Krispy Kreme, Inc. · NASDAQ:DNUT
Krispy Kreme — Investor Day (December 2022)
103 slides from Krispy Kreme's investor day presentation, Dec 15, 2022
Slide 1: Krispy Kreme Investor Day December 15, 2022
KRISPY KREME INVESTOR DAY December 15, 2022
Slide 2: Disclosures
Krispy Kreme | Investor Day 2022 2 DISCLOSURES Cautionary Note Regarding Forward-Looking Statements This presentation contains forward-looking statements that involve risks and uncertainties. The words “target,” “expect,” “outlook,” “guide,” or similar words, or the negative of these words, identify
Slide 3: Today's Agenda
Krispy Kreme | Investor Day 2022 3 TODAY’S AGENDA 1 2 3 4 5 Introduction & Overview U.S. Hub & Spoke Maximization Accelerating Global Expansion Brand, Innovation & Omni-Channel Insomnia Cookies – Owning the Night 6 Financial Overview & Capital Allocation
Slide 4: Introduction & Overview
Krispy Kreme | Investor Day 2022 4 INTRODUCTION & OVERVIEW Mike Tattersfield President & Chief Executive Officer Terri Zandhuis Chief People Officer
Slide 5: Meet the Management Team
Krispy Kreme | Investor Day 2022 5 MEET THE MANAGEMENT TEAM Mike Tattersfield Josh Charlesworth Dave Skena Matt Spanjers Seth Berkowitz President & Chief Executive Officer Chief Growth OfficerGlobal President, Chief Operating Officer & Chief Financial Officer Chief Brand Officer & President, Branded
Slide 6: Deep, Diverse Board of Directors
Krispy Kreme | Investor Day 2022 6 DEEP, DIVERSE BOARD OF DIRECTORS WITH COMBINED >200 YEARS OF EXPERIENCE Olivier Goudet Marissa Andrada David Bell David Deno Paul Michaels Managing Partner & CEO, JAB CEO, Bloomin’ Brands Former Chief Diversity, Inclusion and People Officer, Chipotle Senior Partner
Slide 7: TITLE
Krispy Kreme | Investor Day 2022 7 TITLE
Slide 8: Globally Loved Brand with Significant Growth Opportunities
Krispy Kreme | Investor Day 2022 8 GLOBALLY LOVED BRAND WITH SIGNIFICANT GROWTH OPPORTUNITIES #1 Most Loved Sweet Treat Brand in the US, UK, Australia, Thailand & Turkey1 New York City Mexico Singapore Canada Japan AustraliaGuatemala Qatar Saudi ArabiaSouth Africa Countries served31 System-wide sale
Slide 9: A Fresh Approach to an 85-Year-Old Icon
Krispy Kreme | Investor Day 2022 9 A FRESH APPROACH TO AN 85-YEAR-OLD ICON… GO TO MARKET APPROACH GROWTH MODEL INVESTMENT APPROACH OWNERSHIP MODEL Krispy Kreme of the Past Krispy Kreme Today Discounted Long Shelf-life Doughnuts; Coffeehouse Execution Retail and Legacy Wholesale Primarily Franchise F
Slide 10: Simple Actions Create Powerful Cultures
Krispy Kreme | Investor Day 2022 10 SIMPLE ACTIONS CREATE POWERFUL CULTURES N EW S
Slide 11: Our Leadership Mix
Krispy Kreme | Investor Day 2022 11 OUR LEADERSHIP MIX The 12 ingredients that define our culture Respect All Opinions Love Your Community Appreciate Our Differences Think & Act Like an Owner Deliver Kudos for Positive Change Own the Outcomes Inspire Customer Wonder Behave Like a Start-up Create You
Slide 12: Transforming Our Talent and Culture
Krispy Kreme | Investor Day 2022 12 TRANSFORMING OUR TALENT AND CULTURE
Slide 13: How We Care for Our People
Krispy Kreme | Investor Day 2022 13 HOW WE CARE FOR OUR PEOPLE, GUIDED BY OUR MIX Respect All Opinions Appreciate Our Differences Respect All Opinions Diversity & Inclusion Pay Equity & Access Grow Our Peeps Create Your Path Think & Act Like and Owner Employee Engagement & Wellbeing Deliver Kudos fo
Slide 14: Our Transformational Journey
Krispy Kreme | Investor Day 2022 14 OUR TRANSFORMATIONAL JOURNEY 2016 ~4,800 Fresh points of access <50% doughnuts delivered fresh $557M total revenue $85M adjusted EBITDA 2022E >11,700 Fresh points of access 100% doughnuts delivered fresh ~$1,520M total revenue ~$190M adjusted EBITDA Took control o
