Wendy's Company (the) · NASDAQ:WEN
Wendy's Company (the) — Wendy's/Arby's Group — Investor Presentation (January 2009)
34 slides from Wendy's Company (the)'s investor presentation, Jan 13, 2009
Slide 1: 2009 Analyst and Investor Presentation
2009 Analyst and Investor Presentation
Slide 2: Agenda
AGENDA Overview QSR Industry Overview 2009 Key Goals Wendy’s ® Brand Arby’s ® Brand Wendy’s/Arby’s Group Summary
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation, and certain information that management may discuss in connection with this presentation, may contain statements that are not historical facts, including, importantly, information concerning possible or assumed future results of our operations. Those sta
Slide 4: Our Vision: Why Invest in WEN?
Our Vision: To continuously grow stakeholder value by leveraging the strengths of vibrant, independent restaurant brands. 3rd Largest Restaurant Company in the U.S. 10,000 Restaurants $12 Billion in 2007 System-Wide Sales Strong Consumer Brands Commitment to quality and operational excellence Financ
Slide 5: Wendy's: third largest quick-service hamburger chain in U.S.
Third largest quick-service hamburger chain in U.S. with 6,625 system-wide restaurants as of Q3 2008 Approximately $9 billion in system-wide sales 79% franchised and 21% company-owned Generated U.S. average unit volumes in 2007 Company units: $1.4 million Franchised units: $1.3 million Quality leade
Slide 6: Arby's: second largest quick-service sandwich chain in U.S.
Second largest quick-service sandwich chain in U.S. with 3,735 system-wide restaurants as of Q3 2008 Approximately $3 billion in system-wide sales 69% franchised and 31% company-operated Generated U.S. average unit volumes in Company units: $1.0 million Franchised units: $0.9 million Industry leader
Slide 7: Wendy's and Arby's Worldwide
Wendy’s and Arby’s Worldwide* Latin America/Caribbean 14 countries, 16 franchisees Canada United States Wendy’s 6,288 337 6,625 Arby’s 3,726 3,735 TOTAL 10,014 346 10,360 North America International Total Units 375 Wendy’s 110 Arby’s 5,913 Wendy’s 3,616 Arby’s 170 Wendy’s Asia/Pacific 6 countries, 6
Slide 8: New Leadership Team
New Leadership Team ARBY’S BRAND Thomas Garrett, President & CEO Michael Lippert, Chief Operating Officer Steve Davis, Chief Marketing Officer WENDY’S BRAND Roland Smith, CEO J. David Karam, President Stephen Farrar, Chief Operating Officer Ken Calwell, Chief Marketing Officer WENDY’S / ARBY’S GROUP
Slide 9: Agenda
AGENDA Overview QSR Industry Overview 2009 Key Goals Wendy’s Brand Arby’s Brand Wendy’s/Arby’s Group Summary
Slide 10: Wendy's and Arby's Operate in Growing Segments
Wendy’s and Arby’s Operate in Growing Segments +2% +7% Restaurant Industry Overview *YTD thru October / **All Other includes Bakery, Asian, Coffee, Convenience, Food/Drug Stores, etc. QSR Sales by Segment Year-to-date through October – Data in billions Total U.S. QSR Sales YTD 2008* $190 billion FLA
Slide 11: QSR Traffic Outpacing Midscale and Casual Dining Restaurants
QSR Traffic Outpacing Midscale and Casual Dining Restaurants Traffic % Change vs. Year Ago – Total Dayparts Source: NPD CREST AVG CHECK 3Q 07 2Q 08 4Q 07 1Q 08 3Q 08 QSR Midscale Casual Dining $4.86 $8.44 $12.69 2% 1% 1% -2% 1% 1% -2% 1% 1% 0% 0% -3% -1% -1% -1% Restaurant Industry Overview
Slide 12: Agenda
AGENDA Overview QSR Industry Overview 2009 Key Goals Wendy’s Brand Arby’s Brand Wendy’s/Arby’s Group Summary
Slide 13: 2009 Key Goals
2009 Key Goals Drive positive same-store sales at both brands New marketing programs, menu development and improved customer experience Significantly improve Wendy’s restaurant margins Complete key steps in integration process Achieve significant progress on synergies/efficiencies Reduce company-own
Slide 14: Significant Profit Drivers
Significant Profit Drivers IMPROVE WENDY’S STORE-LEVEL OPERATIONS AND MARGINS $100 million in Incremental EBITDA (500 bps) Institute ownership mentality and pay-for-performance culture Invigorate spirit of cooperation with franchisees RIGHT-SIZE COMBINED CORPORATE STRUCTURE 3-year implementation tim
Slide 15: Wendy's Restaurant EBITDA Margin Growth Plan
Wendy’s Restaurant EBITDA Margin Growth Plan 2008 2009 Estimate Estimate Estimate Estimate Estimate 160-180 160-180 150-170 +500 bps 11-12% 16-17% Margin Improvement Targets by Year
Slide 16: Wendy's/Arby's Group $60 Million Cost Reduction
