The Cheesecake Factory Incorporated · NASDAQ:CAKE
The Cheesecake Factory — Cheesecake Factory — Investor Presentation (December 2016)
30 slides from The Cheesecake Factory's investor presentation, Dec 6, 2016
Slide 1: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements about our financial condition, results of operations, performance, plans, goals and other matters. These statements are based on our current expectations and involve known and unknown risks and uncertainties that may cause o
Slide 2: A Compelling Investment Opportunity
Highly differentiated concepts delivering unique guest experience Diversified growth drivers Track record of consistent and predictable financial performance Robust cash flow to support growth and maximize shareholder value 3 A Compelling Investment Opportunity
Slide 3: Company Overview and Key Competitive Advantages
Company Overview and Key Competitive Advantages 4
Slide 4: Our Global Footprint
Our Global Footprint 5 High quality, high profile locations worldwide International - Licensed Domestic – Company Owned China (1) 194 13 1 5 Shanghai Mexico (2) Saudi Arabia (1) UAE (5) Kuwait (3) Lebanon (1) Mexico City Guadalajara U.S.A. (Company Owned - 208) 10 2 1 Middle East Latin America Asia
Slide 5: The Cheesecake Factory - A Highly Differentiated Concept
Leader in Menu Innovation Ambiance, Service and Hospitality The Cheesecake Factory - A Highly Differentiated Concept Best-in-Class Operational Execution Integrated Bakery 6
Slide 6: Industry Leader in Menu Innovation
No veto vote – something for everyone across price points Menu changes twice a year Increases sales at full margin Industry Leader in Menu Innovation 250 menu items made fresh from scratch in-house Quality Relevance Performance Drives sales Continued market share gains Profit 7 Breadth of menu is a
Slide 7: Dining With Us Is an Experience
Dining With Us Is an Experience 8 Ambiance, Service and Hospitality Drive Sales
Slide 8: Leveraging Technology to Further Enhance the Guest Experience
Leveraging Technology to Further Enhance the Guest Experience 9 CakePay App Delivery KMS Training Redesign
Slide 9: Integrated Bakery – The Cheesecake Magic
Integrated Bakery – The “Cheesecake” Magic Produces over 70 cheesecakes and other baked desserts Enables creativity and quality control 10 Industry-Leading Dessert Sales 16%
Slide 10: Broad Consumer Appeal
The women and men behind The Cheesecake Factory reveal the untold story of how a tiny Beverly Hills restaurant known for its brown bread became a global chain mentioned in Drake songs and on “Keeping up with the Kardashians.” Broad Consumer Appeal 11 With a Moderate Average Check Highest Unit Volume
Slide 11: Strong Consumer Engagement Across Channels
Strong Consumer Engagement Across Channels 430K followers 5M+ likes 352K followers 12 Millions of Viewers
Slide 12: Leveraging Technology to Manage Costs
Leveraging Technology to Manage Costs Energy Management Optimization AutoPAR KMS Dashboards Market-Based Labor Analytics 14
Slide 13: Diversified Growth Drivers
Diversified Growth Drivers 15
Slide 14: Continued Domestic Growth Opportunity
The Cheesecake Factory – Continued Domestic Growth 16 Opportunity for 300 domestic locations Strong Unit Economics ($ millions, assumes 10,000 sq. ft. unit) Sales $10.6 EBITDAR $2.4 Cash Capex Investment $8.2 Capitalized Rent $4.2 Fully Capitalized ROI ~ 20%
Slide 15: Expanding International Presence
The Cheesecake Factory – Expanding International Presence 17 Continued expansion within current geographies Potential for additional geographies with current partners Opportunity to add licensees and territories $0 Capital Expenditure +1¢ Per Restaurant in EPS
Slide 16: Incremental Growth Opportunities
Incremental Growth Opportunities 18 North Italia and Flower Child investment Measured growth of Grand Lux Cafe and RockSugar Further leveraging the power of The Cheesecake Factory brand in the CPG channel Internal development of a fast casual concept
Slide 17: Track Record of Consistent & Predictable Financial Performance
19 Track Record of Consistent & Predictable Financial Performance
Slide 18: Outperforming the Industry and Taking Market Share
