Wendy's Company (the) · NASDAQ:WEN
Wendy's Company (the) — The Wendy's Company — Q3 2020 Earnings Presentation
26 slides from Wendy's Company (the)'s earnings presentation, Nov 4, 2020
Slide 1: Third Quarter 2020 Conference Call
Third Quarter 2020 Conference Call November 4, 2020 © Quality Is Our Recipe, LLC
Slide 2: Greg Lemenchick
Greg Lemenchick Senior Director – Investor Relations & Corporate FP&A © Quality Is Our Recipe, LLC
Slide 3: 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 “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). For all such forward-looking s
Slide 4: Agenda
Agenda Business Update Financial Results IR Calendar Q&A THE WENDY'S COMPANY | 4
Slide 5: Todd Penegor
Todd Penegor President & Chief Executive Officer © Quality Is Our Recipe, LLC
Slide 6: Q3 Business Update
Q3 Business Update ▪ Highest Global SRS in Over 15 Years ▪ Restaurant Margin Accelerating ▪ Liquidity Position Remains Strong ▪ Increasing Quarterly Dividend to 7 cents ▪ Committed to Long Term Growth Initiatives THE WENDY'S COMPANY | 6
Slide 7: U.S. SRS Acceleration Continues in Q3
U.S. SRS Acceleration Continues in Q3 2-Yr: 14.4% ▪ Sales trends continue to 2-Yr: 12.1% accelerate ▪ Two-year SRS grew each 2-Yr: 9.1% month throughout the quarter ▪ Rest of day sales remain strong ▪ Average check remains elevated July August September THE WENDY'S COMPANY | 7
Slide 8: Building our Breakfast Business
Building our Breakfast Business ▪ Average weekly breakfast sales dollars improve in Q3 ▪ Breakfast contributed ~6.5% to U.S. SRS in Q3 ▪ Breakfast % of total sales remains strong at over 7% ▪ Continue to drive awareness through our incremental marketing spending ▪ Awareness levels remain strong at ~
Slide 9: Digital Sales Accelerate as Delivery Grows and Reward Program Ramps
Digital Sales Accelerate as Delivery Grows and Reward Program Ramps THE WENDY'S COMPANY | 9
Slide 10: Operational Excellence Remains a Key Priority
Operational Excellence Remains a Key Priority ▪ ~75% of dining rooms open ▪ Staffing levels remain strong ▪ Elevated customer satisfaction scores ▪ Restaurant margin continues to accelerate THE WENDY'S COMPANY | 10
Slide 11: International Business Improving
International Business Improving ▪ ~95% of restaurants now operating ▪ Canada and Puerto Rico drove improved sales ▪ U.K. launch remains on track THE WENDY'S COMPANY | 11
Slide 12: Organizational Enhancements to Drive Growth
Organizational Enhancements to Drive Growth ▪ Hired a highly qualified CIO ▪ Re-aligning and adjusting our resources to drive growth ▪ Streamlined our U.S. Operations organization under one leader ▪ Eliminating field offices ▪ Reinvesting savings to fuel growth ▪ Diversity, Equity and Inclusion Kevi
Slide 13: Wendy's Creates Joy & Opportunity Through Food, Family & Community
WENDY’S CREATES JOY & OPPORTUNITY THROUGH FOOD, FAMILY & COMMUNITY i RESTAURANTS FOOD | A place | love to go Food I love © CLEAN & WELL MAINTAINED FRESH TRUSTED COMMUNITY PARTNER HONEST INGREDIENTS UP TO DATE CRAVEABLE TASTE ENERGIZING (E29) MADE RIGHT QE ’ The Wendy’s Way FAST FOOD DONE RIGHT BY WE
Slide 14: Gunther Plosch
Gunther Plosch Chief Financial Officer © Quality Is Our Recipe, LLC
Slide 15: Third Quarter Financial Results
Third Quarter Financial Results $ Mils (except per share amounts) (Unaudited) 2020 2019 B/(W) Global System SRS 6.1% 4.4% 2-Yr 10.5% Adjusted Revenues1 $367.5 $351.1 4.7% Company Restaurant Margin 16.9% 16.2% 70 bps G&A $47.3 $46.2 (2.4)% Adjusted EBITDA1 $118.8 $109.9 8.1% Adjusted EPS1 $0.19 $0.19
Slide 16: 2020 Financial Expectations
2020 Financial Expectations Commodity inflation: ~2% G&A: ~$205 million Annual tax rate: ~25% CAPEX: ~$70 million THE WENDY’S COMPANY 16
Slide 17: Capital Allocation Policy Remains Unchanged
Capital Allocation Policy Remains Unchanged Continue to Invest in the 1 Business for Growth Sustain an Attractive Dividend; 2 Payout Ratio > 50% Flexibility to Utilize Excess 3 Cash to Repurchase Shares and/or Reduce Debt
Slide 18: Greg Lemenchick
Greg Lemenchick Senior Director – Investor Relations & Corporate FP&A © Quality Is Our Recipe, LLC
Slide 19: Investor Relations Calendar (All Virtual)
Investor Relations Calendar (All Virtual) • November 11: NDR with Wells Fargo (Boston) • November 16: Call with Kalinowski Research • November 18: HQ Visit with MKM Partners • November 19: Deutsche Bank Conference • December 2: Morgan Stanley Conference THE WENDY'S COMPANY | 19
Slide 20: Q&A
Q&A
Slide 21: Appendix
Appendix
Slide 22: 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 presented certain non-GAAP financial measures (i.e., adjusted revenues, adjusted EBITDA, adjusted earnings per share, free cash flow and systemwide sales). These no
Slide 23: Reconciliations of Net Income to Adjusted EBITDA and Revenues to Adjusted Revenues
In Thousands (Unaudited) Reconciliations of Net Income to Adjusted EBITDA and Revenues to Adjusted Revenues THE WENDY'S COMPANY | 23
Slide 24: Reconciliation of Net Income and Diluted EPS to Adjusted
In Thousands except per-share amounts (Unaudited) Reconciliation of Net Income and Diluted Earnings Per Share to Adjusted Income and Adjusted Earnings Per Share THE WENDY'S COMPANY | 24
Slide 25: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
Reconciliation In Thousands (Unaudited) of Net Cash Provided by Operating Activities to Free Cash Flow THE WENDY'S COMPANY | 25
Slide 26: Slide 26