Wendy's Company (the) · NASDAQ:WEN
Wendy's Company (the) — ICR XChange Investor Conference 2013
42 slides from Wendy's Company (the)'s conference presentation, Jan 16, 2013
Slide 1: The Wendy's Company – ICR XChange Investor Conference
Exhibit 99.1 THE WENDY’S COMPANY ICR XChange Investor Conference January 16, 2013 The Wendy’s Company
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures This presentation, and certain information that management may discuss in connection with this presentation, contains certain statements that are not historical facts, including information concerning possible or assumed future results of ou
Slide 3: Emil Brolick, Chief Executive Officer
EMIL BROLICK CHIEF EXECUTIVE OFFICER
Slide 4: 2012 Preliminary Financial Summary
2012 Preliminary Financial Summary 2012 2011 Adjusted EBITDA* $333.3 mil vs. $ 331.1 mil Adjusted EBITDA Q4* $ 95.9 mil vs. $ 80.9 mil Adjusted EPS* $ 0.16 vs. $ 0.15 SSS Year 1.6% vs. 2.0% SSS Q4 (0.2)% vs. 5.1% Doubled Quarterly Dividend Rate in Q4 2012: $0.04 per share *See reconciliation of Adju
Slide 5: Positioning for Growth
Positioning for Growth Clarity of Direction and Action “A Cut Above” Strategic Growth Drivers Recipe to Win The Wendy’s Company
Slide 6: "A Cut Above"
“A CUT ABOVE”
Slide 7: Wendy's Long-Term Strategic Growth Drivers
WENDY’S LONG -T ERM STRATEGIC GROWTH DRIVERS Restaurant Ownership Shareholder Optimization Value-Enhancing Financial Management Initiatives Global Growth Restaurant Utilization & Daypart Expansion Core Organic New Restaurant Development Growth Strategies Image / Experience Activation North America S
Slide 8: Recipe to Win
RECIPE TO WIN PEOPLE 5-Star Talent PRICE New QSR Quality at QSR Price PRODUCT Play a different game. Superior perceived quality, competitive price. PROMOTION Strategically driven, tactically brilliant PLACE The complete brand experience PERFORMANCE Keeping the brand promise The Wendy’s Company 8
Slide 9: Positioning for Growth: Image Activation Progress
Positioning for Growth Clarity of Direction and Action ”A Cut Above” Growth Drivers Recipe to Win Image Activation…Great Progress The Wendy’s Company 9
Slide 10: 2012 Image Activation restaurants completed
2012 Image Activation 66 restaurants completed Reimages averaging +25% sales
Slide 11: Positioning for Growth: Comprehensive Brand Reimage
Positioning for Growth Clarity of Direction and Action ”A Cut Above” Growth Drivers Recipe to Win Image Activation…Great Progress Initiated Comprehensive Brand Reimage The Wendy’s Company 11
Slide 12: Positioning for Growth: Building 5-Star Talent Base
Positioning for Growth Clarity of Direction and Action ”A Cut Above” Growth Drivers Recipe to Win Image Activation…Great Progress Initiated Comprehensive Brand Reimage Building 5-Star Talent Base The Wendy’s Company 12
Slide 13: 5-Star Talent
5-Star Talent Greatest Source of Differentiation The Wendy’s Company 13
Slide 14: Positioning for Growth
Positioning for Growth Clarity of Direction and Action “A Cut Above” Growth Drivers Recipe to Win Image Activation…Great Progress Initiated Comprehensive Brand Reimage Building 5-Star Talent Base Discontinue breakfast at certain restaurants … $14.6 million charge 14 The Wendy’s Company
Slide 15: Brand, Sales & Profit Growth
Brand, Sales & Profit Growth Solid North America Growth Outlook SSS 2% to 3% New Restaurant Development: 120 to 130 (system) Image Activation: 200 reimages (system) Image Activation to be standard in Franchise New Builds, Renewals, Remodels and Transfers Estimates based on Company’s current outlook
Slide 16: Brand, Sales & Profit Growth