Slide 15: Flexible Omni-Channel Model Drives Growth, Access and Convenience
Krispy Kreme | Investor Day 2022 15 FLEXIBLE OMNI-CHANNEL MODEL DRIVES GROWTH, ACCESS AND CONVENIENCE Experiential shops with high brand impact, many with drive-thru Hot Light Theater Shops Additional access in other channels with fresh full-sized doughnuts produced at the local Krispy Kreme doughnu
Slide 16: 75K+ Points of Access Opportunity
Krispy Kreme | Investor Day 2022 16 75K+ POINTS OF ACCESS OPPORTUNITY 10-15% POA growth per year ~6,000 >15,000 Today Long Term Goal ~5,400 >30,000 Today Long Term Goal 0 >30,000 Today Long Term Goal Markets US Existing 30 Country International Footprint 20 Signed or Planned Future International Cou
Slide 17: Creating a High Growth & More Profitable Business
Krispy Kreme | Investor Day 2022 17 CREATING A HIGH GROWTH & MORE PROFITABLE BUSINESS A global omni-channel fresh doughnut business strategy… Drive omni-channel growth to realize the 75,000 points of access opportunity globally Increase productivity of manufacturing hubs by adding delivered fresh da
Slide 18: Insomnia Cookies Is the Next Krispy Kreme
Krispy Kreme | Investor Day 2022 18 INSOMNIA COOKIES IS THE NEXT KRISPY KREME Universally beloved sweet treat Omni-channel model Global platform Capital-efficient growth Warm, delicious, delivered Digital first Large domestic & international opportunity Best in class new shop cash on cash Passionate
Slide 19: Best in Class Investment Thesis
Krispy Kreme | Investor Day 2022 19 BEST IN CLASS INVESTMENT THESIS Globally loved brand with significant opportunities for growth and premiumization Digital-First Insomnia Cookies leader in rapidly growing cookie space Substantial white space globally allows for expansion in US and International ma
Slide 20: Drivers of Our Path Forward
Krispy Kreme | Investor Day 2022 20 DRIVERS OF OUR PATH FORWARD Accelerating Global Expansion Brand, Innovation & Omni-Channel U.S. Hub & Spoke Maximization Insomnia Cookies Owning the Night STRATEGY TO DELIVER STRONG, SUSTAINABLE ROIC & GENERATE SUBSTANTIAL RETURNS FOR SHAREHOLDERS
Slide 21: Brand, Innovation & Omni-Channel
Krispy Kreme | Investor Day 2022 21 BRAND, INNOVATION & OMNI-CHANNEL Dave Skena Chief Brand Officer & President, Branded Sweet Treats
Slide 22: 99% Global Aided Awareness #1 Most Loved Brand US, UK, Australia >30B Earned Media
Krispy Kreme | Investor Day 2022 22 99% Global Aided Awareness #1 Most Loved Brand US, UK, Australia >30B Earned Media Impressions annually
Slide 23: Video Placeholder
Krispy Kreme | Investor Day 2022 23 VIDEO PLACEHOLDER
Slide 24: Krispy Kreme Is a Meaningful, Loved Brand
Krispy Kreme | Investor Day 2022 24 KRISPY KREME IS MORE THAN KNOWN, IT IS A MEANINGFUL, LOVED BRAND 1. GENEROUS: 150 2. TRUSTWORTHY/HONEST: 142 3. PASSIONATE: 138 Top 3 – KKD Brand Lover Traits Index to non-KK Lovers 31M Doughnuts given away since 2020 through Acts of Joy >$500M Raised for organiza
Slide 25: Our Innovation Makes an Occasion Even More Special
Krispy Kreme | Investor Day 2022 25 133% revenue growth from holiday/event innovation in last 5 years OUR INNOVATION MAKES AN OCCASION EVEN MORE SPECIAL 86% of purchases are shared with others 37% of purchases were for a special occasion or event +16pts vs 2019
Slide 26: Consumers See Value at Many Price Points
Krispy Kreme | Investor Day 2022 26 Price Promoted? Sometimes Selectively Very Rarely Never AND CONSUMERS SEE VALUE AT MANY PRICE POINTS *Current, Dec 2022 Company Majority Pricing (Cluster 3) Original Glazed Classic Assorted Premium LTOs Handmade/ Specialty +>15% +>35% +>100%Price Var % to OG Doz:
Slide 27: Access, Not Price, Is Biggest Barrier to Purchase
