Jack In The Box Inc. · NASDAQ:JACK
Jack In The Box — Investor Day (2021)
88 slides from Jack In The Box's investor day presentation, Jul 30, 2021
Slide 1: Investor Day 2021
Jack_, in the box’ INVESTOR DAY 2021
Slide 2: Today's Presenters
TODAY’S PRESENTERS
Slide 3: Safe Harbor Statement
SAFE HARBOR STATEMENT SAFE HARBOR STATEMENT TODAY'S PRESENTATION AND 02. SESSION WILL CONTAIN FORHARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE FEDERAL SECURITIES LAMS. FORHARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY WORDS SUCH AS “ANTICIPATE” “BELIEVE,” “ESTIMATE: “EXPECT” “FORECAST” “GOALS: “GU
Slide 4: Darin Harris, CEO
PRESENTED BY DARIN HARRIS CEO
Slide 5: 3-5 Year Strategic Plan
3-5 VEAR STRATEGIC PLAN 3-5 YEAR GUIDANCE TARGET NEW RESTAURANT PROTOTYPE
Slide 6: The Strengths
Sen eee i i WHERE WE’VE BEEN ins Strengths Commited team members & franchisees Strong regional footprint Differentiated brand Broad menu & operational capabilities Passionate guest loyalty _ Wy Wy | a
Slide 7: The Areas of Opportunity
- 4 4 WHERE WE’ E BEEN The Areas of Opportunity Sb FB \ ig Broken franchisee relationships Limited focus on unit economics mR Hesitant to invest and innovate Stale guest Lack of development , ' strategy Poy ; = /) a | “Just another /e @ ! burger player” |. ® y VAS; ae research | i
Slide 8: Where We Are
WHERE WE ARE ED franchisee FOCUSED on relationships unit economics @ ‘strategy INT IN to invest REFRESHED guest “Just another andi ininaeate research burger player”
Slide 9: New Team of Operations and Growth-Focused Management
New Team of Operations and Growth-Focused Management
Slide 10: Franchisee Profitability
- os FRANCHISEE PROFITABILITY
Slide 11: :
:
Slide 12: 7%
7%
Slide 13: We Believe
Slide 14: Our Foundation
Slide 15: Our Foundation
Slide 16: Our Foundation
OUR FOUNDATION CULTURE, PEOPLE, INNOVATION & TECHNOLOGY Build | i Brand Drive Operational | | Grow Restaurant Expand Jack's Loyal t | E P y ! xcellence | rofits Reach Leverage Innovation and Technology Platforms Shape a Caring High-Performance Culture by Serving our People, Guests and Franchisees we
Slide 17: Strategic Objectives: Build Brand Loyalty
STRATEGIC OBJECTIVES BUILD BRAND LOYALTY * Refine, Communicate | & Amplify Our Brand Position Dri . } : Operationay |) a Xcellence | OW Restaurant + Accelerate Product Profits a | & Packaging Pipeline * Transform the Future Restaurant Design Plus Leverage Innovation and Technology Platforms inabiici
Slide 18: Strategic Objectives: Drive Operational Excellence
STRATEGIC OBJECTIVES DRIVE OPERATIONAL EXCELLENCE + Consistently Staff & Train A-Level Players Grow Restaur; ‘ant Profi Expand = Teach ae alld Standards ystems + Improve Speed Consistency Leverage Innovation and Technology Platforms Shape a Caring High-Performance Culture by Serving our People, Gues
Slide 19: Strategic Objectives: Grow Restaurant Profits
STRATEGIC OBJECTIVES GROW RESTAURANT PROFITS franchisees Profits elk 9 rive operational franchisees are €89 oar ; uild Brand Excellence own more Jack in the Box + Influence Pricing with Loyalty restaurants. a Dynamic Model * Develop & Implement Financial Fundamentals * Build Our Data Advantage Lever
Slide 20: Strategic Objectives: Expand Jack's Reach
STRATEGIC OBJECTIVES EXPAND JACK’S REACH nchisees * Create Modular, Diversified revating around the Value-Engineered t erience ; w restauran guest exp! Restaurant Designs prive operational Gro ofits of the future. . d Hence * Build Company Owned Stores antl exe & Seed Growth + Establish & Foster Fra
Slide 21: Outcomes
OUTCOMES Grow Sales and Transactions Improve Guest Satisfaction-NPS Increase Operating Margin i) Open New Restaurants Grow Restaurant | Expand Jack’s Profits \\ Reach Build Brand Drive Operational Loyalty Excellence Leverage Innovation and Technology Platforms Shape a Caring High-Performance Culture
Slide 22: Blueprint for the Future
BLUEPRINT FOR THE FUTURE Create Long-Term Shareholder Returns Increase EBITDA Optimize Return On Invested Capital Grow Total Revenue Grow Sales and Transactions Improve Guest Satisfaction-NPS Increase Operating Margin 4] Open New Restaurants Build Brand Drive Operational Loyalty Excellence Grow Rest
Slide 23: Ryan Ostrom, CMO
PRESENTED BY RYAN OSTROM CMO//EXECUTIVE VICE PRESIDENT
Slide 24: Making Jack More C.R.A.V.E.D. Is the Key to Driving Brand Loyalty
MAKING JACK MORE C.R.A.4Y.E.D. IS THE KEY TO DRIVING BRAND LOYALTY
Slide 25: C.R.A.V.E.D.
