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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Dp Eurasia N.v. | LSE:DPEU | London | Ordinary Share | NL0012328801 | ORD EUR0.12 (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 190.00 | 100.00 | 296.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
TIDMDPEU
RNS Number : 9090K
DP Eurasia N.V
07 September 2021
For Immediate Release 7 September 2021
DP Eurasia N.V.
("DP Eurasia" or the "Company", and together with its subsidiaries, the " Group ")
Interim Results for the Period Ended 30 June 2021
Full year guidance for Turkey like-for-like raised from 21-25% to 35-40% and adjusted EBITDA expected to be slightly ahead of current market expectations.
Highlights
Hot Features
Premium
For the period ended
30 June
-----------------------
2021 2020 Change
------------- -------- -------
(in millions of TRY,
unless otherwise
indicated)
Number of stores 789 754 35
Group system sales (1)
Turkey 754.4 438.9 71.9%
Russia 278.6 212.7 31.0%
Azerbaijan & Georgia 19.3 13.1 47.0%
Total 1,052.2 664.7 58.3%
Group system sales like-for-like growth(2)
Group(8) 53.5% 6.0%
Turkey 65.0% 13.5%
Russia (based on RUB) 18.2% -20.1%
Revenue 658.0 437.7 50.3%
Turkey adjusted EBITDA(3) 91.9 50.4 82.4%
Russia adjusted EBITDA(3) 12.9 (3.0) n.m.
Adjusted EBITDA(3) 98.0 42.7 129.7%
Adjusted net income(4) 34.8 (60.9) n.m.
Adjusted net debt(5) 471.2 445.0 5.9%.
Financial Highlights
-- Group revenue up 50.3% and system sales up 58.3%, on the back of unprecedented demand in Turkey and against very weak comparables for H1 2020 in both Turkey and Russia due to the pandemic
o Turkish systems sales growth of 71.9%
o Russian system sales growth of 31.0% (15.5% based on RUB)
-- Adjusted EBITDA of TRY 98.0 million, representing growth of 129.7% from the previous year -- Adjusted net income of TRY 34.8 million (2020: TRY (60.9) million)
-- Strong liquidity position with TRY 110 million of cash at hand and additional available bank lines of TRY 186 million as at 30 June 2021
-- Adjusted net debt of TRY 471.2 million as at 30 June 2021 (H1 2020: TRY 445.0 million)
Operational Highlights
-- Online delivery system sales(6) as a share of delivery system sales at 77.5% (June 2020: 75.1%) reflects our continued strong online offering and positioning
-- Group online system sales(7) growth of 77.2%
o Turkish online system sales growth of 106.7%
o Russian online system sales growth of 33.2% (17.5% based on RUB)
-- 35 net store openings year-on-year
2021 Outlook
Whilst the Board is conscious of the potential continued risks posed by the pandemic, the strong like-for-like performance achieved in Turkey in the first half of the year and the expectation of continued buoyant trading enables raised guidance for full year like-for-like growth rates in Turkey. In late March 2021, guidance was set at 21-25%, which is now being raised to 35-40%.
Given the stronger revenue performance than anticipated earlier in the year, the Board is pleased to report that adjusted EBITDA is now likely to be slightly ahead of the market's current expectations.
Commenting on the results, Chief Executive Officer, Aslan Saranga said:
"On behalf of the Board, I am pleased to report a set of strong results for the first half of 2021 that shows a marked improvement compared to the same period in 2020. We have increased our adjusted EBITDA by 129.7% compared to the same period a year ago on the back of a 50.3% increase in Group revenue.
"Our Turkish business continues to expand in record breaking fashion despite the challenging inflationary environment that we have been experiencing. This is mainly due to our strategy of delivering better value to the customers and better margins to the franchisees for the past 18 months.
"Our Russian business continues to show encouraging signs of improvement and we see positive impact from the implementation of our Russian plan, where we posted positive adjusted EBITDA figures after a loss in the comparable period in 2020.
"Following certain restrictions due to Covid-19, especially related to dine-in service, in the first half of the year, both countries are currently open for business across all three channels. After a slow start to vaccination, both countries have improved their respective vaccination rates, which gives us hope that we will not see any further constraints in the second half of the year.
"Both product and technology innovation continue to be key for the Group. We have launched Çokominos, a chocolate dessert product, and chicken products with different assortment of sauces in Turkey and pear blue cheese pizza and pizza pies in Russia. On the technology front, we have been upgrading the user experience to increase the conversion rates in both the website and the apps.
"The robust franchisee demand has resulted in 16 store openings in Turkey during the first half of the year with a very strong pipeline for the second half of 2021 and beyond. In Russia, we have also added two stores in the first half.
"Digital continues to be the driving force behind our sales with the digital mix in delivery reaching record levels in both Turkey and Russia for the first half of the year.
"Whilst the Board is conscious of the potential continued risks posed by the pandemic, we are increasing our Turkish like-for-like guidance and the Board expects the full year adjusted EBITDA(6) for 2021 to be slightly higher than the market's current expectations."
Enquiries
DP Eurasia N.V. Selim Kender, Chief Strategy Officer & Head of Investor Relations +90 212 280 9636 Buchanan (Financial Communications) Richard Oldworth / Victoria Hayns / Tilly +44 20 7466 5000 Abraham / Verity Parker dp@buchanan.uk.com
A conference call will be held at 9.30am on 7 September 2021 for analysts and investors via the following dial-in details:
Conference UK Toll: +44 3333000804
call: UK Toll Free: 08003589473
Participant PIN code: 86026261#
URL for international dial in numbers:
http://events.arkadin.com/ev/docs/NE_W2_TF_Events_International_Access_List.pdf
DP Eurasia N.V.'s 2021 interim results and corporate presentation are available at www.dpeurasia.com . A conference call replay will be available on the website in due course.
Notes
(1) System sales are sales generated by the Group's corporate and franchised stores to external customers and do not represent revenue of the Group.
(2) Like-for-like growth is a comparison of sales between two periods that compares system sales of existing system stores. The Group's system stores that are included in like-for-like system sales comparisons are those that have operated for at least 52 weeks preceding the beginning of the first month of the period used in the like-for-like comparisons for a certain reporting period, assuming the relevant system store has not subsequently closed or been "split" (which involves the Group opening an additional store within the same map of an existing store or in an overlapping area).
(3) EBITDA, adjusted EBITDA and non-recurring and non-trade income/expenses are not defined by IFRS. These items are determined by the principles defined by the Group management and comprise income/expenses which are assumed by the Group management to not be part of the normal course of business and are non-trading items. These items which are not defined by IFRS are disclosed by the Group management separately for a better understanding and measurement of the sustainable performance of the Group. Please refer to Note 3 in the Consolidated Financial statements for a reconciliation of these items with IFRS.
(4) Adjusted net income is not defined by IFRS. Adjusted net income excludes income and expenses which are not part of the normal course of business and are non-recurring items. Management uses this measurement basis to focus on core trading activities of the business segments and to assist it in evaluating underlying business performance. Please refer to Note 3 in the Consolidated Financial statements for a reconciliation of this item with IFRS.
(5) Net debt and adjusted net debt are not defined by IFRS. Adjusted net debt includes cash deposits used as a loan guarantee and cash paid, but not collected during the non-working day at the year end. Management uses these numbers to focus on net debt including deposits not otherwise considered cash and cash equivalents under IFRS.
(6) Delivery system sales are system sales of the Group generated through the Group's delivery distribution channel.
(7) Online system sales are system sales of the Group generated through its online ordering channel.
(8) Group like-for-like growth is a weighted average of the country like-for-like growths based on store numbers as described in Note (2).
Notes to Editors
DP Eurasia N.V. is the exclusive master franchisee of the Domino's Pizza brand in Turkey, Russia, Azerbaijan and Georgia. The Company was admitted to the premium listing segment of the Official List of the Financial Conduct Authority and to trading on the main market for listed securities of the London Stock Exchange plc on 3 July 2017. The Company (together with its subsidiaries, the "Group") is the largest pizza delivery company in Turkey and the third largest in Russia. The Group offers pizza delivery and takeaway/ eat-in facilities at its 789 stores (584 in Turkey, 192 in Russia, nine in Azerbaijan and four in Georgia as at 30 June 2021), and operates through its owned corporate stores (28%) and franchised stores (72%). The Group maintains a strategic balance between corporate and franchised stores, establishing networks of corporate stores in its most densely populated areas to provide a development platform upon which to promote best practice and maximise profitability. The Group has adapted the Domino's Pizza globally proven business model to its local markets.
Performance Review
For the period ended
System Sales 30 June
-------------------------------
2021 2020 Change
---------------- ------------- -------
(in millions of TRY,
unless otherwise indicated)
Group system sales (1)
Group 1,052.2 664.7 58.3%
Turkey 754.4 438.9 71.9%
Russia 278.6 212.7 31.0%
Azerbaijan & Georgia 19.3 13.1 47.0%
Group system sales like-for-like
growth(2)
Group(8) 53.5% 6.0%
Turkey 65.0% 13.5%
Russia (based on RUB) 18.2% -20.1%
Store Count As at 30 June
----------------------------------------------------------------
2021 2020
Corporate Franchised Total Corporate Franchised Total
Turkey 103 481 584 121 421 542
Russia 115 77 192 120 79 199
Azerbaijan - 9 9 - 9 9
Georgia - 4 4 - 4 4
Total 218 571 789 241 513 754
DP Eurasia's store count grew by 35 stores year-on-year and by 18 since the end of 2020. The Group increased its system sales by 58.3% year-on-year, driven by a combination of like-for-like sales growth due to unprecedented demand in Turkey and against very weak comparables for H1 2020 in both Turkey and Russia due to the pandemic, and store openings.
