Wendy's Company (the) · NASDAQ:WEN

Wendy's Company (the) — Q4 2017 Earnings Presentation

46 slides from Wendy's Company (the)'s earnings presentation, Feb 22, 2018

1. Slide 1: Fourth Quarter 2017 Conference Call

   Fourth Quarter 2017 Conference Call February 22, 2018 © Quality Is Our Recipe, LLC Exhibit 99.1

2. Slide 2: Peter Koumas, Director – Investor Relations

   Peter Koumas Director – Investor Relations © Quality Is Our Recipe, LLC

3. Slide 3: 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

4. Slide 4: Agenda

   THE WENDY'S COMPANY | Agenda CEO Update6 2017 Preliminary Results 20 2018 Outlook24 Capital Allocation30 2020 Goals34 IR Calendar38 Q&A

5. Slide 5: Todd Penegor, President & Chief Executive Officer

   Todd Penegor President & Chief Executive Officer © Quality Is Our Recipe, LLC

6. Slide 6: Full Year 2017 Highlights

   THE WENDY'S COMPANY | Full Year 2017 Highlights * See reconciliation of non-GAAP financial measures in the Appendix. NA SRS of 2.0%; 3.6% on a 2-year basis 20 consecutive quarters of positive SRS 1.5% global net restaurant growth Global systemwide sales increase 3.5% to $10.3B NA AUVs increase 2.7%

7. Slide 7: QSR Continues to Grow

   THE WENDY'S COMPANY | QSR Continues to Grow Source: The NPD Group / CREST â Y/E December Speed Convenience Affordability

8. Slide 8: Scale Matters

   THE WENDY'S COMPANY | Scale Matters Traffic Growth Percentage Change vs. Prior Year Source: The NPD Group / CREST â Y/E December

9. Slide 9: Consecutive Quarters of NA SRS Growth

   THE WENDY'S COMPANY | 20 Consecutive Quarters of NA SRS Growth

10. Slide 10: Global Footprint Expansion Continues to Accelerate

    Global Footprint Expansion Continues to Accelerate THE WENDY'S COMPANY | 149 Total 58 Net 174 Total 97 Net Net New Restaurant Growth

11. Slide 11: NA Net Restaurant Growth Continues to Increase

    NA Net Restaurant Growth Continues to Increase THE WENDY'S COMPANY | 0.08% ’17 Net New Growth Rate 0.5% ’18 Net New Growth Rate ~1% Recipe for Growth Disruptive customer focused designs: Smart Platform Attractive new restaurant incentives and support Development commitments cover >50% of new restaur

12. Slide 12: 2017 International Restaurant Growth Exceeds Expectations

    2017 International Restaurant Growth Exceeds Expectations THE WENDY'S COMPANY | ’17 Net New Growth Rate 14.8% ’18 Net New Growth Rate ~16% Japan, Middle East, Indonesia, Chile, Brazil, Argentina & Mexico v Portfolio Approach to Accelerated Growth Key markets continue to drive restaurant development

13. Slide 13: Healthy Systemwide Sales Growth Driven by SRS and New Restaurant Development

    Healthy Systemwide Sales Growth Driven by SRS and New Restaurant Development THE WENDY'S COMPANY | Excludes Venezuela; systemwide sales growth is calculated on a constant currency basis

14. Slide 14: Transforming Our Franchise System

    Transforming Our Franchise System THE WENDY'S COMPANY | ~34% of Global System Image Activated at the end of Q1 2017 Strategy Update Will be more selectively involved in real estate See presentation on IR website for details regarding the change in fee structure Completed 130 Expect to complete ~200

15. Slide 15: Rapidly Growing Delivery Footprint

    THE WENDY'S COMPANY | Rapidly Growing Delivery Footprint Delivery offered in >20% of NA restaurants at the end of 2017 Exploring additional partners to drive further expansion Incremental orders and higher average checks

16. Slide 16: Enabling a Better Customer Experience Through Technology

    THE WENDY'S COMPANY | Enabling a Better Customer Experience Through Technology Mobile ~80% of NA restaurants mobile ordering capable at end of 2017 Recently introduced mobile offers Rewards pilot underway ~150 restaurants with kiosks at the end of 2017 Incremental throughput, improved customer exper

