Ladies and gentlemen, thank you for standing by and welcome to the FY 2020 half-year results investor briefing. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session, and to ask questions during the session, you will need to press star one on your telephone keypad. Please be advised that today's conference is being recorded, and I would now like to hand the conference over to your first speaker today, Mr. Don Meij. Thank you. Please go ahead.
Good morning, everybody. It's Don Meij here. I'm the Group CEO and Managing Director of Domino's Pizza Enterprises. In Sydney today, we have with us Richard Coney, our Group CFO. We've also got Andrew Rennie, now our retiring European CEO. We've got Andre Ten Wolde, who is now our new European CEO. We've got Stoffel Thijs, our German CEO, Misja Vroom, who operates our Benelux business, Nick Knight, who operates Australia and New Zealand, and Josh Kilimnik, who operates Japan. I'm going to be working to the PowerPoint presentation that we put up on the ASX today. So if you come with me straight onto slide three, I'm happy to report today that we were able to achieve network sales of AUD 151 million for the half, plus 10.6%. This is driven through our strong online sales, up 18.8%.
That's the rolling comparable half for the same half last year at 16.5%, so strong online growth. We opened 85 organic stores in the half to be just under 2,600 stores. Our underlying EBITDA was up 10%. Our EBIT up 6%. Our net CapEx for the half was AUD 49.1 million. And our free cash flow was up 59.3% with an additional AUD 21.7 million. So if you come with me now onto slide four, as I mentioned, the growth of our business is largely coming from delivery, and that's online delivery. And if you look at the last five years as a business, we've doubled our network sales but more than tripled our online sales. In this particular half, we're really proud of the strong growth that we achieved in the European and Japanese operations.
And when we look across the group, right now, year- to date, we're at 96 stores organically opened as new stores, and we expect to be on track for a full-year record. For any of the nervous Nellies that are watching our store count on a day-to-day basis, you can expect that that will be a strong opening in June, right up to the last week. Now that we're so transparent in the way we show it, I think you can see that we open a lot of stores in December, and particularly in the last week, and that's the same in June for whatever reason every financial year. So just be aware of that as you're tracking our progress online. Our profit growth is in line with expectations within the group for the first half.
Based on the recent sales that we are achieving in the first seven weeks, we have a positive outlook for the group in this half. Margins have compressed as a group in the medium term due to the accelerated new corporate store investment in Japan, where we're taking advantage of the progress, and we're opening more stores corporately and then refranchising them later. We're also operating a larger corporate store portfolio in Australia. Both of these mean that in the near term, we have the operating expenses of either opening or, in some cases, taking back a franchise store in Australia, and that has a pent-up profit in those stores with profit on sale of future corporate stores to come.
DPE will also benefit in the medium term as we realize that profit on sale, and it does mean that we are cycling a higher CapEx in this year, and you'll see the ebbs and flows, and Richard and I'll talk about that further in the presentation. If we come on to slide five, we want to reconfirm our three- to-five -year outlook as an ongoing view that same-store sales in that 3%-6%. For the first half, we're up 4.1%, and the new organic stores to be in the range of 7%-9%, and we're confident we're going to be well and truly within that range for the full year.
If you come with me now onto slide six, for those shareholders who have been following us for a long time, we're really reaping the benefits of those investments in Japan and Europe, where nearly AUD 1 billion of our network sales for this half came from overseas. And as we've already achieved in previous years, the momentum is quite strong when well more than half of our EBIT is now also coming from other global markets. We can also see the store growth is being predominantly in our international businesses, be it that Australia will open more stores in this half that are in the pipeline.
When we look at the CapEx, you can see that a significant proportion of our CapEx is recyclable, whether it be through opening a corporate store today and selling it later, or whether we're funding a new manager into a franchise store. If you come onto slide seven, it really illustrates the breakout. Now, this is in AUD as a percentage growth. We do break out further in a constant currency, the growth of our online business. But yeah, I think it highlights just how strong online is. You can also see that the realm of 3%-6% is well and truly live in our business with Australia in this half, and the first half being on the lower end at 3%, and Japan on the higher end at 6%, and Europe on the higher end at 5%. That sits comfortably in the range.
When we see what we've already achieved in the second half, it also gives us comfort that that's the right outlook to be giving shareholders. Fortressing continues to work. We live by example with that as well. You can see in Japan where we're doing it predominantly with corporate stores because we know it's the right thing to do. That's illustrated in this slide on slide eight, where new stores opened since the full year of F 15 now contribute 29.3% of group sales. If you come onto slide nine, this is a slide that we're really proud to present today. In the first seven weeks of trade, like-for-like sales are up 6.3% across the group.
I want to highlight that Germany is by far the most outstanding performer in that, and not too distantly followed by Australia, believe it or not, that Australia has actually had our highest like sales the last two months in three years, so we've even had a week over double-digit, which has been quite exciting, so well, congratulations to Stoffel and the team, and also Nick and the team in Australia and New Zealand. Network sales as a result of that are up 12.1%. We've opened 11 new stores in the first seven weeks, which means we're now about six stores ahead of our run rate last year, and this brings our year-to-date sales as of Sunday at like-for-likes now 4.6% as a group, group sales up 10.7% in network and 96 additional stores.
If you come now onto slide 10, I'm going to pass over to our Group CFO, Richard Coney, to talk about their financials in detail. Thank you.
Thank you, Don. Now moving to slide 11, as highlighted by Don, that network sales is flowing into our revenue, but in addition, we're benefiting from the structural changes made to our Australian warehouse and distribution process, which is quite material from a financial sense, which we highlighted back in the ASX on the 6th of December. Our depreciation and amortization is actually higher than our EBITDA growth at 25%, as highlighted by Don, primarily due to operating a proportionally higher number of corporate stores, specifically in ANZ and Japan, noting our corporate stores are actually 20% higher in numbers between H1 19. This flowed right down to NPAT, which is up 6.4%, also noting that our statutory profit growth was up 29.8%. Our EPS growth up 6.1%, and this year our dividend at 6.4 is 100% fully franked.
Moving across to slide 12, this is just a reconciliation of our underlying compared to H1 2020. Also, though, we've excluded the impact of AASB 16 leasing standard, which is quite material, so you can see a like-for-like for comparison. Moving on to slide 13, our group numbers where we split out the geographies, as highlighted by Don, group EBITDA up 10%, but Europe was a standout performer at 17.9% with the strong network sales and driving the expansion of our margins, noting in addition, this is also absorbing the new market of Denmark in these results. ANZ at 1.7% is up. Again, our margins were impacted by decline due to a mix of our corporate stores.
We've highlighted before that 40- 60 is our optimal level of corporate stores, and so at 118, this will have a bit of a drag on our margins until we refranchise these corporate stores. Japan, very strong growth at 21.6%, 10.6% on a constant currency, with some of our margins being offset by accelerating our corporate store openings in existing territories, and Josh will talk about that a little bit more. Our global cost increase has flipped us out for the first time, as previously highlighted to the market, noting that the majority of the increase is relating to your property across a lot of the D&O insurance costs going up for a lot of listed companies today, and we're no exception, and we expect this actually to continue with the market hardening over the next 12 months at least.
Moving across to slide 14, we've broken out our non-recurring costs. You can see they're a lot lower than the prior half, with Germany conversion and integration costs continuing at AUD 3.4 million for the Hallo Pizza acquisition. We did have some costs also associated with the Denmark integration at AUD 0.8 million. ANZ, as we've highlighted, we've got a class action relating to the Fast Food Industry Award. That's at AUD 1.1 million. Also noting, we expect to conclude the Hallo conversion with about another AUD 5 million remaining for the second half. Moving to slide 15, our group cash flow. This has been a good half for us with our working capital improving AUD 19.3 million. We do have some timing benefits of the seasonality in Japan, where we do a lot higher sales in Japan, which helps us.
