Papa John's International, Inc. · NASDAQ:PZZA
Papa John's International — Investor Day (December 2024)
49 slides from Papa John's International's investor day presentation, Dec 12, 2024
Slide 1: Meet the Papa Johns Team
Ingredients, Getter Piz MEET THE
Slide 2: Stacy Frole, Vice President, Investor Relations
Stacy Frole Vice President, Investor Relations
Slide 3: Important Disclosures: Forward-Looking Statements
Ml IMPORTANT DISCLOSURES Forward-Looking Statements Certain matters discussed in this presentation that are not statements of historical fact constitute forward-looking statements within the meaning of the federal securities laws. Generally, the use of words such as “expect,” “intend,” “estimate,” “
Slide 4: Important Disclosures: Industry and Market Information
Ml IMPORTANT DISCLOSURES Industry and Market Information Statements in this presentation concerning our industry and the markets in which we operate, including our general expectations and competitive position, business opportunity and market size, growth and share, are based on information from ind
Slide 5: Today's Speakers
MH TODAY'S SPEAKERS TODD PENEGOR President & Chief Executive Officer RAVI THANAWALA Chief Financial Officer & Executive Vice President, International STACY FROLE Vice President, Investor Relations JENNA BROMBERG Chief Marketing Officer KEVIN VASCONI Chief Digital & Technology Officer JOE SIEVE Chief
Slide 6: Today's Agenda
M8 TODAY'S AGENDA Welcome & Introduction Papa Johns Today & Tomorrow Financial Overview Fireside Chat Q&A Session Tasting & Meet the Team
Slide 7: Papa Johns Today & Tomorrow
PAPA JOHNS TODAY & TOMORROW Todd Penegor President & Chief Executive Officer
Slide 8: ▪
▪ 7
Slide 9: Key Takeaways From Today
MH KEY TAKEAWAYS FROM TODAY Our #1 priority is to for our customers and team members in our restaurants - ensuring the Focusing on our core strength of crafting high-quality, traditional pizza to consistently meet and exceed customer expectations and investing to amplify our brand promise Building i
Slide 10: Our Values
Our Values People First Innovate to Win Everyone Belongs Have Fun Do the Right Thing
Slide 11: Better Today
MZ BETTER TODAY Nasdaq trading began Restaurants Pizzas sold each year *TTM ending 9/29/24 Franchise & corporate team members ~107,000 Countries served Global systemwide sales* S5B C1 Domestic Company-Owned Restaurants Gi North America Franchising Revenues by Segment* Bl North America Commissaries C
Slide 12: Our Culture Is Strong
IS STRONG
Slide 13: Our Values-Driven Culture Is Thriving
America’s Most Responsible Companies 2025 Mi OUR VALUES-DRIVEN CULTURE IS THRIVING Passion for Communities 300+ organizations supported through the Papa Johns Foundation Reached 45 M meals toward our goal of donating 10M meals to those in need hy 2027 600+ team members have accessed our Dough & Degr
Slide 14: Our Footprint Has Grown
OUR FOOTPRINT HAS GROWN United Kingdom North America EMEA 3,454 635 LATAM PAPAJOHNS: —asof 9/29/24 * Excludes suspended restaurants previously disclosed in Q12022
Slide 15: Leading Position in Top Markets
LEADING POSITION IN T1 OF OUR TOP 15 MARKETS Our brings significant Opportunity for strategic domestic expansion. 1 kestourantdensty OOF Houston 9 Represents Papa Johns market share ranking PAPAJOHNS: source: Restaurant Trends QSR MarketSHARE Report MY2024 as of 6/30/24. Market share is defined as d
Slide 16: Our Strengths and Opportunities Within the Pizza Segment
HZ OUR STRENGTHS AND OPPORTUNITIES WITHIN THE PIZZA SEGMENT According to Papa Johns customers: We continue to outpace peers in quality and taste. We need to return to being the industry leader in consistency. We see the greatest opportunity to differentiate ourselves in overall digital experience an
Slide 17: My Convictions in Papa Johns Have Only Grown Stronger
MZ MY CONVICTIONS IN PAPA JOHNS HAVE ONLY GROWN STRONGER ... .. as we have what it takes to he the best pizza makers and create value for all stakeholders. v Passion for pizza = Better Ingredients. Better Pizza. * Quality-based growth will deliver long-term profitability v Experienced team with prov
Slide 18: The Journey
THE JOURNEY
Slide 19: Our Recipe for Profitable Growth
MH OUR RECIPE FOR PROFITABLE GROWTH Focus on Core Product & ) ge § Innovation “27 < Franchisee Transform é BAN >) Invest in International “<2 Profitability >) technology GP) Differentiate Evolve (<)>) g oy) KOS * <> Customer Experience Franchisee Base <-”
Slide 20: Getting Back to Being the Best Pizza Makers
