Bloomin' Brands, Inc. · NASDAQ:BLMN

Bloomin' Brands — Debt Investor Presentation (October 2012)

51 slides from Bloomin' Brands's debt investor presentation, Oct 11, 2012

  1. Slide 1: Investor Presentation October 10, 2012

    Investor Presentation October 10, 2012

  2. Slide 2: Forward looking statements

    Forward looking statements Certain information contained in this presentation, particularly information regarding future economic performance, finances, and expectations and objectives of management constitutes forward-looking statements. Forward-looking statements can be identified by the fact that

  3. Slide 3: Today's presenters

    Today’s presenters 3 Elizabeth Smith Chairman and Chief Executive Officer David Deno Executive Vice President, Chief Financial Officer Joe Hartnett Vice President – Risk Management Dexter Newman Vice President – Treasurer

  4. Slide 4: Agenda

    Agenda 4  Introduction and Transaction Overview  Company Overview  Growth Strategy  Key Credit Highlights  Historical Financials  Summary of Terms and Timeline  Closing Remarks and Q&A

  5. Slide 5: Introduction and Transaction Overview

    5 Introduction and Transaction Overview

  6. Slide 6: Executive summary

    Executive summary 6 Company Overview  OSI Restaurant Partners, LLC (“OSI”, “OpCo” or the “Company”) is one of the largest casual dining restaurant companies in the world  5 founder-inspired concepts with 1,450 restaurants across 49 states and 21 countries and territories  LTM revenue of $3,920 mi

  7. Slide 7: Transaction overview

    Transaction overview 7  New $225 million revolver  $1,000 million new TLB  Proceeds of the new facilities will be used to refinance the Company’s working capital revolver, pre-funded revolver and existing term loan ($ in millions) Sources Uses New revolving credit facility ($225mm) $45 Pre-funded

  8. Slide 8: Transaction overview (continued)

    Transaction overview (continued) 8 (1) Pro forma for net proceeds from Bloomin' Brands' IPO and senior notes redemption (2) Pro forma for proceeds from draw on the pre-funded revolving credit facility. (3) Pro forma for scheduled amortization on Existing Term Loan B (4) Total rent expense capitalize

  9. Slide 9: Company Overview

    Company Overview e=) RESTAURANT PARTNERS. LLC® BLOOMIN’ BRANDS?

  10. Slide 10: Business Overview

    Business Overview CHI Us RESTAURANT PARTNERS, LLC® BLOOMIN’ BRANDS"

  11. Slide 11: Differentiated brands with leading market positions

    Differentiated brands with leading market positions $3.9 bn Sales Revenue by Concept(3) 11 Diversified Brand Portfolio Brand Market Position (1) Locations 775 #1 231 #2 162 #2 64 #4 Brazil / Korea 62% 18% 12% 6% 2% 196 #1 (2) (1) Per Technomic and Euromonitor International (2) Includes joint venture

  12. Slide 12: BLMN revitalization plan introduced Q4 2009

    BLMN revitalization plan introduced Q4 2009  Enhanced Brand Competitiveness  Elevated Organizational Effectiveness  Strengthened Restaurant Operating Performance  Continuous Productivity Mindset to Fund Growth 1 2 3 4 12

  13. Slide 13: Enhanced brand competitiveness across all touch points

    Enhanced brand competitiveness across all touch points 13 1 Menu Innovation  Lighter, broader appeal  >60 new menu items since 2010 many less than 600 calories Price  Introduced lower price point items rather than discounting  Outback value rating up 69% ’09 – ’12(1) Ambience  Lively, contempor

  14. Slide 14: Outback: Superior Brand, Strong Customer Experience

    ` 14 Innovative Promotions: 14 Overall Satisfaction – % Top Box(1) Fresh, real, spirited, together Superior Brand: Strong Customer Experience: 2012 Consumer Picks Top CDR: #8 (1) Represents the percentage of respondents that rated Outback as “excellent” for overall satisfaction 63% 69% 72% 74% Q2 '0