In addition, that's flowed into our operating cash flow, which is up 31.3% to AUD 108.9 million. Our cash conversion continues to be maintained at over 100%. Again, our loan book continues to recycle predominantly out of Japan, where we released a further AUD 22 million. And our free cash flow, as highlighted by Don, is up 59.3%. Moving to slide 16, this slide provides a lot more detail, breaking out our CapEx, and we've done this so you understand that a large part of this CapEx is recyclable at AUD 21.9 million. As you can see, from a gross CapEx perspective in the recycle section, we've spent AUD 50.6 million investing in corporate stores primarily in Japan, franchisee loans to new and existing stores, and franchise acquisitions predominantly in Europe and ANZ.
Offsetting this, though, is continuing to get cash inflows, as highlighted with the franchise loan repayments and the sell- down of some of the corporate stores. Digital CapEx, we're continuing to invest in our digital platforms at AUD 10.2 million, noting that our stay in business in the scheme of things is relatively small at AUD 7.2 million. Also noting, other investments include a significant investment in our Dutch commissary and head office, which will be coming live towards the end of June, I believe, to drive a lot of the benefits at the logistics end. Moving across to slide 17 is our group balance sheet. For comparability, we've actually restated this, removing the leasing impact. As you can see, this is fairly material in terms of assets up AUD 700-odd million and liabilities a similar amount.
Also noting, with the impact of our new warehousing model in Australia, as you would expect, our receivables, payables, and inventories are higher purely due to this, and again in Japan with the holiday trading period. Our borrowings have reduced with repayments at AUD 12.4 million. Moving to slide 18, our group key financial ratios. Really not a lot to say here. Our ROCE remains strong, slightly reduced with investments that we're making in our international markets and our corporate stores, and we expect these earnings to be realized in future periods. Our net debt's down by AUD 37.4 million, and we continue, as highlighted, our cash conversion going from 101.9%- 104.9%. Finally, my favorite slide, this graph just continues to highlight our 10-year track record of consistent growth in earnings. I'll now pass you on to Andrew Rennie
Thanks, Richard. Coming to be on to page 20, guys. First of all, as you saw in the note released today, I'm officially retiring from DPE at the end of the financial year after 25 years to start the next chapter of my life. I've been extremely proud to be a part of the DPE story. I'm moving back to Wales because there's lots of speculation out there, but I'm definitely coming back to Australia, and the reason I can leave now at this point in time is because, as you've seen from these results today, the business is in such great shape due to the depth of management we have, particularly in Europe.
I mean, having Andre as COO stepping up into my role, three great CEOs with Misja, Stoffel, and Andrew Bradley, and also two country managers who are also in development as well in Belgium with Misja and Kellie in Denmark, it just gives me such great confidence to pass the baton on to these guys. I'm leaving a large portion of my wealth in the business because that's how much I believe in the long-term prospects of DPE. I honestly believe that. People ask about the moat of DPE, and it really is our people, the culture that we've built over 20, 30 years through Don's leadership. I'm very proud to have played a role in this part of the success. If you come with me on to slide 21.
Andrew, I'd like to say a few words if that's all right.
Yeah, sure.
I'll ping her right there. Yeah, just on behalf of the board, on behalf of all of our peers throughout the world, all the leadership in DPE, on behalf of all the franchisees that you've helped become wealthy and successful in various parts of the world, and even the team members that you inspire and influence, we want to say thank you. You've played such an incredible role in our business. You're going to be greatly missed. But your legacy, I think, without a doubt, has been the ability that you've been able to grow the leaders, and not just only in Europe, although that's your most recent legacy, the outstanding leadership, but even here in Australia, you've played a big role in influencing. So thank you for that. You put some incredible pillars in place.
I remember back in 2006 when we announced that we were going to Europe. I think a lot of people thought we were a little bit crazy, and you picked up your family and made a lot of personal sacrifices to help build our business, and now we sit here today. Europe's by far the fastest, biggest growth part of our business, and that's your legacy, so thank you very much on behalf of everybody in the group, and I know that you'll be with us over the next couple of days, so shareholders can talk to you personally and hopefully thank you as well on their behalf, so thank you.
Thanks, Don. Thanks for those kind words. We'll come on and get back to work now. That's page 21. Obviously, the growth here is very impressive. 5% like-for-likes in Europe, and I think that momentum will definitely continue. I think the strong online sales, again, I think it answers those questions about people having fears of aggregators at 26%. And I think some people don't realize that Netherlands has actually been on the aggregators for over 15 years. We were using aggregators before we had our own One Digital system. So it's not as if this is a flash in the pan. This is something that we've been working with for many, many years, for over a decade. So we've never been fearful of those guys who work with them.
So obviously, the 37 new stores and the first half is always our slower half with stores because of the summer months, etc. But very promising in France. Andrew Bradley's doing a great job. We've already achieved the entire last financial year's openings already in this first half. So it just shows the momentum is back there in France, which is a market that is obviously dear to my heart after spending many years there. I think the other points, the things to point out is that Germany is just a powerhouse at the moment due to the great leadership of Stoffel and the whole team there, which has been driven by having the franchisees with one brand, one focus, which has been perpetuated by great operations, and great marketing, and great value offering. And I think that's just only going to get stronger.
1,000 stores in Germany, in my mind, is just not a question. In fact, I think they'll run through that number very, very easily in the future. If you look at things like the rest of the region, France continues to have excellent growth. I think small markets like Denmark, which is a little bit of a drag in our earnings today, but is driven operationally extremely well by Kellie Taylor, I think, is going to become a great part of our addition over the future. Obviously, the five-year growth, I'm very proud of there at 492% of the EBITDA there. If you go on to slide 22, we've added circa 1,000 stores in Europe since 2006, since we moved to that market and took those markets on. Back then, it was negative profit.
As Don said, people were very nervous about us going to Europe, and we have had a lot of naysayers over the years, and rightly so, but if you look at the current half year, we are on track to exceed AUD 100 million EBITDA in this financial year, which makes me extremely proud, so with that, I'm very happy to pass the baton on to the guys I'm leaving behind, and the person I'm about to pass on to now, Stoffel, I've known for probably close to 20 years. When he was a single-store franchisee, he ended up being a multi-unit franchisee. We liked Nick and many of the others. We brought him into the business, and now he's running one of the most exciting markets in our business, and he's had a lot to do with that success there.
So on that point, I'd like to pass that to Mr. Stoffel Thijs.
Thank you, Andrew. And good morning to everybody listening. Before I tell you about Germany, I do want to take a little moment to recognize my mentor, Andrew Rennie. Thank you, Andrew. And I want to wish you all the best. I want to thank you not just on my behalf, but on behalf of the whole European team. And strong leadership in building the business and the last years mentoring us to the next level has been great for all of us. All the best in your endeavors. So, as Andrew would say, back to business. 2020 marks my 23rd year in Domino's, and I can't remember a more exciting time to be part of this family. In the previous meetings, we have spoken about our three-step approach to the German conversion of Hallo Pizza and Joey's Pizza. Step one was the physical conversion of the stores.
Step two, converting the mindset of the franchisees and the people in our team to HVM, high-volume mentality. And step three would be organic store growth. So if you look at the top left of your slide, you can see the size of the market. And I just want to touch on that Germany is about three times the size of Australia and New Zealand combined. And Germans eat more pizza per capita than the Aussies do. To put it in perspective, from the 10 biggest cities, only Hamburg has a reasonable penetration with one store for every 50,000 people. The other towns are way behind on that, and this shows how much we've got to grow in the future. Following the successful integration of Joey's and Hallo, we are now focused on one single brand, which marks the first step of conversion done.