Krispy Kreme | Investor Day 2022 27 ACCESS, NOT PRICE, IS BIGGEST BARRIER TO PURCHASE – OUR OMNI-CHANNEL MODEL IS BUILT TO SOLVE THIS Reasons customers don’t choose Krispy Kreme 59% 22% 21% The location is not convenient Cut back on spending due to the economy I am not buying treats as much Krispy K
Slide 28: Increasing Access Through Ecommerce and DFD
Krispy Kreme | Investor Day 2022 28 INCREASING ACCESS THROUGH ECOMMERCE AND DFD 18% Global Total Global Ecommerce as a % of Retail Sales Available across 7 delivery platforms globally: 130 Dark Shops Globally 2020 2021 2022E Consumers recognize increased convenience of DFD …and love us more for it 2
Slide 29: Increasing Access Through Branded Sweet Treats
Krispy Kreme | Investor Day 2022 29 INCREASING ACCESS THROUGH BRANDED SWEET TREATS 2023: Setting the stage for breakout growth Profitable growth in 2023 while completing initiatives for 2024 and beyond Most Loved Sweet Treat In The Grocery Aisle In-aisle innovations to expand reach into adjacent cat
Slide 30: Pumpkin Spice Shows How This All Comes Together
Krispy Kreme | Investor Day 2022 30 PUMPKIN SPICE SHOWS HOW THIS ALL COMES TOGETHER ~4B Earned Media Impressions $5M $2M $2M $1M $1M $11M Sales Contribution Drive Thru In-Store DFD Ecommerce BST
Slide 31: After Years the Brand Is Better Than Ever
Krispy Kreme | Investor Day 2022 31 AFTER 85 YEARS THE BRAND IS BETTER THAN EVER! Building the Most Loved Sweet Treat Brand in the World Amazing Product Premiumization Meeting Consumers Where They Are
Slide 32: Maximizing U.S. Fresh Hub & Spoke Opportunity
Krispy Kreme | Investor Day 2022 32 MAXIMIZING U.S. FRESH HUB & SPOKE OPPORTUNITY Josh Charlesworth Global President, Chief Operating Officer & Chief Financial Officer
Slide 33: Beloved Krispy Kreme: Ideally Positioned for Sustained High Growth
Krispy Kreme | Investor Day 2022 33 BELOVED KRISPY KREME: IDEALLY POSITIONED FOR SUSTAINED HIGH GROWTH 1Source: Krispy Kreme annual brand tracker, Service Management Group, fielded 2021;2Source: Company customer research, Krispy Kreme annual brand tracker, Service Management Group, fielded 2022 Alre
Slide 34: Transformed into 100% Fresh Omni-Channel Business
Krispy Kreme | Investor Day 2022 34 WE HAVE TRANSFORMED INTO 100% FRESH OMNI-CHANNEL BUSINESS TO UNLOCK THIS GROWTH OPPORTUNITY 2016 ~50% network control ~65% Fresh doughnuts ~$230M1 total Fresh revenue ~2,400 Fresh points of access ~50 Hubs with spokes <10% fresh revenue off-premise 2022E ~85% netw
Slide 35: Strong Growth Already with Increased Availability
Krispy Kreme | Investor Day 2022 35 WE HAVE SEEN STRONG GROWTH ALREADY WITH INCREASED AVAILABILITY Fresh Points of Access Fresh Doughnuts Sold (M) +40% +11% Fresh Revenue ($M) +13% Organic growth vs. 2019 Source: Company information; Doughnuts sold KPI represents trailing 12 months ended the respect
Slide 36: Hub & Spoke Model Is Critical to High-Growth, Profitable Business
Krispy Kreme | Investor Day 2022 36 OUR “HUB & SPOKE” MODEL IS CRITICAL TO DELIVERING BOTH A HIGH-GROWTH AND PROFITABLE FRESH DOUGHNUT BUSINESS Source: company information Financial information represents trailing 12 month ending Q3 2022; excludes points of access All figures relate to the UB busine
Slide 37: We Are Just Getting Started
Krispy Kreme | Investor Day 2022 37 • Accelerate points of access growth including new channels • Upgrade DFD merchandising to drive sales per point of access • Reduce waste and improve labor efficiency • Omni-channel brand activation and innovation • Digital/ecommerce execution • Optimize legacy sh
Slide 38: Success Has Unlocked New DFD Channel Opportunities
Krispy Kreme | Investor Day 2022 38 OUR SUCCESS HAS UNLOCKED NEW DFD CHANNEL OPPORTUNITIES INCLUDING QSR, DRUG AND CLUB Our DFD Business Today Total Addressable Market ~450K potential locations in the US Total Sales ~$165M Total DFD Doors ~5,700 Grocery Convenience All Other Grocery cabinet display
