The Cheesecake Factory Incorporated · NASDAQ:CAKE
The Cheesecake Factory — Cheesecake Factory — Investor Presentation (February 2020)
37 slides from The Cheesecake Factory's investor presentation, Feb 19, 2020
Slide 1: Investor Presentation February 2020
Investor Presentation February 2020
Slide 2: Safe Harbor Statement
Safe Harbor S tatement This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as codified in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. This incl
Slide 3: A Compelling Investment Opportunity
A Compelling Investment Opportunity Highly differentiated concepts delivering a unique guest experience Accelerated and diversified g rowth drivers Sustained track record of consistent financial performance • • • • Robust cash flow to support growth and maximize shareholder value 3
Slide 4: The Cheesecake Factory - Global Footprint
The Chees ecake Factory - Global Footprint High quality, high profile locations worldwide Arabia Macau 4 International – Licensed: 26 y Mexico Toronto Company-Owned: 206 Monterre Guadalajara City (3) Beijing Shanghai Hong Kong Kuwait (3) Bahrain (1) Qatar Saudi(3) (4) UAE (6)
Slide 5: The Cheesecake Factory - A Highly Differentiated Concept
The Cheesecake Factory - A Highly Differentiated Concept Service and 5 Ambiance, Hospitality Integrated Bakery Best-in-Class Operational Execution Breadth of Menu & Innovation
Slide 6: Breadth of Menu & Innovation are Key Competitive Advantages
Breadth of Menu & Innovation are Key Competitive Advantages 250 Menu Items - Made Fresh, From Scratch 6
Slide 7: Dining With Us Is an Experience
Dining With Us Is an Experience Ambiance, Service and Hospitality Drive Sales 7
Slide 8: Integrated Bakery – The “Cheesecake” Magic
Integrated Bakery – The “Cheesecake” Magic • Produces over 70 cheesecakes and other baked desserts Enables creativity, quality control Industry-Leading Dessert Sales 16% • and supply chain efficiencies 8
Slide 9: Cult Status & Strong Consumer Engagement
Cult Status & Strong Consumer Engagement A divisi on of Vice Media LLC 5M+ fans 850K followers 370K followers Millions of Viewers 9
Slide 10: Broad Consumer Demographic and Appeal
Broad Consumer Demographic and Appeal #2 Top Large Chain With a Moderate Average Check Highest Unit Volumes ($ in millions) $32 $10.7 $29 $27 $23 $23 $23 $22 $19 $17 $5.5 $5.2 $5.0 $3.6 $3.6 $3.0 $2.9 Maggianos Yard House BJ's Texas Olive Outback LongHorn Bonefish Carrabbas Yard House Maggianos Bone
Slide 11: Leveraging Differentiation in the Off-Premise Channel
Leveraging This Differentiation in the Off-Premise Channel To Go Sales (% of Total Revenue) 16% 14% 12% ~$1.7 million per restaurant 9% 2013 2017 2018 2019 New Takeout Packaging 11
Slide 12: Further Leaning in to Convenience
Further Leaning in to Convenienc e Thu 1/30/2020 S:« AM The Cheesecake Factory ' Order Online for The Big Game and Get a Free Slice! ffi Menu 0 Locations Order Onlll'lf!i Ship a Cheesecake Gift: Cards The Cheesecake Factory DDDC' ·. o Reviev;< $$ Desserts, American :Traditional) Open Lntil11:00 PM I
Slide 13: Increasing Unaided Awareness to Drive Comparable Sales Growth
Increasing Unaided Awareness to Comparable Sales Growth Drive Attain Top of Mind Status 13
Slide 14: Capitalizing on the Power of the Brand
Capitalizing on the Power of the Brand The Cheesecake Factory At Home® 14
Slide 15: Best-in-Class Operational Execution Has Driven Our Success
Best-in-Class Operational Execution Has Driven Our Success Guest Experience Efficiencies Cost Management Retention Labor Productivity Forecasting 15
Slide 16: Supported by Our Tenured Teams
Supported by Our Tenured Teams Who Execute Our Complex Concept Everyday Average Tenure by P osition 31 years Senior VP of Operations Regional Vice Presidents 22 years “What we found is that food and beverage innovation is Area Directors of Operations 19 years table stakes; you need to do it, but it’
Slide 17: Being A Great Place to Work
Being A Great Place to Work FORTUNE Place To . Best WorkplacesN BEST COMPANIES Best WorkplacesN TO WORK FOR. -for Women - ====== 2019 === FromFORTUNE.@2019 Fcxti¥>9Mede/P ed. FORTUNE 100 BeslC«<J)ani?s toWork Fais a tradeff'l<lkof • 7 Foll!neMedia IP Lhilec1 and15 ussd lllCier fcenae. FORTUNE arxi F
Slide 18: We Raise the Bar
We Raise the Bar Drives Best-in-class training Culture of fun Indust ry-Leading Retention • • • • • Recognition Commitment to our communities, charitable giving and a sustainable future Industry-leading benefits 18 18
Slide 19: Looking Ahead - Diversified Growth Drivers
Looking Ahead - Diversified Growth Drivers 1199
Slide 20: An Experiential Dining Category Leader
An Experiential Dining Category Leader Culinary forward. First class hospitality. Concepts like no other. 20
Slide 21: The Cheesecake Factory – Returns-Focused Domestic & Canadian Growth Opportunity
The Cheesecake Factory – Returns-Focused Opportunity for 300 Do mestic & Growth 8 - 10 Canadian Locations Over Time * Illustrative example of target returns for new restaurant openings. 21 Philadelphia Average Unit Economics* ($ millions) Sales $10.7 ~18% $8+ 20% - 25% Restaurant-Level Margin % Cash