The Turkish operations' system sales, representing 72% of Group system sales, increased by 71.9%. The Group achieved 65.0% like-for-like growth in Turkey, overcoming the negative effects of dine-in restrictions by a very strong performance in the delivery channel. As a result of the strong top line performance since the second half 2020, the Company experienced robust franchisee interest in Turkey resulting in a strong store pipeline, laying strong foundations for future growth. The Company's Turkish store count (including Azerbaijan and Georgia) increased by 42 over the last twelve months and sixteen since the end of 2020.
The Russian operations' system sales, representing 26% of Group system sales, increased by 31.0% (15.5% based on RUB). The Group reported 18.2% like-for-like growth in Russia during the period as it was lapping the 72-day lock down period in Moscow in 2020. The Group added two stores since the end of 2020, whilst Russian store count decreased by seven over the last twelve months.
Delivery Channel Mix and Online like-for-like growth
The following table shows the Group's delivery system sales, analysed by ordering channel and by the Group's two largest countries in which it operates, as a percentage of delivery system sales:
For the period ended 30 June
--------------------------------------------------
2021 2020
------------------------ ------------------------
Turkey Russia Total Turkey Russia Total
25.6 7.7 22.2
Store % % % 28.3% 10.9% 23.5%
Group's online 25.9 69.5 36.5
Online platform % % % 25.1% 73.9% 41.5%
48.1 22.9 41.0
Aggregator % % % 44.4% 15.2% 33.6%
74.0 92.3 77.5
Total online % % % 69.5% 89.1% 75.1%
0.4 0.3
Call centre % - % 2.3% - 1.4%
Total(6) 100% 100% 100% 100% 100% 100%
The following table shows the Group's online like-for-like growth (2) , analysed by the Group's two largest countries in which it operates:
For the period ended
30 June
-----------------------
2021 2020
------------ ---------
Group online system sales like-for-like growth(2)(7)
Group(8) 73.6 % 32.3%
Turkey 91.2 % 38.6%
Russia (based on RUB) 19.2 % 8.9%
The Group's like-for-like growth continues to be driven by the performance of its online ordering platforms. Online delivery system sales as a share of delivery system sales reached 77.5% for the period, which represents a 2.4 percentage point increase on a year-on-year basis.
In Turkey, online system sales like-for-like growth for the period was 91.2%, as a result of which online delivery system sales as a share of delivery system sales reached 74.0% for the period, a 4.5 percentage point increase from a year ago. This performance was aided also by an increase in volumes through the aggregator and an addition of a second aggregator as a new channel.
In Russia, online system sales like-for-like growth for the period was 19.2%, as a result of which online delivery system sales as a share of delivery system sales reached 92.3% for the period, a 3.2 percentage point increase from a year ago, aided by the Group's participation in an aggregator in May 2020.
Online system sales continued to outpace the overall system sales growth at 77.2% for the Group. Turkish online system sales grew by 106.7%, while Russian online system sales grew by 33.2% (17.5% based on RUB).
Financial Review
For the period ended
30 June
-----------------------
2021 2020 Change
----------- ---------- -------
(in millions of TRY)
Revenue 658.0 437.7 50.3%
Cost of sales (426.8) (309.3) 38.0%
Gross Profit 231.2 128.4 80.1%
General administrative expenses (95.5) (76.9) 24.1%
Marketing and selling expenses (112.2) (79.5) 41.0%
Other operating expenses, net (1.1) (0.9) 22.4%
Operating profit 22.5 (29.0) n.m.
Foreign exchange gains/(losses) 48.6 (7.6) n.m.
Financial income 9.0 12.7 -29.1%
Financial expense (42.3) (45.5) -7.1%
Profit/(Loss) before income
tax 37.8 (69.4) n.m.
Tax expense (17.8) 0.9 n.m.
Profit/(Loss) after tax 19.9 (68.5) n.m.
Turkey adjusted EBITDA(3) 91.9 50.4 82.4%
Russia adjusted EBITDA(3) 12.9 (3.0) n.m.
Adjusted EBITDA(3) 98.0 42.7 129.7%
Adjusted net income(4) 34.8 (60.9) n.m.
Adjusted net debt(5) 471.2 445.0 5.9%
Revenue
Group revenue grew by 50.3% to TRY 658.0 million. Turkey segment revenue grew by 60.0% to TRY 454.1 million, while Russia segment revenue grew by 32.5% to reach TRY 204.0 million.
Adjusted EBITDA
The Group's adjusted EBITDA grew by 129.7% to TRY 98.0 million. Adjusted EBITDA for the Turkish segment, which includes the Azerbaijani and Georgian businesses, was TRY 91.9 million, a year-on-year increase of 82.4%, and adjusted EBITDA for the Russian segment was TRY 12.9 million. The Group's adjusted EBITDA for H1 2020 figure included TRY 8.6 million of Covid-19 related costs. The same figure for H1 2021 is TRY 1.0 million. Additionally, costs relating to the Group's Dutch corporate expenses reduced adjusted EBITDA by TRY 6.7 million in the first half of 2021. The comparable adverse effect of this item was TRY 4.7 million for the same period in 2020, with the increase in 2021 primarily due to the further devaluation of the TRY against the EUR and the GBP.
For the period ended 30 June 2021, the Group's adjusted EBITDA margin as a percentage of system sales was 9.3% compared to 6.4% over the same period in 2020. The main reason for the increase was the improvement in the operational constraints the Group was subject to in the first half of 2020.
Adjusted EBITDA margin as a percentage of system sales for the Turkish segment (including Azerbaijan and Georgia) recorded an increase to 11.9% from 11.1% mainly due to the strong sales performance creating operating leverage through the system.
The Russian segment margin increased to 4.6% from -1.4% as it returned to profitability after a loss in the period twelve months ago. The main reasons for the increase are the system sales growth achieved and cost cutting measures undertaken in the middle of last year despite increased competition from the aggregators.
Adjusted Net Income
For the period ended 30 June 2021, adjusted net income was TRY 34.8 million. The growth in revenue and adjusted EBITDA as well as the foreign exchange gains due to the devaluation of the TRY against the RUB were the main reasons for the return to profitability. While the Group's bank facilities are TRY and RUB denominated, the Group recorded a foreign exchange gain of TRY 48.6 million primarily due to the devaluation of the TRY against the RUB versus a foreign exchange loss of TRY 7.6 million in the same period of the previous year.
Capital expenditure and Cash conversion
The Group incurred TRY 24.5 million of capital expenditure in the period ended 30 June 2021. The Turkish segment capital expenditure was TRY 18.5 million and the Russian segment capital expenditures amounted to TRY 6.0 million (RUB 57.4 million).
Cash conversion, defined as (adjusted EBITDA - lease expenses - capital expenditure)/(adjusted EBITDA - lease payments)) for the period increased to 61.9% (H1 2020: -103.3%) for the Group as a result of the pandemic and increased competition in Russia. The Turkish segment improved its cash conversion to 77.2% (H1 2020: 57.8%) as a result of its vastly improved adjusted EBITDA and prudent capital expenditure management. The Russian segment had negative cash conversion due to its negative adjusted EBITDA minus lease payment figure.
Adjusted net debt and leverage
The Group's adjusted net debt at 30 June 2021 was TRY 471.2 million, representing an increase of 5.9% from 30 June 2020. The Group's bank borrowings and lease liabilities continue to be denominated in its operational currencies of TRY and RUB. As at 30 June 2021, 54% of the Group's bank borrowings and lease liabilities were denominated in TRY, while 46% is denominated in RUB.
The Group's leverage ratio (defined as adjusted net debt/adjusted EBITDA) decreased to 2.5x as at 30 June 2021 from 3.2x at the end of 2020 as a result of the improving EBITDA performance.
As at 30 June 2021, long term bank borrowings made up 57% of the Group's total bank borrowings.
The Group continues to have a strong liquidity position, having access to cash at hand and additional borrowing capacity available from its Turkish banks. As at 30 June 2021, the Group had TRY 110 million of cash at hand and additional available bank lines of TRY 186 million.
The Group's strong liquidity position enables it to prepay its bank borrowings in Russia if required, and still maintain a strong liquidity position. The Group obtained a waiver from Sberbank with respect to its covenants for all four quarters of 2021 and is in negotiations to reset the covenants or repay the remaining loan. The principal outstanding under the Sberbank loan currently amounts to RUB 0.9 billion, of which RUB 0.2 billion is supported by a cash collateral deposit.
Board compliance statement
The Board of DP Eurasia N.V. declares that, to the best of their knowledge, the attached condensed combined and consolidated financial statements give a true and fair view of the assets, liabilities, financial position and the result of DP Eurasia N.V. and its subsidiaries included in the attached condensed combined and consolidated financial statements and the interim report includes a fair review of the information required pursuant to section 5:25d, subsections 8 and 9 of the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).
Amsterdam, 7 September 2021
The Directors of DP Eurasia N.V. as at the date of this announcement are as set out below:
Peter Williams*
Aslan Saranga, Chief Executive Officer
Frederieke Slot, Company Secretary
Shyam S. Bhartia*
Hari S. Bhartia*
Pratik R. Pota*
David Adams*
* Non-Executive Directors
Auditor's Involvement
This Interim Report for the six months ended 30 June 2021, and the attached condensed consolidated financial statements included herein have been reviewed but not audited by an external auditor.
Forward looking statements
This press release includes forward-looking statements which involve known and unknown risks and uncertainties, many of which are beyond the Group's control and all of which are based on the Directors' current beliefs and expectations about future events. They appear in a number of places throughout this press release and include all matters that are not historical facts and include predictions, statements regarding the intentions, beliefs or current expectations of the Directors or the Group concerning, among other things, the results of operations, financial condition, prospects, growth and strategies of the Group and the industry in which it operates.