17. Slide 17: Wendy's Creates Joy & Opportunity Through Food, Family & Community

    THE WENDY'S COMPANY | WENDY’S CREATES JOY & OPPORTUNITY THROUGH FOOD, FAMILY & COMMUNITY A place I love to go CLEAN & WELL MAINTAINED UP TO DATE EASY & CONVENIENT UPBEAT & COMFORTABLE FOOD Food I love FRESH HONEST INGREDIENTS CRAVEABLE TASTE MADE RIGHT VALUE Worth what I pay COMPETITIVE PRICE WENDY’

18. Slide 18: Gunther Plosch, Chief Financial Officer

    Gunther Plosch Chief Financial Officer © Quality Is Our Recipe, LLC

19. Slide 19: Agenda

    THE WENDY'S COMPANY | Agenda CEO Update6 2017 Preliminary Results 20 2018 Outlook24 Capital Allocation30 2020 Goals34 IR Calendar38 Q&A

20. Slide 20: Fourth Quarter Financial Highlights

    Fourth Quarter Financial Highlights THE WENDY'S COMPANY | 2017E 2016 B/(W) Company Restaurant Margin 17.5% 18.8% (130) bps G&A $51.9 $61.2 15.2% Adjusted EBITDA* $104.0 $91.1 14.2% Adjusted EBITDA Margin* 33.6% 29.4% +420 bps Adjusted EPS* $0.11 $0.08 37.5% $ Mils (except per share amounts) (Unaudit

21. Slide 21: 2017 Demonstrates Strong Quality of Earnings

    THE WENDY'S COMPANY | 2017 Demonstrates Strong Quality of Earnings $ Mils (Unaudited) Adj. EBITDA margin calculated as adj. EBITDA divided by total revenue, excludes advertising funds revenue and expense

22. Slide 22: Earnings Growth Drives Adj. EPS in 2017

    THE WENDY'S COMPANY | Earnings Growth Drives adj. EPS in 2017 (Unaudited)

23. Slide 23: Free Cash Flow Acceleration Continues

    THE WENDY'S COMPANY | Free Cash Flow Acceleration Continues (Unaudited) $ Mils Free cash flow calculated as cash flows from operating activities less CAPEX

24. Slide 24: 2018 Outlook

    THE WENDY'S COMPANY | 2018 Outlook CAPEX of ~$75 to $80M Free Cash Flow of ~$220 to $240M North America SRS of ~2.0 to 2.5% Interest Expense of ~$120M G&A Expense of ~$195M Company Operating Restaurant Margin of ~17 to 18% Adjusted EBITDA (Margin) of ~$420 to $430M (~33 to 34%) Adjusted Tax Rate of

25. Slide 25: 2018 Adjusted EBITDA Expected to Grow ~8 to 10%

    2018 Adjusted EBITDA Expected to Grow ~8 to 10% THE WENDY'S COMPANY | Adj. EBITDA Margin 33-34%

26. Slide 26: Restaurant Margin Expands Despite Headwinds

    Restaurant Margin Expands Despite Headwinds THE WENDY'S COMPANY | (80) bps reclassification of training and other restaurant support costs from G&A ~17.0 - 18.0% Labor Inflation of approximately 3 to 4% Commodity Inflation of approximately 1 to 2%

27. Slide 27: G&A Savings Initiative Drives Year over Year Improvement

    G&A Savings Initiative Drives Year over Year Improvement THE WENDY'S COMPANY | $5M reclassification of training and other restaurant support costs to cost of sales G&A Savings Initiative within Expectations Expect >$100M Cumulative Savings since 2013

28. Slide 28: Strong 2018 Adj. EPS Growth of ~38 to 44%

    THE WENDY'S COMPANY | Strong 2018 Adj. EPS Growth of ~38 to 44% (Unaudited)

29. Slide 29: 2018 Free Cash Flow Growth of ~29 to 41%

    THE WENDY'S COMPANY | 2018 Free Cash Flow Growth of ~29 to 41% (Unaudited) $ Mils

30. Slide 30: Strong Track Record of Shareholder Returns

    Strong Track Record of Shareholder Returns THE WENDY'S COMPANY | $ Mils (except per share amounts) 250% Growth in Quarterly Dividend Rate $0.02 in Q1 2013 to $0.07 in Q4 2017 ~$2.3B of Cumulative Cash Returned to Shareholders

