 765,359 983,090 Amount unused 419,152 257,287 1,184,511 1,240,377 Uncommitted facilities, at call: Amount used 916 – Amount unused 34,340 23,836 35,256 23,836 Committed commercial bill facilities Floating rate borrowings 372,084 529,982 Fixed rate borrowings 394,191 453,108 766,275 983,090 MATURITY OF FINANCIAL ASSETS AND LIABILITIES The following tables analyse the Group’s financial assets and liabilities, including net and gross settled financial instruments, into relevant maturity periods based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are contractual undiscounted cash flows and hence will not necessarily reconcile with the amounts disclosed in the balance sheet. Expected future interest payments on loans and borrowings exclude accruals already recognised in trade and other payables. For foreign exchange derivatives and cross-currency interest rate swaps, the amounts disclosed are the gross contractual cash flows to be paid. For interest rate swaps, the cash flows are the net amounts to be paid at each quarter, excluding accruals included in trade and other payables, and have been estimated using forward interest rates applicable at the reporting date. 26 FINANCIAL RISK MANAGEMENT (continued) continued Notes to the Financial Statements 165 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. 30 JUNE 2024 LESS THAN 1 YEAR $’000 1–5 YEARS $’000 MORE THAN 5 YEARS $’000 Financial assets Trade and other receivables 132,570 – – Interest rate swap 45 3,375 – Loans receivable 35,220 59,097 – Cash and cash equivalents 87,651 – – Other financial assets – 538 – Investment in lease assets 85,984 266,007 96,152 Foreign exchange contracts 1,651 – – Deposits – 27,013 – Financial liabilities Trade and other payables (325,991) – – Foreign exchange contracts (789) – – Bank loans (916) (765,359) – Lease liabilities (144,230) (419,266) (155,396) Other financial liabilities (12,949) (4) – 02 JULY 2023 LESS THAN 1 YEAR $’000 1–5 YEARS $’000 MORE THAN 5 YEARS $’000 Financial assets Trade and other receivables 155,135 – – Interest rate swap – 912 – Loans receivable 31,708 77,412 – Cash and cash equivalents 159,891 – – Other financial assets – 761 – Investment in lease assets 84,386 266,906 116,581 Forward exchange contracts 4,934 – – Deposits – 29,849 – Financial liabilities Trade and other payables (366,473) – – Foreign exchange contracts (943) – – Bank loans – (983,090) – Lease liability (146,530) (438,163) (196,716) Contingent consideration – (23,324) – Other financial liabilities (317) (14,234) – 26 FINANCIAL RISK MANAGEMENT (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 166 The following table details the Group’s liquidity analysis for its derivative financial instruments. The table has been drawn up based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis, and the undiscounted gross inflows and outflows on those derivatives that require gross settlement. When the amount payable or receivable is not fixed, the amount disclosed has been determined by reference to the projected interest rates as illustrated by the yield curves at the end of the reporting period. 2024 LESS THAN 1 MONTH $’000 1–3 MONTHS $’000 3 MONTHS TO 1 YEAR $’000 1–5 YEARS $’000 Net Settled Interest rate swaps – (371) 416 3,375 Gross Settled Forward foreign exchange contracts – Inflow 13,909 18,651 42,023 – Forward foreign exchange contracts – Outflow (12,958) (18,145) (42,617) – 951 506 (594) – 2023 LESS THAN 1 MONTH $’000 1–3 MONTHS $’000 3 MONTHS TO 1 YEAR $’000 1–5 YEARS $’000 Net Settled Interest rate swaps – (32) (911) 912 Gross Settled Forward foreign exchange contracts – Inflow 13,670 27,836 78,312 – Forward foreign exchange contracts – Outflow (13,076) (26,533) (75,019) – 594 1,303 3,293 – MARKET RISK NATURE OF FOREIGN CURRENCY RISK The Group enters into a variety of derivative and non-derivative financial instruments to manage its exposure to interest rate and foreign currency risk, including; • Interest rate swaps to mitigate risk of rising interest rates • Cross currency interest rate swaps to mitigate rising interest rates and foreign exchange fluctuations • Debt to manage currency risk • Forward foreign exchange contracts to hedge the exchange rate risk of purchases 26 FINANCIAL RISK MANAGEMENT (continued) continued Notes to the Financial Statements 167 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. EXPOSURE The Group’s exposure, before hedging arrangements, to the NZ Dollar, Euro, Japanese Yen, Taiwanese Dollar, Malaysian Ringgit, Singaporean Dollar and United States Dollar at the balance sheet date were as follows: ASSETS LIABILITIES 2024 $’000 2023 $’000 2024 $’000 2023 $’000 New Zealand Dollar 17,726 21,068 (29,832) (33,345) Euro 79,234 100,909 (69,249) (63,904) Japanese Yen 108,803 166,012 (404,002) (523,198) Taiwan Dollar 13,652 11,352 (13,573) (9,645) Malaysian Ringgit 7,131 24,676 (11,742) (20,187) Singapore Dollar 4,859 3,885 (7,497) (8,258) United States Dollar 165 67 (150) (2,861) SENSITIVITY TO FOREIGN EXCHANGE MOVEMENTS The sensitivity analysis below shows the impact that a reasonable possible change in foreign exchange rates over a financial year would have on profit after tax and equity, based solely on the Group’s foreign exchange rate exposure existing at the balance sheet date. The Group has used the observed range of actual historical rates for the preceding five-year period, with a heavier weighting placed on recently observed market data, in determining reasonable possible exchange movements to be used for the current year’s sensitivity analysis. Past movements are not necessarily indicative of future movements. The following exchange rates have been used in performing the sensitivity analysis: EURO JPY NZD TWD MYR SGD USD Actual 2024 0.62 106.61 1.09 21.50 3.13 0.90 0.66 + 10% 0.68 117.27 1.20 23.65 3.44 0.99 0.73 - 10% 0.56 95.95 0.98 19.35 2.81 0.81 0.60 Actual 2023 0.61 95.92 1.09 20.63 3.10 0.90 0.66 + 10% 0.67 105.51 1.20 22.69 3.41 0.99 0.73 - 10% 0.55 86.33 0.98 18.57 2.79 0.81 0.60 The Group’s exposure to changes in market interest rates relates primarily to the Group’s debt obligations that have floating interest rates. The impact on profit and equity is estimated by relating the hypothetical changes in the NZ Dollar, Japanese Yen, Euro, Malaysian Ringgit, Singapore Dollar and United States Dollar exchange rate to the balance of financial instruments at the reporting date. Foreign currency risks, as defined by AASB 7 Financial Instruments: disclosure, arise on account of the financial instruments being denominated in a currency that is not the functional currency in which the financial instruments are measured. Differences from the translation of the financial statements into the Group’s presentation currency are not taken into consideration in the sensitivity analysis. The results of the foreign exchange rate sensitivity analysis are driven by three main factors, as outlined below: • The impact of applying the above foreign exchange movements to financial instruments that are not in hedge relationships will be recognised directly in profit or loss; • To the extent that the foreign currency denominated derivatives on balance sheet form part of an effective cash flow hedge relationship, any fair value movements caused by applying the above sensitivity movements will be deferred in equity and will not affect profit or loss; and • Movements in financial instruments forming part of an effective fair value hedge relationship will be recognised in profit or loss. However, as a corresponding entry will be recognised for the hedged item, the net effect on profit or loss will be nil. The below table details the impact of the Group’s profit after tax and other equity had there been a movement in the NZ Dollar, Japanese Yen, Euro, Malaysian Ringgit, Singapore Dollar and United States Dollar with all other variables held constant. 26 FINANCIAL RISK MANAGEMENT (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 168 TOTAL IMPACT 2024 $’000 2023 $’000 Profit or (loss) If there was a 10% increase in exchange rates with all other variables held constant – – If there was a 10% decrease in exchange rates with all other variables held constant – – Other equity If there was a 10% increase in exchange rates with all other variables held constant 30,385 29,975 If there was a 10% decrease in exchange rates with all other variables held constant (37,137) (38,846) FOREIGN CURRENCY RISK MANAGEMENT The hedging function of the Group is to address foreign currency risk and is managed centrally. The Group requires all subsidiaries to hedge foreign exchange exposures for firm commitments relating to sale or purchases or when highly probable forecast transactions have been identified. Before hedging, the subsidiaries are also required to take into account their competitive position. The hedging instrument must be in the same currency as the hedged item. The objective of the Group’s policy on foreign exchange hedging is to protect the Group from adverse currency fluctuations. NATURE OF INTEREST RATE RISK INTEREST RATE RISK MANAGEMENT The risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings, and by the use of interest rate swaps. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied. From a Group perspective, any internal contracts are eliminated as part of the consolidation process, leaving only external contracts. SENSITIVITY TO INTEREST RATE MOVEMENTS The following sensitivity analysis shows the impact that a reasonable possible change in interest rates would have on Group profit after tax and equity. The impact is determined by assessing the effect that such a reasonable possible change in interest rates would have had on the interest income/(expense) and the impact on financial instrument fair values. This sensitivity is based on reasonable possible changes over a financial year, determined using observed historical interest rate movements of the preceding five-year period, with a heavier weighting given to more recent market data. If interest rates had moved by 100 basis points and with all other variables held constant, profit before tax and equity would be affected as follows: IMPACT ON PROFIT BEFORE TAX 2024 $’000 2023 $’000 Interest rates – increase by 100 basis points (6,439) (5,834) Interest rates – decrease by 100 basis points 6,250 5,051 EXPOSURE As at the balance sheet date, the Group had financial assets and liabilities with exposure to interest rate risk. Interest on financial instruments classified as floating rate, is repriced at intervals of less than one year. Interest on financial instruments, classified as fixed rate, is fixed until maturity of the instrument. The classification between fixed and floating interest takes into account applicable hedge instruments. Other financial instruments of the Group that are not included in the following table are non-interest bearing and are therefore not subject to interest rate risk. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts and estimated fair values of all Group’s financial instruments recognised in the financial statements are materially the same. The methods and assumptions used to estimate the fair value of financial instruments are as follows: 26 FINANCIAL RISK MANAGEMENT (continued) continued Notes to the Financial Statements 169 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. OTHER FINANCIAL ASSETS/LIABILITIES Loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘Other financial Assets’. Loans are measured at amortised cost using the effective interest method less impairment. Interest income is recognised by applying the effective interest rate. DERIVATIVES The Group enters into derivative financial instruments with various counterparties, principally financial institutions with investment grade credit ratings. Foreign exchange forward contracts, interest rate swap contracts and cross-currency interest rate swaps are all valued using forward pricing techniques. This includes the use of market observable inputs, such as foreign exchange spot and forward rates, yield curves of the respective currencies, interest rate curves and forward rate curves of the underlying commodity. Accordingly, these derivatives are classified as Level 2. INTEREST BEARING LOANS AND BORROWINGS Quoted market prices or dealer quotes for similar instruments are used to value long-term (greater than one year) debt instruments. VALUATION OF FINANCIAL INSTRUMENTS For all fair value measurements and disclosures, the Group uses the following to categorise the method used: • Level 1: the fair value is calculated using quoted prices in active markets. • Level 2: the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices). • Level 3: the fair value is estimated using inputs for the asset or liability that are not based on observable market data. The following table presents the Group’s assets and liabilities measured and recognised at fair value at the reporting date. 30 JUNE 2024 LEVEL 1 $’000 LEVEL 2 $’000 LEVEL 3 $’000 TOTAL $’000 Recurring fair value measurements Financial assets Foreign exchange contracts – 1,651 – 1,651 Interest rate swaps – 3,420 – 3,420 Total financial assets – 5,071 – 5,071 Financial liabilities Foreign exchange contracts – 789 – 789 Total financial liabilities – 789 – 789 02 JULY 2023 LEVEL 1 $’000 LEVEL 2 $’000 LEVEL 3 $’000 TOTAL $’000 Recurring fair value measurements Financial assets Interest rate swaps – 912 – 912 Foreign exchange contracts – 4,934 – 4,934 Total financial assets – 5,846 – 5,846 Financial liabilities Contingent consideration payable – – 17,336 17,336 Interest rate swaps – 943 – 943 Total financial liabilities – 943 17,336 18,279 26 FINANCIAL RISK MANAGEMENT (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 170 There have been no transfers between Level 1 and Level 2. The only financial liabilities subsequently measured at fair value on Level 3 fair value measurement represent contingent consideration for acquisition for Domino’s Malaysia, Singapore and Cambodia. The fair value remeasurement has been recognised in the consolidated statement of profit and loss in the current period. VALUATION TECHNIQUES USED TO DERIVE LEVEL 2 AND 3 FAIR VALUES The fair values of the financial assets and financial liabilities included in the level 2 and 3 categories above have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparties and long-term revenue and profit growth rates. The level 2 financial instruments have been valued using the discounted cash flow technique. Future cash flows are estimated based on forward interest rates (from observable yield curves at the end of the reporting period) and contract interest rates, discounted at a rate that reflects the credit risk of various counterparties. Specific valuation techniques used to value level 3 financial instruments include: CONTINGENT CONSIDERATION IN A BUSINESS COMBINATION The discounted cash flow method was used to calculate the present value of the expected future economic benefits that will flow out of the Group arising from the contingent consideration. The significant unobservable inputs include the projected gross margin based on management’s experience and knowledge of market and industry conditions. Significant increase/(decrease) in the gross profit would result in a higher/(lower) fair value of the contingent consideration liability. HEDGING The Group designates certain derivatives as hedging instruments in respect of foreign currency risk and interest rate risk in fair value hedges, cash flow hedges, or hedges of net investment in foreign operations as appropriate. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges. At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument is effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk, which is when the hedge relationship meet all of the hedge effectiveness requirements prescribed in AASB 9. If a hedging relationship ceases to meet the hedge effectiveness requirement relating to the hedge ratio but the risk management objective for that designated hedging relationship remains the same, the Group adjusts the hedge ratio for the hedging relationship (i.e. rebalances the hedge) so that it meets the qualifying criteria again. The Group holds the following hedging instruments: FORWARD EXCHANGE CONTRACTS Contracts denominated in US dollar to hedge highly probable sale and purchase transactions (cash flow hedges). INTEREST RATE SWAPS To optimise the Group’s exposure to fixed and floating interest rates arising from borrowings. These hedges incorporate cash hedges, which fix future interest payments, and fair value hedges, which reduce the Group’s exposure to changes in the value of its assets and liabilities arising from interest rate movements CROSS-CURRENCY INTEREST RATE SWAPS To either reduce the Group’s exposure to exchange rate variability in its interest repayments of foreign currency denominated debt (cash flow hedges) or to hedge against movements in the fair value of those liabilities due to exchange and interest rate movements (fair value hedges). The borrowing margin on the Group’s cross-currency interest rate swap has been treated as a cost of hedging and deferred into equity. These costs are then amortised to the profit and loss as a finance cost over the remaining life of the borrowing. CASH FLOW HEDGES The effective portion of changes in the fair value of derivatives and other qualifying hedging instruments that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated under the heading of cash flow hedging reserve, limited to the cumulative change in fair value of the hedged item from inception of the hedge. The gain or loss relating to the ineffective portion is recognised immediately in the profit or loss. 26 FINANCIAL RISK MANAGEMENT (continued) continued Notes to the Financial Statements 171 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. The Group discontinues hedge accounting only when the hedging relationship (or a part thereof) ceases to meet the qualifying criteria. This includes instances when the hedging instrument expires or is sold, terminated or exercised. The discontinuation is accounted for prospectively. Any gain or loss recognised in other comprehensive income and accumulated in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur the gain or loss accumulated in equity is recognised immediately in profit or loss. The Group uses cash flow hedges to mitigate the risk of variability of future cash flows attributable to foreign currency fluctuations over the hedging period associated with foreign currency borrowings and ongoing business activities, predominantly where there are highly probable purchases or settlement commitments in foreign currencies. The Group also uses cash flow hedges to hedge variability in cash flows due to interest rates associated with borrowings. At 30 June 2024 the Group have interest rate swap agreements in place with a notional amount of ¥11 billion whereby the Group receives a variable rate of interest of TIBOR +0% and pay interest at a rate equal to 0.526% on the notional amount. The swap is being used to hedge the exposure to changes in the fair value of its fixed rate secured loans. At 30 June 2024 the Group have interest rate swap agreements in place with a notional amount off ¥10 billion whereby the Group receives a variable rate of interest of TIBOR + 0% and pays interest at a rate equal to 0.17% on the notional amount. The swap is being used to hedge the exposure to changes in the fair value of its fixed rate secured loans. During the year, the Group had interest rate swap agreements in place with a notional amount of ¥12 billion, whereby the Group received a variable rate of interest of TIBOR and pays interest at a rate equal to 0.24% on the notional amount. The interest rate swap agreement expired on 24 August 2023. The swap was being used to hedge the exposure to changes in the fair value of its fixed rate secured loans. Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing interest rates on the fair value of issued fixed rate debt held and the cash flow exposures on the issued variable rate debt held. The fair value of interest rate swaps at the reporting date is determined by discounting the future cash flows using the curves at the reporting date and the credit risk inherent in the contract, and is disclosed below. The average interest rate is based on the outstanding balances at the end of the financial year. As the critical terms of the interest rate swap contracts and their corresponding hedged items are the same, the Group performs a qualitative assessment of effectiveness and it is expected that the value of the interest rate swap contracts and the value of the corresponding hedged items will systematically change in opposite direction in response to movements in the underlying interest rates. The main source of hedge ineffectiveness in these hedge relationships is the effect of the counterparty and the Group’s own credit risk on the fair value of the interest rate swap contracts, which is not reflected in the fair value of the hedged item attributable to the change in interest rates. No other sources of ineffectiveness emerged from these hedging relationships. The impact of the hedging instruments on the statement of financial position as at 30 June 2024 is, as follows: 2024 2023 AUD $’000 JPY ¥’000 AUD $’000 JPY ¥’000 Interest Rate Swap Notional Amount (i) – – 125,104 12,000,000 Notional Amount (ii) 93,800 10,000,000 104,254 10,000,000 Notional Amount (iii) 103,180 11,000,000 114,679 11,000,000 Change in intrinsic value of outstanding hedging instrument since 03 July 2023 (AUD) 3,450 – (64) – Change in value of hedged item used to determine hedge effectiveness (AUD) 3,419 – (30) – (i) Interest rate swap expired 24 August 2023 (ii) Interest rate swap has an expiration date of 24 August 2028 (iii) Interest rate swap has an expiration date of 25 November 2027 The line item in the statement of financial position which is impacted by the hedging instrument is current financial liabilities. 26 FINANCIAL RISK MANAGEMENT (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 172 Amounts recognised in equity are transferred to income statement when the hedged transaction affects profit or loss, such as when hedged income or expenses are recognised or when a forecast sale occurs or the asset is consumed. When the hedged item is the cost of a non-financial asset or liability, the amounts taken to equity are transferred to the initial carrying amount of the non-financial asset or liability. If the forecast transaction is no longer expected to occur, amounts previously recognised in equity are transferred to the income statement. If the hedging instrument expires or is sold, terminated or exercised without replacement or roll over, or if its designation as a hedge is revoked, amounts previously recognised in equity remain in equity until the forecast transaction occurs. HEDGES OF NET INVESTMENT IN FOREIGN OPERATIONS Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in Other Comprehensive Income and accumulated under the heading of foreign currency transaction reserve. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss. Gains and losses on the hedging instrument relating to the effective portion of the hedge accumulated in the foreign currency translation reserve are reclassified to profit or loss on the disposal or partial disposal of the foreign operations. Included in borrowings at 30 June 2024 is borrowings of $291,909 thousand, which has been designated as hedge of the net investments in the Group’s European subsidiaries and $42,326 thousand, which has been designated as a hedge of the net investments in the Group’s Taiwanese subsidiaries. These borrowings are being used to hedge the Group’s exposure to the foreign exchange risk on these investments. There are economic relationships between the hedged items and the hedging instruments as the net investment creates a transaction risk that will match the foreign exchange risk on the Euro and Taiwanese dollar borrowings. The Group has established a hedge ratio of 1:1 as the underlying risk of the hedging instruments are identical to the hedged risk component. The hedge ineffectiveness will arise when the amount of the subsidiary become lower than the amount of the fixed rate borrowing. The impact of the hedging instruments on the statement of financial position is, as follows: 2024 $’000 2023 $’000 Hedge of Net Investment in Foreign Operations Notional amount (EURO) 180,867 180,867 Carrying amount (AUD) 291,909 296,551 Change in intrinsic value of outstanding hedging instrument since 02 July 2023 (AUD) 4,643 (10,724) Change in value of hedged item used to determine hedge effectiveness (AUD) (4,643) 10,724 Notional amount (TWD) 910,000 910,000 Carrying amount (AUD) 42,326 44,111 Change in intrinsic value of outstanding hedging instrument since 02 July 2023 (AUD) 1,785 497 Change in value of hedged item used to determine hedge effectiveness (AUD) (1,785) (497) HEDGING RESERVES The Group’s hedging reserves are disclosed in note 18. CREDIT RISK NATURE OF CREDIT RISK Credit risk is the risk that a contracting entity will not complete its obligations under a financial instrument or customer contract that will result in a financial loss to the Group. The Group is exposed to credit risk from its operating activities (primarily from customer receivables and from its financing activities, including deposits with financial institutions, foreign exchange transactions and other financial instruments). 26 FINANCIAL RISK MANAGEMENT (continued) continued Notes to the Financial Statements 173 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. CREDIT RISK MANAGEMENT: RECEIVABLES & LOANS Customer credit risk is managed by each division subject to established policies, procedures and controls relating to customer credit risk management. The Group trades with recognised well-established franchisees. Depending on the division, credit terms for receivables are generally up to 30 days from date of invoice. Loans payments are received weekly in advance. The Group’s exposure to bad debts is not significant and default rates have historically been very low on both receivables and loans. Franchisee’s and customers who trade on credit terms are subject to credit verification procedures, including an assessment of financial position, past experience and industry reputation. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. In the event that a loan defaults, the Group seeks is to purchase and operate the store as a corporate store. The credit quality of trade receivables and loans has been assessed as high based on information on counterparty and historical counter party default. The carrying value of the Groups trade, other receivables and loans are denominated in Australian dollars, NZ dollars, Japanese Yen, Euro, Taiwanese dollar, Malaysian Ringgit, Singaporean Dollar and the United States Dollar. EXPOSURE The Group’s maximum credit exposure to current receivables, finance advances and loans are shown below: 2024 $’000 2023 $’000 ANZ 73,928 91,842 Europe 58,198 58,016 Japan 82,736 106,062 Taiwan 7,623 3,510 Malaysia 3,987 2,361 Singapore 464 772 Cambodia 8 8 Total 226,944 262,571 CREDIT RISK MANAGEMENT: FINANCIAL INSTRUMENTS AND CASH DEPOSITS Credit risk from balances with banks and financial institutions is managed by the Group in accordance with the Board-approved policy. Investments of surplus funds are made only with approved counterparties. The carrying amount of financial assets represents the maximum credit exposure. There is also exposure to credit risk when the Group provides a guarantee to another party. Details of contingent liabilities are disclosed in note 30. There are no significant concentrations of credit risk within the Group. OFFSETTING FINANCIAL INSTRUMENTS The Group presents its derivative assets and liabilities on a gross basis. Derivative financial instruments entered into by the Group are subject to enforceable master netting arrangements, such as International Swaps and Derivatives Association (ISDA) master netting agreements. In certain circumstances, for example, when a credit event such as a default occurs, all outstanding transactions under ISDA agreements are terminated, the termination value is assessed and only a single net amount is payable in settlement of all transactions. The amounts set out in note 24 and 25 represent the derivative financial assets and liabilities of the Group, that are subject to the above arrangements and are presented on a gross basis. 