The Cheesecake Factory Incorporated · NASDAQ:CAKE
The Cheesecake Factory — Cheesecake Factory — Investor Presentation (April 2018)
33 slides from The Cheesecake Factory's investor presentation, Apr 25, 2018
Slide 1: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements about our current and presently expected performance trends, growth plans, business goals and other matters. These statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act
Slide 2: A Compelling Investment Opportunity
A Compelling Investment Opportunity •Highly differentiated concepts delivering a unique guest experience •Diversified growth drivers •Sustained track record of consistent financial performance •Robust cash flow to support growth and maximize shareholder value 3
Slide 3: Company Overview and Key Competitive Advantages
Company Overviewand KeyCompetitive Advantages4
Slide 4: Our Global Footprint
Our Global Footprint High quality, high profile locations worldwide Toronto Company-Owned: 214 Lebanon (1) Bahrai n (1) Kuwait (3) Qatar (3) Beijing Shanghai Saudi Arabia (1) UAE (5) Hong Kong Guadalajara Mexico City (2) Company-Owned 199 13 2 International - Licensed Middle East14 Mexico3 China, In
Slide 5: International Licensed Presence
International Licensed Presence Guadalajara Shanghai Dubai Festival CityAbu Dhabi 6
Slide 6: The Cheesecake Factory - A Highly Differentiated Concept
The Cheesecake Factory - A Highly Differentiated Concept Leader in Menu Innovation Ambiance, Service and Hospitality Best-in-Class Operational Execution Integrated Bakery 7
Slide 7: 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 Profit •I
Slide 8: Dining With Us Is an Experience
Dining With Us Is an Experience Ambiance, Service and Hospitality Drive Sales 9
Slide 9: Leveraging Technology to Drive Sales
Leveraging Technology to Drive Sales Delivery Online Ordering New Guest Satisfaction Platform 10
Slide 10: Integrated Bakery – The Cheesecake Magic
Integrated Bakery – The “Cheesecake” Magic Industry-Leading Dessert Sales 16% •Produces over 70 cheesecakes and other baked desserts •Enables creativity and quality control 11
Slide 11: Broad Consumer Appeal
Broad Consumer Appeal 2017 #1 Food Quality A division of Vice Media LLC $10.6 Highest Unit Volumes ($ in millions) With a Moderate Average Check $32 $8.3$8.1 $5.6 $5.0$4.7 $3.4$3.3$3.0$2.9 $28 $25 $22$22$21$21 $18$17 $15 Maggianos Yard BJ'sTexas Olive Outback LongHorn Bonefish Carrabbas Yard Maggian
Slide 12: Strong Consumer Engagement Across Channels
Strong Consumer Engagement Across Channels 5M+ fans It takes more than 30 minutes to prepare a small batch of our Sake Butter Sauce, and that’s just one of dozens of sauces that we prepare fresh in-house every day. 375K followers 640K followers Millions of Viewers 13
Slide 13: Capitalizing on the Power of the Brand
Capitalizing on the Power of the Brand The Cheesecake Factory At HomeTM 14
Slide 14: Best-in-Class Operational Execution
Best-in-Class Operational Execution Dual Management Structure Above 4-Walls Average Tenure by Position Industry-Leading Retention ---------Area Director of Operations GMGMGMGMGMGM ---------Area Kitchen Operations Manager EKMEKMEKMEKMEKMEKM Senior VP of Operations Regional Vice President Area Directo
Slide 15: Leveraging Technology to Manage Costs
Leveraging Technology to Manage Costs Market-Based Labor Analytics Kitchen Management System Automated Production Call Dashboards 16
Slide 16: Diversified Growth Drivers
Diversified GrowthDrivers 17
Slide 17: Returns-Focused Growth Opportunity for Cheesecake Factory
The Cheesecake Factory – Returns-Focused Growth Opportunity for 300 Domestic & 8 - 10 Canadian Locations Over Time Average Unit Economics* Sales $10.6 ~18% $8+ 20% - 25% EBITDA % Cash Capex Investment Cash-on-Cash Return •Focused on premier locations – high street, lifestyle centers and A malls •Inf
Slide 18: 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 +1¢ Per Restaurant in EPS, on Average $0 Capital Expenditure 19 Shanghai
Slide 19: CAKE 2022 Multi-Concept Growth
…CAKE 2022 •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 Illustrative Unit Growth Roadmap Potential Acq. 1* Incremental Growth Opportunities Pot
