Red Robin Gourmet Burgers, Inc. · NASDAQ:RRGB
Red Robin Gourmet Burgers — Investor Day (May 2017)
124 slides from Red Robin Gourmet Burgers's investor day presentation, May 23, 2017
Slide 1: Agenda
Denny Marie Post Welcome foals Muhtar Mai ing & Off-Premise a GA Goel Break Operations Update Les Z, Lehner Development Strategy Guy Constant Financials Q&Aand Break Denny Marie Post Closing Q&A
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT Forward-looking statements in this presentation regarding the eames strategy and initiatives, marketing and d targets, development plans and markets and impact, expected new restaurant opening trend, future performance, margin rage, G&A leverage, EBITDA, cost of goods, and rest
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Slide 4: Red Robin Analyst & Investor Day
Red Rol yin Analyst 8 Investor Day WELCOME Denny Marie Post Chief Executive Officer
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Slide 6: Vision and mission
oY ea To make everyone sy better for being here f OY . | Tocreate craveable burgers, | welcoming experiences, and \ genuine connections yA
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Slide 9: Marketing & Off-Premise
MARKETING & OFF-PREMISE Jonathan Muhtar Senior Vice President,
Slide 10: REVRoBIN: Brand Guest Growth
1 REVRoB: Robin BRAND GUEST GROWTH
Slide 11: A Powerful Differentiator
A POWERFUL DIFFERENTIATOR REDROBIN CASUAL DINING Guttural craving Consensus rules Immersive, bonding experiences Fragmented menu, independent eating Real,raw moments _ Passively pleasant & generic 7/10 AGREE “Other restaurants ™X have random stuff, ; Brands with a clear, strong and they don't have a
Slide 12: Nothing Is As Beloved As The Hamburger
NOTHING IS AS BELOVED AS THE HAMBURGER “The hamburger has a special semiotic power... At the end of the day, nothing says American like a hamburger.” — Josh Ozersky, The Hamburger 9/10 Burgers #I Had a burger in the fs Most popular last 3 months Guiltless menu item External research provided by Kirs
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Slide 14: Who Is Our Guest?
WHO IS OUR GUEST? AND WHAT ARE THEY LIKE? Male and Female Skew Lifestyle ¢ Families ¢ Connected ¢ Older Millennials ¢ Cost-conscious ¢ Hispanics ¢ Entertainment lovers Red Robin Heavy Users Study
Slide 15: What Our Guests Value
WHAT OUR GUESTS VALUE Quality & Attentive Value for the Craveability Service Money ¢ Food quality ¢ Hospitality ¢ Portion size ¢ Innovation * Appropriate for price paid e Abundance speed for e Abundance occasion ° Royalty ° Spirit of incentives generosity
Slide 16: vs. 012015 022015 032015
vs. 012015 022015 032015 042
Slide 17: What Our Guests Told Us
WHAT OUR GUESTS TOLD US FOUR KEY DRIVERS IN GUEST VISITATION A BS oa One Z—-/A GUEST VALUE TOP OF OFF-PREMISE EXPERIENCE MIND ACCESS AWARENESS
Slide 18: Guest Experience
GUEST EXPERIENCE ONGOING MENU AND MARKETING CONTRIBUTIONS TO IMPROVE SERVICE {3 Reduce number of promotional windows Simplify recipes and procedures cal . . Remove slow moving menu items ®) Minimize single use SKUs and prep steps
Slide 19: Casual Dining PPA and Traffic Trends
CASUAL DINING PPA AND TRAFFIC TRENDS $18.80 $18.60 $18.40 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 Q2 Q3 Q4 Ql Q2 Q3 Q4 Qi Q2 Q3 Q4 Ql ——PPA/PTA Traffic -3.0% -4.0% -5.0% -6.0% Traffic
Slide 20: Innovation focused on Finest
Innovation focused on Finest Billion Dollar Baby Finest Burger
Slide 21: Buzz Mac 'N' Cheese Tavern
Buzz Mac ‘N’ Cheese Tavern Double Four Cheese Melt Pub Mac ‘N’ Cheese
Slide 22: Tavern
TAVERN Smoky Jack Tavern Double Sir Acha Tavern Double GOURMET Wedgie Burger
Slide 23: Reinforcing Bottomless across all channels
Reinforcing Bottomless across all channels
Slide 24: Value: Royalty Members
VALUE : 6,633, 082+ Current Royalty Members Royalty Program Objective: Drive profitable sales and traffic through the analysis and reward of Guest behavior. Royalty members visited 3.7 times more on average in 2016 Creates a I-to-I relationship. SBGB5B5Ba8 FREE BIRTHDAY — EVERY 10TH $20 TOWARDS —- S
Slide 25: Three Main Messaging Objectives
THREE MAIN MESSAGING OBJECTIVES: |. Surprise & Delight Offers 2. New Product Introductions 3. Support Key Growth Channels ve EASETOTARE SS BURGER, FLICKS & CHILL NOW IT'S EA WHERE oe, “eo Oa SNS NAL YUM FRET DME DENTAL USNG YUMMM2.G TODAY! FANDANGON®
Slide 26: Top of Mind Awareness
TOP OF MIND AWARENESS RIGHT SMART SOCIAL MESSAGE MEDIA ENGAGEMENT
Slide 27: Our Rally Cry
“OUR RALLY CRY.”