  15. Slide 15: Broad, innovative menu provides universal appeal beyond signature steak

    Broad, innovative menu provides universal appeal beyond signature steak 15

  16. Slide 16: Upgraded ambience to match the food

    Upgraded ambience to match the food 16 After Before

  17. Slide 17: Carrabba's: Warm, authentic, fresh, welcoming

    Warm, authentic, fresh, welcoming Ambience & Value: Superior Brand: Great Food: 2012 Consumer Picks Top CDR: #5 17 • Best Pasta • Top Service • Top Overall Additional 2012 Honors: 2012 Overall Full-Service Italian: #1

  18. Slide 18: Bonefish Grill: Innovative, independent, polished, unique

    18 Innovative, independent, polished, unique Hottest concept in casual dining: 2012 Consumer Picks Seafood CDR: #1 2012 Golden Chain Award 2012 Operator of the Year • Most Popular • Top Food • Best Seafood • Top Service • Top Overall • Top Facilities 2012 Honors in Six Categories:

  19. Slide 19: Fleming's: Stylish, lively, inviting

    19 Stylish, lively, inviting 2012 Best Chain Wine Program 2012 Best Spirits Program 2012 Wine Spectator Award Leading Wine & Spirits Program: Upscale Ambiance & Dining:

  20. Slide 20: Elevated organizational effectiveness

    Elevated organizational effectiveness 20 Executive Title Past Experience Elizabeth Smith Chairman & Chief Executive Officer <3 • Avon Products: President • Kraft Foods NA: President US Beverages & Grocery Jeff Smith Outback President 22 • Bonefish: Vice President Operations David Berg International

  21. Slide 21: Strengthen restaurant level operating performance

    Strengthen restaurant level operating performance 21 Entrepreneurial Culture  Managing Partners have Skin in the game  Incented for growth Highly Attentive Service  Customer surveys implemented in 2009 (SMG)  Comprehensive training program Experienced Field Team  Core brand Presidents average 2

  22. Slide 22: Continuous productivity mindset

    $48 $75 $46 $43 $50 2008 2009 2010 2011 2012E Continuous productivity mindset  Dedicated team with cross-functional commitment at senior level  Long-range productivity plans developed across 5 key areas: • Sourcing scale • Food cost reduction • Supply chain efficiencies • Headcount and labor cost

  23. Slide 23: Revitalization plan has driven strong comp growth

    (2.8%) 3.6% 3.0% 2.5% 4.3% 1.8% 6.0% 3.9% 5.3% 2.3% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 1.1% 0.6% 4.9% 5.4% 3.9% 4.8% 6.3% 3.6% 4.3% 1.5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 3.5% 5.6% 7.6% 9.3% 9.6% 10. % 7.4% 5.9% 6.2% 2.1% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 23 Source: Company filings 2010 2011 2012 2010 2011 2012

  24. Slide 24: Revitalization plan has driven strong comp growth

    1.9% 2.0% 2.5% 7.0% 6.8% 6.9% 6.7% 4.6% 3.9% 0.7% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 24 24 Source: Company filings 2011 2012 (0.1%) 3.7% 4.7% 9.3% 7.9% 7.4% 6.5% 5.3% 3.4% 4.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2010 2011 2012 Knapp Track High End Steak Houses Revitalization plan has driven strong comp growth

  25. Slide 25: Growth Strategy

    a Growth Strategy © RESTAURANT PARTNERS, LLC® = _ BLOOMIN’ BRANDS*

  26. Slide 26: Platform for disciplined growth

    Platform for disciplined growth Continuous Productivity Mindset to Fund Investment Build Scale, Infrastructure and Systems 1 Grow Comp Sales & Profitability 2 Accelerate Domestic & International Growth 26

  27. Slide 27: Grow comp sales & profitability

     Expand occasions and frequency, with a focus on $24 Billion domestic lunch segment  Continue to deliver outstanding brand experience vs. competition • Refreshed marketing to drive higher ROI’s  Strong remodel program to support comp growth • 400-450 Outback units renovated thru 2013 program; dri