Slide 39: More Than 15K Points of Access Opportunity
Krispy Kreme | Investor Day 2022 39 MORE THAN 15K POINTS OF ACCESS OPPORTUNITY WITH NEW MARKETS, CUSTOMERS & CHANNELS IN U.S. Existing Markets ~60% New & Under-Served Markets (e.g., Boston, Minneapolis) ~40% >1,500 >1,500+1,500 +1,500 ~6,000 Total points of access today ~3,000 >15K # Points of Acces
Slide 40: Opportunity to Increase Average Revenue per Door
Krispy Kreme | Investor Day 2022 40 Upgrading our DFD merchandising displays OPPORTUNITY TO ALSO INCREASE AVERAGE REVENUE PER DOOR IN GROCERY DFD Tower/Table Display Hybrid Cabinet Loose Cabinet & Tower Display +~30% Annual revenue per door +~70% Annual revenue per door Good Better Best
Slide 41: Leveraging Marketing & Innovation Across Omni-Channel Model
Krispy Kreme | Investor Day 2022 41 LEVERAGING OUR MARKETING & INNOVATION ACROSS THE OMNI-CHANNEL MODEL 2020 2021 2022 2023 Halloween Case Study DFD LTO Products Retail LTO Products Core Items Only DFD LTO Strategy Evolution Single Sprinkle LTO Launch FPO Premium Sprinkle LTO Launch Premium Assortme
Slide 42: Productivity Initiatives to Improve EBITDA Margin
Krispy Kreme | Investor Day 2022 42 PRODUCTIVITY INITIATIVES TO DELIVER AN ESTIMATED >250BP IMPROVEMENT TO EBITDA MARGIN Product & Distribution Costs Operating Expenses Selling, general & administrative expenses ~50bps improvement in margin +125 – 175bps improvement in margin +50 – 100bps improvemen
Slide 43: Current Doughnut Production Is Manually Intensive and Costly
Krispy Kreme | Investor Day 2022 43 CURRENT DOUGHNUT PRODUCTION AND PROCESSING IS MANUALLY INTENSIVE AND COSTLY Doughnut Production Post-Doughnut Production Processing & Packing >$100M annual spend on doughnut production labor in US Post-production represents ~60% US Production Facilities # Location
Slide 44: Opportunity to Automate Post-Production Processes
Krispy Kreme | Investor Day 2022 44 EARLY TRIALS INDICATE SIGNIFICANT OPPORTUNITY TO AUTOMATE THE POST-PRODUCTION PROCESSES WITHOUT IMPACTING THEATER EXPERIENCE Inline icing Inline filling Robotic traying/boxing ~18% doughnuts expected to be produced on automated lines within 18 months Capital inves
Slide 45: Optimizing the Legacy Network in the U.S.
Krispy Kreme | Investor Day 2022 45 OPTIMIZING THE LEGACY NETWORK IN THE U.S. IS KEY TO CAPTURING THE FULL BENEFIT OF HUB & SPOKE 1 Spokes revenue includes Spoke Shops and DFD 2 Shop-level EBITDA margin excluding overhead; Financial metrics are trailing 12 months as of end of Q3 2022 Total # Hubs Q3
Slide 46: Addressing Low Performers Through Conversions and Exits
Krispy Kreme | Investor Day 2022 46 ADDRESSING THE LOW PERFORMERS THROUGH A COMBINATION OF CONVERSIONS AND EXITS Convert shop to drive-thru only to leverage lobby space for DFD staging Convert production hubs to Fresh Shops where DFD opportunity is limited Shop exits in addition to the 8 closed YTD
Slide 47: Optimization of Hub & Spoke Model in Dallas
Krispy Kreme | Investor Day 2022 47 OPTIMIZATION OF THE HUB & SPOKE MODEL IN THE DALLAS MARKET Note: 1 Financial metrics represent annualized figures based on Q1 2021 2 Financial metrics represent trailing 12 months (TTM) ending Q3 2022 3 Pro forma financial metrics adjusting TTM ending Q3 2022 for
Slide 48: Future State: Healthier Fresh Hub & Spoke Network
Krispy Kreme | Investor Day 2022 48 THE FUTURE STATE WILL BE A HEALTHIER FRESH HUB & SPOKE NETWORK Hubs with Spokes Hubs without Spokes 3Q22 TTM # of Hubs 2026E 3Q22 TTM 2026E 127 >160 ~20 new ~15 converted # of Spokes ~5,790 ~8,000 ~ 2,000 DFD doors ~ 20 new & converted fresh shops Sales/Hub $4.5M
Slide 49: Maximizing the Fresh Opportunity in the U.S.
