Pizza franchisee DP Eurasia posts high sales growth for 2021, unsure outlook for 2022
Uncertainties loom amid Russia-Ukraine conflict and inflation.
DP Eurasia, which operates the Domino's Pizza brand in Turkey and Russia, posted strong sales growth in 2021 but warned of a slowdown in 2022 due to uncertainties linked to the war in Ukraine and inflation.
The company enjoyed profitability in the full year, reporting a 58.5% increase in adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) to 208.4 million Turkish lira ($14.19 million), driven by a strong performance in Turkey and recovery in Russia.
Despite the growth, DP Eurasia admitted that uncertainties brought by the conflict between Russia and Ukraine, as well as the high inflationary environment in Turkey, make the company unable to provide meaningful guidance for this year's financial outlook.
CEO Aslan Saranga shared, “Whilst the pandemic seems to have lost momentum in recent months, we expect general inflationary pressures and recent geopolitical developments in the region to create headwinds in 2022. Whilst the Board is cognisant of these facts, it expects a resilient performance for 2022.”
Growth and Recovery
Last year, DP Eurasia was able to set a record year of 39 store openings in Turkey. It also introduced new pizzas like Ocakbaşı as well as new side offerings, an oven-baked sandwich line, new chicken offerings and Döner (chawarma) products ranges.
In Russia, 2021 was a strong recovery year for the company with several product launches including the pear-and-blue cheese pizza, half-and-half pizza, and a range of bread.
Also contributing to the company's growth was online delivery which saw sales increase reaching all-time high figures of 77% in Turkey and 93% in Russia.
DP Eurasia also announced the launch of a new coffee shop and product brand, COFFY which has opened 11 stores in Turkey.
Uncertainties loom
DP Eurasia is the largest pizza delivery company in Turkey with about 10,000 employees and the third-largest in Russia with 188 stores and 3,000 employees. According to Saranga, it had not seen any major change in consumer demand since the start of the war in Ukraine. However, the company has suspended royalty payments from its Russian operations until further notice.
“The safety and welfare of all of the Group’s employees and customers remains our primary priority at this time and we continue to monitor the situation closely," Saranga said in a statement.
DP Eurasia is the fifth largest master franchisee of the Domino’s Pizza brand, with operations in Turkey, Russia, Azerbaijan and Georgia.