Outperforming the Industry and Taking Market Share 20 27 Consecutive Quarters of Comparable Sales Growth 2010 2011 2012 2013 2014 2015 2016 YTD Knapp-Track 2.0% 2.0% 2.2% 1.1% 1.5% 2.6% 1.2% (0.5)% 1.5% 0.5% (1.4)% (0.2)% 1.4% (0.9)% 2010 2011 2012 2013 2014 2015 2016E*
Slide 19: Leveraging Sales & Managing Costs to Drive Earnings Growth
Leveraging Sales & Managing Costs to Drive Earnings Growth 21 ~12% CAGR *Midpoint of 2016 earnings guidance provided October 26, 2016. Please see Appendix for GAAP to non-GAAP reconciliations. Earnings Per Share $1.42 $1.64 $1.88 $2.10 $1.97 $2.37 $2.83 2010 2011 2012 2013 2014 2015 2016E*
Slide 20: Our Restaurants Generate Significant Cash Flow
Our Restaurants Generate Significant Cash Flow 22 Cash Flow and Strong Balance Sheet Provide Significant Financial Flexibility Free cash flow defined as cash flow from operations less capital expenditures. Please see Appendix for GAAP to non-GAAP reconciliations. ($ millions) Proceeds from Exercise
Slide 21: Effective Capital Allocation Supports Our Financial Objectives
Effective Capital Allocation Supports Our Financial Objectives 23 ~$900 Million in Share Repurchases Reducing WASO 3% Per Year ($ millions) *2016 guidance provided October 26, 2016. $42 $77 $86 $106 $114 $154 $100 $52 $172 $101 $184 $141 $109 $150 $13 $27 $30 $36 $42 60,446 49,400 2010 2011 2012 201
Slide 22: Disciplined, Returns-Focused Growth Has Paid Off
Disciplined, Returns-Focused Growth Has Paid Off 24 Return on Invested Capital (ROIC) ROIC = NOPAT / Average invested capital NOPAT = Income from operations excluding non-recurring expenses (-) income tax provision Invested Capital = Property and equipment + long-term assets + net working capital (-
Slide 23: Creating Value for Shareholders
Creating Value for Shareholders 25 Targeting Mid-Teens Total Return to Shareholders (EPS + Dividend) Total Shareholder Return Core Business ~6% International ~2% Incremental Growth Opportunities ~1-2% Share Repurchases ~3% Dividend ~2%
Slide 24: 2017 Financial Targets
2017 Financial Targets 26 2017E Company-Owned Restaurants As many as 8 - 9 International Licensed Restaurants As many as 4 - 5 Comparable Sales 1% - 2% EPS Growth 5% - 10% 2017 guidance provided October 26, 2016. EPS growth rate reflects lapping of 53-week year in 2016. Anticipating another year of
Slide 25: A Compelling Investment Opportunity
27 A Compelling Investment Opportunity Highly differentiated concepts delivering unique guest experience Diversified growth drivers Track record of consistent and predictable financial performance Robust cash flow to support growth and maximize shareholder value
Slide 26: A Compelling Investment Opportunity
{The A Compelling Investment Geercle Opportunity * Highly differentiated concepts delivering unique guest experience * Diversified growth drivers * Track record of consistent and predictable financial performance + Robust cash flow to support growth and maximize shareholder value
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation 29 In addition to the results provided in accordance with the Generally Accepted Accounting Principles (“GAAP”) in this presentation, the Company is providing non-GAAP measurements which present diluted net income per share excluding the impact of certain items and free cash
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation 30 (1) The pre-tax amounts associates with these items in fiscal 2011, 2012, 2013, 2014 and 2015 were $1,547, $9,536, $(561), $696 and $6,011 respectively and were recorded in impairment of assets and lease terminations. (2) The pre-tax amounts associated with this item were
Slide 29: Non-GAAP Reconciliation
Non-GAAP Reconciliation 31 The Cheesecake Factory Incorporated and Subsidiaries Reconciliation of Non-GAAP Financial Measures ($ millions) Fiscal Year 2010 2011 2012 2013 2014 2015 2016 YTD Cash Flow from Operations $ 167 $ 196 $ 195 $ 205 $ 240 $ 235 $ 217 Capital Expenditures 42 77 86 106 114 154
Slide 30: Non-GAAP Reconciliation
Ofte Non-GAAP Reconciliation ‘The Cheesecake Factory Incorporated and Subsidiaries Reconciliation of Non-GAAP Financial Measures {8 millions) Fiscal Year 2010, 2011 2012 2013, 2014 2018-2016 YTD ‘Cash Flow from Operations. S$ 167 $ 196 $ 195 $ 205 $ 20 $ 25 $ 217 Capital Expenditures 42 7 86 106 114
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