Slide 26: C.R.A.V.E.D. Questions
Cultural: Relevant: Authentic: Visible: Easy: Distinctive: Are we following cultural trends? Are we relevant with consumer wants & needs? Are we being authentic to Jack? Are we being seen by our potential customers? Are we making it as easy to experience? Are we standing out in an “Only Jack” way?
Slide 27: Building Brand Loyalty: Key Areas to Prioritize
BUILDING BRAND LOYALTY | 4 KEY AREAS TO PRIORITIZE IN MAKING JACK MORE C.R.ANM.E.D.. |. jk | PRODUCT & RESTAURA MARKETING = PACKAGING _ sTaunaNt
Slide 28: C.R.A.V.E.D. Marketing
Slide 29: Unapologetically Jack
4 UNAPOLOG BEEN THE CURLY FRY IN DOING THINGS OTHERS DON’T. SERVING THINGS OTHERS WON'T. CHALLENGING THE STATUS quo. AFTER ALL, WE'RE JACK, WHERE YO! omy : U CAN EXPECT THE UNEXPECTED. . Fai
Slide 30: Consistent Brand Messaging Across All Guest Touchpoints
CONSISTENT BRAND MESSAGING ACROSS ALL GUEST TOUCHPOINTS
Slide 31: Authentically Integrating in Gaming
- AUTHENTICALLY INTEGRATING IN oS SAMING ©
Slide 32: Becoming Part of Everyday Culture
BECOMINGPART OF EVERYDAY -¢ ieee
Slide 33: Unboxing Unexpected Executions
UNBOXING UNEXPECTED \ EXECUTIONS ie
Slide 34: C.R.A.V.E.D. Product Strategy
Slide 35: Social Media Guest Sentiment
alyson se & @alysonpax ase GDN MOE Just did one of my favorite things: eat Jack in the Box esTxas8 10:26 AM - Ape 7, 2021. Twiter for Phone @JackBox, will you open a stor NJ someday? edith Se eS on @ediitthhhh = i es hia YOU know what really hits the spot when I’m hungry Can't slop eating and want s
Slide 36: Variety Beyond Expectations
VARIETY BEYOND EXPECTATIONS
Slide 37: Jack's Iconic Innovation
JACK’S ICONIC INNOVATION
Slide 38: Jack's Cult Innovation
JACK’S CULT INNOVATION THE cu
Slide 39: Everyday Value That Drives Visits
E¥VERDAY VALUE THAT DRIVES VISIT
Slide 40: Upselling to Premium Products
UPSELLING TO PREMIUM PRODUCTS
Slide 41: All Day Everyday Menu
ALL DA ERYDAY MENU OPEN 24/7 | g ( THE ACCESS ouR FANS CRAVE
Slide 42: Restaurant Design
Slide 43: Modernizing the Restaurant to Be More C.R.A.V.E.D.