In September last year, we have started our first national television campaign, which has been the key driver behind record sales growth and a remarkable increase in our brand awareness. The brand awareness surged from only 20% three years ago to around 40% today, showing both a very positive trend as well as enormous potential to grow. Our One Digital platform has allowed for our business to grow from under one-third of our business back in 2016 when we bought Joey's to over 75% in the last half year. And I'm very proud to announce that the hard work that has been put in by our franchisees, the team members in store, and our corporate team in the office has resulted in record sales growth and profits for both the franchisees as well as DPE. Marking step two of the conversion wellness way.
I'm confident that the increased store profits paves the way to step three of our conversion, organic store growth. Looking at the bottom left of the page, you can see that over 60% of our franchisees have only one store. So we have a big number of operators with whom we can grow into the future. Having said that, I want to hand over to Misja to tell you more about our Benelux business.
Thank you, Stoffel. My name is Misja Vroom, the fat guy, you can call me. I'm around for 26 years within Domino's. I remember starting in the Netherlands when we only had four stores, and we've come a long way. I've worked on the corporate side and on the franchise side. I've been a franchisee for 13 years. I was a franchisee when Don and Andrew came and took us along on a successful journey, and lately, I've been building stores in Belgium from actually zero to nearly 100, and today I'm the CEO for the Benelux. I want to take you through slide 24. As far as sales, we have strong sales growth in Belgium, and the Netherlands is also increasing in delivery counts and sales. In fact, we are in our 40th quarter of positive same-store sales in the Netherlands.
Despite the headwind of a VAT rate in the Netherlands, which has been challenging for all the countries that have been suffering the VAT rate, we're still managing to have positive same-store sales. In the Netherlands, which is typically a low-frequency market, we've introduced our loyalty program, and this is designed to increase frequency. If you consider that we have a frequency of only four times a year for the average Dutch customer, then you can imagine what potential we have there. Our digital has been continuing to grow, and we have the highest online penetration within the DPE network, with more than 85% of our sales coming in digitally. We're currently testing additional aggregator platforms, and this is on top of the aggregator that we've been working with since we started in the Netherlands in 2000 with aggregators, which is Takeaway.com.
And we think that adding those aggregator platforms can bring us additional customers. So it's on top. We opened 15 organic new stores in the first half, and that's all been opened through existing franchisees or managers grown from within the system. And that's making us really proud. And we also opened the first store in Luxembourg. It's a little small country down below Belgium. Luxembourg is leveraging on both our Belgian and Netherlands teams, so we don't have to add extra overhead for them. And the first store was opened by a Belgian franchisee. So we will open our 400th store in the second year half, and we forecast to have over 600 stores within the next five years. And if you consider that the Benelux has the same population as ANZ, then you can imagine what potential we still have there.
And in order to service all that growth, we are currently building a new commissary, which will bring us a lot of efficiencies, and it's very necessary to facilitate the growth. Okay. So now I would like to pass on to Andre T en Wolde.
Thank you, Misja. What a great run to help the business grow from four stores to 400 stores in the time you've been there, and I know you've been very material in that growth. Let me take you to page 25. Before that, for people that don't know me, my name is Andre Ten Wolde. I'm the current CEO of Europe. I've been with Domino's for 15 years now. Looking around the table, it makes me sort of a Benjamin, which is great to say if you have a 15-year experience in the business. I'm happy to announce some pleasing results in France. It was still growing fast in France, and it's been really good to see that the tough strategic decisions we made in financial year 2019 have delivered some really improvements in our performance.
If you recall, we did some targeted support to our franchisees to increase alignment and get back to a growth path, and I'm happy to inform you that that's definitely working. Also, we've talked a lot about adding aggregators in France, and we are now on the bigger aggregators in France for the stores that are in areas where the aggregators are active, and we're seeing some promising results from that. Besides that, our online business is still growing fast through our online One Digital system, which helps us to get more customers on our system and also grow the business with our own media because we have more information about our customers, and that's helping us to be more out there, to increase the brand presence, and grow sales.
As a result of all those actions, franchisees are in a way better place, and it does deliver them higher results in their stores, making them positive to open more stores. And on the point of opening more stores, we opened 12 in the first half year, which was the same amount that we did 12 months before that. And I'm still really positive we'll open a record number of stores in France based on our current pipeline. And as Don said, it's skewed to the end of the financial year. And I wish it was a cadence that we open two stores every week, but it just doesn't work that way. We are highly reliant on permits and finding the right sites and finding the right franchisees. Let me take you to page 26 about Denmark.
Most of you know that we bought the business out of liquidation at the beginning of last calendar year. Since then, we've been lucky enough to open six stores, and I can tell you that it's still a tough market because lots of customers remember the old Domino's, and we counter that by saying that that was the old Domino's. We are the real Domino's, and customers are slowly finding their way back to our stores, and that's based on the excellent product service and image the team over there is doing. I can assure you that the PSI in Denmark is the best within DPE currently, and that's the way we're winning back customers, one customer at a time. Also, very lucky that we've increased our team with a new head of corporate stores coming here from Australia, hitting the ground running.
Thank you, Nick, for sharing your talent with us. I know talent is scarce, and it's really good that we can get talent out of our bigger DPE group to grow our business in Europe. The key difference for the Domino's, compared to the old Domino's, but also compared to the loss of independence that are there, because believe me, with six stores, we are the only chain in Denmark that our product service image is so much better, and our service we deliver in less than half the time that the customers used to in Denmark, and that makes me positive that we'll grow more stores in Denmark in the near future and grow our success over there. It's not lost on me that Denmark is, in number of people, bigger than New Zealand.
So six stores is not where we want to be, but we have a lot of potential to grow when we fix the consumer perspective on the brand. Let me take you to page 27, looking forward. With Germany, and enough said about Germany, we have fantastic momentum driven by Stoffel and his team over there. We were very successful using the, I'll call it the Benelux playbook, but then adapted to the German market in marketing, in operations, and very happy with the results in Germany. And I don't see why that wouldn't continue over the next years. We're still a small brand over there as you look at the total potential market, and still a lot of growth to be had and results to be had there. In France, positive momentum as well, and we can get more out of that.
We will still work with aggregators and do all the right things that we've done previously in Germany and in the Benelux. We will roll out the loyalty program. Also there, we have some gains in frequency if we do the right thing with loyalty. And we're doing something very interesting in the Paris market, a program we call Project Reset. And I'm sure in August, when we're back talking to you, that Andrew Bradley will share results of that, but it looks really promising. Benelux, like Misja said, we're opening our new commissary that will deliver some operational benefits and savings. Very, very excited about going on TV in Belgium for the first time ever with a good offer. And based on the learnings out of France and the Netherlands, I'm expecting same-store sales to increase even more over there.
We're opening our 100th store in Belgium in two months, which is very exciting. In Denmark, we'll just continue to rebuild the brand and invest in opening more stores. Before I hand over to Nick, lots have been said about Andrew Rennie, but let me finish that. I want to take the opportunity to thank him for his leadership and friendship, or mateship, as you would call it maybe here in Australia. It's no doubt that his positive attitude and his think-big attitude has rubbed off, and we've taken some of his DNA about thinking big and positive, definitely in our team. I want to thank him for his great leadership over the last lots of years. Over to you, Nick.