No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Group. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed, or implied in such forward-looking statements.
Forward-looking statements contained in this press release speak only as of the date of this press release. The Company and the Directors expressly disclaim any obligation or undertaking to update these forward-looking statements contained in this press release to reflect any change in their expectations or any change in events, conditions, or circumstances on which such statements are based.
Appendices
Exchange Rates
For the period ended 30 June
----------------------------------------------------------
2021 2020
---------------------------- ----------------------------
Currency Period End Period Average Period End Period Average
----------- --------------- ----------- ---------------
EUR/TRY 10.365 9.485 7.708 7.132
RUB/TRY 0.119 0.105 0.097 0.093
EUR/RUB 86.203 89.547 78.678 77.961
Delivery - Take away / Eat in mix
For the period ended 30 June
--------------------------------------------------
2021 2020
------------------------ ------------------------
Turkey Russia Total Turkey Russia Total
83.2 77.2 81.4
Delivery % % % 70.0% 77.4% 72.4%
Take away / Eat 16.8 22.8 18.6
in % % % 30.0% 22.6% 27.6%
Total(2) 100% 100% 100% 100% 100% 100%
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIODED 30 JUNE 2021 AND 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira (TRY) unless otherwise stated.)
30 June 30 June
------------------------------------- ------
Notes 2021 2020
------------------------------------- ------ ---------- ----------
Revenue 4 658,038 437,745
Cost of sales 4 (426,797) (309,339)
------------------------------------- ------ ---------- ----------
GROSS PROFIT 231,241 128,406
------------------------------------- ------ ---------- ----------
General administrative expenses (95,511) (76,934)
Marketing and selling expenses (112,178) (79,534)
Other operating expense (1,090) (891)
------------------------------------- ------ ---------- ----------
OPERATING PROFIT/(LOSS) 22,462 (28,953)
------------------------------------- ------ ---------- ----------
Foreign exchange gains/(losses) 6 48,569 (7,594)
Financial income 6 8,985 12,664
Financial expense 6 (42,254) (45,506)
------------------------------------- ------ ---------- ----------
PROFIT/(LOSS) BEFORE INCOME TAX 37,762 (69,389)
------------------------------------- ------ ---------- ----------
Tax expense 20 (17,844) 882
Income tax expense (14,456) (4,574)
Deferred tax (expense)/income (3,388) 5,456
PROFIT/(LOSS) FOR THE PERIOD 19,918 (68,507)
------------------------------------- ------ ---------- ----------
OTHER COMPREHENSIVE EXPENSE (53,764) (16,735)
Items that will not be reclassified
to profit or loss
- Remeasurements of post-employment
benefit obligations, net of tax (415) 165
- Tax income/(expense) of these
obligations 104 (41)
Items that may be reclassified
to profit or loss
- Currency translation differences (53,453) (16,859)
------------------------------------- ------ ---------- ---------- TOTAL COMPREHENSIVE LOSS (33,846) (85,242) ------------------------------------- ------ ---------- ---------- Earnings/(loss) per share 7 0.14 (0.47) ------------------------------------- ------ ---------- ----------
The accompanying notes form an integral part of these consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 30 JUNE 2021 AND 31 DECEMBER 2020
(Amounts expressed in thousands of Turkish Lira (TRY) unless otherwise stated.)
ASSETS Notes 30 June 2021 31 December 2020 --------------------------- ------ ------------- ----------------- Trade receivables 13 17,415 16,707 Lease receivables 10 36,533 24,674 Right-of-use assets 10 106,519 112,895 Property and equipment 8 136,110 131,203 Intangible assets 9 80,801 73,516 Goodwill 11 49,427 47,413 Deferred tax assets 20 27,914 26,500 Other non-current assets 16 51,726 40,256 --------------------------- ------ ------------- ----------------- Non-current assets 506,445 473,164 --------------------------- ------ ------------- ----------------- Cash and cash equivalents 12 85,831 109,036 Trade receivables 13 120,818 107,760 Lease receivables 10 15,483 16,621 Inventories 15 98,925 61,744 Other current assets 16 76,622 73,488 --------------------------- ------ ------------- ----------------- Current assets 397,679 368,649 --------------------------- ------ ------------- ----------------- TOTAL ASSETS 904,124 841,813 --------------------------- ------ ------------- -----------------
The accompanying notes form an integral part of these consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 30 JUNE 2021 AND 31 DECEMBER 2020
(Amounts expressed in thousands of Turkish Lira (TRY) unless otherwise stated.)
Notes 30 June 2021 31 December 2020
-------------------------------------------- ------------ ------------- -----------------
EQUITY
Paid in share capital 19 36,353 36,353
Share premium 119,286 119,286
Contribution from shareholders 21 21,930 20,600
Other reserves
not to be reclassified to profit or loss
- Remeasurements of post-employment
benefit obligations (3,845) (3,534)
Other reserves
to be reclassified to profit or loss
- Currency translation differences (64,636) (11,183)
Retained earnings (127,997) (147,915)
-------------------------------------------- ------------ ------------- -----------------
Total equity (18,909) 13,607
-------------------------------------------- ------------ ------------- -----------------
LIABILITIES
Financial liabilities 17 220,438 193,015
Lease liabilities 17 124,260 110,549
Long-term provisions for employee benefits 16 3,134 2,874
Other non-current liabilities 16 43,833 39,867
-------------------------------------------- ------------ ------------- -----------------
Non - current liabilities 391,665 346,305
-------------------------------------------- ------------ ------------- -----------------
Financial liabilities 17 168,876 167,181
Lease liabilities 17 67,314 72,476
Trade payables 13 218,386 173,359
Current income tax liabilities 20 9,759 8,931
Provisions 7,035 5,740
Other current liabilities 16 59,998 54,214
-------------------------------------------- ------------ ------------- -----------------
Current liabilities 531,368 481,901
-------------------------------------------- ------------ ------------- -----------------
TOTAL LIABILITIES 923,033 828,206
-------------------------------------------- ------------ ------------- -----------------
TOTAL LIABILITIES & EQUITY 904,124 841,813
-------------------------------------------- ------------ ------------- -----------------
The accompanying notes form an integral part of these consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIODED 30 JUNE 2021 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira (TRY) unless otherwise stated.)
Remeasurement
of
Contribution post-employment Currency
Share Share from benefit translation Retained Total
capital premium shareholders obligations differences earnings Equity
----------------- ----------- ------------ ------------- ---------------- ------------ ----------- ------------
Balances at 1
January 2020 36,353 119,286 19,970 (2,591) (22,288) (40,332) 110,398
Remeasurements
of
post-employment
benefit
obligations,
net - - - 124 - - 124
Currency
translation
adjustments - - - - (16,859) - (16,859)
Total loss for
the period - - - - - (68,507) (68,507)
Total
comprehensive
loss - - - 124 (16,859) (68,507) (85,242)
Share-based
incentive plans
(Note 21) - - 726 - - - 726
----------------- ----------- ------------ ------------- ---------------- ------------ ----------- ------------
Balances at 30
June 2020 36,353 119,286 20,696 (2,467) (39,147) (108,839) 25,882
----------------- ----------- ------------ ------------- ---------------- ------------ ----------- ------------
Balances at 1
January 2021 36,353 119,286 20,600 (3,534) (11,183) (147,915) 13,607
----------------- ----------- ------------ ------------- ---------------- ------------ ----------- ------------
Remeasurements
of
post-employment
benefit
obligations,
net - - - (311) - - (311)
Currency
translation
adjustments - - - - (53,453) - (53,453)
Total profit for
the period - - - - - 19,918 19,918
Total
comprehensive
loss - - - (311) (53,453) 19,918 (33,846)
Share-based
incentive plans
(Note 21) - - 1,330 - - - 1,330
Balances at 30
June 2021 36,353 119,286 21,930 (3,845) (64,636) (127,997) (18,909)
----------------- ----------- ------------ ------------- ---------------- ------------ ----------- ------------
The accompanying notes form an integral part of these consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIODED 30 JUNE 2021 AND 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira (TRY) unless otherwise stated.)
Notes 30 June 2021 30 June 2020
------------------------------------------------------------ ------ ------------- -------------
Profit/(Loss) before income tax 37,762 (69,389)
Adjustments for:
Depreciation 8,10 47,110 49,172
Amortisation 9 13,570 14,835
Gains on sale of property and equipment 293 728
Impairment of property and equipment and intangible assets 8,9 3,616 5,321
Performance bonus accrual 5,084 -
Non-cash employee benefits expense -
share based payments 21 1,330 726
Interest income 6 (8,985) (12,664)
Interest expense 6 39,326 45,506
------------------------------------------------------------ ------ ------------- -------------
Changes in operating assets and liabilities
Changes in trade receivables (12,975) 20,762
Changes in other receivables and assets (7,293) 12,547
Changes in inventories (37,181) 10,205
Changes in contract assets (2,085) 198
Changes in contract liabilities (7,596) (3,881)
Changes in trade payables 45,027 36,216
Changes in other payables and liabilities 20,544 (751)
Income taxes paid (13,627) (11,562)
Performance bonuses paid (8,784) (4,119)
------------------------------------------------------------ ------ ------------- -------------
Cash flows generated from
operating activities 115,136 93,850
------------------------------------------------------------ ------ ------------- -------------
Purchases of property and equipment (7,360) (7,227)
Purchases of intangible assets 9 (17,156) (13,248)
Disposals from sale of tangible and intangible assets 3,873 997
------------------------------------------------------------ ------ ------------- -------------
Cash flows used in investing activities (20,643) (19,478)
------------------------------------------------------------ ------ ------------- -------------
Interest paid (22,257) (24,855)
Interest on leases paid (6,883) (9,272)
Interest received 2,236 5,444
Loans obtained 213,000 309,497
Loans paid 17 (195,437) (151,564)
Payment of lease liabilities 17 (46,804) (51,064)
Cash flows (used in)/ generated from
from financing activities (56,145) 78,186
------------------------------------------------------------ ------ ------------- -------------
Effect of currency translation differences (61,553) 7,525
------------------------------------------------------------ ------ ------------- -------------
Net increase/ (decrease) in cash and cash equivalents (23,205) 160,083
------------------------------------------------------------ ------ ------------- -------------
Cash and cash equivalents at the
beginning of the period 12 109,036 70,928
------------------------------------------------------------ ------ ------------- -------------
Cash and cash equivalents at the
end of the period 12 85,831 231,010
------------------------------------------------------------ ------ ------------- -------------
The accompanying notes form an integral part of these consolidated financial statements.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS AS AT 30 JUNE 2021
(Amounts expressed in thousands of Turkish Lira (TRY) unless otherwise stated.)