Slide 44: Incorporating Relevant and Distinctive Elements
INCORPORATING RELEVANT AND DISTINCTIVE ELEMENTS TO STAND OUT IN NEW AND EXISTING MARKETS
Slide 45: Next Generation Store Design
—— v7 -yihiat CRAB TID ee! | HEL La = ny NEXT GENERATION STORE DESIGN WILL CONTINUE TO LEVERAGE OUR DISTINCTIVE BRAND ELEMENTS a ele
Slide 46: Especially During Late Night
y\ 4 i “1h ESPECIALLY DURING LATE NIGHT
Slide 47: C.R.A.V.E.D. Digital Guest Experience
Slide 48: Building a Digital Ecosystem with Data at the Core
BUILDING A DIGITAL ECOSYSTEM WITH DATA AT THE CORE IS THE FOUNDATION ; LOYALT CUSTOMER | STRONGER AND MORE TO DEVELP A VALUABLE CUSTOMER RELATIONSHIP
Slide 49: Digital Sales
WE HAVE STARTED SEEING SOME STRONG SUCCESS = ¢ Ss DOMMES = S s Y VY J —— ——— Fiscal Year 2019 FY 2020 FY 2021 YTD % of Sales 1.5% 2.1% 2.2% 2.4% 2.8% 3.5% 5.6% 5.7% 6.7% 7.3%
Slide 50: Leveraging a Clear Roadmap for Continuous Improvement
Optimizing Enhanced Omnichanne! Out of the Box Solutions Explorations LEVERAGING A CLEAR ROADMAP FOR CONTINUOUS IMPROVEMENT
Slide 51: Darin Harris, CEO
PRESENTED BY DARIN HARRIS CEO
Slide 52: Your Top Two Questions for Us
YOUR TOP TWO QUESTIONS FOR US #1 - NEW RESTAURANT GROWTH POTENTIAL? #2 - HOW QUICKLY CAN YOU MAKE IT HAPPEN?
Slide 53: An Iconic Brand
AN ICONIC BRAND STRONG RESTAURANT ECONOMICS HOMEGROWN FRANCHISEES WITH 2/3 DESIRING GROWTH HISTORY OF STRONG SAME-STORE SALES GROWTH RANK #1 OR #2 IN UNIT COUNT WITHIN 8 OF OUR TOP 10 EXISTING MARKETS
Slide 54: Built-Out States and Untapped Potential
* 9 states - >60% built out (28% of U.S. Population) + 13 states - <35% built out (25% of U.S. Population) + 29 states - untapped (47% of U.S. Population) Competitors’ Stores in Same Geography: ¥\. 7,350 4,455 2,945 @ 3,656 © wwe 62,615
Slide 55: Jack in the Box Historical Openings Compared to the Sandwich Segment
JACK IN THE BOX HISTORICAL OPENINGS COMPARED TO THE SANDWICH SEGMENT SANDWICH SEGMENT DIFFERENCE - 10 Year Average New Unit Growth a 2.0 % -1.1% - 10 Year Average Closures - -1, 6% - 10 Year Net Openings . A -4% Restaurant Research: 2021 Jack in the Box Report, Estimates for Domestic System Sandwich
Slide 56: What's Different Today
yeins DIFFERENT TODAY CLEAR DEVELOPMENT STRATEGY MARKETING AND RESOURCES DEDICATED TOWARD FRANCHISE AND SITE LEAD GENERATION STORE PROTOTYPE DEVELOPMENT AND INNOVATION UNRESTRICTIVE GROWTH POLICIES AND PROCESSES UPDATED RESTAURANT IMAGE FRANCHISEE ALIGNMENT
Slide 57: Ramping to 4% Annual Restaurant Growth by 2025
RAMPING TO 4% ANNUAL RESTAURANT GROWTH BY 2025
Slide 58: New Restaurant Growth Potential Map
Slide 59: Additional Potential Stores in Existing States
10 + Additional Potential tores In Existing 21 States Top Competitors’ Stores in Same Geography: 7,350 4,455 3,700+ 3,656 2,945 2,615
Slide 60: A Clear and Focused 3-Pronged Approach to Market Penetration
A CLEAR AND FOCUSED 3-PRONGED APPROACH TO MARKET PENETRATION AND DEVELOPMENT Fortressing Wagon Wheel Diversified Development OSo IJO°9 OPO Builds out and supports existing markets ‘Supports adjacent market penetration Establishes New Regional Hubs Phases of growth
Slide 61: Untapped States
+ 29 states - untapped (47% of U.S. Population) Competitors’ Stores in Same Geography: 6,287 3,472 2908 2,908 some §=— 894
Slide 62: 6,000+ U.S. Store Potential
cx) 6,000+ U.S. Store Potential
Slide 63: Dark and Virtual Kitchens
pees SG Dy | bil nr cain = DARK & VIRTUAL KITCHENS|