Krispy Kreme | Investor Day 2022 49 MAXIMIZING THE FRESH OPPORTUNITY IN THE U.S. Expand Omni-Channel access: new markets, new customers new channels Drive Efficiencies & High ROIC Increase Sales/Hub through premiumization & innovation 2026E >8,000 points of access >$5.3M Sales per hub >40% Off Premi
Slide 50: Accelerating Global Expansion
Krispy Kreme | Investor Day 2022 50 ACCELERATING GLOBAL EXPANSION Matt Spanjers Chief Growth Officer
Slide 51: Our International Transformational Journey
Krispy Kreme | Investor Day 2022 51 OUR INTERNATIONAL TRANSFORMATIONAL JOURNEY 2016 2022E1 ~2,400 points of access 22 # of Countries $125M total revenue $43M adjusted EBITDA ~5,400 points of access 30 # of Countries ~$475M total revenue ~$115M adjusted EBITDA Acquired Australia & Mexico Global Expan
Slide 52: Massive Global Opportunity with Proven Business Model
Krispy Kreme | Investor Day 2022 52 WE HAVE A MASSIVE GLOBAL OPPORTUNITY WITH A PROVEN BUSINESS MODEL Sydney Cape Town London Tokyo Global brand with proven omni- channel model – 30 countries and 5000+ points of access Tremendous whitespace opportunity in existing and new markets Momentum is buildin
Slide 53: International Business Already Significant
Krispy Kreme | Investor Day 2022 53 INTERNATIONAL BUSINESS ALREADY SIGNIFICANT, WITH MIX OF OWNED BUSINESSES AND FRANCHISE PARTNERS Sales coming from International Markets % of Total System Wide Sales 46% EBITDA coming from International Markets % of YTD 2022 Adjusted EBITDA 55% 81% 66% 50% 51% 46%
Slide 54: Long Runway for Continued Global Growth
Krispy Kreme | Investor Day 2022 54 WE HAVE A LONG RUNWAY FOR CONTINUED GLOBAL GROWTH 1 Source: January 2022 Euromonitor International LTD for 2020. See appendix for additional information on opportunity for points of access 20,000 20,000 Today Long Term Goal >60,000 Existing Market Growth Signed or
Slide 55: U.K. and Australia Pioneered Omni-Channel Hub and Spoke
Krispy Kreme | Investor Day 2022 55 KRISPY KREME U.K. AND AUSTRALIA PIONEERED OMNI-CHANNEL HUB AND SPOKE STRATEGY U.K. & IRELAND Potential for +2k additional POA AUSTRALIA & NEW ZEALAND Potential for +1k additional POA POA Growth 2022EAcquisition 2026E2016 941 1,650 3,065 POA Growth 2022E2016 2026EA
Slide 56: Mexico Acquisition Implementing Same Strategy
Krispy Kreme | Investor Day 2022 56 WE SAW AN OPPORTUNITY TO IMPLEMENT THE SAME STRATEGY IN MEXICO, ACQUIRED THE BUSINESS IN 2019 POA Growth (Since acquisition) +269 Off Premise % of Sales (Q3 2022) 18% Sales Per Hub (Q3 2022) (Since acquisition) $11.9m +$1.5m Organic Growth (Since acquisition) 69%
Slide 57: Recent Japan and Canada Acquisitions
Krispy Kreme | Investor Day 2022 57 RECENT JAPAN AND CANADA ACQUISITIONS SHOW SAME OPPORTUNITY FOR GROWTH KRISPY KREME JAPAN 2 Years into the acquisition Acquired in late 2020 with 67 POA. Since acquisition, have been implementing omni-channel strategy by expanding hot light in Tokyo, expanding ecom
Slide 58: Network of Franchise Partners Performing Well
Krispy Kreme | Investor Day 2022 58 NETWORK OF FRANCHISE PARTNERS PERFORMING WELL, EXECUTING OMNI-CHANNEL VISION International Franchise AMERICANA CASE STUDY Unique Partners20 New POA this year174 Markets globally25 Total Points of Access1,749 Systemwide sales growth*19% *Q3 trailing twelve months,
Slide 59: Strong Pipeline for New Market Growth
Krispy Kreme | Investor Day 2022 59 WE ARE BUILDING A STRONG PIPELINE FOR NEW MARKET GROWTH Priority Markets Secondary Markets 2021-2022 2023 2024 and beyond SIGNED COMMITMENTS POTENTIAL OPPORTUNITIES TURKEY 3000+ POA New partner (existing market) EGYPT 1000+ POA Current partner 2000+ POA New partne
Slide 60: New Market Entry Strategy
Krispy Kreme | Investor Day 2022 60 NEW MARKET ENTRY STRATEGY WE ARE TAKING A THOUGHTFUL VIEW ON WHERE TO DEPLOY CAPITAL Franchise with local operator executing omni- channel model Preference for franchise or potential joint venture if risk can be managed Market / Execution Risk S iz e o f O p p o r
