Online growth sees Domino's serve up AU$82.4m FY16 profit

Australian-listed Domino's has dished up a 43.6 percent profit increase for the 2016 financial year, with online growth and a bunch of data-driven initiatives feeding its AU$82.4 million profit.
Written by Asha Barbaschow, Contributor

Domino's has delivered another record year, cooking up net profit after tax of AU$82.4 million, a long list of digital initiatives, and an autonomous delivery vehicle known as DRU.

With AU$1.9 billion in network sales, Domino's reported earnings before interest, tax, depreciation, and amortisation (EBITDA) of AU$167.2 million on total revenue of AU$930.2 million.

Revenue in the local region was AU$268 million, AU$260.9 million in Europe, and AU$401.4 million in Japan.

The pizza giant ended the financial year with AU$128.5 million in operating cash flow, recording year-on-year online sales growth of 33 percent in the Australia/New Zealand market, 44 percent in the Netherlands, 69 percent in France, 125 percent in Belgium, and 31 percent in Japan.

Despite the online sales growth across all regions, Domino's still opened 484 new stores, bringing the total global store count to 1,983.

Before the 2016 financial year wrapped up, Domino's Group CEO and Managing Director Don Meij announced 10 digital initiatives the Australian-listed company were rolling out, in a bid to put its ever increasing pile of customer data to good use.

Building on its GPS driver tracker application launched early last year in partnership with Navman Wireless, Domino's began tracking its customers en route to in-store pizza collection, launching On Time Cooking in June.

"We're using data a lot, a lot more than we ever have before ... over 10 years Domino's has been building a rich customer database," Domino's chief digital officer Michael Gillespie said previously. "Hopefully the customer won't see it as an intrusive element, but an enriching and more valuable experience."

In addition to On Time Cooking, the pizza giant added estimated delivery time to its online ordering system and updated its Live Pizza Tracker, which is a function that shares real-time data with customers on the progress of their order.

Currently, customers can order a pizza by sending a text message displaying only a pizza emoji, but Meij's team has taken this one step further, creating a separate smartphone application called Zero Click, which will see an order placed within 10 seconds of opening the app.

Domino's has also initiated Project 3/10, which Meij hopes will cut cooking time down to three minutes and delivery to 10 minutes.

Earlier this year, Domino's unveiled the first commercial autonomous delivery vehicle, the Domino's Robotic Unit, known as DRU.

Capable of driving at only 18 to 20 kilometres per hour, DRU uses Google Map data and data obtained by Domino's GPS tracking technology to manipulate bridges, footpaths, and even rubbish bins placed on the curb.

Weighing in at just under 190kg, DRU has a custom-built hot and cold food compartment and upon receiving a delivery, the customer inputs a code provided to them by Domino's, which opens the top hatch of the unit.

"Further development of DRU, with him set to embody a bigger, more holistic artificial intelligence, enhancing the customer experience," Meij told shareholders Tuesday.

DRU was born out of Domino's innovation lab, DLAB, with help from local startup Marathon Robotics. Opened in February, DLAB is a startup incubator based in Brisbane, designed to attract a dynamic range of entrepreneurs from food science through digital technology.

Previously, Gillespie said that in order to succeed, companies need to embrace startup thinking.

"Learn what makes those startups special and keep that aggressive innovative thinking -- make people want to use you," he said. "We've remembered our core; we've just used digital as a method to enhance that experience and delivery of our core product, which has evolved."

Domino's recorded net profit after tax of AU$64.4 million, EBITDA of AU$71.6 million, and total revenue in the ANZ marketplace of AU$216.8 million for the 2015 financial year.

Editorial standards