  28. Slide 28: Accelerate domestic & international growth

    28  Focus on growing in existing markets with significant presence such as South Korea, Brazil and Hong Kong  Actively pursue opportunities in other high priority markets such as China, Mexico and other Latin American countries  Preference for company-owned / joint venture arrangements in high pr

  29. Slide 29: Infrastructure in place to support new unit growth of 5%+ per annum

    Infrastructure in place to support total new unit growth of 5%+ per annum with attractive unit economics 29 7 ~30 5 ~5 12 ~35 2011A 2012E International Domestic % Unit Growth (1) <1% ~3% New Unit Potential Source: Company data Note: March 2012 FX rate used for US$ conversion on international figures

  30. Slide 30: Transformation of Bloomin' Brands

    30 30 Transformation of Bloomin’ Brands Then Now 100% sponsor owned company Public company with a market cap of ~$2 billion Highly leveraged company 6.1x OpCo rent adjusted leverage at 2007 LBO Modest OpCo rent adjusted leverage of 4.4x pro forma Reliant solely on debt markets for capital Additional

  31. Slide 31: Key Credit Highlights

    Key Credit CH] oo = 8; . 2 CA PARTNERS, LLC® rN BLOOMIN’ BRANDS*

  32. Slide 32: Key credit highlights

    Key credit highlights 32 Diversified portfolio of market leading brands 1 Strong free cash flow generation and track record of deleveraging 4 Consistent growth in margins with additional room for improvement 3 Significant opportunities for disciplined growth 5 Culture of continuous innovation and dr

  33. Slide 33: Diversified portfolio of market leading brands

    LTM sales ($mm) 2,085 693 466 249 83(1) 344 % of Total 53% 18% 12% 6% 2%(1) 9% Average check size ($) 20 21 23 68 57 -- Description Casual dining steakhouse Authentic Italian casual dining Upscale casual seafood Contemporary prime steakhouse Pacific Rim fine dining Outback with local touch # Locatio

  34. Slide 34: Productivity initiatives: sourcing, food cost, supply chain, labor

    34 Sourcing Scale Food Cost Reductions Supply Chain Labor Optimization  Strategic partnerships  SKU reduction & specification standardization  Implementing new systems and tools to minimize waste  Continue to work with supply chain partners to reduce overall food costs without affecting quality

  35. Slide 35: Adjusted EBITDA margins over time

    Adjusted EBITDA Margins Over Time 35 (1) Includes Bravo Brio, Brinker, Cheesecake Factory, Darden and Texas Roadhouse (2) LTM as of 6/30/12 (2)  Consistent improvement in EBITDA margins in recent years  Opportunity to expand margins and improve productivity vs. peers, driven by: • Long runway on p

  36. Slide 36: Strong free cash flow generation and track record of deleveraging

    Strong free cash flow generation and track record of deleveraging 36 Free Cash Flow(1)(2) Net OpCo Leverage Adjusted OSI EBITDA / Interest Expense (Adjusted OSI EBITDA - Capex) / Cash Interest Expense ($ in millions) (1) Free cash flow defined as EBITDA less capital expenditure less cash interest ex

  37. Slide 37: Significant opportunities for disciplined growth

    Significant opportunities for disciplined growth 37 5 3%+ Same Store Sales growth 7%+ Revenue growth 13%+ Operating Income growth 20%+ Net income growth  Expand share of occasions and increase frequency  Improve promotional marketing to drive traffic  Remodel restaurants  Pursue domestic dev

  38. Slide 38: Historical Financials

    a Historical Financials © RESTAURANT PARTNERS, LLC® BLOOMIN’ BRANDS#

  39. Slide 39: Consistent growth in revenue and EBITDA

    Consistent growth in revenue and EBITDA 39 Source: Company filings. Note: Financial results are as reported. (1) 2009 excludes 34 Cheeseburger in Paradise locations that were sold and de-consolidated. OSI Total Revenue ($ in millions) ($ in millions) OSI Adjusted EBITDA $305 $319 $345 $367 8.7% 8.8%