Thank you, Andre Ten Wolde. Good morning, everybody. Nick Knight here, and CEO for Australia and New Zealand. While we're all sharing, today's, well, not today, but this year is my 24th year in the Domino's business. And at 14 years of age in Tamworth, all those years ago, it was doubted that I even had the talent to make a pizza, let alone stand here and be able to lead this amazing team that's driving the Australia-New Zealand result right now. And it was largely Andrew who placed a lot of faith in me to help me on that journey. So thank you, Andrew. So if you move with me now here onto slide 29, ANZ's performance was a positive one in the last half: 3.5% network sales, 3.3% on a same-store basis. Inside of that result, 6.4% coming online.
That's just speaking to the extraordinary momentum we have in delivery right now and how strong that platform is performing for us. We added six new stores to the network and a positive EBITDA result as well, largely driven from those network sales increase, with a couple of headwinds inside of that, and that namely being the value proposition that we hadn't got quite right in the business in that half that we were working on reversing. Also, we're carrying an extra few corporate stores that is factoring into that result. I'm really proud that the stores that we are taking on are showing improved sales and operations performance. They're a shining light for the business, and that gives us good heart of being able to then look through into this next half.
As I step back and as a reminder of what we said we were setting out to achieve in this half was to fix that carryout value layer, which we've done now, lift the bench strength of our franchisees through Operations 360, and that program is well underway, a focus on store profits, and we alluded also that we were really happy with how the delivery business was progressing and really happy to say that that has continued into this half. If you move now on to slide 30, I won't go through all of these graphs, just highlight really quickly on the bottom right-hand side that graph there, and what that does show is just how incremental the new stores that we are opening have been to the business, but also how the existing stores just continue to grow.
If you move with me now onto slide 31, as I've mentioned, getting the layers right, the core layers in place in this business is key to our success. And I really do feel that we have those core layers in place, but I think it would be a drastic oversimplification to say it was just on price. We have taken some calculated risks, namely around our working media strategy. That's how we look at our TV and also print. And as a result of that and some challenging the team with some new creative ideas, we've seen a marked step up in same-store sales. In fact, we've had the two highest sales weeks since those changes in the ANZ business in the first double-digit weeks of hopefully many more to come for many years.
There has been a slight lift in corporate stores, and we expect that refranchising will accelerate based on, as we've highlighted many times in the past, that operating leverage that sales delivers helps our franchisees to have faith and be able to take those opportunities as they arise, and also managers becoming franchisees for the first time, and I'm really proud to say that of the stores we have refranchised, that has been the case. They've been internal candidates. If you move with me now onto slide 32, we're really excited about the recent changes to our layers, and I'm very pleased with sales, cautiously optimistic that we can continue this cadence, which is above our three- to five-year outlook for the ANZ busineso of 3%-6%.
I want to stress that our main focus in the refranchising of our corporate business is making sure we have the right franchisees, and that's been one thing that hasn't changed over time and in my mind won't change. The quality of operator inside our business is the biggest factor for long-term success, and that's our vested interest to make sure that we're putting the right franchisees into the system and allowing them to be successful over many, many more years to come. I want to highlight that we are seeing a material increase in soft commodity prices in this half. I'm pleased to be able to say that because of the momentum in the business right now, from what we can see, we are able to mitigate those costs well, and we do expect those costs to moderate into the next half.
I mentioned at the last update that we were investing in a new app, and we are still progressing along that, but we have decided to slow down the development of this given, firstly, how strong the current platform is performing, but also so we can invest in some operational projects that will allow our stores to become more efficient and deliver on some of this increased volume that we are seeing. Lastly, before I sign off, I want to just thank the teams out there in stores, the team members who work really hard every day, our store managers, our franchisees for their hard work and faith in the model, and my team who has really worked hard in this last half to get a lot of work done that is now translating into this really exciting start to the year.
I'll hand over to Josh now to talk on Japan.
Good morning, everyone. Josh Kilimnik here. While we're all sharing, it's my 23rd year here with Domino's. And I want to say a few words about Andrew as well because Andrew and I actually crossed paths when I was running the New Zealand market, and he became a great mentor and friend through that time and has continued, and I appreciate his leadership all the way through there. So thanks, Andrew. Great to be back here reporting on the Japanese business. It's my second full year that I've been in Japan. And as I reflect on the half and the whole year, really pleased with the Japan results.
We've been pretty consistent in our strategies, and that's the strong top line, same-store, in general across the half with a respective 12.2% increase in network sales, 6.1% on a same-store basis, and the engine rooms, which is our digital business, at 17.1%. Through them all, and in line with our long-term strategy of 1,000 stores in the market, we've had a record half, 42 stores we've been able to put on the ground across Japan. If you look at the calendar year, that's actually 92 stores for the calendar year. We've also worked hard to balance and grow our sales and profit outside our busy Christmas period.
It did become a bit of a focal point for these meetings, and I'm pleased to say that we've been able to reorient the business and achieve profit and sales across many of the months, all the months across the year, taking the emphasis off Christmas. That said, Christmas was actually very successful for those who are wondering, and that's despite losing a key public holiday, which was the old Emperor's Birthday. For those that are interested, the new Emperor's Birthday is actually this Saturday. EBITDA has grown thanks to two main factors: high sales through more relevant marketing and really renewed brand strategy. Secondly, we've benefited from the sell-down of corporate stores as we look to grow our franchise partners in regional locations where, in most cases, where our overhead structure doesn't actually make a lot of sense.
We've grown at a really fast pace, and it's been mentioned before that some of our profits have been partially offset by the investment in our new corporate stores. I'll add a little bit more color on this if you come over to the next page, page 35. And just to orient you down, if you look at the bottom right here, the exciting cadence of store growth that we've achieved, and as I mentioned on the investor day last October for those that could attend, we've been accelerating store builds through our fortressing strategy across the key areas in Japan like Tokyo, Osaka, and Nagoya, in which we operate the majority of our corporate stores. We do expect sales to continue, to improve, as our local store marketing plans, our print strategy, and just overall better delivery times gain momentum.
The stores naturally mature in each newly defined territory. If you look above this chart, this acceleration has really bolstered up our online engine room, as I said before, 17.1%. Really meaningful if you go over to the left, as that has an impact on our total network sales as well. Coming over to the next page, page 36, a little bit more detail about how we're performing from a marketing, operational, franchisee perspective. The growth in store sales and sales has led to increased marketing exposure, not only just with print, but across many of our channels, including search and some of even our owned media channels. But TV, being a very big driver of our sales, we've been investing a lot on there as well.
Now, one way to think about that is if you think about 2017, we're about 50% more TV and reach in terms of frequency and reach than we were in 2017. We're still committed to fortressing and Project 3TEN. We've seen ADT average delivery time drop by 1.2 minutes since this time last year. And furthermore, our franchisee base has really seen the biggest improvements in ADT as they really embrace this long-term strategy. Speaking of franchisees, we've seen really renewed demand for the new stores as well as existing corporate stores. And while it is 43% of the system, and that number hasn't materially changed, we did add 21 stores to the franchise network, which actually means that we've got 276 franchise stores. You'll see that this is all internal.
We do not go external for franchisees, and you see the biggest growth has come in from the three to five-store franchisees or the six or more as you look half on half. Finally, as you come to me with my final slide, which is 37, like last time, we're really committed to the Barbell strategy as we look to access more of this single household and this two-person household, which actually makes up 50%-60% of the population right now. We will continue to open more stores and continue to invest in platforms both globally and locally where it makes sense. We'll also look to leverage the existing channels that we have. We've got over 1 million active users on our coupon apps and some of the other assets that we have.
