Slide 1: Second Quarter 2011 Earnings Call
Second Quarter 2011 Earnings Call August 11, 2011
Slide 2: Opening Comments
Opening Comments John Barker SVP and Chief Communications Officer
Slide 3: Agenda
Agenda Business Highlights Roland Smith * Anew day —The Wendy’s Company * Key second quarter 2011 highlights Financial Results and Outlook Steve Hare * Second quarter 2011 financial overview * Cash flow and debt capitalization * Share repurchases and dividends * 2011 Outlook Wendy’s Key Initiatives
Slide 4: Forward-Looking Statements and Regulation G
Forward-Looking Statements and Regulation G This presentation, and certain information that management may discuss in connection with this presentation, may contain statements that are not historical facts, including, importantly, information concerning possible or assumed future results of our oper
Slide 5: Business Highlights
Business Highlights Roland Smith President & Chief Executive Officer
Slide 6: A New Day – The Wendy's Company
A New Day – The Wendy’s Company Completed sale of Arby’s to Roark Capital Group effective July 4, 2011 Company name changed to The Wendy’s Company Corporate headquarters moving to Dublin, OH Reduced support center and international division in Atlanta, GA
Slide 7: A New Day – The Wendy's Company
A New Day – The Wendy’s Company Launched new corporate website – www.aboutwendys.com
Slide 8: Q2 2011 Business Overview
Q2 2011 Business Overview Revenues grew 2.5% to $622 million North America Company-owned same-store sales of +2.3% Positive transactions of +0.9% Adjusted EBITDA* was $89.4 million * See Appendix Performance met Company’s expectations
Slide 9: Wendy's Q2 2011
Wendy’s Q2 2011 June Berry Almond Chicken Salad & Wild Berry Tea May April Natural-Cut Fries with Sea Salt Bacon Mushroom Flavor Dipped Chicken
Slide 10: Q2 2011 Results & Full-Year Outlook
Q2 2011 Results & Full-Year Outlook Steve Hare Chief Financial Officer
Slide 11: Changes in Q2 Financial Presentation
Changes in Q2 Financial Presentation Income Statement Arby’s results are accounted for as discontinued operations for all periods presented G&A costs that directly relate to Arby’s are included in discontinued operations Shared G&A costs that indirectly relate to Arby’s are included in G&A expense f
Slide 12: Q2 2011 Results
Q2 2011 Results *See Appendix.
Slide 13: Q2 2011 Special Items Included in Income from Continuing Operations
Q2 2011 Special Items Included in Income from Continuing Operations
Slide 14: General and Administrative Expense
General and Administrative Expense
Slide 15: Cash Flow Q2 YTD 2011
Cash Flow Q2 YTD 2011 * Includes commissions of $0.1 million and excludes $9.2 million of repurchases that were not settled until after quarter end.
Slide 16: Company Supporting Franchisee Key Initiatives
Company Supporting Franchisee Key Initiatives Dave’s Hot ‘N Juicy Cheeseburger Toasters and Grill enhancements Subsidized franchisee loans Supplemental loan guarantees Breakfast Equipment $20 million loan program for 1,000 stores Royalty abatement to fund advertising New Restaurant Development U.S.
Slide 17: Consolidated Debt
Consolidated Debt * Includes $118 million for sale of Arby's (Purchase price of $130 million less transaction costs)
Slide 18: Stock Repurchases and Dividends
Stock Repurchases and Dividends Quarterly Cash Dividend $0.02 per share Payable on September 15, 2011 to stockholders of record as of September 1, 2011
Slide 19: 2011 Outlook
2011 Outlook Expect $330-340 million adjusted EBITDA1 Key Assumptions: Wendy’s same-store sales growth +1% to +3% Wendy’s company-operated restaurant margin2 down 50-100 basis points Capital expenditures of $145 million Restaurant development 20 North America Company-owned 45 North America franchise
Slide 20: Wendy's Initiatives & Global Expansion
Wendy’s Initiatives & Global Expansion Roland Smith President & Chief Executive Officer
Slide 21: Wendy's Growth Initiatives
Wendy’s Growth Initiatives Deliver ‘Real’ brand positioning Introduce exciting, new products Focus on oper: excellence wis ene i) Pursue global expansion
Slide 22: Value Chicken Hamburgers Salads Fries
Value Chicken Hamburgers Salads Fries
Slide 23: Recent Product Introductions
Recent Product Introductions Local Options
Slide 24: Upcoming Beverage and Snack Products
Upcoming Beverage and Snack Products Local Options
Slide 25: Enhanced Chicken Menu
Enhanced Chicken Menu Local Options
Slide 26: Dave's Hot 'N Juicy Cheeseburgers October 2011 Launch
Dave’s Hot ’N Juicy Cheeseburgers October 2011 Launch
Slide 27: Wendy's Breakfast Opportunity
Wendy’s Breakfast Opportunity Customer reaction to new menu is positive Annualized average weekly sales meeting incremental breakfast sales target of $150,000, Represents a 10% sales lift to $1.4 million average unit volumes Maintaining targeted sales levels with reduced couponing Artisan Egg Sandwi
Slide 28: Breakfast Menu Test – Premium Coffee
Breakfast Menu Test – Premium Coffee
Slide 29: 2011 Breakfast Expansion Timeline
2011 Breakfast Expansion Timeline Q4 2011 Q2 2011 Q3 2011 Q1 2011 2010 1,000 STORES YE 2011 CONVERT 300 STORES FROM OLD TO NEW MENU NEW MENU LAUNCH LOUISVILLE & SAN ANTONIO ADDITIONAL MARKETS Kansas City Phoenix Pittsburgh Shreveport
Slide 30: Improving Operational Performance
Improving Operational Performance Internal Operational Ratings for North American Restaurants A & B F Q2 2011 2008 Q2 2011 2008
Slide 31: Highest Rated QSR Hamburger Chain
Highest Rated QSR Hamburger Chain Source: American Customer Satisfaction Index, June 2011
Slide 32: Remodel Designs to be Tested
Remodel Designs to be Tested Modern Contemporary Urban Traditional
Slide 33: First Modern Design Opens in Columbus, Ohio
First Modern Design Opens in Columbus, Ohio Digital Signage Casual Seating
Slide 34: Wendy's International Division
Wendy’s International Division Long-term development agreements signed since Q4 2008 Joint venture agreement with Higa Industries Target countries – Brazil and China Brazil China Potential for 8,000 international restaurants Currently 333 international locations (all franchised) +700 future commitme
Slide 35: Wendy's Enters the Russian Market
Wendy’s Enters the Russian Market First Moscow location celebrated grand opening on June 23 Part of development agreement with Wenrus Restaurant Group, LTD., a Wendy’s franchisee Wenrus plans to develop 180 restaurants over the next 10 years.
Slide 36: Average annual EBITDA growth of 10-15%, beginning in 2012
Average annual EBITDA growth of 10-15%, beginning in 2012
Slide 37: Q&A
COMPANY Quality is Our Recipe...Worldwide Q&A
Slide 38: Appendix
THE wentivis COMPANY Quality is Our Recipe...Worldwide Appendix
Slide 39: Reconciliation of EBITDA to Adjusted EBITDA
Reconciliation of EBITDA to Adjusted EBITDA The Wendy’s Company and Subsidiaries Calculation and Comparison of EBITDA and Reconciliation of EBITDA to Net Income