Brand, Sales & Profit Growth Solid North America Growth Outlook SSS 2% to 3% New Restaurant Development: 120 to 130 (system) Image Activation: 200 reimages (system) Image Activation to be standard in Franchise New Builds, Renewals, Remodels and Transfers Image Activation Tier II and III expansion Th
Slide 17: 2013: Image Activation Accelerating
2013: Image Activation Accelerating Tier II Tier III 2013 Outlook: 30 to 35 company reimages 20 to 25 company reimages Investment: $510 to 550K $375K Estimates based on Company’s current outlook; Excludes maintenance and other costs The Wendy’s Company
Slide 18: Brand, Sales & Profit Growth
Brand, Sales & Profit Growth Solid North America Growth Outlook SSS 2% to 3% New Restaurant Development: 120 to 130 (system) Image Activation: 200 reimages (system) Image Activation to be standard in Franchise New Builds, Renewals, Remodels and Transfers Image Activation Tier II and III expansion St
Slide 19: Determined to Re-Capture High/Low Balance
Determined to Re-Capture High/Low Balance Premium Products Value Menu High Low 19 The Wendy’s Company
Slide 20: Brand, Sales & Profit Growth
Brand, Sales & Profit Growth Solid North America Growth Outlook SSS 2% to 3% New Restaurant Development: 120 to 130 (system) Image Activation: 200 reimages (system) Image Activation to be standard in Franchise New Builds, Renewals, Remodels and Transfers Image Activation Tier II and III expansion St
Slide 21: Grow Transactions & Sales
Grow Transactions & Sales MESSAGE MEDIA CREATIVE National Spend Strategically Driven, Stepped Up in 2013 Tactically Brilliant New Digital Agency 21
Slide 22: Brand, Sales & Profit Growth
Brand, Sales & Profit Growth Solid North America Growth Outlook SSS 2% to 3% New Restaurant Development: 120 to 130 (system) Image Activation: 200 reimages (system) Image Activation to be standard in Franchise New Builds, Renewals, Remodels and Transfers Image Activation Tier II and III expansion St
Slide 23: A Total Brand Transformation
A Total Brand Transformation anchise Contempor Fresh Contempor Image &Stylish Updated ry Activ Pac ry Uniforms Brand kaging Menuboar tion—Logo Graphics Macon, ds G The Wendy’s Company 23
Slide 24: Market/Competitive Environment
Market/Competitive Environment QSR Traffic: +0.5% to 1.0% QSR Traffic Share: 78.2% and growing Share of Stomach … C-Stores, Grocery, New QSR and Traditional QSR Promotional Impact Strong … Short Term Influence Relevant Brand Differentiation … Strong Big Brand Still Key Long Term The Wendy’s Company
Slide 25: 2013: Growth – The Imperative
2013: Growth – The Imperative Clear Vision Conviction on How to Get There Great Franchise Partners…Existing and New Strong Financial Position and Flexibility The Wendy’s Company
Slide 26: Steve Hare, Chief Financial Officer
STEVE HARE CHIEF FINANCIAL OFFICER
Slide 27: Wendy's Q4 2012 Highlights
Wendy’s Q4 2012 Highlights October—November November—December North America Same-Store Sales 1-Year 2-Year Company-Operated -0.2% 4.9% Franchise -0.6% 3.6% Company Restaurant Margin Q4 2012 15.9% Q4 2011 15.0% The Wendy’s Company
Slide 28: Q4 2012 Preliminary Financial Summary
Q4 2012 Preliminary Financial Summary (Unaudited) Better/ ($ in millions except per share amounts) Q4 2012 Q4 2011 (Worse) Sales $ 554.0 $ 538.5 $ 15.5 Franchise revenues 75.9 76.5 (0.6) Total revenues $ 629.9 $ 615.0 $ 14.9 growth rate 2.4% Adjusted EBITDA from continuing operations* $ 95.9 $ 80.9
Slide 29: Wendy's 2012 Highlights
Wendy’s 2012 Highlights 2012 North America Same-Store Sales 1-Year 2-Year Company-Operated 1.6% 3.7% Franchise 1.6% 3.4% 2012 Company Restaurant Margin 2012 14.0% 2011 14.0% The Wendy’s Company
