José Carreras

Domino’s Pizza

Fast Food Industry’s Overview• Fast food generates revenue of over $570 billion globally

Hamburger-focused res-taurants

Pizza parlours Sandwich shops Chicken restaurants Mexican restaurants0%

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12%

8% 7%

Top 5 by market share

Pizza’s Industry overview• $97 billion industry, (expected growth 3-4% CAGR), $117 billion by 2020• Innovation• Future is here

CHANGING DEMOGRAPHICS

CULTURAL EVOLUTION

DIGITAL ORDERING

Pizza Eating Statistics Data

Annual pizza sale revenue $32 billion

Slices of pizza that are eaten each second 350 slices

Total number of pizzerias in the U.S. 70,000

Average number of slices of pizza eaten by a person every year 46 slices

Total number of pizza’s sold in the U.S. each year 3 billion

Total number of pizza’s sold worldwide each year 5 billion

Percent of all pizzerias that offer delivery 83%

Total number of pizzerias in the state of New York alone 9,000

Percent of Americans who eat at least one portion of pizza per month 93 %

Company’s Overview• Founded in Michigan,USA - 1960 • More than 12,600 pizza stores in over 80 countries• 2,000 franchises and increasing• IPO in 2004, listed on the NYSE-DPZ• Major products: pizzas, chicken wings, pastas, cakes and beverages

• Major competitors:

Weakness Strengths

Pizza Corner Low investment in advertisingDelivery not satisfactory

VarietyQuality

KFC More variety of chicken, a variety for veggies

Master fried chicken

Mcdonald’s Less variety, bad reputation/quality

Burger leaders

Papa John’s Expensive Excellent quality

Competitors W&S

MAIN DIFFERENCE BETWEEN PIZZA HUT AND DOMINO’S

COMPETITIVE RIVALRY WITHIN AN INDUSTRY

THREAT OF SUBSITUTE PRODUCTS

THREAT OF NEW ENTRANTS

BARGAINING POWER OF CUSTOMERS

BARGAINING POWER OF SUPPLIERS

Porter 5 Forces

Swot Analysis

Strengths:• Strong franchise

system: Franchise Profitability

• Financial stability and healthy cash flow

• Brand name

Weaknesses:• Ambience not up

to expectation -> NO parties

• Lack of variety

Threats:• Increasing

competition• Increasing health

consciousness

Opportunities:• Growing fast food

market• Develop the inside

environment of locals

Franchise Profitability

Domino’s Financial analysis

2012 2013 2014 2015

305.5339.6

381.1

437.8

Growth of EBITDA

2012 2013 2014 2015

282.3313.8

345.3

405.4

Growth of EBIT

2012 2013 2014 2015

112.4

143162.5

192.8

Growth of Net Income

2012 2013 2014 2015

1678.41802.2

1993.82216.5

Growth of Revenue

KEY TO SUCCESS: 2010 Started Brand Turnaround

EPS GROWTH

2010 Started Brand Turnaround• Introduction of new products:

• 30 minutes campaign• Product platforms/ tecnhology

Stock Performance

Domino’s Football Pitch

Current Price

52 week Hi- Lo

Comparables

PGM

EMM

$-00 $20.000 $40.000 $60.000 $80.000 $100.000 $120.000 $140.000 $160.000 $180.000

$135,36

Stock Purchase 50%Cash Purchase 50%

Total Offer Value 9395.68

Offer Value as Equity 4697.84Offer Value as Cash 4697.84Less: Net Tangible Assets -1816.35Goodwill 11212.02 Exchange Ratio 0.98 Shares Issued by Acquirer 54.4 New Debt Issued 4697.84Incremental Interest Expense 248.99 After Tax Interest Expense 149.39 Pro Forma Net Income 1490.80Pro Forma Shares Outstanding 497.35Pro Forma Debt 10,915.63 Pro Forma Interest Expense 347.1 Pro Forma EPS $ 3.00

Accretion/Dilution 2.302%

A/D Analysis (1)

2016 2017 2018 2019 2020 2021 2022 2023 2024 20250.00

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Leverage Ratio Interest coverage ratioAccretion/Dilution

A/D Analysis (2)Stock Purchase 0%Cash Purchase 100%

Total Offer Value 9395.68Offer Value as Equity -00 Offer Value as Cash 9,395.68 Less: Net Tangible Assets -1,816.35 Goodwill 11,212.02 Exchange Ratio - Shares Issued by Acquirer - New Debt Issued 9395.68Incremental Interest Expense 497.97 After Tax Interest Expense 298.78 Pro Forma Net Income 1490.80Pro Forma Shares Outstanding 443.00Pro Forma Debt 15,613.47 Pro Forma Interest Expense 496.5 Pro Forma EPS $ 3.37

Accretion/Dilution 14.854%

2016 2017 2018 2019 2020 2021 2022 2023 2024 20250.00

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Leverage Ratio Interest coverage ratioAccretion/Dilution

A/D Analysis (3)Stock Purchase 100%Cash Purchase 0%

Total Offer Value 9395.68Offer Value as Equity 9,395.68 Offer Value as Cash -00 Less: Net Tangible Assets -1,816.35 Goodwill 11,212.02 Exchange Ratio 1.96 Shares Issued by Acquirer 108.7 New Debt Issued 0.00Incremental Interest Expense -00 After Tax Interest Expense 0.00 Pro Forma Net Income 1490.80Pro Forma Shares Outstanding 551.71Pro Forma Debt 6,217.79 Pro Forma Interest Expense 197.7 Pro Forma EPS $ 2.70 Accretion/Dilution -7.777%

2016 2017 2018 2019 2020 2021 2022 2023 2024 20250.00

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-15%

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-05%

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Leverage Ratio Interest coverage ratioAccretion/Dilution

Yum! Brands, Inc. 6 new restaurants per day!

GLOBAL PORTFOLIO 3 ICONIC BRANDS VERSATILE OWNERSHIP EMERGINGMARKET LEADER

43,000 Restaurants Franchise 16,500 Units

140 Countries

Louisville, Kentucky

505,000 employees

Company 2.5 restaurants/Million people in TOP 10

Acquirer’s overview• Largest franchised pizza chain• Current share price: $90,10• Market Capitalization: $35.13 Bn• Mission: Build 3 Global Iconic Brands that people trust• Vission: Acquire our biggest Pizza competitor• Power of YUM:

Domino’s Appendix (1)

• Income Statement of Domino’s• CFS of Domino’s• Balance Sheet of Domino’s• Working Capital of Domino’s• D&A of Domino’s• Debt of Domino’s• Equity of Domino’s

Acquirer’s Appendix (2)• Income Statement of YUM• CFS of YUM• Balance Sheet of YUM• Working Capital of YUM• D&A of YUM• Debt of YUM• Equity of YUM

Combined Appendix (3)• Combined Income Statement• Combined Ratios and Assumption in a Base Scenario Selector • Combined CFS• Combined Balance Sheet• Combined Debt• Combined Equity

Appendix (4)• DCF (1)• DCF (2)• DCF (3)• LBO• A/D Analysis• Comparables (1)• Comparables (2)

Income Statement of Domino’s

CFS of Domino’s

Balance Sheet of Domino’s

Working Capital of Domino’s

D&A of Domino’s

Debt of Domino’s

Equity of Domino’s

DCF (1)

DCF (2)

DCF (3)

LBO

Income Statement of YUM

CFS of YUM

Balance Sheet of YUM

Working Capital of YUM

D&A of YUM

Equity of YUM

Debt of YUM

A/D Analysis

Combined Income Statement

Combined Ratios and Assumption in a Base Scenario Selector

Combined CFS

Combined Balance Sheet

Combined Debt

Combined Equity

Comparables (1)

Comparables (2)