That said, operations really is the heart of our business, and we're going to also spend some time investing in some of the operational technologies. Our predictive ordering is actually now in phase two, and that gives us a lot better accuracy, which means that we can dispatch orders faster to the customer. We're trialing Uber Eats. We've been an aggregator for seven or eight years now, and Uber Eats is the new player in the market. They don't cover all our restaurants, but we will trial them just to understand how this will work, and as they grow, we'll look to grow with them as well. Finally, we're bolstering up our leadership in the market, especially as we grow our franchise. We've got a seasoned 15-year leader from the Australian market who's run a number of key markets quite successfully here in Australia.
So we thank you, Sydney, for again giving up another person. Hopefully, we'll be able to pay you back pretty soon. From a business point of view, we've continued focusing on females in the workplace. That's not a new strategy. That's been going on for some years now. But we are trying to look for ways to embrace the plus 60-year-old market, which is now going to be one of our largest employment pools as the aging population naturally gets older. But this is also in light of the proposed changes by the new government to raise the retirement age from 60 to 65 to 70 over the next three years. But that's it from me. Thanks, everyone. I'll now pass it back to Don for closing comments.
Thank you very much, Josh. Thank you very much, gentlemen. So if you come with me now onto slide 39, just reconfirming our future outlook of store growth. The various timings are just from the maturity of different markets hitting different targets. And so we still strongly believe we're on track for more than 5,000 stores in that window of 2025 - 2030. It's not lost that we now have a group that services 340 million population around the world. The GDP of those nations exceeds that of China. So we just have so much capacity, and it's so amazing to also watch the more recent countries to our group like Japan and Germany being such extraordinary performers. We will continue to leverage the efficiencies. There'll be some ebbs and flows, as you've seen in this half with the corporate store density.
We do intend to be a majority franchise system, although at any time, if it's appropriate, then we'll have a higher corporate store element as we continue to pursue the growth. We do remain active in acquisitions. They're all Domino's acquisitions, so whether they be another country, and we have a number of those that we're working on. And in some cases, it can still be, as we've seen in Germany more recently, conversions, and they're both underway in conversations, and that will continue. If you come with me now onto slide 40, I want to also reconfirm that three- to- five-year outlook, be it that we'll be on the higher end and may even get to the point of exceeding that higher end in our CapEx, and depending on the timing of recycling some loans that Mr. Coney is working on in our group.
If you come with me now onto slide 41, we want to talk to the environmental and social governance of our business. Running as hard as we do, we often don't give enough communication to the market on what we're doing in this space. We want to get better at that. We are recruiting somebody to be now ahead of this area for our business so that we can bring more focus to sharing with shareholders the work that we're doing and also bring the metrics to market that can be consistent that we can measure with complete accuracy for disclosure of what things we're doing. And just some of the highlights of some of the projects we have been working on. We're continuing to increase the electric vehicles, including electric bikes, throughout the network. That's quite significant.
We're adopting smart load controllers in our Australian stores for better energy usage here. We're using smarter ovens in our stores for better energy usage, which is something we're working hard on. We're improving on an ongoing basis the quality and the health of our ingredients, reducing artificial flavors, preservatives, and colors in all markets, and we are also engaging external consultants to make sure that we can improve our efforts in this communication as well, so I hope with some strength and leadership in this space that we can be better in our communities, and our shareholders are expecting that of us, and we will deliver in that area so in conclusion, on slide 42, management's really looking forward to this next stage of our future growth. We really thank you, Andrew, once more, and glad that you're here on this roadshow to be talking with shareholders.
We've got an experienced team across the board here, very committed to this business, including myself. I celebrate 33 years this coming month and love the passion and the energy in this business as much as ever. The Japanese business continues to be strong, with significant investment being made by both our own investment and our franchisees. So there's some really heavy lifting in our store count. Along with Europe and even Australia and New Zealand contributing this half, we will have a record organic growth full financial year. Please be aware that June is that strong month that will flow through. Online is the powerhouse. It will continue to be a strong growth layer in our business.
We are both investing in further adding to the current platforms, but also investing heavily now in operational technology to improve our service for our customers and make our stores more efficient. We do expect that profit momentum will also continue in this half. The high-volume mentality, the DNA that has been the large driver of our business, is going to continue to be driven in our business. The demand from our customers for affordable, high-quality food delivered fast and safely is our model, and will continue to be a strong driver, and we'll be continuing to work with our franchisees on the execution and also our store managers and team members. As a result of increased franchise engagement, we are seeing the adaptation of these operational efficiencies, and that's strengthening our business into the future, and we believe it's creating competitive edges as we roll out this technology.
Accordingly, due to the investment in our stores and franchise acquisitions and the new commissary, there will be a higher investment in CapEx this year, either at the higher end or just slightly over, and we're reconfirming our outlook. It's not a guidance. It's an outlook. It gives some sort of perspective of how we think that we can deliver a double-digit top line, and then that with the timing of corporate stores, that should flow through to improve margins to deliver the returns to our shareholders, so yeah, finally, we will continue to look at other acquisitions. We're enjoying a really strong relationship with DPZ today. Some of you will probably get to meet Mr. Richard Allison, who's coming to Australia in the next couple of weeks, so we're going to have some exposure to shareholders with Rich and myself hosting some shareholder meetings here in Australia.
And hopefully, you get to see the strength of our relationship as we build Domino's network globally. So thank you very much. At this point in time, I'll now hand over to the moderator for any Q&A.
Thank you, sir. Ladies and gentlemen, it is star one if you wish to ask a question. The first question we have on the line is from Andrew McLennan from Goldman Sachs. You may proceed with your question.
Yeah. Good morning, everyone. Congratulations on the results. My question's in relation to the operating leverage in Europe. It was very strong, and I know historically you've mentioned that the potential to drive operating leverage was going to be very strong out of France, but based on your commentary, it sounds like Germany might be the driver here. Can you just sort of speak to what is actually driving some of this operating leverage within the region over this half?
Yeah, sure. It's actually been across the board. So when we look at all of the units we talk about, the Benelux, Germany, and France, all of them have contributed. Actually, from a percentage point of view, France still was the largest because of the windback of some of the support that we're unwinding in France. So that flowed through. But yeah, Germany has the it was growing, like we've talked about today, incredibly. We do have the step-up of royalties that we were given from DPZ when we acquired the market. So that's a little bit of a tax against the really strong performance and just the continual work that Stoffel and Andre and the team are doing to lift the knowledge and skill set of franchisees. So we're making sure we're investing some of this at the same time.
But yeah, the genuine view is, or the general reality is, all three areas are growing. Andre, anything to add to that?
No, no. From a store-count perspective, we see that there's a hunger in Germany for existing franchise to open stores, but there's also a possibility for them to take over stores that we converted out of the Hallo and Joey's systems. So organically, France will open more stores, but growth in Germany is exceptional, driven by the playbook that we've used in the Benelux.
Okay. And again, on margin, just noting the pretty dramatic change in Japan, very strong comp-store sales growth, which should have driven operating leverage. You've noted corporate stores as a factor. Was there anything else? You mentioned a lot of advertising spend that has been taking place. I'm just wondering, have you invested ahead of the curve, or have corporate stores actually diluted the performance that materially?
No, look, it's Josh here. Actually, it is actually just all corporate stores. There's a number of startup costs that go into that that takes its time to get all the training down, find people, get them trained well ahead before we open the stores. So it's really just related to those startup costs for corporate stores.
Okay. Thanks very much.
Thank you.
Thank you. The next question is from the line of Richard Barwick from CLSA. Your line's open.