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Slide 29: Synchronized National Media
SYNCHRONIZED NATIONAL MEDIA Dx) tae EMAIL & ROYALTY REDROBIN.COM 0,9’ ig ry) 6° | ff DISPLAY ADS GS with SOCIAL CONTENT & COMMUNITY MANAGEMENT SEARCH
Slide 30: March Madness
ARCH MADNESS, Building Reach & Fiahtenina th Seeking Opportunistic Contemporizi Efficiency with an Network eet_ High Pro! ne the Media Mic Adult Target Programming
Slide 31: Local Media Upside
LOCAL MEDIA UPSIDE Target spend to markets with potential greatest impact (% sales and ROAI) Drive higher sales, for more weeks, with local TV and radio supplementing national Reach Hispanic consumers in key local markets
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Slide 33: Social Media Engagement
SOCIAL MEDIA ENGAGEMENT ry Brittani Michelle Howard » Red Robin Gourmet Burgers RE os : My sister has been in this world for 18 yrs and today is the first time she has been offered a menu at a restaurant Today my boytriend, 13 mo ins, and th 3 month sweetest ing 've ever witnesseat Thank you, Kendra
Slide 34: 4015 1016 2016 3al6 4Qi6
2.2% 4015 1016 2016 3al6 4Qi6
Slide 35: Taking Yummm Off-Premise
bed . * : sap lh EH nies ie boar TAKING YUMMM OFF-PREMISE
Slide 36: The Promise of Off-Premise
THE PROMISE OF OFF-PREMISE OFF-PREMISE IS ONLY GROWTH AREA IN CDR Includes To-go, Delivery, & Catering CONSUMERS EXPECT TO GET THEIR FOOD WHEN, WHERE AND HOW THEY WANT IT Restaurants must learn from retail KEYS TO WINNING Seamless accessibility Order accuracy Quality Temperature of food
Slide 37: Off-Premise Opportunity
OFF-PREMISE OPPORTUNITY Half of consumers claim that having burgers as conveniently available as pizza would increase frequency Delivery, having food available for carry-out, and availability of catering/large group orders were cited as motivators of increased frequency Room to grow — we are at abou
Slide 38: Off-Premise Opportunity
OFF-PREMISE OPPORTUNITY CARRY-OUT CURBSIDE PICKUP CALL CENTER 20% MARKETING SUPPORT LARGE PARTY DELIVERY 3° PARTY DELIVERY 30% SELF-DELIVERY CATERING CATERING
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Slide 40: To-Go guest satisfaction
of Red Robin Guests said their To-Go experience was “Very Good” or “Excellent” said they “Probably” or “Definitely Would” use Red Robin again for To-Go in the future rated Red Robin's To-Go as better or the same as competitors Source: Red Robin On Demand study
Slide 41: Ordering, Curbside Pickup
ey ororing, Cuado Pickup. Yummr2G0 mates ay to beg Res Robin any
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Slide 43: REVRoBIN: Differentiated Brand, Focus on Off-Premise
REVRobin CYOD ig Ff DIFFERENTIATED FOCUSONTHE OFF-PREMISE BRAND GUEST GROWTH
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Slide 45: Coming Up
~ COMING UP GOURMET BURGERS 4X2 BREWS Red Robin | Break Carin Stutz Operations Update Les L. Lehner Development Strategy Guy Constant Financials Q&Aand Break Denny Marie Post Closing Q&A
Slide 46: Break Time
Red Robin Analyst & Investor Day BREAK TIME 15 minutes
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Slide 48: Operations Update
OPERATIONS UPDATE
Slide 49: Strategic Plan
4 YEAR STRATEGIC PLAN Build Team Member ageme! Our Vision To make everyone better for being here Deliver Great Shareholder Value Our Mission To create craveable burgers, welcoming experiences, and genuine connections Regain Operational Edge Become Guest Go-To For BU RGER. Great Burgers
Slide 50: Evaluating Our Business
EVALUATING OUR BUSINESS FIVE KEY VALUES. Leadership Do we have the right team and talent? Performance How can we quickly get momentum? Strategy Move dependency from NROs to 4-wall growth Relationships Re-engaging with our franchisees Operations Raise the bar
Slide 51: Cut costs the right way
Cut costs the right way Engage team members in problem-solving Develop financial acumen Inform operators of the “why” behind change Provide clarity of goals and standards + Generate an “excellence” mindset
Slide 52: Disruption
Disruption Off-Premise Returns Time
Slide 53: BFBH culture
BFBH culture - an important legacy, we have a responsibility to not break it, but enhance it o School of Leadership © Hay Climate Feedback An engaged team that believes in the brand Enviable position in CDR - niche player Community involvement
Slide 54: Strengthening Our Foundation: Year in Review