Wendy’s/Arby’s Group $60 Million Cost Reduction WAG is formed Savings achieved through 2008 budget efficiencies and top-level reductions Wendy’s Co-Op implementation Shared Service Center operational $20-25 million $35-45 million $60 million Target Completion of IT project rationalization Additional
Slide 17: Agenda
AGENDA Overview QSR Industry Overview 2009 Key Goals Wendy’s Brand Arby’s Brand Wendy’s/Arby’s Group Summary
Slide 18: Wendy's Brand Overview
Wendy’s Brand Overview 80% Off-Premise Customers 65% drive-thru 15% take-out DAYPART MIX Lunch 37.5% Dinner 21.7% Afternoon Snack 19.9% Evening Snack 10.6% Late Night 8.1% Breakfast 2.2% Menu features… Hamburgers made with fresh, never frozen beef Center-cut premium chicken sandwiches Fresh sandwich
Slide 19: Wendy's Marketing Focus
Wendy’s Marketing Focus Commitment to high quality, great tasting products Enhance quality of key core products Hamburgers (buns, bacon) French fries Chicken Commitment to compelling value message Execute disciplined testing plan Improve advertising, signage, menu boards
Slide 20: Wendy's Operational Initiatives
Wendy’s Operational Initiatives Significant margin improvement “Service Excellence” Re-launch breakfast program
Slide 21: Wendy's Restaurant EBITDA Margin Growth Plan
Wendy’s Restaurant EBITDA Margin Growth Plan Food Cost +500 bps 90-110 230-250 60-80 80-100 11-12% 16-17% Total Labor Repairs/ Maintenance Other Controllables Estimate Estimate Margin Improvement Targets by P&L Category
Slide 22: Wendy's Breakfast Plan
Wendy’s Breakfast Plan Significant growth opportunity for Wendy’s 22% of total QSR traffic* 4% annual growth rate over the past 6 years* 2009 Action Plan Focus on three key markets (Pittsburgh, Kansas City, Phoenix) with revamped menu and media Reduce store count from 850 to 450-475 Leverage “best q
Slide 23: Agenda
AGENDA Overview QSR Industry Overview 2009 Key Goals Wendy’s Brand Arby’s Brand Wendy’s/Arby’s Group Summary
Slide 24: Arby's Brand Overview
Arby’s Brand Overview 70% Off-Premise Customers 60% drive-thru 10% take-out DAYPART MIX Dinner 33.6% Lunch 60.1% Evening Snack 4.7% Breakfast 1.6% Menu features… Signature Roast Beef Market Fresh Deli sandwiches and wraps Market Fresh Salads Toasted Subs Hand-spun shakes Curly fries and side-kickers
Slide 25: Arby's Key Marketing Focus
Arby’s Key Marketing Focus Grow visit frequency among core/loyal customers Leverage equity in roast beef with new products Extend oven-roasting to other proteins (chicken) Continue to build check with unique menu side items Testing new value offerings and promotions
Slide 26: Arby's Operations Initiatives
Arby’s Operations Initiatives Grow visit frequency with great customer service New Hospitality Program New Customer Service Measurements
Slide 27: Agenda
AGENDA Overview QSR Industry Overview 2009 Key Goals Wendy’s Brand Arby’s Brand Wendy’s/Arby’s Group Summary
Slide 28: Financial Summary
Financial Summary Pro Forma Results 3Q YTD 2008 Revenue $2.8 billion Adjusted EBITDA* $300.2 million Pro Forma Leverage As of Sep. 28, 2008 Long-term Debt $1.2 billion Debt/(Debt + Equity) 30% NYSE: WEN As of Jan. 6, 2009 Share Price $4.92 Market Capitalization $2.3 billion Shares Outstanding 470 mi
Slide 29: Financial Reporting Plans
Financial Reporting Plans Annual and Quarterly reporting Consolidated results Brand specific SSS, revenue, costs, and restaurant operating margins Investor conference calls Reporting schedule Q4 and FY08 March 5 (pro-forma financials) Q1 May 7 Q2 Aug 4 Q3 Nov 5
Slide 30: Why Invest in WEN?
3rd Largest Restaurant Company in the U.S. 10,000 Restaurants $12 Billion in 2007 System-Wide Sales Strong Consumer Brands Commitment to quality and operational excellence Financial Opportunity Significantly enhance Wendy’s restaurant margins Achieve G&A synergies and efficiencies Drive revenue grow
Slide 31: Wendy's Arby's Group
WENDY'S ARBY'S GROUP SERVING FRESH IDEAS DAILY.
Slide 32: Appendix
APPENDIX
Slide 33: Investor Information
Investor Information NYSE: WEN www.wendysarbys.com Investor Contacts John Barker, Chief Communications Officer 614.764.3044 or john.barker@wendysarbys.com Kay Sharpton, VP Investor Relations and Strategic Planning 678.514.5292 or kay.sharpton@wendysarbys.com Marsha Gordon, Manager Shareholder Relati
Slide 34: EBITDA and Adjusted EBITDA Reconciliation
EBITDA and Adjusted EBITDA Reconciliation (In thousands) Pro Forma results 3Q YTD 2008 Operating profit $58,062 Plus: depreciation and amortization 154,556 EBITDA 212,618 Depreciation and amortization (154,556) Interest expense (69,910) Investment loss, net (76,497) Other expense,net (6,101) Consoli
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