Okay. Thank you. Good morning, all. Richard, I just wanted to obviously, you've talked about record store openings, and I'm pretty sure you said you clarified, or at least you're confident of hitting the 7%-9% growth in store numbers for the full year. That's obviously store openings. I mean, one of the surprises, a little bit at least for me, was the number of store closures in the first half. Can you talk to expectations around store closures for the second half so we can get a clearer idea of what you're expecting in terms of net store openings? And also, I'd love to hear a bit more of an explanation. I mean, you talk about it time and time again about how you end up with store openings heavily skewed to December and June. Why is that?
Is that just a reflection of people being, I don't know, leaving things at the last minute, being disorganized? Does it encourage the wrong behavior? Everyone's scrambling to open stores in the last weeks of the period. How do you actually or how can you mitigate that?
Yes. So a number of different things there. Yeah, we don't expect any notable store closures in this half. The majority of those were Hallo that didn't convert in the last half. So yeah, we do expect to be able to have a we always give an outlook to organic, but you're going to see that that's going to still be reflective also in net for this full financial year. But coming back to, as long as I've been around, it's been a December, June business. That's not just exclusive to DPZ. That's what happens globally in Domino's, with the rare exceptions. So when there's a heavy corporate growth market like Japan, you'll see Japan is by far the most consistent, and the rest of the businesses, which are more franchised, are half to half.
The only things we can continue to point to is that the franchisees do also think in halves. The banks seem to think that way in the way we close things out. So yeah, it's a Domino's factor. And because now we're breaking it out, it's a little bit more obvious for you to see that. I don't expect it will change because it's been that way as long as I can remember. And ultimately, we're still getting them open, and we're growing the business.
Okay. And can I just ask that your average stores per franchisee fell in both France and ANZ? And ANZ, as sort of the big mature market, you seem to be having trouble budging that number. And I get what you're doing in terms of the Operations 360 and taking on more corporate stores. But I also thought we might have started to see that flow through in terms of the actual lift in the number of stores per franchisee. How do you expect that to unfold over not just the second half, but over the next year or two?
Yeah. So Nick here to answer that one. You'll see that there was a material lift in the two-store category and the three-plus. And while it was a slight decrease in the six-plus category, I still believe firmly that over time, performance and operating passion in stores will be able to drive that number upwards. And just because you own a number of stores doesn't necessarily mean that you're still fully engaged and still passionate about the business. And our focus is making sure that that is the primary focus. But I just want to reiterate that we still believe over time that that target is achievable.
Okay. I mean, I'm watching that as much as anything as a sense of franchisee strength and franchisee support that they want to be taking on more stores. So to me, that's a bit of a proxy for maybe it's too strong a term, but some sort of proxy for franchisee strength and commitment to it. And so it's a high.
Yeah. The other thing, but sorry, Richard, is that a lot of the growth is also coming from managers becoming franchisees for the first time. So obviously, they start with one store. That dilutes into those numbers too.
Yeah. And you heard all of the tenure of the leadership around the room, and that continues even in other markets where we've just brought on a new corporate guy in Germany, for example. He was one of our largest franchisees. He had 10 stores - sorry, eight stores. So that, unfortunately, sometimes dilutes that other number at the other end, but it's the right strategy. The tenure, the experience, the way to lead with empathy. So from time to time, you'll see that little indent come from the five category because that's where we source our best leadership.
Okay. All right. Thank you, guys.
Thank you.
Thank you. Once again, ladies and gentlemen, if you wish to ask a question, you may press s tar one on your telephone keypad and wait for your name to be announced. Again, it is star one. The next question we have is from the line of Michael Simotas from Jefferies. Your line is now open.
Good morning, guys. The first question for me, I was just hoping we could talk a little bit more about the Operations 360-related corporate stores that you're carrying in ANZ. Are they profitable for DPE at the EBITDA and the EBIT line at the moment?
Hi, Michael. Nick here, well, many of them are, but I guess the best analogy I can share is that we're running a bit of an orphanage. And no different to what you're seeing in Japan in terms of opening a new store requires a lot of investment and training and initial marketing. Well, when you take on an existing store, especially if it's been under operated, it does require an initial level of investment. So depending on where they are in that cycle, it depends on sort of to what extent they do contribute to EBIT or EBITDA. But what is true is that as we continue to improve the performance of those, and like I said in the presentation, they do continue that group of stores to be a shining light for the group in terms of sales and operations.
What happens is we refranchise those out, and inevitably, that becomes profit on sale.
Yeah. Yeah. Okay. I guess the reason I ask, and I mean, you can just talk in aggregate. That's fine. If they're not profitable for DPE at the moment in aggregate and you continue to do the work on them, get to a point of profitability, and then sell them on, you obviously get the profit from the store sale, but then you didn't lose anything relative to the base currently. But if they are generating EBIT and EBITDA, you get the profit on store sale, but that's a kind of one-time benefit, and then you lose the ongoing contribution. So I'm just trying to understand whether that ongoing contribution is actually positive or negative at the moment.
Yeah. So I might even jump in there because this happens globally. So as Nick said, you bring it on, you spend on training, you spend on marketing, you spend on refurbing, and in that window, you're growing it. By the time we hand it to a franchisee, we do hand it over in a profitable state. Sometimes that may even be still with some minor support if we believe that rather than if we've been driving it with some extra marketing, then we should give it some extra marketing to hand it over. But in most of the cases, we're handing it over in a profitable state. And when you look at the portfolio, we sometimes even keep a couple of them.
Some of the ones that we took back last year have become such rockstar stores and a field for us to grow people, that we actually even hold on to them longer because they become a nice farm for growing more store managers and so on because they're so successful, so our portfolio moves around a little bit. We want to have a mixture between stores that are stable. The one underneath our head office in Brisbane at Hamilton is a high-performing store, and it's a growing ground and so forth, so we look at that in each market, whether it be Sydney, Melbourne, Brisbane, which are our major corporate markets, and we keep some of those, and then the others are basically what we're refurbing to bring back out into the market.
Yeah. Okay. That helps. And then that sort of brings me on to the next question. It looks like you made about AUD 11 million during the half on profit on store sales. Just like to sort of get into the detail on that a little bit if we can. Is that a function of refranchising some stores? Because obviously, we only get to see the start and end point, and we don't know what the moving parts are in the middle, or is it just a function of the heavy store rollout that happened in the half?
Yeah. So predominantly, that's just business as usual for us. And it is sort of split across our globe in Japan, Europe, and ANZ. And it's refranchising and selling those, let's call, turned-around corporate stores. And in the case of Japan, what happens in Japan, and Josh can jump in, but the Japanese franchisees prefer us to open the store and sell it to them as a turnkey. And then obviously, we do make a little bit of goodwill on that because we've taken that big risk, and they're buying a store that's already got a track record. So yeah, but this is not a one-off type profit. It comes about through our growth of new stores and building new stores, building corporate stores, along with in Australia, selling down some of the stores we've taken back from franchisees.
Yeah. Can you give us some color on what we should expect going forward? Because it's a much bigger number than what it was in the PCP, but it's more in line with what we saw in the second half of 2019. Is this the sort of run rate we should see?
Yes. It ebbs and flows depending on what's happening in the market conditions, but we expect this to continue for a very long time, if not. One would say that we've got pent-up on the balance sheet. Can't say that because we can't value on our balance sheet the real value of the store that we're going to sell it. So that goodwill is sitting there. Yeah. So what you're seeing is because we are holding so many corporate stores in Japan and Australia right now, that is pent-up profit that we're going to release in the next 18 months. But in Japan, as Richard said, we're putting our foot to the floor right now because we're getting such good momentum. There's never been a thousand-store brand in Japan for pizza, and thousand-store seems to be the breakaway where you watch all the brands go to another level.
