Domino’s Pizza
®
July 2005
Investor Presentation
1
Forward-Looking Statements
This presentation and our accompanying comments may contain “forward-looking statements.” These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from these expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We caution you not to place undue reliance on forward-looking statements, which reflect our analysis only and speak only as of the date of this presentation. We undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances.
This presentation contains trade names, trademarks and service marks of other companies. We do not intend our use or display of other parties’ trade names, trademarks and service marks to imply a relationship with, or endorsement or sponsorship of, these other parties.
2
Business Overview
33
International
Domestic
Domino’s is a Global Business
Domino’s…− delivers an average of over 1 million pizzas a day
− drives 9 million miles a week
− operates approximately 7,800 stores worldwide
− employs over 145,000 people worldwide
− is located in more than 55 countries
2004 Global Retail Sales: $4.6 Billion
31%69%
44
Our Industry
Delivery = $12 Billion
Pizza = $33 Billion
QSR = $187 Billion
Retail Food = $467 Billion
Domestic Landscape
0%
25%
50%
75%
100%
1991 1997 2004
Delivery Carry-out Dine-In
Delivery is Fastest Growing Over Time
Pizza Channel Share (%)
33%
41%
26%
31%
40%
29%
26%
38%
36%
Food Industry = $922 Billion
Carry-out includes Drive-Thru
Large and Growing Channel
5
Domestic StoresDomestic Stores Domestic DistributionDomestic Distribution InternationalInternational
Domino’s Business Units
4,428 franchise stores
580 company-owned stores
18 dough manufacturing & distribution facilities
1 equipment supply facility
2,728 franchise stores
21 company-owned stores
8 dough manufacturing & distribution facilities
As of year-end 2004
66
The Domino’s Advantage
Domino’s Pizza is a powerful global brand
#1 pizza delivery company in the U.S.
Large and growing international presence
Strong and proven business model with superior returns
Profitable, value-added distribution system
Proven 44-Year History
Strong and Consistent Cash Flow Generator
7
“Mega Brand” as defined by Advertising Age
Clear leader in delivery channel –“Get the Door. It’s Domino’s®”
Invested approximately $1.3 billion in advertising over the last five years (9% - 10% of sales)
Increased national contribution rate from 3% to 4% of sales in 2005
Increasing national contribution rate from 4% to 5% of sales for 2006
Powerful Global Brand
88
#1 Pizza Delivery Company in the U.S.
Growing Market Share
Source: NPD Crest2004 breakdown does not include drive-thru
2000 2004 2000 2004 2000 2004
8.6% 10.0% 1.4% 18.9% 19.5% 0.6% 5.1% 6.5% 1.4%
15.4% 15.5% 0.1% 15.6% 17.6% 2.0% 13.9% 12.6% (1.3%)
4.9% 5.1% 0.2% 9.3% 9.7% 0.4% 4.2% 3.9% (0.3%)
All Other 71.1% 69.4% (1.7%) 56.2% 53.2% (3.0%) 76.8% 77.0% 0.2%
Change Change Change
Total Pizza Pizza Delivery Carry Out
9
2,1592,259
2,3822,523
2,749
2000 2001 2002 2003 2004
4.0%
6.4%
3.7%4.1%
5.9%
2000 2001 2002 2003 2004
Large and Growing International Presence
International Store Growth Same Store Sales Growth
5 Year Growth - 819 Stores
Constant Dollar
10
International Leadership with Significant Upside
4,5002,150TOTAL
600#377France
200#162Netherlands
300#189India
150#1108Taiwan
800#3172Japan
300#2247South Korea
350#3247Canada
400#1317Australia
800#1333United Kingdom
600#1498Mexico
Potential Store Count
Delivery Market Position
01/02/05 StoresTop 10 Markets
11
Strong and Proven Business Model
Drives
Strong Unit Economics
Strong and Diversified Domestic Franchise System
Strong and Stable Cash FlowTo Domino’s
Drives
1212
Strong Unit Economics
Focused and efficient operating model
– Delivery and carry-out only (no dining area)
– Limited menu
Low cost to open
– Minimal square footage
– $100K - $250K cost range
Strong cash-on-cash returns
– 30% - 40% annually
Franchise Model Generates Exceptional Returns
Drives
Strong and Diversified Franchise System
1313
Solid partnership– 17+ years average relationship with top 50
– 99+% renewal rate
– 98+% voluntary participation in Distribution
– 99+% collection rate
Owner-operators with no outside business interests
Geographically diverse
No significant concentrations– Average domestic franchisee owns 3 stores
– Only 4 franchisees own more than 50 stores
Strong and Diversified Domestic Franchise System
Our Franchisees Succeed Because Our Model Works
Drives
Strong and Stable Cash Flow
to Domino’s
14
Ensures quality and consistency
Leverages purchasing power
Enhances partnerships
− 50% profit sharing program
Allows stores to focus on sales
and customer service
Profitable, Value-AddedDistribution System
15
Many Available Growth Levers
Low Density Expansion
Increase Share of Voice
Market ShareConsolidation
Operate More Corporate Stores
Deploy Excess Distribution Capacity
Strategic Investments Day/Week Part Expansion
Grow Ticket
Grow Domestic StoresGrow International Stores
Marketing
Strategies
Long-TermEarnings Growth
Grow Order Count
Core Operations
Inve
stm
ent
Opp
ortu
nitie
s
16
Financial Review
17
Steady and Consistent Top Line Growth
2,647.2 2,816.7 2,926.7 3,003.4 3,113.3
896.3967.9 1,035.0 1,189.0
1,431.0
2000 2001 2002 2003 2004
Domestic International
378.0 362.2 376.5 375.4 375.1
120.6 134.2 140.7 144.5 152.0
604.1 691.9 676.0 717.1 775.3
96.470.0 81.8
114.5
63.4
2000 2001 2002 2003 2004
Domestic Company-owned Domestic Franchise
Domestic Distribution International
5 Year CAGR: 4.1%*
$1,166.1$1,258.3 $1,275.0
$1,333.3$1,416.9
Company Revenues ($M)
5 Year CAGR: 6.2%*$4,544.3
$3,543.5$3,784.6 $3,961.7
$4,192.4
Global Retail Sales ($M)
* CAGR is adjusted to remove the impact of the 53rd week.