STRENGTHENING OUR FOUNDATION YEAR IN REVIEW ¢ Hiring and retaining our best people o Performance driven culture; Engagement on the rise o Made key people decisions to elevate results ¢ Educating the RVP team on higher level financials ¢ Focused approach on key initiatives © Momentum in all areas of
Slide 55: Disruption
Disruption Off-Premise Returns Time
Slide 56: Seeding the Innovation
SEEDING THE INNOVATION FUTURE OPPORTUNITY Off-Premise/To-Go/Catering/Delivery FOH Service Models - 6 in test New equipment for quality, speed, labor and cost improvements Payment options - frictionless guest experience Manager scheduling models - compliance to/changing pars Menu/prep simplification
Slide 57: Disruption
Disruption Off-Premise Returns Time
Slide 58: Flexible Service Model
Flexible Service Model - customizing the guest experience Technology plays a bigger role Frictionless What is the future role of full service? Future of aggregators
Slide 59: Regaining Our Operational Edge
REGAINING OUR OPERATIONAL EDGE
Slide 60: Regaining Operational Edge
REGAINING OPERATIONAL EDGE YFOR Focus: RVPs and RODs spending more time in restaurants, moving from Administrators to Multi-Unit Leaders. * Scaled back in-person meetings from II per year to 3, while providing resources for web hosted or Burginar meetings * Building library of Red Talks to help Oper
Slide 61: Reengaging Franchise Community
Reengaging Franchise community * Franchise advisory board * Operations committee - Sharing best practices for common issues * Presidents Club GMs/ROD Council Early feedback on initiatives from the best of the best * Work groups to influence peers - For operators by operators ¢ Innovation
Slide 62: NPS
NPS Apr 24 - Apr 30, 2017 63 Dec 26 - Jan |, 2017 54 Dec 28 - Jan3, 2016
Slide 63: Detractors
Detractors Dec 28 - Jan 3, 2016 Dec 26 - Jan|, 2017 9% Apr 24 - Apr 30, 2017 11.5% 6.6%
Slide 64: NPS by RVP
NPS BY RVP 2016 - 2017 Period 1, Period 2, Period 3, Period, Period, Period 6, Period 7, Period, Period 8, Period 10, Period 11, Period 12, Period 13, Period 1, Period2, Period 3, Period 4, 2016 2016-2016 «2016 2016-«2016 «2016 2016—2016-—«2016.|—«2016-—«2016—«2016-—«2017””—«2017—«2017— 2017
Slide 65: KDS / Dine Time
KDS / Dine Time: and are both measured on guest survey * KDS is having positive impact on restaurant operations
Slide 66: Food Safety Trend
FOOD SAFETY TREND AUDIT SCORES ona 94.55 Bound 1. Round
Slide 67: Labor pressure
¢ Labor pressure * Staffing levels at 95% - not enough to minimize overtime Wage pressures; minimum wage increases in 21 states Heavy competition for HOH TMs Service and labor model tests only support FOH * Restaurant Manager role continues to grow more complex * Running a time mo motion sini on ae
Slide 68: Building Team Member Engagement
BUILDING TEAM MEMBER ENGAGEMENT
Slide 69: * New measurement tools
* New measurement tools ¢ New development tools PAT the camel of Operators, he best id n’t be sustainable
Slide 70: Operations
Operations 60 46.7 aE 45 48.7,
Slide 71: The Go-To for Great Burgers
THE GO-TO FOR GREAT BURGERS
Slide 72: Become the go-to destination for high quality hamburgers
To become the go-to destination for high quality hamburgers, Red Robin must consistently and strategically execute on: * Speed * Attentiveness
Slide 73: Service Time
Service Time Taste of Food Restaurant Cleanliness
Slide 74: Delivering Great Shareholder Value
DELIVERING GREAT SHAREHOLDER VALUE
Slide 75: Food and Beverage Costs
FOOD AND BEVERAGE COSTS WASTE CONSIDERATION Improvement in waste (AvT) seen since yield change to food and beverage items in 03 2016. COGS Variance % “Cofte locatoine © Refocused effort on AvT 150% with new automated COGS report to the field © Food waste has normalized 1.00% to pre-yield change leve
Slide 76: Industry Turnover
INDUSTRY TURNOVER MANAGER VS HOURLY ¢ Inthis tight labor market, attracting and retaining talent is more important than ever. ¢ While Casual Dining turnover is on the rise, Red Robin has managed to reduce turnover. Manager Turnover: Hourly Turnover om 39% en; a 40% = , 96% 100% 30% 26% 80% 20% 60% i
Slide 77: Evaluating Our Business
EVALUATING OUR BUSINESS FIVE KEY VALUES. Leadership Do we have the right team and talent? Performance How can we quickly get momentum? Strategy More dependency from NROs to 4-wall growth Relationships Re-engaging with our franchisees Operations Raise the bar
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Slide 79: Development Strategy
DEVELOPMENT STRATEGY Les L. Lehner
Slide 80: Portfolio Concentration
PORTFOLIO CONCENTRATION
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