Slide 64: Relationship of Development Agreements to Future Openings
Relationship of Development Agreements to Future Openings FY18 FY19 FY20 ques Development Agreements Signed mms [Ofa! Openings
Slide 65: Improving Policies and Processes
IMPROVING POLICIES & PROCESSES + Market Mapping + Development Agreements + Franchise Growth Policy * Site-selection Support + Real Estate Site Approval + Franchise Recruitment + Prototype Development + Market Planning Online Access IMPROVING FRANCHISE RECRUITMENT SUPPORT PREPARING FOR PROVIDING ACCE
Slide 66: Promoting the Jack Story to Build a Pipeline of Leads and Sites
BY PROMOTING THE JACK STORY, WE WILL BUILD A PIPELINE OF LEADS AND SITES THAT RESULTS IN EXPANDING JACK’S REACH Franchising |S mastoratie' HubSpt IMPROVING FRANCHISE RECRUITMENT SUPPORT PREPARING FOR PROVIDING ACCESS TO CAPITAL POLIGIES & PROCESSES + Digital & social media advertising * Franchise re
Slide 67: Tim Mullany, CFO
PRESENTED BY TIM MULLANY CFO//EXECUTIVE VICE PRESIDENT
Slide 68: Annual System-Wide Sales
ANNUAL SYSTEM-WIDE SALES $4 BILLION #1 OR #2 IN 8 OF TOP 10 MARKETS
Slide 69: $1.8MM System-Wide AUV
$1.8MM SYSTEM-WIDE AUV
Slide 70: Annual Franchisee 4-Wall EBITDA
ANNUAL FRANCHISEE 4-WALL EBITDA $188,000 (FY 2020, +21% YOY)
Slide 71: Unit Economics
Slide 72: Franchisee Profitability per Restaurants Owned
* *Based on average of 20 restaurants owned per franchisee
Slide 73: Average AUV and 4-Wall EBITDA
$1.8M $400K + AVERAGE AUV 4-WALL EBITDA NOTE: AUY AND 4-WALL EBITDA MARGINS REPRESENTATIVE OF 2ND AND 32RD GUARTILES OF 43 NEW UNITS OPENED IN 2015 AND 2019
Slide 74: Operational Support for Franchisees
OPERATIONAL SUPPORT FOR FRANCHISEES
Slide 75: New Restaurant Pro Forma Economics
& Average Unit Volume Restaurant 4-wall EBITDA Investment Cost Unlevered Year 1 ROI 70% Leveraged Breakeven PRO FORMA 2018/2019 Openings (43) $1.7M - $2.1M $325K - $600K $2.0M ~23% Traditional Build $1.6M - $2.0M $275K - $460K $1.7M - $1.9M 16% - 24% 3 years Drive-Through Only $1.6M - $2.0M $275K -
Slide 76: 3-5 Year Strategy
Slide 77: Asset-Light Transition Complete
ASSET-LIGHT TRANSITION COMPLETE STRONG UNIT ECONOMICS NEW LEADERSHIP TEAM REINVIGORATED FRANCHISEE RELATIONSHIPS A PLAN TO EXPAND INTO SIGNIFICANT WHITE SPACE CAPITAL TO INVEST IN GROWTH RETURN CAPITAL TO SHAREHOLDERS
Slide 78: Cumulative Free Cash Flow FY16-FY20
140 120 100 5 Year Cumulative 80 Free Cash Flow FY16 - FY20 60 ~ $450 Million 40
Slide 79: Jack's 4-Box Financial Strategy
JACK’S 4-BOX FINANCIAL STRATEGY
Slide 80: Jack's 4-Box Financial Strategy
JACK’S 4-BOX FINANCIAL STRATEGY
Slide 81: Jack's 4-Box Financial Strategy
JACK’S 4-BOX FINANCIAL STRATEGY
Slide 82: Jack's 4-Box Financial Strategy
JACK’S 4-BOX FINANCIAL STRATEGY
Slide 83: Strong Franchisees
STRONG FRANCHISEES SITE SELECTION SUPPORT PURCHASE SELECTIVE LOW-GROWTH FOs PRE AND POST-OPEN MARKETING SUPPORT MARKET-SPECIFIC MENUS HARMONIZED SUPPLY CHAIN ONGOING DAILY OPS OVERSIGHT
Slide 84: 3-5 Year Financial Guidance
Slide 85: Financial Guidance: Metrics and CAGR
Slide 86: 2021 CapEx and 3-5 Year CapEx Priorities
2021 CAPEX $S40MM - S45MM 3-5 YEAR CAPEX PRIORITIES REMODEL AND REFRESH IT SYSTEMS AND CAPABILITIES NEW COMPANY OWNED STORES
Slide 87: Discrete 2021 Items
DISCRETE 2021 ITEMS $6MM MARK-TO-MARKET GAINS $6-7MM 53° WEEK BENEFIT $4MM EARLY TERMINATION FEES $3MM FAVORABILITY IN INSURANCE PLANS
Slide 88: Jack in the Box
in the box’