18
Increased Store Counts and Same Store Sales
4,818 4,813 4,848 4,904 5,008
2,159 2,259 2,523 2,7492,382
2000 2001 2002 2003 2004
Domestic International
5 Year Growth - 1,198 Stores
6,977 7,072 7,230 7,427
Store Counts Same Store Sales
0.0%
2.6%
1.3%1.8%
3.7%
6.4%
4.1%
5.9%
4.0% 4.0%
2000 2001 2002 2003 2004
Domestic International
International same store sales on a constant dollar basis
7,757
11 consecutive years without a negative annual same store sales comparison
19
$123.3$132.4
$157.8
$175.2$181.4
2000 2001 2002 2003 2004
Operating Income ($M)
5 Year CAGR: 10.9%
Excludes covenant not to compete amortization and 2003 recap expense and 2004 IPO expense
Strong and Growing Operating Income
20
16.6% 16.7%
19.1%
21.0% 20.7%
12.5%13.1%12.4%
10.5%10.6%
2000 2001 2002 2003 2004
Expanding Operating Income Margins
Operating Income Margin (%)
Pizza Only Margins – 410 bps
Total Company Pizza Only (Excludes Distribution)
Drivers
Higher domestic and international retail sales− Royalty income− Distribution earnings
Disciplined G&A spending
Offset by
Lower corporate store margins
Area Of Opportunity
21
0.0
10.0
20.0
30.0
40.0
50.0
60.0
2000 2001 2002 2003 2004
Recurring Store Reimage ProgramDomino's Pulse WRC Renovation
Low Capital Investment to Grow Business
Capital Expenditures ($M)
$37.9$40.6
$53.9
$29.2
Normalized Capex run-rate $20M to $30M
$39.8
5-year capital spend -$201 million
Breakdown Includes− Recurring capital
expenditures− Store reimage
program− New store computer
technology (Domino’s Pulse)
− World Resource Center renovations
22
Total Debt to EBITDA
3.6x
4.7x
3.2x
4.0x
4.6x
5.4x
1999 2000 2001 2002 2003 2004
$30.5
$47.8 $50.5
$88.0 $87.7
2000 2001 2002 2003 2004
Free Cash Flow ($M)
Strong and Reliable Cash Flow Growth
$305M Free Cash FlowLeverage
Leverage
2323
Q1 2005 Financials
Global Retail Sales 13.8%
Same Store SalesDomestic 11.2%International 8.5%
Net Store GrowthQuarter 42Trailing 4 Quarters 326
Top Line Growth
+
++
++
2424
Q1 2005 Financials
Earnings Growth
Operating Income $50.5 million
Net Income $25.0 million
EPS $0.35
* Pro Forma Comp
Strong earnings enabled us to:− Increase dividend from $0.26/share to $0.40/share
− Reduce debt by $25 million
− Repurchase $75 million of non-registered
shares in Q2
+ 16.2%
+ 26.6% *
+ 25.7% *
2525
Top Line Growth
- Domestic Same Store Sales 1% - 3%
- International Same Store Sales 3% - 5%
- Net Units 200 - 250
Margin Expansion
De-leveraging
Long Range Outlook
Grow Shareholder Returns by 13% to 15% through:
+
+
+
2+%Dividend
Yield
NET INCOME GROWTH 11% - 13%+
Total Shareholder Return + 13% - 15%
26
Net Income Growth Generates Significant Free Cash Flow
Growing Net Income by 11% - 13%
Buy Back
Shares
Invest in GrowingBusiness
Pay a SignificantDividend
Reduce Long-Term
Debt
Low CapitalInvestments
Generates Significant Free Cash
Flow
2727
The Domino’s Advantage
Domino’s Pizza is a powerful global brand
#1 pizza delivery company in the U.S.
Large and growing international presence
Strong and proven business model with superior returns
Profitable, value-added distribution system
Proven 44-Year History
Strong and Consistent Cash Flow Generator
®