Slide 22: The Cheesecake Factory – Expanding International Licensed Presence
The Cheesecake Factory – Expanding International Licensed Presence • Continued expansion within current geographies Potential for additional geographies with current licensees Opportunity to add licensees and territories • • Shanghai 22 $0 Capital Expenditure +1¢ Per Restaurant in EPS, on Average
Slide 23: Turning a Modern Lens on Italian Cooking in the Upscale Casual Segment
Turning a Modern Lens on Italian Cooking in the Upscale Casual Segment • Potential for 200 domestic locations over time - 23 locations in 11 states & Washington D.C. currently All dishes handmade from scratch daily Serving lunch, dinner, weekend brunch & weekday happy hour • • • • Average check: $25
Slide 24: Fox Restaurant Concepts Will Serve as an Incubation Engine
Fox Restaurant Concepts Will Serve as an Incubation Engine Innovating Concepts of the Future 24 Boutique Brands Potential Growth Concepts
Slide 25: Attractive Unit Economics Drive Significant Accretive Growth Potential
Attractive Unit Economics Drive Significant Accretive Growth Potential Note: Stead y-state restaurant-level margin typically reached by year three of operations. 25 Sales ~$7 million~$1,000/sq. ft. ~18% - 20%~16% - 18% $3 - $3.5 million$500/sq. ft. 35%+25% - 30% 2:12:1 Restaurant-Level Margin % Cash
Slide 26: The Future CAKE
The Future CAKE Multi-concept with segment, price point, occasion, real estate and labor model diversification Leveraging brand power, operational excellence, scale, supply chain and real estate development expertise • • Anticipated Unit Growth Roadmap 26 Target Size (sq. ft.) 7,500 – 10,0005,000 -
Slide 27: All Supports Our Long-Term Financial Objective
All Supports Our Long-Term Financial Objective 13% - 14% Total Return to Shareholders, on Average (EPS + Dividend) Revenue Growth ~8% Capital Return ~5.5% Dividend Share Repurchases Debt Repayment 27 Targeted Total Return to Shareholders ~2.5% ~1.5% ~1.5%
Slide 28: Track Record of Consistent Financial Performance
Track Record of Consistent Financial Performance factory -------------
Slide 29: Continuing to Outperform the Industry
Continuing to Outperform the Industry Comparable Sales - Historical 2-year Stack 20 11 2012 2013 2014 2015 2016 2017 2018 2019 4.2% 4.1% 4.0% 3.8% 3.3% 2.6% 2.5% 2.0% 1.4% 1.0% 0.9% 0.8% 0.5% 0.4% (0.4)% (0.9)% (1.6)% (2.2)% Knapp-Track Index 29
Slide 30: Leveraged Sales and Managed Costs to Drive Adjusted Earnings Per Share
Leveraged Sales and Managed Support Profitability Costs to Adjusted Earnings Per Share* $2.83 $1.88 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 *Please see Appendix for GAAP to non-GAAP reconciliations. 30 $2.37 $2.60$2.51$2.61 $2.10$1.97 $1.64 $1.42
Slide 31: Our Restaurants Generate Significant Cash Flow
Our Restaurants Generate Significant Cash Flow Free Cash Flow a nd Strong Balance Sheet Provide Significant Financial ($ millions) Flexibility $163 $158 $128 $120 $112 $107 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Free cash flow defined as cash flow from operations less capital expenditures
Slide 32: Effective Capital Allocation Supports Our Financial Objectives
Effective Capital Allocation Supports Our Financial Objectives $1+ Billion in Share Repurchases Reducing WASO 3% Per Year Committed to Supporting ($ millions) the Dividend 60,446 44,545 $13 2010 2011 2012 2013 2014 2015 2016 2017 2018 WASO 2019 Capex / Investment Share Repurchases Dividend 32 *2019
Slide 33: A Compelling Investment Opportunity
A Compelling Investment Opportunity Highly differentiated concepts delivering a unique guest experience Accelerated and diversified growth drivers Sustained track record of consistent financial performance • • • • Robust cash flow to support growth and maximize shareholder value 33
Slide 34: Appendix
OF Appendix
Slide 35: Non-GAAP Reconciliations
Non-GAAP Reconciliations In addition to the results provided in accordance with the Generally Accepted Accounting Principles (“GAAP”) in this presentation, the Company is providing non-GAAP measurements which present diluted net income per share excluding the impact of certain items and free cash fl
Slide 36: Non-GAAP Reconciliation
Non-GAAP R econciliation T he Cheesecake Factory Incorporated Reconciliation of Non-GAAP Financial Measures ($ in thousands, except per share data) Fiscal Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Net Income (GAAP) After-tax impact from: - Impairment of assets and lease terminations - P
Slide 37: Non-GAAP Reconciliation
Non-GAAP Reconciliation The Cheesecake Factory Incorporated Reconcili ation of Non-GAAP Financial Measures ($ in millions) Fiscal Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Cash flow from operations (1) Capital expenditures / investments Free cash flow $ 170 42 $ 197 77 $ 198 86 $ 213 10
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