Slide 61: Case Study: France Minority JV
Krispy Kreme | Investor Day 2022 61 Paris 2023 CASE STUDY: IN FRANCE, WE SEE A GREAT OPPORTUNITY, AND ARE PURSUING A MINORITY JV Points of Access >500 Theater Shops 9 Fresh Shop & Kiosk/Box Shop 81 DFD Doors 445 POINTS OF ACCESS SYSTEMWIDE SALES ($M) High profile market with established partner • Mi
Slide 62: Case Study: Turkey Franchising
Krispy Kreme | Investor Day 2022 62 POINTS OF ACCESS +400 27 30 110 200 430 300 SYSTEMWIDE SALES Istanbul 2022 CASE STUDY: TURKEY IS AN EXAMPLE OF HOW FRANCHISING CAN UNLOCK POTENTIAL 9.5x $6 $6 $19 $31 $57 $44 Points of Access >500 Theater Shops 8+ Fresh Shop & Kiosk/Box Shop 140+ DFD Doors 350+ 5-
Slide 63: Our Transformational Journey to 2026
Krispy Kreme | Investor Day 2022 63 OUR TRANSFORMATIONAL JOURNEY Selective investment in high priority JV's Global Expansion: 3-5 International Development Agreements signed each year 2x DFD Door count in 4 years Continued omni- channel development across existing markets 2022E ~5,400 points of acce
Slide 64: Break
BREAK
Slide 65: Insomnia Cookies: Owning the Night Since 2003
INSOMNIA COOKIES OWNING THE NIGHT SINCE 2003 Seth Berkowitz CEO Insomnia Cookies
Slide 66: Category Creating Brand Positioned to Win
Krispy Kreme | Investor Day 2022 66Krispy Kreme| Investor Day 2022 66 Category creating brand that is positioned to win ~50% 18-24 Age ~80% Sales after dark Our cult brand meaningfully connects with a highly attractive demographic through delicious, craveable and creative products ~30% 4-wall Margin
Slide 67: A Story That Starts with a Craving
Krispy Kreme | Investor Day 2022 67Krispy Kreme| Investor Day 2022 67 A story that starts with a craving It starts as so many great stories do…A group of college friends up late with a hankering for something delicious. For Seth, our founder, the craving was more specific. He wanted something sweet,
Slide 68: Cult-like Community of Insomniacs
Krispy Kreme | Investor Day 2022 68Krispy Kreme| Investor Day 2022 68 We stay up late for our cult-like community of Insomniacs We’ve created a highly connected gen-z community of brand advocates We Are All Insomniacs Dream Big Stay Hungry Bake to Perfection Do What’s Different Indulge in Life Our c
Slide 69: Obsessed with Delivering on Our Brand Promise
Krispy Kreme | Investor Day 2022 69Krispy Kreme| Investor Day 2022 69 We are obsessed with delivering on our brand promise We deliver warm moments that build lifelong brand advocacy Our cookies are ALWAYS served warm Our unique process ensures the warm moments that our Insomniacs can rely on Our cre
Slide 70: We Own the Night Like No Other
Krispy Kreme | Investor Day 2022 70Krispy Kreme| Investor Day 2022 70 We own the night like no other Open late seven days a week until 1am or 3am Late-night grand openings Experiential activations like PJ Party We create shareable moments at every touchpoint with our unique personality and “cult” br
Slide 71: From College Startup to National Cookie QSR Leader
Krispy Kreme | Investor Day 2022 71Krispy Kreme| Investor Day 2022 71 We’ve grown from a college startup to national leader in cookie QSR Since partnering with Krispy Kreme in 2018 we’ve seen accelerated scale and substantial margin improvement +15%C A G R +23% $83 8% 14% 0% 2% 4% 6% 8% 10% 12% 14%
Slide 72: A Unique Model That's Baked to Perfection
A UNIQUE MODEL THAT’S BAKED TO PERFECTION 72
Slide 73: Efficient, Scalable Business Model
Krispy Kreme | Investor Day 2022 73Krispy Kreme| Investor Day 2022 73 Our efficient, scalable business model allows us to deliver the cookie magic Capital-lite assets Yielding best-in-class $ / square foot Efficient labor model 35% increase in AUV since 2018 +8%CAGR ~$850 $187 $633 2018 2022 AUV E P
Slide 74: Digital Sales Are ~50% of Revenue