Slide 30: 2012 Preliminary Financial Summary
2012 Preliminary Financial Summary (Unaudited) Better/ ($ in millions except per share amounts) 2012 2011 (Worse) Sales $ 2,198.3 $ 2,126.6 $ 71.7 Franchise revenues 306.9 304.8 2.1 Total revenues $ 2,505.2 $ 2,431.4 $ 73.8 growth rate 3.0% Adjusted EBITDA from continuing operations* $ 333.3 $ 331.1
Slide 31: 2013 Outlook
2013 Outlook SSS +2% to 3% Traffic and check growth from core business: new products, marketing, operations Image Activation benefit, offset by fewer breakfast restaurants Commodities +90 to 120 bps Increases in beef and chicken, partially offset by cost-savings initiatives Company-Operated Restaura
Slide 32: Factors Affecting 2013 Outlook vs. 2012
Factors Affecting 2013 Outlook vs. 2012 2013: Higher Adjusted EBITDA growth in Q1, lower growth in Q4 2012 SSS and Adjusted EBITDA* Q1 Q2 Q3 Q4 2012 SSS 0.8% 3.2% 2.7% -0.2% 1.6% Adj. EBITDA* $63.9 $89.1 $84.5 $95.9 $333.3 Unusually soft results in Q1 2012, but expect Q1 2013 Adjusted EBITDA more in
Slide 33: 2013 Image Activation Outlook
2013 Image Activation Outlook Image Activation Quarterly Reopenings Company Image Activation Plan Q1 Q2 Q3 Q4 2013 Co. 6 35 37 22 100 Fran. 100 Total 200 Estimates based on Company’s current outlook The Wendy’s Company
Slide 34: 2013 New Restaurant Development
2013 New Restaurant Development Expect 120 to 130 New System Restaurants in 2013 2013 New Restaurants Company Franchise Global 2013 Expected Closures N.A. Company: 5 to 10 N.A. Franchise: 90 to 100 Global: 15 to 20 Note: new restaurant numbers represent the midpoint of the expected range; Estimates
Slide 35: Image Activation Multi-Year Growth Plan
Image Activation Multi-Year Growth Plan Image Activation Progress by Year-End 2015: 40 50% of Company restaurants 25 out of 5 of the Wendy’s System restaurants 40 Fr. New 300 Co. New 200 Fr. Reimage 25 Co. Reimage 100 45 200 200 69 16 100 20 48 2011 10 2012 2013 2014 2015 Cumulative 10 76 301 766 1,
Slide 36: 2013 Capital Expenditures
2013 Capital Expenditures Restaurant Equipment & Maintenance $40 Product Dev./Equipment Upgrades/Other 20 Technology/POS 40 Base Cap Ex 100 Cap Ex New Restaurants 50 approx. Reimages 95 $200 mil Image Activation Cap Ex 145 Total Projected Cap Ex $245 36 Estimates based on Company’s current outlook T
Slide 37: Free Cash Flow & Balance Sheet Flexibility
Free Cash Flow & Balance Sheet Flexibility Core Growth Priority Accelerating Investment in Image Activation: Expect $440 to $500 million 2013 to 2015 Return Capital to Shareholders 100% increase in quarterly dividend rate effective Q4 2012 $100 million share repurchase program authorized through 12/
Slide 38: 2013 and Long-Term Earnings Outlook
2013 and Long-Term Earnings Outlook Adjusted EBITDA: $350 to $360 million Adjusted EPS: $0.18 to $0.20 Long-Term Estimates based on Company’s current outlook Average annual Adjusted EBITDA and Adjusted EPS growth rates in high-single-digit to low-double-digit range The Wendy’s Company 38
Slide 39: Breakout Sessions
Breakout Sessions Splash 12 8:50 am 2:25 pm
Slide 40: Appendix
APPENDIX
Slide 41: Reconciliation of Adjusted EBITDA from Continuing Operations to Net Income
Reconciliation of Adjusted EBITDA from Continuing Operations to Net Income Attributable to The Wendy’s Company The Wendy’s Company
Slide 42: Reconciliation of Adjusted Income and Adjusted Earnings Per Share
Reconciliation of Adjusted Income and Adjusted Earnings Per Share from Continuing Operations to Net Income and Earnings Per Share Attributable to The Wendy’s Company The Wendy’s Company 42