  40. Slide 40: Continued excellent performance in Q2 2012

    Continued excellent performance in Q2 2012 40 Source: Company filings and projections. Note: Financial results are un-audited. Total revenues increased by 2.6% to $981 million This increase was primarily due to traffic increases driven by – Menu innovations and promotions – Improvements in custome

  41. Slide 41: Minimal maintenance capex with continued investment in the business

    Minimal maintenance capex with continued investment in the business 41 ($ in millions) Source: Company filings $23 $29 $33 $42 $44 $101 $29 $28 $79 $108 $124 $58 $60 $121 $152 $0 $20 $40 $60 $80 $100 $120 $140 $160 FY 2008 FY 2009 FY 2010 FY 2011A LTM 6/30/12 OSI Maintenance Capex OSI Growth Capex

  42. Slide 42: Strong and stable free cash flow

    Strong and stable free cash flow 42 PF LTM ($ in millions) 2009 2010 2011 6/30/12 EBITDA $305 $319 $345 $367 Less: cash interest 92 80 56 56 Less: maintenance capex 29 33 42 44 Less: growth capex 29 28 79 108 Free cash flow $155 $179 $168 $159

  43. Slide 43: Bloomin' Brands IPO

    43 43 Bloomin’ Brands IPO August 7, 2012  Offer price: $11.00  Shares offered: – 14,200,000 primary – 4,200,000 secondary  Public offering size: $202 million  Use of proceeds: net proceeds together with cash on hand were used to retire all of the Company’s 10% notes due 2015  Pro forma ownershi

  44. Slide 44: Summary of Terms and Timeline

    44 Summary of Terms and Timeline

  45. Slide 45: Summary of terms

    Summary of terms 45 Borrowers: OSI Restaurant Partners, LLC (the “Borrower”) Guarantees: The Senior Secured Credit Facilities shall be unconditionally guaranteed on a senior secured basis by the Company and, subject to certain exceptions, each of its direct and indirect wholly-owned domestic subsidi

  46. Slide 46: Organizational structure

    Organizational structure 46  Owns 261 restaurants  $500M CMBS matures April 2017 at 6.1% weighted average interest rate at time of financing Bloomin’ Brands 100% ownership Master Lease  Operates 1,450 restaurants  $225M New Revolver  $1,000M New Term Loan B  $34M Other Notes Payable 100% owner

  47. Slide 47: Transaction timeline

    Transaction timeline 47 October 5th • Announce transaction October 10th • Bank meeting October 19th • Commitments due from lenders October 26th • Closing and funding October 2012 28 S 7 14 21 M 8 15 22 29 1 T 9 16 23 30 2 W 10 17 24 31 3 T 11 18 25 4 F 12 19 26 5 S 13 20 27 6 Holiday Key date

  48. Slide 48: Closing Remarks and Q&A

    Closing Remarks andQ &A . RESTAURANT PARTNERS, LLC® BLOOMIN’ BRANDS*

  49. Slide 49: Summary

    Summary 49  Diversified portfolio of market leading brands  Culture of continuous innovation and drive for productivity gains  Consistent growth in margins with additional room for improvement  Strong free cash flow generation and track record of deleveraging  Significant opportunities for disc

  50. Slide 50: Appendix

    Appendix © RESTAURANT PARTNERS, LLC® BLOOMIN’ BRANDS#

  51. Slide 51: Adjusted EBITDA reconciliation

    Adjusted EBITDA reconciliation 51 LTM ($ in millions) 2009 2010 2011 6/30/2012 EBITDA $257 $247 $297 $325 Impairments, closings and disposals 98 10 8 11 Stock-based and other compensation expense 49 35 25 26 Non-cash rent expense 21 19 20 13 Income from operations of unconsolidated affiliates, net (

Bloomin' Brands — Debt Investor Presentation (October 2012) on 6ix