Krispy Kreme | Investor Day 2022 74Krispy Kreme| Investor Day 2022 74 Digital sales are ~50% of revenue Ecommerce AOV >2x retail Our delivery expertise allows us to extend far beyond the four walls of our bakeries Primary zone Primary zone Delivery is a core competency 2022 Extended zone 2020 Extend
Slide 75: Best in Class Return Model
Krispy Kreme | Investor Day 2022 75Krispy Kreme| Investor Day 2022 75 Best in class return model that is proven…everywhere 2022 4-Wall AUV ~$850K Real Estate ~5% 4-Wall EBITDA ~30% Avg Build Cost 2022 ~$300K Avg. Payback: ~ 1 year West AUV $672K Midwest AUV $782K Northeast AUV $970K Southeast AUV $9
Slide 76: A Brand That Builds Community
A BRAND THAT BUILDS COMMUNITY 76
Slide 77: Own the Night Approach to Growth
Krispy Kreme | Investor Day 2022 77Krispy Kreme| Investor Day 2022 77 O w n t h e n ig h t We take an “own the night” approach to growth Strategic approach to real estate supports best-in-class success rate of 99% 152 College Locations 71 City Locations Format Exploration Current footprint can reach
Slide 78: Ready to Expand Insomniac Community Across the Globe
Krispy Kreme | Investor Day 2022 78Krispy Kreme| Investor Day 2022 78 We’re ready to expand our Insomniac community across the globe Global Market Entry 2023 Initial consumer research shows strong excitement for the brand outside of the US Global opportunity >3000 Segment Current Total Opportunity U
Slide 79: 2026 Goals Reflect High Growth Opportunity
Krispy Kreme | Investor Day 2022 79Krispy Kreme| Investor Day 2022 79 Our 2026 goals reflect the high growth opportunity in front of us $7 $26 $58 -2% 3% 8% 13% 18% 23% 28% 0% 5000% 10000% 15000% 20000% 2018 2022 2026 EBITDA ($M) EBITDA Margin $83 $189 $350 144 232 427 -200 0 200 400 600 800 $0 $100
Slide 80: A Brand That Delivers
Krispy Kreme | Investor Day 2022 80Krispy Kreme| Investor Day 2022 80 A brand that delivers ~30% 4-wall Margin ~50% 18-24 Age ~80% Sales after dark ~50% Digital Revenue ~1 Yr Payback Our cult brand meaningfully connects with a highly attractive demographic through delicious, craveable and creative p
Slide 81: Financial Overview & Capital Allocation
FINANCIAL OVERVIEW & CAPITAL ALLOCATION Josh Charlesworth Global President, Chief Operating Officer & Chief Financial Officer
Slide 82: Strong Financial Track Record
Krispy Kreme | Investor Day 2022 82 STRONG FINANCIAL TRACK RECORD…. Fresh Points of Access Sales per Hub ($ MILLIONS) Net Revenue ($ MILLIONS) Adj. EBITDA ($ MILLIONS) 4,800 11,700 2016 2022E 2.5 4.54.5 9.8 2016 2022E US Intl 557 1,520 2016 2022E 85 190 2016 2022E 16% CAGR 18% CAGR 14% CAGR
Slide 83: With the Best Yet to Come
Krispy Kreme | Investor Day 2022 83 …WITH THE BEST YET TO COME Fresh Points of Access Sales per Hub ($ MILLIONS) Net Revenue ($ MILLIONS) Adj. EBITDA ($ MILLIONS) 11,700 18,500 2022E 2026E 4.5 5.3 9.8 11.0 2022E 2026E US Intl 1,520 2,150 2022E 2026E 190 315 2022E 2026E 12% CAGR 9% CAGR, 10% Organic
Slide 84: Line of Sight to Over $2.15 Billion of Revenue by 2026
Krispy Kreme | Investor Day 2022 84 $780 $189 $38 $1,007M ~$1,000 ~$350 ~$100 OUR OMNI-CHANNEL PLANS GIVE US LINE OF SIGHT TO OVER $2.15 BILLION OF REVENUE BY 2026 2022E Revenue Mix($ millions) 2026E Revenue Mix U.S. International Market Development $361M $152M1 ~$500M ~$200M 1 2022 Revenue includes
Slide 85: Hub & Spoke Adds >225 bps Margin Improvement
Krispy Kreme | Investor Day 2022 85 HUB & SPOKE BRINGS HIGH GROWTH AND PROFITABILITY, ADDING >225 BPS IN MARGIN IMPROVEMENT Product & Distribution Costs Operating Expenses Selling, general & administrative expenses ~50 bps improvement in margin ~100 bps improvement in margin ~75 bps improvement in m
Slide 86: Over $300 Million of Adjusted EBITDA in 2026
Krispy Kreme | Investor Day 2022 86 $86 $26 $109M WHICH WILL LEAD US TO OVER $300 MILLION OF ADJUSTED EBITDA IN 2026 2022E EBITDA Mix($ millions) 2026E EBITDA Mix U.S. International Market Development ~$190M1 ~$315M1 ~$110M ~$70M ~$76M ~$50M ~21% Adj. EBITDA Margin ~33% Adj. EBITDA Margin ~22% Adj.
