Dodo Brands reports 2020 results in accordance with IFRS
We summed up Dodo Brands’ preliminary results for 2020 as far back as January. Since then, our reporting team has been working untold hours to prepare our financial statements in accordance with International Financial Reporting Standards (IFRS) and get them audited by Ernst & Young.
Now the reports are ready — both for the fourth quarter and the whole fiscal year ended 31 December 2020.
- Global system sales increased by 38.2% in the fourth quarter; 27.1% in fiscal 2020;
- Added 28 net new units in the fourth quarter; 103 net new units in the fiscal 2020
- Finished the year with 679 units in 14 countries;
- Eurasia (Russia, Kazakhstan, Belarus) comparable system sales increased 17.6% in the fourth quarter; 5.3% in fiscal 2020;
- International Master Franchising (IMF) comparable system sales increased 33.9% in the fourth quarter; 11.3% in fiscal 2020;
- Adjusted EBITDA (ex. IFRS 16) increased to RUB 202 million for fiscal 2020 vs negative RUB (12) million for fiscal 2019;
- Free Cash Flow of negative RUB (28) million for fiscal 2020 vs negative RUB (41) million for fiscal 2019.
- RUB 111 million net cash (ex. IFRS 16) as of end of fiscal 2020.
What happened in 2020
- Dodo Pizza was recognized as the fastest-growing pizza chain in the world by Technomic
- Dodo Pizza shared the #1 position as the most trusted foodservice brand in Russia as per the recent research by the Romir agency.
- In Russia, our home market, we continued to dominate the pizza category and increased system sales by 24%.
- Dodo Pizza launched its first franchised unit in Munich, Germany, our 14th market of presence.
- We launched our first company-owned unit in the UK (in Royal Leamington Spa).
- In China, we opened Dodo Pizza’s second corporate unit and the R&D laboratory.
- We also launched the first pilot units of our new concepts, a digital-first coffee brand Drinkit and a better doner brand Doner 42.
- On 1 April 2021, the newly composed Board of Directors met for the first time. In addition to the founder and CEO Fyodor Ovchinnikov and Executive Directors Andrey Petelin (COO) and Kirill Vyrypaev (CFO) three new Independent Directors — Elena Shifrina, Alexey Marey and Vassilli Phillipov — joined the Board.
What we plan for 2021
- We aim to open additional Drinkit and Doner 42 units this year.
- We are going to launch at least two additional international master-franchised markets for Dodo Pizza and continue building a strong pipeline of future launches.
What Dodo’s founder has to say
Fyodor Ovchinnikov, Dodo Brands founder and CEO, commented:
“When I launched my first pizza shop ten years ago in Syktyvkar, Russia I had a vision to transform pizza and franchising markets with the help of technology and build a global brand. Over the recent years our vision has become even more ambitious as we decided to go beyond pizza and started our transformation into a digital-first franchising platform. I am happy that last year we continued to execute on that vision despite the market conditions.
2020 was a challenging year in many ways but we managed to continue rapid expansion driven by the strong momentum in the online delivery and collection ordering. And just this month, we agreed internally on a 3-year plan that assumes that our system sales will grow over 2x by 2024. We believe that Dodo Brands will be a strong candidate for an IPO by early 2024 and if market conditions allow we will consider taking the company public.”
In our reporting we combine Drinkit, Doner 42, UK and China into a single Startups segment, our key growth initiatives that have the potential to increase our total addressable market by an order of magnitude.
System sales are sales generated by the Company’s corporate and franchised stores to external customers (including VAT) and do not represent revenue of the Group.
Comparable sales growth is a comparison of sales between two periods that compares system sales of existing system stores. The Company’s system stores that are included in comparable sales calculation are those that have operated for at least 12 full calendar months preceding the beginning of the first month of the period used in the comparable sales for a certain reporting period, assuming the relevant system store has not subsequently closed.
Net debt, adjusted EBITDA and one-off income/expenses are not defined by IFRS. These items are determined by the principles defined by the Company’s management. These items which are not defined by IFRS are disclosed by the Company management separately for a better understanding and measurement of the sustainable performance of the Company.