So we're pushing hard with that, and that just means that we've got a bigger weight in our portfolio. But that could ebb and flow too because unemployment's quite low in Japan. And if we get under pressure with staffing those stores, we'll slow it down because it's still about operating successful stores. But yeah, that's all pent-up profit in our balance sheet right now.
From a financial sense, speeding up growth of corporate stores in Japan does impact our margins i n the short term.
In the short term. Yeah. So it's just you're going from a store that's on the ground new. It's got to get customer acquisition, and it takes a little while.
Yep. Okay. No, that helps. Thank you.
Thank you, Michael.
Thank you. The next question we have is from the line of Craig Wolford from Citi. Your line is open.
Good morning, Don. Morning, team. I just wanted to step back to the announcement in December about the decision to insource food purchases for Australia. Can you just provide some more rationale for that decision and what implications we could see for the Australian business?
Yeah. It's basically for better efficiencies. There's a little tiny bit of margin in there that we can pass through to stores and just being in more control of that, which is similar to what we've got in Europe. So that was the main motivation, is the transparency that we're seeing all of what happens between the business partner that we do a contract with and our distributors to make sure that we're in tighter control of that and own that destiny. So it's been something we've been thinking about for a while, and then we saw a window of opportunity to pass through some efficiency to franchisees. It's very small on a per-store basis, but it's still margin. It's still margin worth going after. And the bigger we get, some of these small incremental things still are material enough to add up to the group. So we pursue them.
We make the admin a lot more efficient and effective for both ends from our end and also our suppliers and distributors using a lot of our back-end technology at ERP platforms.
Okay. So there is definitely a cost saving at the back end for the business, but that wasn't an issue about, let's call it, compliance for franchisees and their own food purchases?
No. No. This is a model we've operated since acquiring Europe. So this was about looking at the same sort of model. We operate a hybrid of this in Japan as well, where we have a third-party distributor that's holding the stock, but we own the stock and so on. So yeah, it's just fit for purpose in market and finding that opportunity.
Okay. My second question was just around Europe. So network sales growth was about 11% in Aussie dollar terms. And then the revenue growth was only 6.5%. So I'm just trying to understand why there was lower revenue growth than network sales growth.
Yeah. Look, first of all, yeah, it is, and I think I've highlighted this before, looking at our revenue versus network sales, we've got a lot of moving parts. But in this case, it's a good pickup. We did have a lot of sales of large equipment from the prior year, which we put through our distribution platforms with the Hallo conversions and end of Joey's conversion in those prior periods. So a lot of one-off type equipment sales in the previous half. And in addition, there was a slight reclassification under the new revenue standard of where we put discounts. But I can talk you through that if you want a more technical understanding. But yeah, it's really those two one-off movements that adjusted that. So they had a negative, I guess, swing on revenue in Europe. Does that make sense?
Yeah. That does make sense. And it probably.
Hello?
The other question is just the cost growth.
Nathan Scholz, you may proceed.
Good morning, all. It's Nathan Scholz here from Domino's. Just apologies on our end. We apparently had a Wi-Fi outage in our building, but we're back online. So operator, if we can go back to calls, please.
Sure. The next question we have is from the line of Ben Gilbert from UBS. Your line is open.
Good morning, Don .
Hi there.
First question from me. Could you just talk a bit around just the Australian franchisee profitability? And particularly, just interested in fleshing out a little bit the comment that Nick made around just the input cost pressures. And I'm just wondering how you're managing that in the business, and should we expect that to flow through to margin at any stage?
Yeah. So as I highlighted, one of the things that's really working well for us at the moment is sales. And primarily, the leverage of that flows through to the bottom line, and that's helped us mitigate all of those costs so far. And at this point in time, we're really happy with how franchise profits are flowing through in the first half. So like I said, cautiously optimistic. And also, we do believe that it's a moment in time as well. So yeah, feeling good about that.
Can you just remind us when you took off the value-paid sprains? That was back into Q2 last year, is that right? So you'll be getting this benefit from reinstating for the next sort of six months or so?
Yeah. It was a bit over a year ago now. So we did roll out earlier, slightly earlier in our corporate stores, which as a test just to make sure that we're on the right track. And as I mentioned and on the call, that's been a guiding light in terms of the sales growth. And in the rest of the business, we fully rolled out in December. So yeah, we're now only into the third month of the benefit of that.
Great, and just a final one from me, just to Richard, just to confirm to Michael's comment before, because my understanding was previously that those profit on sales were starting to peak out with sort of peak levels previously. So we should think about annualizing that AUD 11 million to sort of doubling that to around AUD 22 million as a base case sort of go forward type view around profit on sale. So the second one is Richard. I was just interested in this financing income number that's come through in the P&L now. It's AUD 2.4 million, but it's on top of the other finance revenue received. And was there anything in the PCP? So I was wondering what that was as well.
I thought there was in the PCP, but our financing, it might be a reclassification. Let me come back to you on that. But in terms of just stepping back to the profit on sale, it does swing between years depending on what's happening. But yeah, you're right. We expect profit on sales to continue. I think the comments we might have made in the prior period was at that time, we weren't necessarily expecting a material increase. But again, I'll maybe let Don comment on that. It can change depending on the individual market, like with Josh, if he's in a phase where he's opening lots of corporate stores, that might be less. But as we sell down those corporate stores, that will increase. Yeah.
When our portfolio in Australia was smaller at one point there, then that might have been the comment that we made related to that. But yeah, you can see the number of corporate stores we're sitting on both in Japan and Australia. So that means that that is going to end up. It's just the timing, whether it's six or 18 months. Because we've also got our foot flat to the floor on Japan, unless Josh starts to struggle to bring management through into those stores, we expect we'll just keep going at a really fast rate. And therefore, we'll have pent-up more future profits to come. And Japan was the bigger piece of that in this last half.
Okay. That's great. Thanks, guys.
Thank you.
Thank you. Once again, it is star one if you wish to ask questions. The next question we have is from Shaun Cousins from JPMorgan. You may now proceed with your question.
Great. Thanks. Good morning. Just a couple of questions on Europe. Can I talk a bit about France in terms of what was the reduction in franchising support in first half 2020? And should that go to zero in fiscal 2021? And then just a couple of other questions on France around how do you actually fortress the Paris market? Do you need to acquire corporate stores? And finally, on Europe, just to confirm, I think Andrew made the point that you lost money in Denmark. Could you just quantify that if you did, please?
Yeah. It's Andrew here, Shaun. Just a couple of things on the incentives, if you like. We spoke about when we first gave them is that we've always given rebates and incentives to franchisees across most of our system, and they vary. And basically, we lift that amount up, and we made the incentives easier to achieve, if you like. When we did that first back in the last financial year, what we did was that we lifted the bar, if you like, on the amount that they could achieve or made the targets a bit higher. So that sort of reduced the amount by 30%-40%. It depends. Some franchisees were getting more money because of having such better growth.
And then what happens is that next year, next financial year, that more normalizes to what we've normally been running over the last 10 years of a classic-style rebate system based on growth and service times, etc., etc. So that's why the rebating this year was probably halving of that additional amount. But rebates don't go to zero because we continue to incentivize our franchisees. Does that make sense on that point?
Yeah. So you halve the incentive in this year relative to fiscal 2019?
Yeah. Roughly. Yeah. Roughly. It's not an exact. It's not an exact science because some franchisees are just shooting the lights out, and therefore, they're actually getting more rebates, which is fantastic, right? But on the whole, roughly those sort of numbers. Your point about fortressing Paris, yes, we already have a large portion of corporate stores in Paris. So what we're doing is actually splitting more of our existing stores that we have our own corporate stores that are already not necessarily outlaying for more franchise stores, but just splitting our own territory because Paris is so dense that you can fit a lot more stores there. So there's a bit of CapEx involved there, which we've already talked about.