Slide 20: CAKE 5-Year Plan
CAKE 5-Year Plan Top-Line Growth Drivers Comparable Sales Growth~1% - 2% Unit Growth~5% Total Top-Line Growth6% - 7% 2022 Financial Targets Revenues~$3 billion Net Income Margin 6%+ EPS$4.50 ROIC15%+ 21
Slide 21: Creating Value for Shareholders
Creating Value for Shareholders Long-Term Objective: 13% - 14% Total Return to Shareholders, on Average (EPS + Dividend) Total Return to Shareholders Company-Owned Restaurants~6% - 7% Comparable Sales Growth ~1% - 2% Unit Growth~5% International Licensed~2% Share Repurchases~3% Dividend~2% 22
Slide 22: Track Record of Consistent Financial Performance
TrackRecordofConsistent FinancialPerformance 23
Slide 23: Continuing to Outperform the Industry
Continuing to Outperform the Industry Comparable Sales - Historical 2-year Stack 20112012201320142015201620171Q18 4.0%4.2% 2.0% 3.3% 2.6% 4.1% 3.8% 2.4% 1.0% 0.8% 0.4% (0.9)% (0.4)% (0.8)% (1.6)% (2.2)% Knapp-Track Index 24
Slide 24: Leveraged Sales and Managed Costs to Support Profitability
Leveraged Sales and Managed Costs to Support Profitability Adjusted Earnings Per Share* $1.42 $1.64 $1.88 $2.10 $1.97 $2.37 $2.83 $2.60 20102011201220132014201520162017 *Please see Appendix for GAAP to non-GAAP reconciliations.25
Slide 25: Our Restaurants Generate Significant Cash Flow
Our Restaurants Generate Significant Cash Flow Free Cash Flow and Strong Balance Sheet Provide Significant Financial Flexibility ($ millions) $158 $128 $120 $112$107 $135 $94 $100 $44 201020112012201320142015201620171Q18 Free cash flow defined as cash flow from operations less capital expenditures/i
Slide 26: Effective Capital Allocation Supports Our Financial Objectives
Effective Capital Allocation Supports Our Financial Objectives $1+ Billion in Share Repurchases Reducing WASO 3% Per Year Committed to Continuing to Grow Dividend 60,446 ($ millions) $172 $13 $101 $27 $184 $30$36 $109 $141 $42 $146 48,152 $50 $123 $52 $42 $77$86$106$114 $154$158$139 2010201120122013
Slide 27: Disciplined, Returns-Focused Growth Has Paid Off
Disciplined, Returns-Focused Growth Has Paid Off Return on Invested Capital (ROIC) 17% 13% 13% 14% 15% 14% 15% 15% 20102011201220132014201520162017 ROIC = NOPAT / Average invested capital NOPAT = Income from operations excluding non-recurring expenses (-) income tax provision Invested Capital = Prop
Slide 28: 2018 Outlook
2018 Outlook 2018E Company-Owned Restaurant OpeningsAs many as 4 - 6 International Licensed Restaurant OpeningsAs many as 4 Comparable Sales1% – 2% Adjusted EPS$2.62 - $2.74 Free Cash Flow~$150 million 2018 guidance provided April 25, 2018.29
Slide 29: A Compelling Investment Opportunity
A Compelling Investment Opportunity •Highly differentiated concepts delivering a unique guest experience •Diversified growth drivers •Sustained track record of consistent financial performance •Robust cash flow to support growth and maximize shareholder value 30
Slide 30: Non-GAAP Reconciliation
Non-GAAP Reconciliation In addition to the results provided in accordance with the Generally Accepted Accounting Principles (“GAAP”) in this presentation, the Company is providing non-GAAP measurements which present diluted net income per share excluding the impact of certain items and free cash flo
Slide 31: Non-GAAP Reconciliation
Non-GAAP Reconciliation The Cheesecake Factory Incorporated Reconciliation of Non-GAAP Financial Measures ($ in thousands, except per share data) Fiscal Year - Partial IRS settlement (2) - (1,506) - - - - - - - Unwinding of interest rate collars (3) 4,425 - - - - - - - - Proceeds from variable life
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation The Cheesecake Factory Incorporated Reconciliation of Non-GAAP Financial Measures ($ in millions) Fiscal Year (1) The excess tax benefit related to stock options exercised is no longer reclassified from cash flows from operating activities to cash flows from financing activit
Slide 33: 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 20171018 Cash Flow from Operations $ 170 $ 197 $ 198 $ 23 $ 29 $§ 28 $ 316 239 5 Capital Expenditures / Investments 2 77 6 106 114
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