31. Slide 31: Flexible Capital Structure Supports Growth Initiatives

    Flexible Capital Structure Supports Growth Initiatives THE WENDY'S COMPANY | Leverage Ratio*: 5.9x Max Leverage Ratio: 6x $100 *Net Funded Debt (excl. Capital Leases) + Fully Drawn VFN as of 1/17/18: $2.3B / FY2017 Recast Adj. EBITDA: $389.9M 4.080% 2015 Notes (Callable at par June 2019) 3.573% 2018

32. Slide 32: 21% Dividend Increase and New $175M Share Repurchase Authorization

    21% Dividend Increase and New $175M Share Repurchase Authorization THE WENDY'S COMPANY | Quarterly Dividend Board has authorized a new $175 million share repurchase program Expires 3/3/2019 Plan to purchase shares through the open market Share Repurchase Authorization From $0.07 cents to $0.085 cent

33. Slide 33: Todd Penegor, President & Chief Executive Officer

    Todd Penegor President & Chief Executive Officer © Quality Is Our Recipe, LLC

34. Slide 34: 2020 Goals

    2020 Goals THE WENDY'S COMPANY | Global Systemwide Sales ~$12 billion Global Restaurant Count ~7,250 Global Image Activation 70%+ Adj. EBITDA Margin 37-39% Free Cash Flow ~$300 million Year-End 2017 Global Systemwide Sales $10.3 billion Global Restaurant Count 6,634 Global Image Activation 43% Adj.

35. Slide 35: How are we getting there?

    THE WENDY'S COMPANY | How are we getting there? Global Systemwide Sales ~$12B Global Restaurant Count ~7,250 Global Image Activation 70%+ Adj. EBITDA Margin 37-39% Free Cash Flow ~$300M Resilient and predictable model allows continued focus on returning significant amounts of cash to shareholders wh

36. Slide 36: We Will Become the World's Most Thriving and Beloved Restaurant Brand

    *WE WILL BECOME: , THE WORLD’S thriving Aad beleved QE” RESTAURANT — 5 -BRAND:

37. Slide 37: Peter Koumas, Director – Investor Relations

    Peter Koumas Director – Investor Relations © Quality Is Our Recipe, LLC

38. Slide 38: Investor Relations Calendar (Tentative)

    Investor Relations Calendar (Tentative) February 28: 2017 10-K Filing March 7: UBS Global Consumer & Retail Conference (Boston) March 8: JPM Gaming, Lodging, Restaurant & Leisure Forum (Las Vegas) March 14: BofA Consumer and Retail Technology Conference (New York) March 15: Morgan Stanley NDR (Mid-A

39. Slide 39: Q&A

    Q&A

40. Slide 40: Appendix

    Appendix

41. Slide 41: Reconciliation of Non-GAAP Financial Measures

    Reconciliation of Non-GAAP Financial Measures In addition to the GAAP financial measures included in this presentation, the Company has included certain non-GAAP financial measures (i.e., adjusted EBITDA, adjusted EBITDA margin, adjusted earnings per share, adjusted tax rate, free cash flow and syst

42. Slide 42: Reconciliation of Net Income to Adjusted EBITDA

    THE WENDY'S COMPANY | Reconciliation of Net Income to Adjusted EBITDA In Thousands (Unaudited)

43. Slide 43: Reconciliation of Net Income and Diluted EPS to Adjusted Income and Adjusted EPS

    Reconciliation of Net Income and Diluted Earnings Per Share to Adjusted Income and Adjusted Earnings Per Share In Thousands except per-share amounts (Unaudited) THE WENDY'S COMPANY |

44. Slide 44: Reconciliation of Recast Net Income to Recast Adjusted EBITDA

    THE WENDY'S COMPANY | Reconciliation of Recast Net Income to Recast Adjusted EBITDA In Thousands (Unaudited) The reconciliation of recast net income to recast adjusted EBITDA reflects updates for the implementation of the new revenue recognition standard as if the full retrospective approach was ado

45. Slide 45: Reconciliation of Recast Net Income and Diluted EPS to Recast Adjusted Income and EPS

    Reconciliation of Recast Net Income and Diluted Earnings Per Share to Recast Adjusted Income and Adjusted Earnings Per Share In Thousands except per-share amounts (Unaudited) THE WENDY'S COMPANY | The reconciliation of recast net income and diluted earnings per share to recast adjusted income and ad

46. Slide 46: Slide 46

Wendy's — Q4 2017 Earnings Presentation on 6ix