For example, one of the stores that we split recently in Paris is currently running in the top one or two in the world for best delivery times, which is unheard of in France when you know how bad service can be in France sometimes. So Andrew and the team there are doing an exceptional job on lifting the bar there. So that's why we're confident. And part of that strategy is just literally splitting more stores, which is nothing new, right? That's what we've done for a long time, but just a bit more focus there. And then what was your third question, sorry?
About Denmark? I think you said Denmark. I think you said it lost money. Can you just confirm if that's true and just in that maybe quantify what that could have been, please?
Yeah. Sure. Yeah. Sure. No. Yeah. Definitely. I mean, there's losses there, which we anticipate and we plan for because it's such a small market, and those stores were rebuilding the brand there, etc. It's certainly our main focus is making sure that we get amazing operations there because that market had some difficult times. The costs are on plan for what we budgeted for. A lot of the costs are just reopening store costs, like training costs, marketing costs, etc. And it's a small market, right? So the actual overhead is very minute in the scheme of things. And we can leverage the overhead out of our other markets. So it's not as if it's like a complete greenfield country for us. And that's why we tacked it on, is because we leverage the existing Europeans in there.
Therefore, we can actually have a very small market in real terms and not have big losses there. But yeah, it is a drag on earnings at the moment, but that's what we expected when we bought it. But that's sort of for us, that's an investment in our future growth. So yeah, in fact, we're ahead of the plan in terms of operations. And yeah, honestly, the operations that we're seeing there is quite exceptional. So a couple of years from now, that'll be a nice little contributing market. I mean, Belgium, for example, Belgium had three stores originally doing 3,000 a week when we first went to Europe. It contributed more negative because when you put overhead onto it and population of 10 million, Denmark 6 million, and is at six stores a day. And Belgium's at 100 stores.
So that's the sort of thing we're looking at and we believe in.
Just finding this further to Europe, maybe another one for you, Andrew. The broader interest in other territories in the Nordic regions, or do you want to lock down what you've got currently? Just maybe Andrew or Don, can you talk a little bit about it because they do seem a little more available?
Yeah, they are. But that doesn't mean that we'll buy them because we measure every market on its merits about what we can add value to and the synergies and all the rest of it. So some of them may suit, and some of them may not. I won't talk specifically about markets because I think it's too sensitive. We are casting the eye over different markets around the world. Some of the Nordics may make sense, but it's too soon to make that call. But if we do go for a market, it'll be a market that we think we can add value to, has long-term growth, and we can get some synergies out of with our existing overhead base over there.
Great. Thanks so much, Andrew.
No worries. Thanks, Shaun.
Thank you. And we have the last question on the line from Richard Barwick from CLSA. Your line is open.
All right. Thanks for getting another one in. You've mentioned a couple of times through this 18-month period, Don, in terms of the pent-up profits. Is that what you're thinking in terms of a lot of these heightened corporate store numbers to flow back through? Or maybe another way to ask it is, how should we think about when you're opening a corporate store in Japan, what's the timetable before typically selling it to a franchisee? And these Aussie stores that you're corporatizing, what's the average hold period before they're being sold back?
Yeah. So I don't know if you want to talk to Japan and Australia separately, but on Australia, as I mentioned, one of the biggest guides is the same-store sales. As things improve and we continue to see heightened profits at a store level, that just makes it easier for franchisees and managers to be able to take on those stores and operate them well. But also, as I mentioned, our guiding principle around that is making sure we do find the right franchisees. And whilst there's franchisees who are operationally really strong, we're really conscious of making sure that their whole business is in a position to help them expand as well. So 18- 24 months is, I think, a reasonable expectation at this point in time to be able to get much closer to the number that we ultimately want to get to.
But that all depends on if we can continue the current cadence that we have.
Okay. And for Japan, Josh?
Sorry, can you repeat the question just quickly?
Just what's the average hold period? When you're opening a corporate store in Japan, how long until you'd expect it to be sold onto a franchisee?
The average hold period is really based on our strategy. We're trying to sort of keep where we've got our overhead, which is Tokyo, Osaka, and Nagoya. Things that don't make sense for our overhead, we tend to try to get franchisees to look at. That means the average hold period isn't actually set. It's really just based on which franchisees we're bringing through, remembering that we don't bring anyone from external. We've got to actually grow those managers into franchisees. It just takes a little bit of time. It's really hard to give you a number. Sorry, it's not a typical number.
Okay. And just the last one to clarify for Richard. If we're looking at the profit on sale of stores this period versus PCP, I haven't been able to find, maybe it's in there. Can you get the number of stores that have actually sold to make up the two profit numbers?
Yeah. We don't disclose that specifically, although, no, we don't disclose the actual sale of stores. I don't think, although just let me come back to you on that.
I thought you might do it on a full-year basis, but not the half. So just trying to get a sense. I mean, you're talking about this pent-up profit. We see the number of corporate stores sitting there. It's just a useful way to think about, okay, what number of stores could contribute what sort of profit over the coming 18-24 months if you're talking the ANZ market, for instance?
Yeah. Look, it's a fair num`ber of stores. And yeah, we don't break that down. We do acquisitions of stores, and that's in our 4D, but not the sale of stores and how many we're selling to make up that number. But it's a, as I've highlighted in ANZ, where we've got over 100 stores currently, and we like to sit at around 40-60. So ultimately, they've all got to sell down over the next 18 or so months. And then Japan, it's depending on momentum as how quickly we want to grow the market. We're not expecting a big change in our corporate store mix.
What I'll say, Richard, is that considering the questions on that today, I'll take it offline with Nathan. I can't promise, but we'll see if we can bring some more transparency in some way. I won't overcommit on that, but understanding that what we've seen the last half and the questions that are coming up from yourself and other analysts, and we'll think about that, see if there's a better way to illustrate that.
Yeah. That would be good. Thanks, Don.
Thank you.
Thank you. And we have one question that will drop off. If you would like to press star one again, we will take your question. Thank you. The next question is from Craig Wolford from Citi. Your line is open.
Hi, guys. I think most of it was covered. We were just talking about the European business with that revenue performance. The only other question of clarification there was the underlying cost growth for that European segment. It may tie into Sean's question earlier, but it did seem like there was a step down, in other words, an improvement in the cost growth in that European segment. Other than those incentives, is there anything else you've been doing to try to rationalize costs across the European business?
It's just efficiency of scale. That's what you're seeing that's coming from that. And that's the longer-picture story here, is that I know that we've had a couple of windows where the weight of corporate stores from Japan and Australia have maybe changed that. And even in the history in France, we've had these ebbs and flows. But generally, that's the whole model that as we head towards our 5,000 stores and strong like-for-like growth to support that, that the rate of overhead shouldn't grow at the same rate. And we should be able to pass more of that through to the bottom line.
Thanks, Don.
Craig, just covering off, just finishing, I'm not sure if you heard, but also we had the leasing standards meant we've removed some of the income relating to property leases that we have for franchisees in Europe and the same for Japan, but it's more noticeable in Europe. So that also pulled our revenue number down.
Okay. Thanks, Richard.
Thank you. That's the last question on the line. I'll now hand the conference back to today's presenters for any closing remarks. Thank you.
Thank you very much. Please reach out to Nathan if you need any further communication. Otherwise, we look forward to meeting a number of shareholder analysts over the next couple of days. Thank you very much.
Ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect.