The Cheesecake Factory Incorporated · NASDAQ:CAKE
The Cheesecake Factory — Cheesecake Factory — Investor Presentation (May 2017)
31 slides from The Cheesecake Factory's investor presentation, May 3, 2017
Slide 1: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements about our financial condition, results of operations, performance, plans, goals and other matters. These statements are based on our current expectations and involve known and unknown risks and uncertainties that may cause o
Slide 2: A Compelling Investment Opportunity
A Compelling Investment Opportunity • Highly differentiated concepts delivering experience Diversified growth drivers a unique guest • • Track record of consistent and predictable financial performance • Robust cash flow to support growth and maximize shareholder value 3
Slide 3: Company Overview and Key Competitive Advantages
Company Overview and Key Competitive Advantages 4
Slide 4: Our Global Footprint
Our Global Footprint High quality, high profile locations worldwide Kuwait Saudi (5) (1) China (2) (3) 5 Company-Owned 194 13 1 International - Licensed Middle East11 Mexico3 China25 Mexico Guadalajara Mexico City (2) Shanghai ng Kong Lebanon (1) (3) Qatar (1) ArabiaUAE Ho U.S.A. (Company-Owned: 208
Slide 5: The Cheesecake Factory - A Highly Differentiated Concept
The Cheesecake Factory - A Highly Differentiated Concept Bakery 6 Integrated Ambiance, Service and Hospitality Best-in-Class Operational Execution Leader in Menu Innovation
Slide 6: Industry Leader in Menu Innovation
Industry Leader in Menu Innovation Breadth of menu is a key competitive advantage Quality • 250 menu items made fresh from scratch in-house Relevance • No veto vote – something for everyone across price points Menu updated twice a year • Performance • • Drives sales Continued market share gains Prof
Slide 7: Dining With Us Is an Experience
Dining With Us Is an Experience Ambiance, Service and Hospitality Drive Sales 8
Slide 8: Leveraging Technology to Further Enhance the Guest Experience
Leveraging Technology to Further Enhance the Guest Experience 9 Training Redesign KMS Delivery CakePay App
Slide 9: Integrated Bakery – The "Cheesecake" Magic
Integrated Bakery – The “Cheesecake” Magic • Produces over 70 cheesecakes and other baked desserts Industry-Leading Dessert Sales 16% • Enables creativity and quality control 10
Slide 10: Broad Consumer Appeal
Broad Consumer Appeal A division of Vice Media LLC The women and men behind The Cheesecake Factory reveal the untold story of how a tiny Beverly Hills restaurant known for its brown bread became a global chain mentioned in Drake songs and on “Keeping up with the Kardashians.” Highest Unit Volumes ($
Slide 11: Strong Consumer Engagement Across Channels
Strong Consumer Engagement Across Channels 5M+ likes 360K followers Millions of Viewers 490K followers 12
Slide 12: Best-in-Class Operational Execution
Best-in-Class Operational Execution Average Tenure by Position Industry-Leading Retention Dual Management Structure Above 4-Walls 28 years 19 years 18 years 17 years 12 years 12 Senior VP of Operations Regional Vice President Area Director of Operations Area Kitchen Operations Manager General Manage
Slide 13: Leveraging Technology to Manage Costs
Leveraging Technology Manage Costs to Analytics 14 Automated Production Call Energy Management Optimization Market-Based Labor Dashboards KMS
Slide 14: Diversified Growth Drivers
Diversified Growth Drivers 15
Slide 15: Continued Domestic Growth Opportunity
The Cheesecake Factory – Continued Domestic Growth Opportunity for 300 domestic locations Illustrative example of target returns for new restaurant openings. 16 The Grove, Los Angeles Strong Unit Economics ($ millions, assumes 10,000 sq. ft. unit) Sales $10.0 $2.3 $7.8 $4.0 ~ 20% EBITDAR Cash Capex
Slide 16: Expanding International Licensed Presence
The Cheesecake Factory – Expanding International Licensed Presence • Continued expansion within current geographies Potential for additional geographies • with current Opportunity territories licensees • to add licensees and 17 Shanghai $0 Capital Expenditure +1¢ Per Restaurant in EPS
Slide 17: Incremental Growth Opportunities
Incremental Growth Opportunities North Italia and Flower Child investment Bringing The Cheesecake Factory to Canada Measured growth of Grand Lux Cafe and RockSugar Further leveraging the power of The Cheesecake Factory brand in the CPG channel Internal development of a fast casual concept 18
Slide 18: Track Record of Consistent & Predictable Financial Performance
Track Record of Consistent & Predictable Financial Performance 19
Slide 19: Outperforming the Industry and Taking Market Share
Outperforming the Industry and Taking Market Share 29 Consecutive Quarters of Comparable Sales Growth 2010 2011 2012 2013 2014 2015 2.6% 2016 1Q17 2.2% 2.0% 2.0% 1.5% 1.5% 1.2% 1.1% 1.0% 0.5% 0.3% (0.2)% (0.5)% (0.9)% (1.4)% (1.4)% Knapp-Track Index 20
Slide 20: Leveraging Sales & Managing Costs to Drive Earnings Growth
Leveraging Sales & Managing Costs to Drive Earnings Growth Adjusted Earnings Per Share* ~11% CAGR $2.98 $2.83 $1.97 $1.88 2010 2011 2012 2013 2014 2015 2016 2017E** * Please see Appendix for GAAP to non-GAAP reconciliations. ** Midpoint of 2017 guidance provided May 3, 2017. 21 $2.37 $2.10 $1.64 $1.
Slide 21: Our Restaurants Generate Significant Cash Flow
Our Restaurants Generate Significant Cash Flow Cash Flow and Strong Balance Sheet Provide Significant Financial ($ millions) Flexibility $173 2010 2011 2012 2013 2014 2015 2016 Proceeds from Exercise of Stock Options Free Cash Flow 22 Free cash flow defined as cash flow from operations less capital
Slide 22: Effective Capital Allocation Supports Our Financial Objectives
Effective Capital Allocation Supports Our Financial Objectives ~$900 Million in Share Repurchases Reducing WASO 3% ($ millions) Per Year 60,446 49,372 $13 2010 2011 2012 2013 2014 Dividend 2015 WASO 2016 Capex/Inv Share Repurchases 23 $42 $27 $36 $146 $184 $30 $109 $141 $172 $101 $158 $154 $114 $106
Slide 23: Disciplined, Returns-Focused Growth Has Paid Off
Disciplined, Returns-Focused Growth Has Paid Off Return on Invested Capital (ROIC) 17% 14% 13% 2010 2011 2012 2013 2014 2015 2016 ROIC = NOPAT / Average invested capital NOPAT = Income from operations excluding non-recurring expenses (-) income tax provision Invested Capital = Property and equipment
Slide 24: Creating Value for Shareholders
Creating Value for Shareholders Targeting Mid-Teens Total Return to Shareholders (EPS + Dividend) Core Business ~6% International ~2% Incremental Growth Opportunities ~1-2% Share Repurchases ~3% Dividend ~2% Philadelphia 25 Total Return to Shareholders
Slide 25: 2017 Financial Targets
2017 Financial Targets Anticipating another year of solid performance Company-Owned Restaurants As many as 8 International Licensed Restaurants As many as 4 – 5 Comparable Sales 0.5% - 1.5% Adjusted EPS Growth 4% - 7% 2017 guidance provided May 3, 2017. EPS growth rate reflects adjusted EPS, excludi
Slide 26: A Compelling Investment Opportunity
A Compelling Investment Opportunity • Highly differentiated concepts delivering experience Diversified growth drivers a unique guest • • Track record of consistent and predictable financial performance • Robust cash flow to support growth and maximize shareholder value 27
Slide 27: A Compelling Investment Opportunity
A Compelling Investment Greate Opportunity Highly differentiated concepts delivering a unique guest experience Diversified growth drivers Track record of consistent and predictable financial performance Robust cash flow to support growth and maximize shareholder value
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation In addition to the results provided in accordance with the Generally Accepted Accounting Principles (“GAAP”) in this presentation, the Company is providing non-GAAP measurements which present diluted net income per share excluding the impact of certain items and free cash flo
Slide 29: Non-GAAP Reconciliation
Non-GAAP Reconciliation The Cheesecake Factory Incorporated Reconciliation of Non-GAAP Financial Measures ($ thousands, except per share data) Fiscal Year 2010 2011 2012 2013 2014 2015 2016 Net income (GAAP) After-tax impact from: - Impairment of assets and lease terminations (1) - Partial IRS settl
Slide 30: Non-GAAP Reconciliation
Non-GAAP Reconciliation The Cheesecake Factory Incorporated Reconciliation of Non-GAAP Financial Measures ($ in millions) Fiscal Year 2010 2011 2012 2013 2014 2015 2016 Cash Flow from Operations Capital Expenditures / Investments Free Cash Flow $ 167 42 $ 196 77 $ 195 86 $ 205 106 $ 240 114 $ 235 15
Slide 31: Non-GAAP Reconciliation
Non-GAAP Reconciliation The Cheesecake Factory Incorporated Reconciliation of Non-GAAP Financial Measures (8 in millions) Fiscal Year 2010 2011 2012 2013, 2014 2015 2016 Cash Flow from Operations. $ 7 § 19 § 15 § 25 $ 20 $ 25 $ 303 Capital Expenditures / Investments 42 7 86 106 114 154 158 Free Cash
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