Slide 87: Capital Allocation Strategy Targets Highest Return Opportunities
Krispy Kreme | Investor Day 2022 87 CAPITAL ALLOCATION STRATEGY TARGETS HIGHEST RETURN OPPORTUNITIES Capital Allocation Strategy Examples Capex as % Local Sales • Capacity to support rapid expansion in highest growth/ROIC markets • Mexico • Insomnia US 8 –10% • Selective capacity against highest ROI
Slide 88: Financial Outlook
Krispy Kreme | Investor Day 2022 88 FINANCIAL OUTLOOK FY 2022 Guidance FY 2026 Outlook Revenue ~$1.52B ~$2.15B Adjusted EBITDA ~$190M ~$315M Adjusted EPS ~$0.29 ~$0.53 Points of Access ~11,700 ~18,500 Leverage ~3.6x 2.0-2.5x Capex % ~7.2% ~6% Reiterate 2022 Guidance 2023 Revenue and Adjusted EBITDA
Slide 89: 2026 Goal of ~40% Cash Conversion
Krispy Kreme | Investor Day 2022 89 2026 GOAL OF ~40% CASH CONVERSION Capital Efficiency $315mAdjusted EBITDA Cash Interest & Taxes Strong Free Cash Flow Capex % of Revenue Other Outflows Free Cash Flow Conversion1 ~6% ~$60m ~40% 2026 Expectations 1 Defined as (Operating Cash Flow – Capital expendit
Slide 90: Long-Term Value Creation
Krispy Kreme | Investor Day 2022 90 LONG-TERM VALUE CREATION Double Digit Organic Revenue & Adjusted EBITDA Growth Strong ROIC with Capital Efficient Model High Cash Conversion
Slide 91: Closing Remarks
CLOSING REMARKS Mike Tattersfield, CEO
Slide 92: Omni-Channel Model Allows for Accelerated, Bigger Growth Opportunity
Krispy Kreme | Investor Day 2022 92 KRISPY KREME’S OMNI-CHANNEL MODEL ALLOWS FOR ACCELERATED, BIGGER OPPORTUNITY FOR GROWTH Accelerating Global Expansion Brand, Innovation & Omni-Channel US Hub & Spoke Maximization Insomnia Cookies Owning the Night STRATEGY TO DELIVER STRONG, SUSTAINABLE ROIC & GENE
Slide 93: Best in Class Investment Thesis
Krispy Kreme | Investor Day 2022 93 BEST IN CLASS INVESTMENT THESIS Globally loved brand with significant opportunities for growth and premiumization Digital-First Insomnia Cookies leader in rapidly growing cookie space Substantial white space globally allows for expansion in US and International ma
Slide 94: Break
BREAK
Slide 95: Q&A
Q&A
Slide 96: Appendix & Non-GAAP Reconciliation
APPENDIX & NON-GAAP RECONCILIATION
Slide 97: Reiterate 2022 Outlook
Krispy Kreme | Investor Day 2022 97 • Signed contracts for 8international countries; 7 new countries, expand in 1 country (Signed deals in Ecuador, France, Jamaica, Switzerland, Chile, Costa Rica & Jordan; new development agreement in Turkey) • Net Leverage of approximately 3.6x by end of year, incl
Slide 98: Line of Sight to Over $2.15 Billion of Revenue by 2026
Krispy Kreme | Investor Day 2022 98 OUR OMNI-CHANNEL PLANS GIVE US LINE OF SIGHT TO OVER $2.15 BILLION OF REVENUE BY 2026 2022E Revenue MixRevenue in millions 2026E Revenue MixBuilding Blocks ~20 new hubs >2,000 new DFD Doors Sales/Hub $4.0M to >$5.3M ~200 new cookie shops opened BST 25% CAGR ~12 ne
Slide 99: Net Loss to Adjusted EBITDA
Krispy Kreme | Investor Day 2022 99 NET LOSS TO ADJUSTED EBITDA (in thousands, except per share amounts) 1. Because the quarter ended January 1, 2023 is still in progress, estimated adjusted EBITDA for that quarter has been included herein and added to actual adjusted EBITDA for the three quarters e
Slide 100: Sales per Hub
Krispy Kreme | Investor Day 2022 100 SALES PER HUB (in thousands, except per share amounts) 1. Because the quarter ended January 1, 2023 is still in progress, estimated Sales per Hub for the U.S. and Canada and International segments has been included herein for the full fiscal year ended January 1,
Slide 101: Points of Access
Krispy Kreme | Investor Day 2022 101 POINTS OF ACCESS 1. Because the quarter ended January 1, 2023 is still in progress, estimated Global Points of Access have been included herein for the fiscal year ended January 1, 2023. 2. Excludes Branded Sweet Treat Line distribution points. 3. Includes Points
Slide 102: Global Hubs
Krispy Kreme | Investor Day 2022 102 GLOBAL HUBS 1. Because the quarter ended January 1, 2023 is still in progress, estimated Hubs have been included herein for the fiscal year ended January 1, 2023. 2. Includes only Hot Light Theater Shops and excludes Mini Theaters. A Mini Theater is a Spoke locat
Slide 103: Net Debt and Leverage
Krispy Kreme | Investor Day 2022 103 NET DEBT AND LEVERAGE 1. Because the quarter ended January 1, 2023 is still in progress, estimated Leverage has been included herein for the fiscal year ended January 1, 2023.