26 FINANCIAL RISK MANAGEMENT (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 174 GROUP STRUCTURE Group structure explains aspects of the Group structure and how changes have affected the financial position and performance of the Group. 27 SUBSIDIARIES Details of the Company’s subsidiaries at 30 June 2024 are as follows: NAME OF ENTITY PLACE OF INCORPORATION AND OPERATION FUNCTIONAL CURRENCY PROPORTION OF OWNERSHIP AND VOTING POWER HELD 2024 % 2023 % Hot Cell Pty Ltd (i) Australia AUD 100 100 Silvio’s Dial-a-Pizza Pty Ltd (i) Australia AUD 100 100 Impressu Print Group Pty Ltd (i) Australia AUD 100 100 Catering Service & Supply Pty Ltd (i) Australia AUD 100 100 Domino’s Pizza Enterprises Ltd Employee Share Trust Australia AUD 100 100 Construction, Supply & Service Pty Ltd (i) Australia AUD 100 100 Ride Sports ANZ Pty Ltd (i) Australia AUD 100 100 Domino’s Pizza New Zealand Limited New Zealand NZD 100 100 DPH NZ Holdings Limited New Zealand NZD 100 100 Domino’s Pizza Japan, Inc. Japan JPY 100 100 Domino’s Pizza Europe B.V. The Netherlands EUR 100 100 Domino’s Pizza Netherlands B.V. The Netherlands EUR 100 100 DOPI Vastgoed B.V. The Netherlands EUR 100 100 Domino’s Pizza Geo B.V. The Netherlands EUR 50 50 N4N B.V. The Netherlands EUR 50 50 Domino’s Pizza Belgium S.P.R.L Belgium EUR 100 100 Daytona Holdco Limited (UK) UK EUR 100 100 Daytona JV Limited (UK) (ii) UK EUR – 100 Ausmark Holdco Limited (ii) UK EUR – 100 Ausmark ApS Denmark DKK 100 100 Daytona Germany GmbH Germany EUR 100 100 Domino’s Pizza Deutschland GmbH Germany EUR 100 100 Hallo Pizza GmbH (ii) Germany EUR – 100 DPEU Holdings S.A.S. France EUR 100 100 Domino’s Pizza France S.A.S. France EUR 100 100 HVM Pizza S.A.R.L. France EUR 100 100 Fra-Ma-Pizz S.A.S. France EUR 100 100 Origin Pizza Holdings S.r.L Italy EUR 100 100 Pizza Centre France S.A.S. France EUR 100 100 DPE Global Support Centre Poland sp.zo.o Poland PLN 100 – DPE Shared Services Sdn Bhd Malaysia MYR 100 – Groupe AVB S.A.S. France EUR 100 100 AVB2 S.A.R.L. (ii) France EUR – 100 AVB Services S.A.R.L. (ii) France EUR – 100 AVB3 S.A.R.L. (ii) France EUR – 100 AVB4 S.A.R.L. (ii) France EUR – 100 AVB5 S.A.R.L. (ii) France EUR – 100 Taiwan Domino’s Pizza Co., Ltd Taiwan TWD 100 100 PizzaVest Co., Ltd Taiwan TWD 100 100 Dommal Food Services Sdn Bhd Malaysia MYR 100 100 Domino’s Pizza Singapore Pte Ltd Singapore SGD 100 100 D.Pizza Co. Ltd Cambodia USD 100 100 (i) This entity is a member of the tax-consolidated group where Domino’s Pizza Enterprises Limited is the head entity within the tax-consolidated group. (ii) Entities have been liquidated in the period continued Notes to the Financial Statements 175 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. 28 PARENT ENTITY INFORMATION PARENT ENTITIES The parent entity and the ultimate parent entity in the Consolidated entity is Domino’s Pizza Enterprises Limited. FINANCIAL POSITION 2024 $’000 2023 $’000 Assets Current assets 171,211 174,740 Non-current assets 941,767 1,022,769 Total assets 1,112,978 1,197,509 Liabilities Current liabilities 213,530 191,164 Non-current liabilities 566,412 726,233 Total liabilities 779,942 917,397 Equity Issued capital 518,699 430,476 Retained earnings (108,197) (69,014) Reserves Equity-settled share-based benefits (81,236) (81,918) Cashflow hedge reserve 3,770 568 Total equity 333,036 280,112 FINANCIAL PERFORMANCE Profit for the year 48,615 13,068 Other comprehensive income 3,884 (2,904) Total comprehensive income 52,499 10,164 TAX CONSOLIDATED GROUP The Company and all its wholly-owned Australian resident entities are part of a tax consolidated group under Australian taxation law. Domino’s Pizza Enterprises Limited is the head entity in the tax-consolidated group. Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax-consolidated group are recognised in the separate financial statements of the members of the tax-consolidated group using the ‘separate taxpayer within group approach’ by reference to the carrying amounts in the separate financial statements of each entity and the tax values applying under tax consolidation. Current tax liabilities and assets and deferred tax assets arising from unused tax losses and relevant tax credits of the members of the tax-consolidated group are recognised by the Company (as head entity in the tax-consolidated group). The entities in the tax-consolidated group have not entered into a tax sharing agreement or tax funding agreement. Income tax liabilities payable to the tax authorities in respect of the tax-consolidated group are recognised in the financial statements of the parent entity. A tax-consolidated group was formed with effect from 1 July 2003 and is therefore taxed as a single entity from that date. The head entity within the tax‑consolidated group is Domino’s Pizza Enterprises Limited. The members of the tax-consolidated group are identified at note 27. CONTINGENT LIABILITIES OF THE PARENT ENTITY Guarantees are provided to third party financial institutions in relation to franchisee loans. The amount disclosed as a contingent liability represents the amounts guaranteed in respect of franchisees that would not, without the guarantee, have been granted the loans. The directors believe that if the guarantees are ever called on, the Company will be able to recover the amounts paid upon disposal of the stores. Refer to note 30 for further information regarding the contingent liabilities of the parent entity. continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 176 UNRECOGNISED ITEMS Unrecognised items provides information about items that are not recognised in the financial statements but could potentially have a significant impact on the Group’s financial position and performance. 29 COMMITMENTS The Group has various lease contracts that have not yet commenced as at 30 June 2024. The future lease payments for these non-cancellable lease contracts are $0.4 million within one year and $1.9 million within five years. CAPITAL EXPENDITURE COMMITMENTS 2024 $’000 2023 $’000 Plant and equipment 1,285 3,269 Total 1,285 3,269 30 CONTINGENT LIABILITIES RECOGNITION AND MEASUREMENT 2024 $’000 2023 $’000 Guarantees – franchisee loans and leases 7,649 8,172 Total 7,649 8,172 Included above are guarantees provided to third party financial institutions in relation to franchisee loans. This is a contingent liability representing the amounts guaranteed in respect of franchisees that would not, without the guarantee, have been granted the loans. The directors believe that if the guarantees are ever called on, the Company will be able to recover the amounts paid upon disposal of the stores. Included in the above are contingent liabilities of the parent entity of $3,894 thousand. ESTIMATES AND JUDGEMENTS LEGAL AND REGULATORY MATTERS The Group operates in a number of jurisdictions with different regulatory and legal requirements. Given this complexity, management is at times required to exercise judgement in evaluating compliance with relevant laws and regulations. SPEED RABBIT PIZZA There are various separate French legal proceedings by a competitor, Speed Rabbit Pizza (SRP) against subsidiary, Domino’s Pizza France (DPF) (the main claim) and seven SRP franchisees against DPF and the relevant DPF franchisees (the local claims). The allegations are that DPF and its franchisees breached French laws governing payment time limitations and lending, thereby giving DPF and its franchisees an unfair competitive advantage. SRP claimed significant damages for impediment of the development of its franchise network, lost royalty income from SRP franchisees and harm to SRP’s image. DPF and its franchisees have denied liability and are vigorously defending the claims. On 07 July 2014, the Court at first instance handed down its decision in the main claim, as well as in five of the local claims. All of the claims of SRP and the relevant SRP franchisees were dismissed. SRP filed an appeal to these decisions in the Court of Appeal, which dismissed SRP’s appeal in the main claim on 25 October 2017 and the appeal of SRP and/or SRP franchisees in five local claims on 12 December 2018. SRP then filed an appeal from the decision in the main claim and in 2 local claims to the Cour de Cassation i.e. France’s highest court. In the main claim, the Cour de Cassation handed down its judgement on 15 January 2020 which found errors of law in the Court of Appeal decision and set aside parts of the Court of Appeal’s decision. On 20 December 2020, SRP filed a fresh appeal in the Court of Appeal and on 22 January 2021 provided DPF with a brief of evidence including new claims for compensation of €236 million. The referring appeal was heard on 05 January 2022. On 18 May 2022, the Court of Appeal issued a decision making no findings on the allegations and appointing an independent expert whose mission is to provide a report to inform the Court on the allegations. Five meetings with the expert took place on 12 July 2022, 11 May 2023, 09 October 2023,12 December 2023 and 24 June 2024. The expert handed down an Expert’s Note n°1 on 27 March 2024 as well as Minutes of the meeting on 24 June 2024. These Minutes provide estimate dates for the preliminary report, due by end December 2024, and for the final report, due by end of February 2025. In the two local claims appealed to the Cour de Cassation, judgements were handed down on 07 July 2020 and 30 September 2020 which found errors of law and cancelled the Court of Appeal decisions. SRP initiated the referring appeals of these two local cases in April 2022 before the Court of Appeal of continued Notes to the Financial Statements 177 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. Paris and filed its briefs in June 2022. DPF filed its briefs by mid-August 2022 and the hearings were held on 14 September 2022. On 23 November 2022, the Court of Appeal appointed an independent expert whose mission is to provide a report to inform the Court on the allegations. Two meetings took place on 13 February 2023 and 20 July 2023 with the expert. The expert aims to provide a final report by November 2024. For the sixth local claim, the Court found in favour of DPF at first instance on 27 September 2016, and SRP filed an appeal from this decision to the Court of Appeal. On 30 January 2018, the Court of Appeal dismissed SRP’s appeal. The two SRP franchisees then appealed to the Cour de Cassation which dismissed their appeal on 29 January 2020. The seventh local claim was heard by the Commercial Court of Nanterre at first instance on 15 January 2021. On 12 April 2021, the First President of the Court of Appeal of Versailles handed down a decision transferring the case to the Commercial Court of Versailles, on the request of the President of the Commercial Court of Nanterre. The case was heard by the Commercial Court of Versailles on 09 December 2022. On 03 February 2023, the Court issued a decision ordering DPF to disclose documents and appointing an independent expert whose mission is to provide a report to inform the Court on the allegations. A first meeting took place on 19 June 2023 with the expert. The expert plans to share a pre-report by the end of October 2024, with the aim of a final report by the end of November 2024. Other litigation, initiated by SRP and a former Pizza Sprint franchisee, is also underway and concerns the use of the term “fresh dough”. The allegation is that DPF is guilty of unfair trade practices because its pizza dough would not meet the definition of a fresh product under French law and €8.4 million in damages were sought. On 20 January 2023, the Court at first instance ordered DPF to pay €39.5 thousand in damages for the use of the term “fresh dough” between 2014 and June 2018, and dismissed SRP’s claims for the period following June 2018. On 19 April 2023, SRP initiated an appeal before the Court of Appeal at Versailles and is now claiming €27 million in damages. The Pizza Sprint franchisee is seeking €250 thousand in damages. The proceedings are ongoing, and the case is scheduled for hearing on 28 January 2025. DPE denies all claims made and is vigorously defending the proceedings brought against it. DPE is confident of its legal position. Accordingly, no provision has been recognised as at 30 June 2024. PIZZA SPRINT In May 2016, proceedings were brought against Fra-Ma Pizz SAS and Pizza Center France SAS, the Pizza Sprint entities, by a number of former and current franchisees (Relevant Pizza Sprint Franchisees) whom allege a significant imbalance in the rights and obligations by the franchisor (Franchisees’ Proceedings). The alleged practices predated the acquisition of Pizza Sprint by the Company, the Company has adjusted the purchase price accounting to recognise a contingent liability and asset in relation to the above matter. A number of the claims by the Relevant Pizza Sprint Franchisees have been settled on a commercial basis. The French Ministry for the Economy and Finance (Ministry) also brought proceedings (Ministry Proceedings) involving the same facts against Fra-Ma Pizz SAS, Pizza Center France SAS and Domino’s Pizza France SAS (collectively, DPF Companies). The Ministry Proceedings are being defended by the DPF Companies. The Relevant Pizza Sprint Franchisees sought to join the Franchisees’ Proceedings to the Ministry Proceedings. The request was rejected by the court on 15 February 2018. On 24 June 2019, the Franchisees’ Proceedings and Ministry Proceedings were heard separately. On 22 October 2019, a decision was made in relation to the Ministry Proceedings which did not result in any fine or financial charges against any of the DPF Companies. The Ministry has appealed the decision and the Relevant Pizza Sprint Franchisees have also filed an appeal in support. The appeal has been heard on 15 September 2021 and the Appeal court handed down its decision on 05 January 2022. Fra-Ma Pizz, Pizza Center France and Domino’s Pizza France were ordered to pay a €500k fine to the French Ministry for the Economy and Finance, €60k to six former Sprint franchisees and €20k in procedural costs. On 10 January 2022, Fra-Ma Pizz, Pizza Center France and Domino’s Pizza France filed an appeal to the Cour de Cassation (French Supreme Court). On 24 June 2022, the Ministry filed a motion to dismiss Fra-Ma Pizz, Pizza Center France and Domino’s Pizza France application alleging that the decision of the Appeal court had not been executed. The motion was rejected on 12 January 2023, meaning that the procedure on the merits has resumed. The deliberation hearing was held on 09 January 2024. On 28 February 2024, the appeal filed by Fra-Ma Pizz, Pizza Center France and Domino’s Pizza France was rejected by the Cour de Cassation and the decision handed down on 05 January 2022 by the Appeal court is now final. Five decisions in the Franchisees’ Proceedings were handed down on 03 December 2019 and the remaining four decisions were handed down on 31 January 2020. Fra-Ma Pizz SAS and Domino’s Pizza France SAS were ordered to pay a total amount of €3 million to certain Relevant Pizza Sprint Franchisees. Various appeals have been filed by the DPF Companies, on the one hand, and separately by some of the Relevant Pizza Sprint Franchisees, on the other, with the Paris Court of Appeal. The appeals were heard on 23 November 2022. On 08 February 2023, the Paris Court of Appeal issued decisions ordering the DPF Companies to pay a total amount of approximately €2.1 million to certain Relevant Pizza Sprint Franchisees, which has reduced the legal provision to nil and the remaining amount recognised in the profit and loss statement in the prior year. The DPF Companies filed an appeal to the Cour de Cassation (French Supreme Court), and the hearing date is set for 24 September 2024. 30 CONTINGENT LIABILITIES (continued) continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 178 CLASS ACTION On 24 June 2019, Riley Gall, as the lead applicant, commenced a representative proceeding (class action) against the Company in the Federal Court of Australia on behalf of an alleged group comprising some Australian franchisee employees who were employed as delivery drivers or in-store workers between 24 June 2013 and 23 January 2018. The statement of claim alleges that the Company misled its franchisees who, in reliance on the Company’s representations and conduct, paid their delivery drivers and in-store workers in accordance with a number of industrial instruments rather than under the Fast Food Industry Award 2010. The Company rejects the allegations; it has defended the action vigorously and denies having any liability. Further, the Company does not believe it has a present obligation in respect of the class action. A defence denying the allegations was filed and an application to have the statement of claim (or parts thereof) struck out was heard on 09 June 2020. On 13 April 2021, the Federal Court dismissed that application, and at that time the parties were engaged in a referral before a Registrar of the Federal Court regarding discovery. As a result of that referral process the parties amended their pleadings which were filed in August and September 2021. The parties exchanged lay evidence between February and May 2022. Two separate meditations occurred in June and October 2022 respectively, without resolution of the proceeding. The trial of Gall’s claim was held before Justice Murphy in Melbourne over 12 days in November 2022. Judgment of the Court remains reserved. The statement of claim does not quantify any loss by Gall or the alleged group. The expert evidence at trial concerned the quantum of Gall’s claim and no other group members. As a result, at this stage of the proceeding it is not possible for the Company to determine with accuracy or reliability any potential quantum, if any, arising from the alleged damages claimed by group members in the proceeding. The total alleged group member loss will be dealt with by the Court at a later hearing if Gall is successful at trial and on any final appeal. GENERAL CONTINGENCIES As a global business, from time to time DPE is also subject to various claims and litigation from third parties during the ordinary course of its business. The directors of DPE have considered such matters which are or may be subject to claims or litigation at 30 June 2024 and unless specific provisions have been made are of the opinion that no material contingent liability for such claims of litigation exist. 31 SUBSEQUENT EVENTS OTHER EVENTS On 17 July 2024 the Group announced that it will close up to 80 additional stores in Japan, which consists of a combination of franchised and corporate stores and an additional 20 to 30 corporate stores in France; refer to Note 6 for further details. It is anticipated that the delivery orders of these stores will be serviced by neighbouring stores. On 21 August 2024 the directors declared a final dividend for the financial year ended 30 June 2024 as set out in note 20. Other than the above, there has been no further matters or circumstances occurring subsequent to the end of the financial year that has significantly affected the operations of the Group, the results of those operations, or the state of affairs. 30 CONTINGENT LIABILITIES (continued) continued Notes to the Financial Statements 179 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. OTHER INFORMATION 32 RETIREMENT BENEFIT PLANS RECOGNITION AND MEASUREMENT Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions. For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognised in other comprehensive income in the period in which they occur. Re-measurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows: • Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements); • Net interest expense or income; and • Re-measurement The Group presents the first two components of defined benefit costs in profit or loss in the line item employee benefits expense. Curtailment gains and losses are accounted for as past service costs. The retirement benefit obligation recognised in the consolidated statement of financial position represents the actual deficit or surplus in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available. ESTIMATES AND JUDGEMENTS DISCOUNT RATE USED TO DETERMINE THE CARRYING AMOUNT OF THE GROUP’S DEFINED BENEFIT OBLIGATION The Group’s defined benefit obligation is discounted at a rate set by reference to market yields at the end of the reporting period on high quality corporate bonds. Significant judgement is required when setting the criteria for bonds to be included in the population from which the yield curve is derived. The most significant criteria considered for the selection of bonds include the issue size of the corporate bonds, quality of the bonds and the identification of outliers which are excluded. DEFINED BENEFIT PLANS The Group operates an unfunded retirement benefit plans where a lump-sum amount is paid out to eligible full-time employees of Domino’s Pizza Japan and Domino’s Pizza Taiwan with more than three years of service as of retirement. The lump-sum amount is calculated as monthly salary as of retirement multiplied by a multiple. The multiple is based on years of service up to a maximum of 41 years and whether retirement is voluntary or involuntary. The plan typically exposes the Group to actuarial risks such as: interest rate risk, retention risk and salary risk which impacts the plan as follows: • Interest rate risk: A decrease in the bond interest rate will increase the plan liability by reducing the discount rate; • Retention risk: The present value of the defined benefit plan liability is calculated by reference to the expected length of service of full-time staff. As such, an increase in the length of service above the expected length will increase the plan’s liability; and • Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability. The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at 30 June 2024 by Mr. K. Taniguchi, Certified Pension Actuary. continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 180 The principal assumptions used for the purposes of the actuarial valuations were as follows: 2024 2023 Discount rate 1.00% 0.53% Expected rate of salary increase 1.59% 1.57% Number of employees 611 666 Average service years 6.1 yrs 4.8 yrs Expected service years 6.6 yrs 6.4 yrs Amounts recognised in other comprehensive income in respect of these defined benefit plans are as follows: 2024 $’000 2023 $’000 Service cost: Current service cost 1,019 1,138 Net interest expense 50 38 Components of defined benefit costs recognised in profit or loss 1,069 1,176 Remeasurement of the net defined benefit liability: Actuarial loss/(gain) recognised in the period (288) 364 Components of defined benefit costs recognised in other comprehensive income (288) 364 Total 781 1,540 Of the expense for the year, an amount of $1.1 million has been included in profit or loss as administration expenses. (2023: $1.2 million). Movements in the present value of the defined benefit obligation in the current year were as follows: 2024 $’000 2023 $’000 Opening defined benefit obligation 8,063 7,281 Current service cost 1,019 1,138 Net interest expense 50 38 Remeasurements (gains)/losses: Actuarial (gains) and losses arising from changes in financial assumptions (288) 364 Benefits paid (1,582) (565) Exchange differences of foreign plans (721) (193) Closing defined benefit obligation 6,541 8,063 The Group expects to make a contribution of $1.1 million (2023: $1.3 million) to the defined benefit plans during the next financial year. 32 RETIREMENT BENEFIT PLANS (continued) continued Notes to the Financial Statements 181 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. 33 KEY MANAGEMENT PERSONNEL COMPENSATION 2024 $ 2023 $ Short-term employee benefits 6,192,418 5,828,893 Post-employment benefits 270,296 229,125 Other long-term employee benefits 35,185 107,011 Equity settled share-based payments 833,926 (537,525) Total 7,331,825 5,627,504 The remuneration of directors and key executives is determined by the Nomination, Culture and Remuneration Committee having regard to the performance of individuals and market trends. During the year an independent remuneration consultant was engaged by the Nomination, Culture and Remuneration Committee to provide advice and guidance in relation to market practice and Domino’s remuneration matters. No remuneration recommendation was sought from or provided by the remuneration consultant. In order to ensure that the remuneration recommendation would be free from undue influence by members of the key management personnel to whom the recommendation relates to, the board has ensured that the remuneration consultant is not a related party to any member of the key management personnel. As such, the Board is satisfied that the remuneration recommendation was made free from undue influence by the member or members of the key management personnel to whom the recommendation relates. 34 RELATED PARTY TRANSACTIONS EQUITY INTEREST IN SUBSIDIARIES Details of the percentage of ordinary shares held in subsidiaries are disclosed in note 27 to the financial statements. EQUITY INTERESTS IN OTHER RELATED PARTIES There are no equity interests in other related parties. TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL KEY MANAGEMENT PERSONNEL COMPENSATION Details of key management personnel compensation are disclosed in note 33 to the financial statements. LOANS TO KEY MANAGEMENT PERSONNEL There were no loans outstanding at any time during the financial year to key management personnel or to their related parties. All executive share options issued to the directors and key management personnel were made in accordance with the provisions of the ESOP. Each share option converts on exercise to one ordinary share of Domino’s Pizza Enterprises Limited. No amounts are paid or payable by the recipient on receipt of the option. Further details of the ESOP are contained in note 22 to the financial statements. OTHER TRANSACTIONS WITH DIRECTORS OF THE GROUP During the year the Group engaged the services of Mr Michael Cowin, a related party of Mr Jack Cowin, as a Board Member of DPE Japan Co. Ltd. The services rendered were based on market rates for such services and were due and payable under normal payment terms. A total of $27,750 was paid or payable to Mr Michael Cowin during the year ended 30 June 2024. continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 182 TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL OF DOMINO’S PIZZA ENTERPRISES LIMITED Comgroup Supplies Pty Ltd, Comgroup NZ Limited T/A Franklin Foods, Markwell Pacific Marketing Pty Ltd and Shore Mariner Ltd are entities associated with Mr Jack Cowinand supply food products to the Group on commercial arm’s length terms. The entities were selected as a preferred suppliers after competitive tender processes in which Mr Cowin had no involvement. During the year the Group made purchases and had outstanding balances as at 30 June 2024 as follows:. ENTITY PURCHASES (EXCLUDING GST) 2024 PURCHASES (EXCLUDING GST) 2023 OUTSTANDING BALANCE 2024 OUTSTANDING BALANCE 2023 ComGroup Supplies Pty Ltd and ComGroup NZ Limited (T/A Franklin Foods) $26,450,470 $27,051,267 $4,476,858 $7,320,806 Markwell Pacific Marketing Pty Ltd – – – – Shore Mariner Ltd $304,921 $237,860 $61,497 $55,034 In addition, the Group received sponsorship contributions Company’s annual franchising rally to the value of $50,000 (2023: $50,000) from ComGroup Supplies Pty Ltd (excluding GST) and Markwell Pacific Marketing Pty Ltd $5,000 (excluding GST) (2023: $nil). The Group did not recognise any bad or doubtful debts associated with the above purchases and sponsorship contributions. The Group and Competitive Foods Australia Pty Ltd (CFAL), an entity associated with Mr Jack Cowin, acquire television media services from unrelated third party service providers under a joint venture arrangement and receive volume pricing benefits. The Group does not receive or provide any other benefits to CFAL under the joint venture. During the financial year, key management personnel and their related parties purchased goods, which were domestic or trivial in nature, from the Company on the same terms and conditions available to employees and customers. TRANSACTIONS WITH OTHER RELATED PARTIES Other related parties include: • associates; • directors of related parties and their director-related entities; and • other related parties. TRANSACTIONS WITHIN THE GROUP The Group includes the ultimate parent entity of the Group and its controlled entities. The wholly-owned Australian entities within the Group are taxed as a single entity effective from 1 July 2003. The entities in the tax-consolidated group have not entered into a tax sharing agreement or tax funding agreement. Income tax liabilities payable to the taxation authorities in respect of the tax-consolidated group are recognised in the financial statements of the parent entity. Refer to note 27 to the financial statements for members of the tax-consolidated group. The Company provided accounting, marketing, legal and administration services to entities in the wholly-owned group during the financial year. The Company also paid costs on behalf of entities in the wholly-owned group and subsequently on-charged these amounts to them. During the financial year, services were provided between entities in the group in accordance with the relevant Service Agreements. All transaction were at arm’s length. 34 RELATED PARTY TRANSACTIONS COMPENSATION (continued) continued Notes to the Financial Statements 183 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. 35 REMUNERATION OF AUDITORS The auditor of Domino’s Pizza Enterprises Limited is Deloitte Touche Tohmatsu. GROUP AUDITOR (i) 2024 $ 2023 $ Audit and review of financial reports Audit of the parent company 752,000 626,200 Audit of subsidiaries and other entities 988,499 1,160,290 Total audit and review of financial reports 1,740,499 1,786,490 Other assurance and agreed-upon procedures under other legislation or contractual agreements 19,799 – Total assurance services 19,799 – Other Services Tax consulting services (ii) – 74,438 Other advisory services (iii) 14,068 26,154 Total other non-audit services 14,068 100,592 Total services provided by Deloitte Touche Tohmatsu 1,774,366 1,887,082 (i) All amounts were paid to Deloitte Touche Tohmatsu by the Company and its subsidiaries. Fees are billed in local currencies and converted into AUD at average rates. The auditor of the parent entity is Deloitte Touche Tohmatsu Australia. (ii) Taxation services relate to tax compliance services and tax advisory services paid to related overseas practices of the parent company auditor. (iii) Other advisory services relate principally to the Domino’s Franchisee monitoring and whistleblower services payable to the parent company auditor. 36 OTHER ITEMS NEW ACCOUNTING STANDARDS AND INTERPRETATIONS In the current year, the Group has adopted all the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its operation and effective for an accounting period that begins on or after 03 July 2023. Set out below are the new and revised Standards and amendments which has changed the presentation of certain Group accounting policies, and thereof effective for the current year that are relevant to the Group. AASB 2021-2 Amendments to Australian Accounting Standards – Disclosures of Accounting Policies and Definition of Estimates Effective for annual reporting periods beginning on or after 1 January 2023. This amendment amends five Australian Accounting Standards regarding the disclosure of accounting policies and definition of accounting estimates as a result of amendments to International Financial Reporting Standards. AASB 2023-2 Amendments to Australian Accounting Standards – International Tax Reform – Pillar Two Model Rules The impact of this amendment prohibits the recognition and disclosure of deferred taxes arising from OECD Pillar Two income taxes and requires certain disclosures related to those taxes. The Group is within the scope of Base Erosion and Profit Sharing (BEPS) Pillar Two rules for income years beginning on or after 1 January 2024. The first period for which a Pillar Two return will be required is in the income year ending on 30 June 2025. The Group has applied the mandatory exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes. The Group has performed an analysis in preparation for complying with the Pillar Two model rules for the income year ending on 30 June 2025. Based on the analysis performed on the available information in respect of the financial year ended 30 June 2024, the Group does not expect any material exposure to Pillar Two top up taxes. continued Notes to the Financial Statements 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 184 NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED At the date of authorisation of the financial statements, the Group has not applied the following new and revised Australian Accounting Standards, Interpretations and amendments that have been issued but are not yet effective and are relevant to the Group. AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Effective for annual reporting periods beginning on or after 1 January 2025 This amendment limits the recognition of gain or loss arising from the loss of control of a subsidiary that does not contain a business in a transaction with an associate or joint venture to the extent of the unrelated investors’ interest in that associate or joint venture. Similar limitations apply to remeasurements of retained interests in former subsidiaries. The amendments are not expected to have a material impact on the Group. AASB 2022-6 Amendments to Australian Accounting Standards – Non-current Liabilities with Covenants Effective for annual reporting periods beginning on or after 1 January 2024. This amendment clarifies when liabilities should be presented as current or non-current in the statement of financial position, including the impact of covenants on that classification. The amendments are not expected to have a material impact on the Group. AASB 2022-5 Amendments to Australian Accounting Standards – Lease Liability in a Sale and Leaseback Effective for annual reporting periods beginning on or after 1 January 2024. Requires a seller-lessee to subsequently measure lease liabilities arising from a sale and leaseback transaction in a way that does not result in recognition of a gain or loss that relates to the right of use it retains. The Group does not currently have sale and leaseback arrangements. The Group will apply the amendments if sale and leaseback arrangements are entered into in the future. In addition, at the date of authorisation of the financial statements the following IFRS Accounting Standards were on issue for which equivalent Australian Accounting Standards has not been issued: AASB 18 Presentation and Disclosure in Financial Statements Effective for annual reporting periods beginning on or after 1 January 2027 This Standard will not change the recognition and measurement of items in the financial statements, but will affect presentation and disclosure in the financial statements, including introducing new categories and subtotals in the statement of profit or loss, requiring the disclosure of management defined performance measures, and changing the grouping of information in the financial statements. AASB 2024-2 Amendments to Australian Accounting Standards – Classification and Measurement of Financial Instruments. Effective for annual reporting periods beginning on or after 1 January 2026. This Standard amends requirements related to settling financial liabilities using an electronic payment system; and assessing contractual cash flow characteristics of financial assets with environmental, social and corporate governance (ESG) and similar features. The amendments are not expected to have a material impact to the Group. 