NOTE 1 - GROUP'S ORGANIZATION AND NATURE OF ACTIVITIES
DP Eurasia N.V. (the "Company"), public limited company, having its statutory seat in Amsterdam, the Netherlands, was incorporated under the law of the Netherlands on 18 October 2016. The Company has been incorporated by integrating shares of Fides Food Systems Coöperatief U.A. and Vision Lovemark Coöperatief U.A. in Fidesrus B.V. and Fides Food Systems B.V. Acquisitions occurred on
18 October 2016 when the Company acquired Fidesrus and Fides Foods and their subsidiaries and from this point forward consolidated Group was formed. This was a transaction under common control.
The Company's registered address is: Herikerbergweg 238, Amsterdam, the Netherlands.
The Company and its subsidiaries (together referred as the "Group") operate corporate-owned and franchise-owned stores in Turkey and the Russian Federation, including providing technical support, control and consultancy services to the franchisees.
As at 30 June 2021, the Group hold franchise operating and sub-franchising right in 789 stores
(571 franchise stores, 218 corporate-owned stores) (31 December 2020: 771 stores (550 franchise stores, 221 corporate-owned stores).
Subsidiaries
The Company has a total of four fully-owned subsidiaries. The entities included in the scope of the condensed consolidated financial interim information and nature of their business is as follows:
30 June 30 June
2021 2020
Effective Effective
Subsidiaries ownership (%) ownership (%) Registered country Nature of business
-------------------------------------------- -------------- -------------- ------------------- -------------------
Pizza Restaurantları A. . ( " Domino's
Turkey " ) 100 100 Turkey Food delivery
Pizza Restaurants LLC ( " Domino's Russia "
) 100 100 Russia Food delivery
Fidesrus B.V. ( " Fidesrus " ) 100 100 the Netherlands Investment company
Fides Food Systems B.V. ( " Fides Food " ) 100 100 the Netherlands Investment company
Pizza Restaurants LLC is established in the Russian Federation. Domino's Russia is operating a pizza delivery network of company and franchise-owned stores in Russian Federation. Domino's Russia has a Master Franchise Agreement (the "MFA Russia") with Domino's Pizza International for the pizza delivery network in Russia until 2030.
NOTE 1 - GROUP'S ORGANIZATION AND NATURE OF ACTIVITIES (Continued)
Pizza Restaurantları A. . ("Domino's Turkey") is established in Turkey. Domino's Turkey is operating a pizza delivery network of corporate and franchised stores in Turkey. Domino's Turkey is a food delivery company, which has a Master Franchise Agreement (the "MFA Turkey") with Domino's Pizza International pizza delivery network in Turkey until 2032. The Group expects the terms of the MFAs to be extended.
Fides Food and Fidesrus are established in the Netherlands. Both Fides Food Systems and Fidesrus are acting as investment companies.
Significant changes in the current reporting period
The condensed interim consolidated financial statements have been prepared assuming that the Group will continue as a going concern and be able to realise its assets and discharge its liabilities in the normal course of business. The Group recorded a net profit of TRY 19,918 for the first half of 2021. The Group's current liabilities exceed its current assets by TRY 133,689 as of 30 June 2021. The Group realized operating profit for the first half of 2021 compared to a net loss of TRY 68,507 due to the actions taken in 2020, such as cost optimization and restructuring in Russia management team.
Due to continuing operating loss in Russia,
a- financial covenants of Groups Russia loan facility have not been met but the Group was able to obtain waivers for March, June, September and December 2021 period-ends. The Group's strong liquidity position enables it to repay its bank borrowings in Russia if required, and still maintain a strong liquidity position.
b- impairment cost of TRY 4.790 has been recognized for low performing stores.
However, trading performance across the Group has continued its strong momentum throughout the first half of the year, with 18 stores being opened in Turkey and Russia.
On 19 February 2021, Jubilant Foodworks Limited, the largest foodservice company in India, and Fides Food Systems Coöperatief U.A. announced that Jubilant Foodworks Limited and its wholly owned subsidiary, Jubilant Foodworks Netherlands B.V., have entered into a purchase agreement with Turkish Private Equity Fund II L.P. to fully acquire Fides Food Systems Coöperatief U.A., which holds 32.81% of the ordinary share capital of DP Eurasia, for a price of approximately GBP 24.80 million. The transaction was closed on March 9, 2021.
NOTE 2 - BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS 2.1 Basis of preparation
These condensed consolidated interim financial statements for the six months period ended
30 June 2021 have been prepared in accordance with International Accounting Standard 34 ("IAS 34") Interim Financial Reporting.
The interim report does not include all the notes of the type normally included in the annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended
31 December 2020 and any public announcements made by the Company during the interim reporting period. These condensed interim financial statements were approved for issue on 6 September 2021. The financial statements have been reviewed, not audited.
The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.
Seasonality of operations
There is no significant seasonality effect on the Group's revenue. According to financial year ended
31 December 2020, 43% of revenues accumulated in the first half year, with 57% accumulating in the second half.
Consolidation of foreign subsidiaries
Financial statements of subsidiaries operating in foreign countries are prepared in the currency of the primary economic environment in which they operate. Assets and liabilities in financial statements prepared according to the Group's accounting policies are translated into the Group's presentation currency, Turkish Liras ('TRY'), from the foreign exchange rate at the statement of financial position date whereas income and expenses are translated into TRY at the average foreign exchange rate. Exchange differences arising from the translation are included in the "currency translation differences" under shareholders' equity.
The foreign currency exchange rates used in the translation of the foreign operations within the scope of consolidation are as follows:
30 June 2021 31 December 2020 30 June 2020
------------------ ------------------- -----------------
Period Period Period Period Period Period
Currency End Average End Average End Average
Euros 10.3645 9.48537 9.0079 8.0138 7.708 7.1322
Russian Rubles 0.11942 0.10525 0.0984 0.0964 0.0972 0.0933
NOTE 2 - BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS (Continued)
2.2 New and amended international financial reporting standards as adopted by European Union
New and amended standards adopted by the Group, which are effective for the interim financial statements as at 30 June 2021
A number of new or amended standards became applicable for the current reporting period:
- Amendment to IFRS 16, 'Leases' - Covid-19 related rent concessions Extension of the Practical expedient
- Amendments to IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform Phase 2 - Amendments IFRS 4, 'Insurance contracts', deferral of IFRS 9
These standards did not have any impact on the Group's accounting policies and did not require retrospective adjustments.
The new standards, amendments and interpretations, which are issued but not effective for the interim financial statements as at 30 June 2021
- IFRS 17, 'Insurance contracts'
- Amendments to IAS 1, Presentation of financial statements on classification of liabilities
- A number of narrow-scope amendments to IFRS 3, IAS 16, IAS 17 and some annual improvements on IFRS 1, IFRS 9, IAS 41 and IFRS 16
- Narrow scope amendments to IAS 1, Practice statement 2 and IAS 8
- Amendment to IAS 12 - Deferred tax related to assets and liabilities arising from a single transaction
These standards are not expected to have any impact on the Group's accounting policies.
NOTE 3 - SEGMENT REPORTING
The business operations of the Group are organised and managed with respect to geographical positions of its operations. The information regarding the business activities of the Group as of 30 June 2021 and 2020 comprise the performance and the management of its Turkish and Russian operations and head office.
The Group has two business segments, determined by management according to the information used for the evaluation of performance and the allocation of resources, the Turkish and Russian operations. Other operations are composed of corporate expenses of Dutch companies. These segments are managed separately because they are affected by the economic conditions and geographical positions in terms of risks and returns.
NOTE 3 - SEGMENT REPORTING (Continued)
The segment analysis for the periods ended 30 June 2021 and 2020 are as follows:
1 January-30 June 2021 Turkey Russia Other Total
---------------------------------- --------- --------- -------- ---------
Corporate revenue 129,362 136,831 - 266,193
Franchise revenue and
royalty
revenue obtained from
franchisees 294,021 61,022 - 355,043
Other revenue 30,682 6,120 - 36,802
Total revenue 454,065 203,973 - 658,038
- At a point in time 450,085 202,786 - 652,871
- Over time 3,980 1,187 - 5,167
---------------------------------- --------- --------- -------- ---------
Operating profit/(loss) 67,945 (38,739) (6,744) 22,462
Capital expenditures 18,478 6,038 - 24,516
Tangible and intangible
disposals (2,825) (1,342) - (4,167)
Depreciation and amortisation
expenses (22,638) (38,042) - (60,680)
Adjusted EBITDA 91,913 12,854 (6,744) 98,023
30 June 2021 Turkey Russia Other Total
---------------------------------- --------- --------- -------- ---------
Borrowings
TRY 240,653 - - 240,653
RUB - 102,689 45,972 148,661
---------------------------------- --------- --------- -------- ---------
240,653 102,689 45,972 389,314
Lease liabilities
TRY 72,068 - - 72,068
RUB - 119,506 - 119,506
---------------------------------- --------- --------- -------- ---------
72,068 119,506 - 191,574
---------------------------------- --------- --------- -------- ---------
Total 312,721 222,195 45,972 580,888
---------------------------------- --------- --------- -------- ---------
NOTE 3 - SEGMENT REPORTING (Continued)
1 January-30 June 2020 Turkey Russia Other Total
---------------------------------- --------- --------- -------- ---------
Corporate revenue 94,947 108,822 - 203,769
Franchise revenue and
royalty
revenue obtained from
franchisees 176,292 42,401 - 218,693
Other revenue 12,542 2,741 - 15,283
Total revenue 283,781 153,964 - 437,745
- At a point in time 280,825 152,570 - 433,395
- Over time 2,956 1,394 - 4,350
---------------------------------- --------- --------- -------- ---------
Operating profit/(loss) 23,035 (47,271) (4,717) (28,953)
Capital expenditures 16,485 8,137 - 24,622
Tangible and intangible
disposals (997) - - (997)
Depreciation and amortisation
expenses (24,816) (39,191) - (64,007)
Adjusted EBITDA 50,379 (2,989) (4,717) 42,673
30 June 2020 Turkey Russia Other Total
---------------------------------- --------- --------- -------- ---------
Borrowings
TRY 326,418 - - 326,418
RUB - 154,169 - 154,169
---------------------------------- --------- --------- -------- ---------
326,418 154,169 - 480,587
Lease liabilities
TRY 78,547 - - 78,547
RUB - 142,378 - 142,378
---------------------------------- --------- --------- -------- ---------
78,547 142,378 - 220,925
---------------------------------- --------- --------- -------- ---------
Total 404,965 296,547 - 701,512
---------------------------------- --------- --------- -------- ---------
EBITDA, adjusted EBITDA, net debt, adjusted net debt, adjusted net income and non-recurring and non-trade income/expenses are not defined by IFRS. The amounts provided with respect to operating segments are measured in a manner consistent with that of the financial statements. These items determined by the principles defined by Group management comprise income/expenses which are assumed by the Group management to not be part of the normal course of business and are non-recurring items. These items which are not defined by IFRS are disclosed by Group management separately for a better understanding and measurement of the sustainable performance of the Group.
.
NOTE 3 - SEGMENT REPORTING (Continued)
The reconciliation of adjusted EBITDAs as of 30 June 2021 and June 2020 is as follows:
Turkey 30 June 2021 30 June 2020 ------------------------------- ------------- ------------- Adjusted EBITDA (*) 91,913 50,379 ------------------------------- ------------- ------------- Non-recurring and non-trade (income)/expenses per Group Management (*) One off non-trading costs - 1,449 Share-based incentives 1,330 1,079 ------------------------------- ------------- ------------- EBITDA 90,583 47,851 ------------------------------- ------------- ------------- Depreciation and amortisation (22,638) (24,816) ------------------------------- ------------- ------------- Operating profit 67,945 23,035 ------------------------------- ------------- ------------- Russia 30 June 2021 30 June 2020 -------------------------------- ------------- ------------- Adjusted EBITDA (*) 12,854 (2,989) -------------------------------- ------------- ------------- Non-recurring and non-trade (income)/expenses per Group Management (*) One off non-trading costs (**) 13,551 5,444 Share-based incentives - (353) -------------------------------- ------------- ------------- EBITDA (697) (8,080) -------------------------------- ------------- ------------- Depreciation and amortisation (38,042) (39,191) -------------------------------- ------------- ------------- Operating loss (38,739) (47,271) -------------------------------- ------------- -------------
(*) EBITDA, adjusted EBITDA and non-recurring and non-trade income/expenses are not defined by IFRS. These items are determined by the principles defined by Group management and comprise income/expenses which are assumed by Group management to not be part of the normal course of business and are non-trading items. These items, which are not defined by IFRS, are disclosed by Group management separately for a better understanding and measurement of the sustainable performance of the Group.
(**) The reason for the significant increase in one-off non-trading costs is mainly related to impairment expenses of the tangible and intangible assets and consultancy expenses due to cost reduction program.
NOTE 3 - SEGMENT REPORTING (Continued)
Other 30 June 2021 30 June 2020 ------------------------------- ------------- ------------- Adjusted EBITDA (*) (6,744) (4,717) ------------------------------- ------------- ------------- Non-recurring and non-trade (income)/expenses per Group Management (*) One off non-trading costs - - ------------------------------- ------------- ------------- EBITDA (6,744) (4,717) ------------------------------- ------------- ------------- Depreciation and amortisation - - ------------------------------- ------------- ------------- Operating loss (6,744) (4,717) ------------------------------- ------------- -------------
(*) EBITDA, adjusted EBITDA and non-recurring and non-trade income/expenses are not defined by IFRS. These items are determined by the principles defined by the Group management and comprise income/expenses which are assumed by Group management to not be part of the normal course of business and are non-trading items. These items, which are not defined by IFRS, are disclosed by Group management separately for a better understanding and measurement of the sustainable performance of the Group.
The reconciliation of adjusted net income as of 30 June 2021 and 2020 is as follows:
30 June 2021 30 June 2020
Profit/(loss) for the period as reported 19,918 (68,507)
----------------------------------------------- ------------- -------------
Non-recurring and non-trade (income)/expenses
per Group Management (*)
Share-based incentives 1,330 726
One-off expenses 13,551 6,893
Adjusted net profit/(loss) for the
period 34,799 (60,888)
----------------------------------------------- ------------- -------------
(*) Adjusted net income and non-recurring and non-trade income/expenses are not defined by IFRS. Adjusted net income excludes income and expenses which are not part of the normal course of business and are non-recurring items. Management uses this measurement basis to focus on core trading activities of the business segments, and to assist it in evaluating underlying business performance.
NOTE 4 - REVENUE AND COST OF SALES
30 June 2021 30 June 2020
Corporate revenue 266,193 203,769
Franchise revenue and royalty
revenue obtained from franchisees 355,043 218,693
Other revenue (*) 36,802 15,283
-----------------------------------
Revenue 658,038 437,745
----------------------------------- ------------- -------------
Cost of sales (426,797) (309,339)
----------------------------------- ------------- -------------
Gross profit 231,241 128,406
----------------------------------- ------------- -------------
(*) Other revenue mainly includes handover income, IT income and other income from franchisee.
NOTE 5 - EXPENSES BY NATURE
30 June 2021 30 June 2020
Employee benefit expenses (**) (124,254) (100,498)
Depreciation and amortisation expenses (**) (60,680) (64,007)
---------------------------------------------- ------------- -------------
(**) These expenses are accounted in cost of sales, general administration expenses and marketing expenses.
NOTE 6 - FOREIGN EXCHANGE LOSSES, FINANCIAL INCOME AND EXPENSES
Foreign exchange gains / (losses) 30 June 2021 30 June 2020
--------------------------------------------- ------------- -------------
Foreign exchange gains/(losses), net 48,110 (8,582)
Foreign exchange gains on lease liabilities 459 988
--------------------------------------------- ------------- -------------
48,569 (7,594)
--------------------------------------------- ------------- -------------
Financial income 30 June 2021 30 June 2020
--------------------------------------------- ------------- -------------
Interest income from lease receivables 6,749 7,220
Interest income 2,236 5,444
--------------------------------------------- ------------- -------------
8,985 12,664
--------------------------------------------- ------------- -------------
Financial expense 30 June 2021 30 June 2020
--------------------------------------------- ------------- -------------
Interest expense (25,694) (29,014)
Interest expense on lease liabilities (13,632) (16,492)
Other (2,928) -
(42,254) (45,506)
--------------------------------------------- ------------- -------------
NOTE 7 - EARNINGS PER SHARE
The reconciliation of adjusted profit/(loss) per share as of 30 June 2021 and 2020 is as follows:
30 June 2021 30 June 2020
--------------------------------------------- ------------- -------------
Average number of shares existing
during the period 145,372 145,372
Net gain/(loss) for the period attributable
to
equity holders of the parent 19,918 (68,507)
--------------------------------------------- ------------- -------------
Earnings/(loss) per share 0.14 (0.47)
--------------------------------------------- ------------- -------------
The reconciliation of adjusted earnings/(loss) per share as of 30 June 2021 and 2020 is as follows:
30 June 2021 30 June 2020
-------------------------------------- ------------- -------------
Average number of shares existing
during the period 145,372 145,372
Net profit/(loss) for the period
attributable to equity
holders of the parent 19,918 (68,507)
-------------------------------------- ------------- -------------
Non-recurring and non-trade expenses
per Group Management (*)
Share-based incentives 1,330 726
One-off expenses 13,551 6,893
-------------------------------------- ------------- -------------
Adjusted net loss for the period
attributable to equity holders
of the parent 34,799 (60,888)
-------------------------------------- ------------- -------------
Adjusted Earnings/(loss) per share
(*) 0.24 (0.42)
-------------------------------------- ------------- -------------
(*) Adjusted earnings per share non-recurring and non-trade income/expenses are not defined by IFRS. The amounts provided with respect to operating segments are measured in a manner consistent with that of the financial statements. These items determined by the principles defined by the Group management comprises incomes/expenses which are assumed by the Group management that are not part of the normal course of business and are non-recurring items. These items which are not defined by IFRS are disclosed by the Group management separately for a better understanding and measurement of the sustainable performance of the Group.
There are no shares or options with a dilutive effect and hence the basic and diluted earnings per share are the same.
The earning/ (loss) per share presented for the period ended 30 June 2021 is based on the issued share capital of DP Eurasia N.V. at the date of its incorporation.
NOTE 8 - PROPERTY AND EQUIPMENT
Currency
translation
1 January 2021 Additions Disposals Transfers Impairment(*) adjustments 30 June 2021
-------------------- --------------- ---------- ---------- ---------- -------------- ------------ -------------
Cost
Machinery and
equipment 83,020 1,910 (1,758) 49 - 15,417 98,638
Motor vehicles 37,421 9,557 (12,840) 11 - 6,422 40,571
Furniture and
fixtures 64,109 3,270 (666) 1,322 - 1,170 69,205
Leasehold
improvements 110,348 1,569 (1,969) (598) (5,446) 12,776 116,680
Construction in
progress 4,509 611 - (784) - 147 4,483
-------------------- --------------- ---------- ---------- ---------- -------------- ------------ -------------
299,407 16,917 (17,233) - (5,446) 35,932 329,577
-------------------- --------------- ---------- ---------- ---------- -------------- ------------ -------------
Accumulated
depreciation
Machinery and
equipment (39,691) (6,079) 867 - - (7,991) (52,894)
Motor vehicles (28,820) (4,351) 11,232 - - (5,170) (27,109)
Furniture and
fixtures (33,310) (3,759) 411 - - (552) (37,210)
Leasehold
improvements (66,383) (7,437) 1,479 - 3,525 (7,438) (76,254)
-------------------- --------------- ---------- ---------- ---------- -------------- ------------ -------------
(168,204) (21,626) 13,989 - 3,525 (21,151) (193,467)
-------------------- --------------- ---------- ---------- ---------- -------------- ------------ -------------
Net book value 131,203 136,110
-------------------- --------------- ---------- ---------- ---------- -------------- ------------ -------------
For the period ended 30 June 2021, depreciation expense of TRY17,890 has been charged in cost of sales and TRY3,736 has been charged in general administrative expenses.
(*) The Group has impaired tangible assets due to store closures.
NOTE 8 - PROPERTY AND EQUIPMENT (Continued)
Currency
translation
1 January Additions Disposals Transfers Impairment adjustments 30 June 2020
2020
-------------------------- ---------- ---------- ---------- ---------- ----------- ------------ -------------
Cost
Machinery and equipment 76,825 499 - 2,200 (128) 1,394 80,790
Motor vehicles 29,975 4,147 - - (84) 611 34,649
Furniture and fixtures 62,552 2,978 (329) - - 84 65,285
Leasehold improvements 113,118 2,096 (434) 1,401 (4,595) 1,122 112,708
Construction in progress 7,425 1,654 - (3,601) (95) 20 5,403
-------------------------- ---------- ---------- ---------- ---------- ----------- ------------ -------------
289,895 11,374 (763) - (4,902) 3,231 298,835
-------------------------- ---------- ---------- ---------- ---------- ----------- ------------ -------------
Accumulated depreciation
Machinery and equipment (26,380) (6,009) - - - (659) (33,048)
Motor vehicles (19,601) (4,518) - - 84 (476) (24,511)
Furniture and fixtures (28,778) (3,764) 34 - - (44) (32,552)
Leasehold improvements (55,093) (8,286) 80 - 1,539 (678) (62,438)
-------------------------- ---------- ---------- ---------- ---------- ----------- ------------ -------------
(129,852) (22,577) 114 - 1,623 (1,857) (152,549)
-------------------------- ---------- ---------- ---------- ---------- ----------- ------------ -------------
Net book value 160,043 146,286
-------------------------- ---------- ---------- ---------- ---------- ----------- ------------ -------------
For the period ended 30 June 2020, depreciation expense of TRY17,789 has been charged in cost of sales and TRY4,788 has been charged in general administrative expenses.
NOTE 9 - INTANGIBLE ASSETS
Currency
1 January translation 30 June
2021 Additions Disposals Impairment adjustments 2021
-------------------------- ---------- ---------- ---------- ----------- ------------ ----------
Cost
Key money 44,742 558 (1,434) (2,280) 2,903 44,489
Computer software 89,947 16,598 (741) (589) 7,423 112,638
Franchise contracts 48,485 - - - - 48,485
-------------------------- ---------- ---------- ---------- ----------- ------------ ----------
183,174 17,156 (2,175) (2,869) 10,326 205,612
-------------------------- ---------- ---------- ---------- ----------- ------------ ----------
Accumulated depreciation
Key money (17,431) (3,062) 511 737 (724) (19,969)
Computer software (43,742) (10,508) 741 437 (3,285) (56,357)
Franchise contracts (48,485) - - - - (48,485)
-------------------------- ---------- ---------- ---------- ----------- ------------ ----------
(109,658) (13,570) 1,252 1,174 (4,009) (124,811)
-------------------------- ---------- ---------- ---------- ----------- ------------ ----------
Net book value 73,516 80,801
-------------------------- ---------- ---------- ---------- ----------- ------------ ----------
For the period ended 30 June 2021, amortisation expense of TRY5,972 has been charged in cost of sales and TRY7,598 has been charged in general administrative expenses.
(*) The Group has impaired intangible assets due to store closures.
Currency
1 January translation 30 June
2020 Additions Disposals Impairment adjustments 2020
-------------------------- ---------- ---------- ---------- ----------- ------------ ---------
Cost
Key money 50,622 592 (424) (2,342) 269 48,717
Computer software 68,672 12,656 (139) (2,329) 608 79,468
Franchise contracts 48,485 - - - - 48,485
-------------------------- ---------- ---------- ---------- ----------- ------------ ---------
167,779 13,248 (563) (4,671) 877 176,670
-------------------------- ---------- ---------- ---------- ----------- ------------ ---------
Accumulated depreciation
Key money (12,038) (3,759) 205 603 (85) (15,074)
Computer software (28,989) (8,652) 10 2,026 (249) (35,854)
Franchise contracts (45,328) (2,424) - - - (47,752)
-------------------------- ---------- ---------- ---------- ----------- ------------ ---------
(86,355) (14,835) 215 2,629 (334) (98,680)
-------------------------- ---------- ---------- ---------- ----------- ------------ ---------
Net book value 81,424 77,990
-------------------------- ---------- ---------- ---------- ----------- ------------ ---------
For the period ended 30 June 2020, amortisation expense of TRY6,286 has been charged in cost of sales and TRY8,549 has been charged in general administrative expenses.
NOTE 10 - RIGHT OF USE ASSETS
Details of right-of-use assets as of 30 June 2021 and 31 December 2020 are as follows :
30 June 2021 31 December 2020
Right-of-use assets
Properties 105,938 111,636
Vehicles 581 1,259
106,519 112,895
--------------------- ------------- -----------------
Details of lease receivable as of 30 June 2021 and 31 December 2020 are as follows :
30 June 2021 31 December 2020
Lease receivables
Current 15,483 16,621
Non-current 36,533 24,674
52,016 41,295
------------------- ------------- -----------------
Details of lease liabilities as of 30 June 2021 and 31 December 2020 are as follows :
30 June 2021 31 December 2020
Lease liabilities
Current 67,314 72,476
Non-current 124,260 110,549
191,574 183,025
------------------- ------------- -----------------
The movement of right-of-use assets as of 30 June 2021 and 2020 are as follows:
2021 2020
Opening - 1 January 112,895 180,236
Depreciation (25,484) (26,595)
Current year additions 7,927 9,046
Current year disposals (6,101) (18,748)
Currency translation adjustments 17,282 1,801
---------------------------------- --------- ---------
Closing - 30 June 106,519 145,740
---------------------------------- --------- ---------
For the period ended 30 June 2021, amortisation expense of TRY23,653 has been charged in cost of sales and TRY1,831 has been charged in general administrative expenses (30 June 2020: TRY22,969 and TRY3,626, respectively).
The total amount of interest of sub-lease income is TRY6,749 as of 30 June 2021(30 June 2020: 7,220).
As of June 2021, the total cash outflow for principle of leases and interest of leases is TRY46,804 and TRY6,883, respectively (30 June 2020: TRY51,064 and TRY9,272).
NOTE 11 - GOODWILL
30 June 2021 31 December 2020
1 January 47,413 47,133
Currency translation impact 2,014 280
----------------------------- ------------- -----------------
31 December 49,427 47,413
----------------------------- ------------- -----------------
These Goodwill relates to Turkish and Russian cash generating units at the amounts TRY 36,023 and TRY 13,404 respectively (31 December 2020: TRY36,023 and TRY11,390 (RUB96,016) respectively).
NOTE 12 - CASH AND CASH EQUIVALENTS
The details of cash and cash equivalents as of 30 June 2021 and 31 December 2020 are as follows:
30 June
2021 31 December 2020
Cash 836 1,249
Banks 56,873 19,867
Term bank deposits (less than three
months) 21,500 69,500
Credit card receivables 6,622 18,420
------------------------------------- -------- -----------------
85,831 109,036
------------------------------------- -------- -----------------
Maturity term of credit card receivables are 30 days on average (31 December 2020: 30 days).
NOTE 13 - TRADE RECEIVABLES AND PAYABLES
a) Short-term trade receivables
30 June 2021 31 December 2020
Trade receivables 102,620 89,091
Post-dated cheques (*) 23,318 22,932
--------------------------------- ------------- -----------------
125,938 112,023
--------------------------------- ------------- -----------------
Less: Doubtful trade receivable (5,120) (4,263)
--------------------------------- ------------- -----------------
Short-term trade receivables,
net 120,818 107,760
--------------------------------- ------------- -----------------
The average collection period for trade receivables is between 30 and 60 days (2020: 30 and 60 days).
b) Long-term trade receivables
30 June 2021 31 December 2020
Trade receivables 1,239 539
Post-dated cheques (*) 16,176 16,168
------------------------ ------------- -----------------
17,415 16,707
------------------------ ------------- -----------------
(*) Post-dated cheques are the receivables from franchisees resulting from store openings.
c) Short-term trade and other payables
30 June 2021 31 December 2020
Trade payables 205,788 168,329
Other payables 12,598 5,030
---------------- ------------- -----------------
218,386 173,359
---------------- ------------- -----------------
The weighted average term of trade payables is less than three months. Short-term payables with no stated interest are measured at original invoice amount unless the effect of imputing interest is significant.
NOTE 14 - TRANSACTIONS WITH RELATED PARTIES
Key management compensation
30 June 2021 30 June 2020
------------------------------ ------------- -------------
Short-term employee benefits 20,081 11,144
Share-based incentives 1,330 726
------------------------------ ------------- -------------
21,411 11,870
------------------------------ ------------- -------------
There are no loans, advance payments or guarantees given to key management.
NOTE 15 - INVENTORIES
30 June 2021 31 December 2020
Raw materials 97,196 57,292
Other inventory 1,729 4,452
----------------- ------------- -----------------
98,925 61,744
----------------- ------------- -----------------
NOTE 16 - OTHER ASSETS AND LIABILITIES
Other current assets
30 June 2021 31 December 2020
---------------------------------- ------------- -----------------
Advance payments (*) 48,730 56,208
Prepaid taxes and VAT receivable 9,572 4,175
Prepaid marketing expenses 5,998 3,001
Deposits for loan guarantees
(**) 2,354 1,437
Prepaid insurance expenses 2,122 1,532
Contract assets related to
franchising contracts (***) 870 879
Other 6,976 6,256
---------------------------------- ------------- -----------------
76,622 73,488
---------------------------------- ------------- -----------------
(*) As of 30 June 2021, advance payments are composed of advances given to suppliers for the purchasing raw material and other services.
(**) The Group repaid a portion of its loans to Sberbank Moscow and the TRY 23,899 (RUB 200 million) cash deposit condition that was made as collateral by Fidesrus
(***) The Group incurs certain costs with Domino's Pizza International related to the set-up of each franchise contract and IT systems used for recording of franchise revenue.
NOTE 16 - OTHER ASSETS AND LIABILITIES (Continued)
Other non-current assets
30 June 2021 31 December 2020
------------------------------ ------------- -----------------
Long-term deposits for
loan guarantees (*) 21,545 17,760
Prepaid marketing expenses 16,955 12,620
Deposits given 6,841 5,585
Contract assets related to
franchising contracts (**) 6,385 4,291
------------------------------ ------------- -----------------
Total 51,726 40,256
------------------------------ ------------- -----------------
(*) The Group repaid a portion of its loans to Sberbank Moscow and the TRY 23,899 (RUB 200 million) cash deposit condition that was made as collateral by Fidesrus.
(**) The Group incurs certain costs with Domino's Pizza International related to the set-up of each franchise contract and IT systems used for recording of franchise revenue.
Other current liabilities
30 June 2021 31 December 2020
--------------------------------------- ------------- -----------------
Payable to personnel 10,105 6,368
Unused vacation liabilities 9,894 7,977
Contract liabilities from franchising
contracts (*) 7,745 5,672
Taxes and funds payable 5,753 5,212
Performance bonuses 5,084 9,619
Social security premiums payable 4,898 4,077
Volume rebate advances 4,793 5,364
Advances received from franchisees 2,211 4,239
Other expense accruals 9,515 5,686
--------------------------------------- ------------- -----------------
Total 59,998 54,214
--------------------------------------- ------------- -----------------
(*) The Group incurs certain revenue with set up of each franchise contract and these franchise fee revenues are deferred over the period of the franchise agreement.
Other non-current liabilities
30 June 2021 31 December 2020
--------------------------------------- ------------- -----------------
Contract liabilities from franchising
contracts (*) 43,833 38,311
Long term provisions for
employee benefits 3,134 2,874
Other - 1,556
Total 46,967 42,741
--------------------------------------- ------------- -----------------
(*) The Group incurs certain revenue with set up of each franchise contract and these franchise fee revenues are deferred over the period of the franchise agreement.
NOTE 17 - FINANCIAL LIABILITIES
30 June 2021 31 December 2020
Short term bank borrowings 66,849 54,088
--------------------------------------------- ------------- -----------------
Short-term financial liabilities 66,849 54,088
--------------------------------------------- ------------- -----------------
Short-term portions of long-term borrowings 102,027 113,093
Short-term portions of long-term leases 67,314 72,476
---------------------------------------------
Current portion of long-term financial
liabilities 169,341 185,569
--------------------------------------------- ------------- -----------------
Total short-term financial liabilities 236,190 239,657
--------------------------------------------- ------------- -----------------
Long-term bank borrowings 220,438 193,015
Long-term leases 124,260 110,549
---------------------------------------------
Long-term financial liabilities 344,698 303,564
--------------------------------------------- ------------- -----------------
Total financial liabilities 580,888 543,221
--------------------------------------------- ------------- -----------------
30 June 2021
Currency Maturity Interest rate Short-term Long-term
(%)
---------------- ----------- -------------- ----------- ----------
TRY borrowings Revolving 12.03 161,074 79,579
RUB borrowings 2024 9.08 7,802 140,859
---------------- ----------- -------------- ----------- ----------
168,876 220,438
---------------------------- -------------- ----------- ----------
31 December 2020
Currency Maturity Interest rate Short-term Long-term
(%)
---------------- ----------- -------------- ----------- ----------
TRY borrowings Revolving 10.48 154,960 109,041
RUB borrowings 2024 9.70 12,221 83,974
---------------- ----------- -------------- ----------- ----------
167,181 193,015
---------------------------- -------------- ----------- ----------
The loan agreement between Sberbank Moscow and Domino's Russia is subject to covenant clauses whereby the Group, Domino's Turkey and Domino's Russia are required to meet certain ratios. The financial indicator of:
-- Domino's Russia, which requires the ratio of financial debt to adjusted EBITDA for the relevant period should not be more than 3.0;
-- Domino's Turkey, which requires the ratio of financial debt to adjusted EBITDA for the relevant period should not be more than 2.5; and
-- the Group, which requires the ratio of financial debt to adjusted EBITDA for the relevant period, should not be more than 3.5.
The loan agreement between Sberbank Moscow and Domino's Russia is subject to covenant clauses whereby Group, Turkish and Russian Divisions are required to meet certain ratios. As of 30 June 2021, Sberbank has waived the covenant conditions for 2020 year end, as well as the first, second, third and fourth quarters of 2021.
NOTE 17 - FINANCIAL LIABILITIES (Continued)
The redemption schedule of the borrowings as of 30 June 2021 and 31 December 2020 is as follows:
30 June 2021 31 December 2020
To be paid in one year 168,876 167,181
To be paid between one to two years 95,209 63,762
To be paid between two to three
years 61,769 76,941
To be paid between three years and
more 63,460 52,312
------------------------------------- ------------- -----------------
389,314 360,196
------------------------------------- ------------- -----------------
The details of the finance lease liabilities as of 30 June 2021 and 31 December 2020 are as follows:
30 June 2021 31 December 2020
Leases to be paid in one year 67,314 72,476
Leases to be paid between one to
two years 40,831 37,045
Leases to be paid between two to
three years 28,191 28,403
Leases to be paid between three years
and more 55,238 45,101
--------------------------------------- ------------- -----------------
191,574 183,025
--------------------------------------- ------------- -----------------
The details of the fair value of the financial liabilities as of 30 June 2021 and 31 December 2020 are as follows:
30 June 2021 31 December 2020
------------------- -------------------
Carrying Fair Carrying Fair
value value value value
Borrowings 389,314 450,010 360,196 387,504
Leases 191,574 234,996 183,025 212,353
------------ --------- -------- --------- --------
Total 580,888 685,006 543,221 599,857
------------ --------- -------- --------- --------
NOTE 17 - FINANCIAL LIABILITIES (Continued)
The reconciliation of adjusted net debt as of 30 June 2021 and 31 December 2020 is as follows:
30 June 2021 31 December 2020
--------------------------------------------- ------------- -----------------
Short-term bank borrowings 66,849 54,088
Short-term portions of long-term borrowings 102,027 113,093
Short-term portions of long-term leases 67,314 72,476
Long-term bank borrowings 220,438 193,015
Long-term leases 124,260 110,549
--------------------------------------------- ------------- -----------------
Total borrowings 580,888 543,221
--------------------------------------------- ------------- -----------------
Cash and cash equivalents (-) (85,831) (109,036)
--------------------------------------------- ------------- -----------------
Net debt 495,057 434,185
--------------------------------------------- ------------- -----------------
Non-recurring items
per Group management
Long-term deposit for loan guarantee (23,899) (19,197)
--------------------------------------------- ------------- -----------------
Adjusted net debt (*) 471,158 414,988
--------------------------------------------- ------------- -----------------
(*) Net debt, adjusted net debt and non-recurring and non-trade items are not defined by IFRS. Adjusted net debt includes cash deposits used as a loan guarantee and cash paid, but not collected, during the non-working day at the year end. Management uses these numbers to focus on net debt to take into account deposits not otherwise considered cash and cash equivalents under IFRS.
NOTE 18 - COMMITMENTS, CONTINGENT ASSETS AND LIABILITIES
a) Guarantees given to third parties as of 30 June 2021 and December 2020 are as follows;
30 June 2021 31 December 2020
Guarantee letters given 4,743 4,451
------------------------- ------------- -----------------
4,743 4,451
------------------------- ------------- -----------------
b) Guarantees received for trade receivables are as follows:
30 June 2021 31 December 2020
Guarantee notes received 63,944 54,174
Guarantee letters received 65,572 23,315
---------------------------- ------------- -----------------
129,516 77,489
---------------------------- ------------- -----------------
c) Tax contingencies
The Russian transfer pricing legislation is generally aligned with the international transfer pricing principles developed by the Organisation for Economic Co -- operation and Development ("OECD") but has specific characteristics. This legislation provides the possibility for tax authorities to make transfer pricing adjustments and impose additional tax liabilities in respect of controlled transactions (transactions with related parties and some types of transactions with unrelated parties), provided that the transaction price is not arm's length.
Tax liabilities arising from transactions between companies within the Group are determined using actual transaction prices. It is possible, with the evolution of the interpretation of the transfer pricing rules, that such transfer prices could be challenged. The impact of any such challenge cannot be reliably estimated; however, it may be significant to the financial position and/or the overall operations of the Group.
The Group includes companies incorporated outside of Russia. The tax liabilities of the Group are determined on the assumption that these companies are not subject to Russian profits tax, because they do not have a permanent establishment in Russia. This interpretation of relevant legislation may be challenged but the impact of any such challenge cannot be reliably estimated currently; however, it may be significant to the financial position and/or the overall operations of the Group.
As Russian tax legislation does not provide definitive guidance in certain areas, the Group adopts, from time to time, interpretations of such uncertain areas that reduce the overall tax rate of the Group. While management currently estimates that the tax positions and interpretations that it has taken can probably be sustained, there is a possible risk that an outflow of resources will be required should such tax positions and interpretations be challenged by the tax authorities. The impact of any such challenge cannot be reliably estimated; however, it may be significant to the financial position and/or the overall operations of the Group.
NOTE 18 - COMMITMENTS, CONTINGENT ASSETS AND LIABILITIES (Continued)
Management will vigorously defend the Group's positions and interpretations that were applied in determining taxes recognised in these consolidated financial statements if these are challenged by the authorities.
NOTE 19 - EQUITY
The shareholders and the shareholding structure of the Group at 30 June 2021 and 31 December 2020 are as follows:
30 June 2021 31 December 2020
------------------- -------------------
Share (%) Amount Share (%) Amount
Fides Food Systems Coöperatief U.A. 32.8 11,928 32.8 11,928
Public shares 62.1 22,591 62.1 22,591
Vision Lovemark Coöperatief U.A. 4.9 1,777 4.9 1,777
Other 0.2 57 0.2 57
36,353 36,353
------------------------------------------ ---------- ------- ---------- -------
As of 30 June 2021, the Group's 145,372,414 shares are issued and fully paid for.
The nominal value of each share is EUR0.12 (2020: EUR0.12). There is no preference stock.
DP Eurasia's authorised share capital is EUR 60,000,000.
As of 30 June 2021, the Group's 145,372,414 (30 June 2020: 145,372,414) shares are issued and fully paid for.
NOTE 19 - EQUITY (Continued)
Share premium
Share premium represents differences resulting from the incorporation of Fides Food by Fides Food Systems Coöperatief U.A. at a price exceeding the face value of those shares and differences between the face value and the fair value of shares issued at the IPO.
Ultimate controlling party
The ultimate controlling party of the Company is Jubilant Foodworks Limited There is no individual ultimately controlling the Group.
NOTE 20 - INCOME TAX
The Group is subject to taxation in accordance with the tax regulations and the legislation effective in the countries in which the Group companies operate. Therefore, provision for taxes, as reflected in the condensed consolidated financial information, has been calculated on a separate-entity basis. The tax rate used for the period to 30 June 2021 is 25% (31 December 2020: 25%).
Corporate tax liability for the year consists of the following:
30 June 2021 31 December 2020
Corporate tax calculated 14,456 22,201
Prepaid taxes (-) (4,697) (13,270)
-------------------------- ------------- -----------------
Tax liability 9,759 8,931
-------------------------- ------------- -----------------
Tax income and expenses included in the statement of comprehensive income are as follows:
30 June 2021 30 June 2020
Current period corporate tax expense (14,456) (4,574)
Deferred tax (expense)/income (3,388) 5,456
-------------------------------------- ------------- -------------
Tax expense (17,844) 882
-------------------------------------- ------------- -------------
NOTE 20 - INCOME TAX (Continued)
The reconciliation of the tax expense in the statement of comprehensive income is as follows:
30 June 2021 30 June 2020
Profit before tax 37,762 (69,389)
Corporate tax at statutory rates
(25%) (9,441) 17,347
Disallowable expenses (7,168) (6,552)
Unrecognised tax losses 543 (6,087)
Differences in tax rates (976) (3,627)
Other, net (802) (199)
---------------------------------- ------------- -------------
Total tax expense (17,844) 882
---------------------------------- ------------- -------------
The breakdown of cumulative temporary differences and the resulting deferred income tax assets/liabilities at 30 June 2021 and 31 December 2020 using statutory tax rates are as follows:
30 June 2021 31 December 2020
---------------------------- ----------------------------
Deferred Deferred
tax tax
Temporary assets/ Temporary assets/
differences (liabilities) differences (liabilities)
------------ -------------- ------------ --------------
Carry forward tax losses
(*) 60,231 12,046 49,653 9,931
Contract liabilities from
franchising contracts 49,646 11,929 42,959 8,592
Expense accruals 23,808 4,762 21,804 4,361
Right of use assets and lease
liability 20,143 4,129 19,639 3,928
Legal provisions 5,617 1,404 5,740 1,148
Unused vacation liabilities 4,391 1,098 4,021 804
Provision for employee termination
benefit 3,134 784 2,874 575
Bonus accruals - - 9,132 1,826
------------------------------------ ------------ -------------- ------------ --------------
166,970 36,152 155,822 31,165
Property and equipment and
intangible assets (23,000) (6,516) (27,763) (5,553)
Other (6,140) (1,722) 4,440 888
------------------------------------ ------------ -------------- ------------ --------------
(29,140) (8,238) (23,323) (4,665)
Deferred income tax assets,
net 27,914 26,500
------------------------------------ ------------ -------------- ------------ --------------
(*) Consists of carry forward losses of Domino's Russia. Domino's Russia has not recognised any additional tax assets on carry forward losses in 2020 and first half of 2021, the change is the result of the currency translation differences between Russian Roubles and Turkish Lira.
NOTE 21 - SHARE BASED PAYMENTS
The Phantom Option Scheme
The Phantom Option Scheme was completed after %100 stake sale by Turkish Private Equity Fund II L.P. ( Note-1)
Senior management long term incentive plan
A share incentive scheme was put in place on 8 May 2018. According to the incentive scheme employees were granted an option to acquire shares, at a strike price of GBP 1.85 with an expiry date of 8 May 2021, based on performance targets of the Group for the upcoming three years, and continuing employment until the date of vesting based on performance targets of the Group for the upcoming three years, and continuing employment until the date of vesting. The shares under the option will vest at the end of the scheme period.
Vesting of 2018-2020 LTIP cycle is completed as of 8 May 2021. No shares wested for Aslan Saranga as the performance condition was not met for 2018-2020 cycle.
On 3 May 2019, Aslan Saranga was granted an LTIP award amounting to 332,706 shares (share price GBP 0.88) which will vest in May 2022 subject to achievement of an EBITDA growth target. On 14 May 2020, Aslan Saranga was granted an LTIP award amounting to 506,212 shares (share price GBP 0.59) which will vest in May 2023 subject to achievement of an EBITDA growth target.
Long-term incentive plan for new board adviser
On 7 September 2020, Andrew Rennie, Domino's Pizza Enterprises Limited's ex-CEO of European Operations, agreed to join the Group as Board Adviser. He obtained a call option from the major shareholder Fides Coop for 4 million DPEU shares at a strike price of GBP 1.05 with an expiry date of 30 September 2022.
Under these three existing plans, an amount of TRY 1,330 has been charged for 2021, whereas TRY 1,463 has been charged for 2020 and the cumulative charge is TRY 21,930 as at 30 June 2021 (31 December 2020: TRY 20,600).
NOTE 22 - SUBSEQUENT EVENT
No subsequent events.
Review report To: the board of directors of DP Eurasia N.V.
Introduction
We have reviewed the accompanying condensed consolidated interim financial statements for the six-month period ended 30 June 2021 of DP Eurasia N.V., Amsterdam, which comprises the condensed consolidated statement of financial position as at 30 June 2021, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flows for the period then ended and the notes to the condensed consolidated interim financial statements. The board of directors is responsible for the preparation and presentation of this (condensed) interim financial statements in accordance with IAS 34, 'Interim Financial Reporting' as adopted by the European Union. Our responsibility is to express a conclusion on this interim financial information based on our review.
Scope
We conducted our review in accordance with Dutch law including standard 2410, Review of Interim Financial Information Performed by the Independent Auditor of the entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial statements for the six-month period ended 30 June 2021 is not prepared, in all material respects, in accordance with IAS 34, 'Interim Financial Reporting' as adopted by the European Union.
Amsterdam, 6 September 2021
PricewaterhouseCoopers Accountants N.V.
Original has been signed by B.A.A. Verhoeven RA
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END
IR EAENKEFKFEAA
(END) Dow Jones Newswires
September 07, 2021 02:00 ET (06:00 GMT)
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