Slide 1: Third-Quarter 2015 Conference Call
Third-Quarter 2015 Conference Call November 4, 2015
Slide 2: David Poplar, Vice President Investor Relations
DAVID POPLAR Vice President Investor Relations
Slide 3: Today's Agenda
Today’s Agenda CEO Overview Emil Brolick Financial Update Todd Penegor Q&A
Slide 4: Forward-looking statements
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 our operations. Those statements constitute “forward-looking
Slide 5: Emil Brolick, President & CEO
wees EMIL BROLICK President & CEO
Slide 6: Strong Third-Quarter Results
NA COMPANY-OPERATED RESTAURANT MARGIN INCREASES 330 BPS TO 18.8% IMPROVEMENT OF 350 BPS IN ADJ. EBITDA MARGIN* TO 21.5% COMPANY NOW EXPECTS 2015 SRS, ADJ. EBITDA AND ADJ. EPS AT HIGH END OF PREVIOUSLY ISSUED RANGES STRONG THIRD-QUARTER RESULTS *See Reconciliation of Adjusted EBITDA, Adjusted EBITDA
Slide 7: Company Poised for Long-Term Growth
Company Poised for Long-Term Growth On Track to Hit 2020 Goals New Restaurant Development Highest Since 2006 Balanced Marketing Messages; Encouraged by Early 4 for $4 Results Significant Restaurant Margin Improvement System Optimization Yielding Positive Results Image Activation Contemporizing Brand
Slide 8: Q3 Two Year Comps See Sequential Improvement
Q3 Two Year Comps See Sequential Improvement Various Price / Value Bundled Meals Tests
Slide 9: 2015 Balanced Across Core, LTO & Price/Value
2015 Balanced Across Core, LTO & Price/Value Jalapeno Fresco 4 for $4 Baconator
Slide 10: 4 for $4 Meal Promotion
4 For $4 Meal Promotion GOAL: DRIVE PROFITABLE CUSTOMER COUNT GROWTH COMPELLING AND CONSISTENT VALUE MESSAGING MEETS NEED FOR HIGH-QUALITY CONSUMER VALUE EARLY RESULTS ARE ENCOURAGING
Slide 11: Wendy's Technology is a Differentiator
Wendy’s Technology is a Differentiator
Slide 12: Wendy's: New QSR Quality, QSR Price
EXPERIENCE PRICE HIGH LOW FUNCTIONAL EMOTIONAL Wendy’s: New QSR Quality, QSR Price A B C New QSR Traditional QSR
Slide 13: System Optimization – Quality of Earnings Evolution
System Optimization – Quality of Earnings Evolution 2012 (A) ~23% Co. Ownership 2017 (E) ~5% Co. Ownership Rent & Royalties Company Restaurants
Slide 14: How We Grow
HOW WE GROW BRAND RELEVANCE + ECONOMIC RELEVANCE = GROWTH Financial Management Global Growth Restaurant Utilization & Brand Access System Optimization New Restaurant Growth Image / Experience Activation North America Same-Restaurant Sales Growth Shareholder Value-Enhancing Initiatives Core Organic G
Slide 15: Todd Penegor, Chief Financial Officer
TODD PENEGOR Chief Financial Officer
Slide 16: Third Quarter Financial Highlights
$ Mils (except per-share amounts) Third Quarter Financial Highlights N.A. System SRS 3.1% 0.7% 2-Year 3.8% N.A. Company SRS 1.7% 2.0% 2-Year 3.7% N.A. Co. Rest. Margin 18.8% 15.5% +330 bps G&A $63.7 $65.2 2.3% Adjusted EBITDA* $99.7 $89.5 11.4% Adjusted EBITDA Margin* 21.5% 18.0% +350 bps Adjusted E
Slide 17: Q3 2015 vs. Q3 2014: Adjusted EBITDA
Q3 2015 vs. Q3 2014: Adjusted EBITDA * The Company has provided quarterly reclassified 2014 statements of operations on its website to conform to its current-year presentation. ** Due to the recent sale of its bakery business, the Company is reporting its bakery results as Discontinued Operations in
Slide 18: System Optimization Update
System Optimization Update System Optimization III Expect to complete during 2016 Expect to sell 225 restaurants in 2015 & 315 restaurants in 2016 Continue to expect pre-tax proceeds of $400-$475M Ongoing System Optimization Continue to facilitate franchisee-to- franchisee transactions Catalyst for
Slide 19: 2015 Image Activation On Track
2015 Image Activation On Track Total System Annual Reimages & New Builds Total System Cumulative Reimages & New Builds 450 Reimages 80 New ~22% of NA system reimaged at the end of 2015
Slide 20: Cash Returned to Shareholders
Recently announced a 9-percent increase in quarterly dividend rate, from 5.5 cents per share to 6 cents per share Successfully completed $165 million ASR during Q3 at an average share price of $9.17; have now repurchased ~97.8M shares in 2015 to date. Expect to utilize the remaining $400 million sha
Slide 21: 2015 Outlook
2015 Outlook Reaffirming Company-operated restaurant margin of 17.0 to 17.5 percent G&A expense of approximately $250 million Revising Reported effective tax rate of 41 to 43 percent Capital expenditures of approximately $235 to $245 million Depreciation and amortization ~ $145-$150 million COMPANY
Slide 22: 2020 Goals
2020 Goals Focus on Restaurant Economic Model $2MM 20% 1.3x+ 1,000 AUVs Restaurant Margins Sales to Investment Ratio New NA Restaurants 60% Total Reimaged NA Restaurants BRAND RELEVANCE ECONOMIC MODEL RELEVANCE Achievement requires two growth drivers:
Slide 23: David Poplar, Vice President Investor Relations
DAVID POPLAR Vice President Investor Relations (614) 764-3311 david.poplar@wendys.com
Slide 24: 2015 Investor Relations Calendar: Key Dates
2015 Investor Relations Calendar: Key Dates November 12 Image Activation Market Visit with Barclays (Dublin) November 18 Morgan Stanley Conference (New York) December 9 Wedbush Conference (Santa Monica) December 16-17 Canada Roadshow – CL King (Montreal/Toronto) February 9, 2016 Preliminary Q4 Earni
Slide 25: Q&A
Q&A
Slide 26: Appendix
Appendix
Slide 27: Reconciliation of Adjusted EBITDA to Net Income
Reconciliation of Adjusted EBITDA from Continuing Operations to Net Income In Thousands (Unaudited)
Slide 28: Reconciliation of Adjusted Income and Adjusted EPS
Reconciliation of Adjusted Income and Adjusted Earnings Per Share from Continuing Operations to Net Income and Diluted Earnings Per Share In Thousands except per-share amounts (Unaudited)
Slide 29: Wendy's
Wendys (g)