36 OTHER ITEMS (continued) 185 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. As at 30 June 2024 Consolidated Entity Disclosure Statement Set out below is a list of entities that are consolidated in this set of Consolidated financial statements at the end of the financial year. ENTITY NAME ENTITY TYPE BODY CORPORATES TAX RESIDENCY PLACE FORMED OR INCORPORATED % OF SHARE CAPITAL HELD AUSTRALIAN RESIDENT OR FOREIGN RESIDENT FOREIGN JURISDICTION(S) OF FOREIGN RESIDENTS Domino’s Pizza Enterprises Limited Body corporate Australia N/A Australia (i) N/A Impressu Print Group Pty Ltd Body corporate Australia 100% Australia (i) N/A Catering S&S Holdings Pty Ltd Body corporate Australia 100% Australia (i) N/A Silvios Dial a Pizza Pty Ltd Body corporate Australia 100% Australia (i) N/A Hot Cell Pty Ltd Body corporate Australia 100% Australia (i) N/A Construction, Supply & Service Pty Ltd Body corporate Australia 100% Australia (i) N/A Ride Sports ANZ Pty Ltd Body corporate Australia 100% Australia (i) N/A Domino’s Pizza Enterprises Ltd Employee Share Trust Trust Australia N/A Australia N/A Domino’s Pizza New Zealand Limited Body Corporate New Zealand 100% Foreign New Zealand DPH NZ Holdings Limited Body corporate New Zealand 100% Foreign New Zealand DPE Global Support Centre Poland sp.zo.o Body corporate Poland 100% Foreign Poland DPE Shared Services Sdn. Bhd. Body corporate Malaysia 100% Foreign Malaysia Domino’s Pizza Japan, Inc Body corporate Japan 100% Foreign Japan Dommal Food Services Sdn Bhd Body corporate Malaysia 100% Foreign Malaysia Domino’s Pizza Singapore Pte Ltd Body corporate Singapore 100% Foreign Singapore D. Pizza Co Ltd Body corporate Cambodia 100% Foreign Cambodia Taiwan Domino’s Pizza Co., Ltd Body corporate Taiwan 100% Foreign Taiwan PizzaVest Company Limited Body corporate Taiwan 100% Foreign Taiwan Daytona Holdco Limited (UK) Body corporate United Kingdom 100% Foreign United Kingdom Ausmark ApS Body corporate Denmark 100% Foreign Denmark Daytona Germany GmbH Body corporate Germany 100% Foreign Germany Domino’s Pizza Deutschland GmbH Body corporate Germany 100% Foreign Germany DPEU Holdings S.A.S Body corporate France 100% Foreign France Domino’s Pizza France S.A.S Body corporate France 100% Foreign France Pizza Center France S.A.S Body corporate France 100% Foreign France Fra-Ma Pizz S.A.S Body corporate France 100% Foreign France HVM Pizza SARL Body corporate France 100% Foreign France Groupe AVB S.A.S Body corporate France 100% Foreign France Domino’s Pizza Europe B.V Body corporate The Netherlands 100% Foreign The Netherlands Domino’s Pizza Netherlands B.V Body corporate The Netherlands 100% Foreign The Netherlands Domino’s Pizza Geo B.V Body corporate The Netherlands 50% Foreign The Netherlands N4N B.V Body corporate The Netherlands 50% Foreign The Netherlands DOPI Vastgoed B.V Body corporate The Netherlands 100% Foreign The Netherlands Domino’s Pizza Belgium S.P.R.L Body corporate Belgium 100% Foreign Belgium Origin Pizza Holdings S.r.L Body Corporate Italy 100% Foreign Italy (i) This entity is part of a tax-consolidated group under Australian taxation law, for which Domino’s Pizza Enterprises Limited is the head entity. 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 186 Number of Holders of Equity Securities as at 06 August 2024 Additional Securities Exchange Information ORDINARY SHARE CAPITAL • 90,930,709 fully paid ordinary shares are held by 23,544 individual shareholders. • All issued ordinary shares carry one vote per share, however partly paid shares do not carry the rights to dividends. OPTIONS • 857,143 options are held by 80 individual option holders. • Options do not carry a right to vote. Distribution of holders of equity securities NUMBER OF SHAREHOLDERS % OF SHAREHOLDERS NUMBER OF SHARES HELD % OF ISSUED SHARES NUMBER OF OPTION HOLDERS % OF ISSUED OPTIONS 100,001 and over 20 0.08% 80,267,241 88.27% 1 25.88% 10,001–100,000 77 0.33% 2,059,455 2.26% 16 56.58% 5,001–10,000 145 0.62% 1,030,432 1.13% 11 9.17% 1,001–5,000 1,675 7.11% 3,376,068 3.71% 22 6.27% 1–1000 21,627 91.86% 4,197,513 4.62% 30 2.10% 23,544 100% 90,930,709 100% 80 100% SUBSTANTIAL SHAREHOLDERS ORDINARY SHAREHOLDERS FULLY PAID PARTLY PAID NUMBER HELD PERCENTAGE NUMBER HELD PERCENTAGE SOMAD HOLDINGS PTY LTD 23,354,591 25.68% – –% FIL INVESTMENT MANAGEMENT (AUSTRALIA) LIMITED 8,745,280 9.62% – –% HYPERION ASSET MANAGEMENT LIMITED 7,761,058 8.54% – –% 39,860,929 43.84% – –% 187 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. Number of Holders of Equity Securities as at 06 August 2024 Additional Securities Exchange Information TWENTY LARGEST HOLDERS OF QUOTED EQUITY SECURITIES ORDINARY SHAREHOLDERS FULLY PAID PARTLY PAID NUMBER PERCENTAGE NUMBER PERCENTAGE SOMAD HOLDINGS PTY LTD 23,339,167 25.67% – –% HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 19,762,639 21.73% – –% J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 14,076,305 15.48% – –% CITICORP NOMINEES PTY LIMITED 11,604,158 12.76% – –% BNP PARIBAS NOMINEES PTY LTD 2,862,603 3.15% – –% NATIONAL NOMINEES LIMITED 2,066,468 2.27% – –% BNP PARIBAS NOMINEES PTY LTD 1,934,898 2.13% – –% BNP PARIBAS NOMINEES PTY LTD 936,560 1.03% – –% BNP PARIBAS NOMS PTY LTD 832,433 0.92% – –% MRS ESME FRANCESCA MEIJ 700,000 0.77% – –% MR GRANT BRYCE BOURKE & MRS SANDRA EILEEN BOURKE 698,516 0.77% – –% HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 260,187 0.29% – –% CITICORP NOMINEES PTY LIMITED 189,242 0.21% – –% HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 160,783 0.18% – –% HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 155,419 0.17% – –% DJERRIWARRH INVESTMENTS LIMITED 152,000 0.17% – –% CITICORP NOMINEES PTY LIMITED 150,717 0.17% – –% COMSEC NOMINEES PTY LIMITED 138,337 0.15% – –% MRS KIM MAREE RENNIE 125,872 0.14% – –% BNP PARIBAS NOMINEES PTY LTD 120,937 0.13% – –% 80,267,241 88.29% UNMARKETABLE PARCELS There were 3,122 members holding less than a marketable parcel of shares in the Company. 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. // 188 ASIC means the Australian Securities & Investments Commission. ASX means Australian Securities Exchange Limited (ABN 98 008 624 691). Australian Store Network means the network of Corporate Stores and Franchised Stores located in Australia. Board or Board of Directors or Directors means the Board of Directors of the Company. CAGR means Compound Annual Growth Rate. Capital Reduction means the selective reduction of capital described in Section 11.4 of the prospectus. Company or Consolidated entity means Domino’s Pizza Enterprises Limited (ACN 010 489 326). Corporate Store means a Domino’s Pizza store owned and operated by the Company. Corporate Store Network means the network of Corporate Stores. Corporations Act means the Corporations Act 2001 (Clth). Directors means the Directors of the Company from time to time. Director and Executive Share and Option Plan or ESOP means the Domino’s Pizza Director and Executive Share and Option Plan summarised in note 22 to the financial statements. Domino’s means the Domino’s Pizza brand and network, owned by Domino’s Pizza, Inc. Domino’s Pizza means the Company and each of its subsidiaries. Domino’s Pizza Stores means Corporate Stores and Franchised Stores. DPE Limited means Domino’s Pizza Enterprises Limited (ACN 010 489 326) Earnings Per Share or EPS means NPAT divided by the total number of Shares on issue. EBIT means earnings before interest expense and tax. EBITDA means earnings before interest expense, tax, depreciation and amortisation. Franchised Store means a pizza store owned and operated by a Franchisee and Franchise Network means the network of Franchised Stores. Franchisees means persons and entities who hold a franchise from the Company to operate a pizza store under the terms of a sub-franchise agreement. Listing Rules means the Listing Rules of the ASX. Network or Domino’s Pizza Network or Network Stores means the network of Corporate Stores and Franchised Stores. Network Sales means the total sales generated by the Network. New Zealand Network means the network of Corporate Stores and Franchised Stores located in New Zealand. NPAT means net profit after tax. Related Bodies Corporate has the meaning given to it by section 50 of the Corporations Act. Registry means Link Market Services Pty Limited. Same Store Sales Growth means comparable growth in sales across Domino’s stores that were in operation for at least 24 months prior to the date of the reporting period. Non-Domino’s stores that have been acquired (e.g. Joey’s, Pizza Sprint and Hallo) are included in the Same Store Sales Growth calculation upon conversion to Domino’s for at least 12 months. Share means any fully paid ordinary share in the capital of the Company. Underlying EBITDA and Underlying NPAT excludes significant integration and legal dispute costs. Glossary 189 // 2024 ANNUAL REPORT DOMINO’S PIZZA ENTERPRISES LIMITED. Corporate Directory REGISTERED OFFICE & PRINCIPAL ADMINISTRATION OFFICE Domino’s Pizza Enterprises Ltd ABN: 16 010 489 326 KSD1, L1 485 Kingsford Smith Drive Hamilton Brisbane QLD 4007 Telephone: +61 (7) 3633 3333 WEBSITE ADDRESS dominos.com.au AUDITORS Deloitte Touche Tohmatsu Level 23, Riverside Centre 123 Eagle Street Brisbane QLD 4000 SECURITIES EXCHANGE Domino’s Pizza Enterprises Limited shares are listed in the Australian Securities Exchange under ASX code DMP SHARE REGISTRY Link Market Services Limited Level 21 10 Eagle Street Brisbane QLD 4000 Tel: 1300 554 474 (AUS) Tel: +61 (0) 2 8280 7111 (OS) SECRETARY Craig A Ryan BA LLB LLM AGIS SOLICITORS Thomson Geer Lawyers Level 28, Waterfront Place 1 Eagle Street Brisbane QLD 4000 DLA Piper Level 9, 480 Queen Street Brisbane QLD 4000