ME GETTING BACK TO BEING THE BEST PIZZA MAKERS Innovations have been .. but have led to more complex We will evolve to better serve successful at attracting operations and less consistency i our customers’ needs, optimize new customers... in product. i our menu and consistently : deliver high-qualit
Slide 21: Focus on Core Product & Innovation: Crust Type
FOCUS ON CORE PRODUCT & INNOVATION BEING THE BEST BY FOCUSING ON OUR CORE Pizza Orders hy Crust Type* = Crust innovations drive consumer acquisition = Medium and Large I-top pizzas are operationally simple and drive customer frequency = Balanced approach to acquisition throug innovation and increasi
Slide 22: Focus on Core Product & Innovation: Menu Offerings
FOCUS ON CORE PRODUCT & INNOVATION BEING THE BEST BY FOCUSING ON OUR CORE Menu Offerings* | = Additional offerings have made pizza a smaller portion of total sales = Core offering of pizza is a key opportunity to drive higher frequency of our most loyal customers = Optimizing menu offerings to be co
Slide 23: Driving Premium-Quality Distinction
FOCUS ON CORE PRODUCT & INNOVATION DRIVING PREMIUM-QUALITY DISTINCTION The Foundation of Our Success Being the hest pizza makers will he supported by three primary workstreams: Consumer Perception Assess current perception of Papa Johns to determine appropriate level of differentiation to feature Br
Slide 24: Amplify Marketing
AMPLIFY MARKETING WINNING CUSTOMERS WITH A FOCUS ON QUALITY AND VALUE QUALITY EMPHASIS Best pizza craftsmanship: Emphasize bringing the freshest ingredients to every pizza order VALUE PERCEPTION Across the menu: Emphasize value propositions — from Papa Pairings to Shaq-a-Roni Our approach CHALLENGER
Slide 25: Investment in Brand Evolution Is Improving Consideration
INVESTMENT IN BRAND EVOLUTION IS IMPROVING CONSIDERATION Consideration - General Population, Al8+ 3 in a s 2or more 2 XL NY Style Papa Pairings a forsi0.29 for $6.99 each EL as Cheesy € Burger for 2 $9.99 3 2 Better Get 2 You Some & 60 ovou24 02/01/24 03/01/24 04/01/24 05/01/24 06/01/24 07/01/24 08/
Slide 26: Q3 Results Show Strength With Gen Z
▪ ▪ ▪ Q3 results show strength with Gen Z and an additional opportunity to gain reach ▪ 25
Slide 27: Invest in Technology
INVEST IN TECHNOLOGY CREATING A SMOOTH AND REPEATABLE CUSTOMER EXPERIENCE Agilit Boost agility, service and husiness potential INITIATIVES: Simplify products, operations and processes Evolve to an omnichannel experience with product team mentality Intelligence: Further develop cutting-edge capabilit
Slide 28: Growth Driving Capital Investments
INVEST IN TECHNOLOGY GROWTH DRIVING CAPITAL INVESTMENTS Annual Capex Spend Four-Year Average 2025 2021-2024 Estimate — Plan to reallocate capital in 2025 3 7 to support highest ROI items = Tech spend will be incremental to 2024, _ — 48% but comparable with four-year average Approximately two-thirds
Slide 29: Enhancing Customers' Digital Experience
DIFFERENTIATE CUSTOMER EXPERIENCE ENHANCING CUSTOMERS’ DIGITAL EXPERIENCE Improving user interaction with revitalized app and redesigned website = Q3 Brand Health results showing increase in customers who found the app and website easy to use = Enhancing website homepage to realign with user experie
Slide 30: Delivering Loyalty Rewards Customers Deserve
DIFFERENTIATE CUSTOMER EXPERIENCE DELIVERING LOYALTY REWARDS CUSTOMERS DESERVE Papa Rewards Program Update: Earning Papa Dough’ faster and more often = As of Q3 2024, ~1/4 of active loyalty program members had not yet reached a reward due to the current thresholds = Threshold reduced from 75 points
Slide 31: ▪ (a) Does not include Company-owned restaurants (b) Weighted average based on number of
▪ 30 (a) Does not include Company-owned restaurants (b) Weighted average based on number of restaurants multiplied by franchisee tenure (c) Calculated based on date of opening, excluding any remodel work
Slide 32: Domestic Market Presents Opportunity for Growth
DOMESTIC MARKET PRESENTS OPPORTUNITY FOR GROWTH Weekly Per-Restaurant Average a Sa Sa = Domestic market average unit sales of ~$1.2M have grown at an ~7.5% CAGR over last four years oe = Development team has rebuilt the foundation to scale and accelerate profitable growth [ sv. | + Future average do
Slide 33: Evolve Franchisee Base
EVOLVE FRANCHISEE BASE OPPORTUNITIES TO ACCELERATE DOMESTIC DEVELOPMENT Domestic opportunities exist to utilize our existing infrastructure and create sustainable unit growth EXISTING CORPORATE NEW FRANCHISEES: DEVELOPMENT: FRANCHISEES: Identify and focus on Refranchise select New operators bring ex
Slide 34: Expanding Our Domestic and International Footprint
EXPANDING OUR DOMESTIC AND INTERNATIONAL FOOTPRINT Papa Johns Penetration vs. Peers (units) 7500 6000 4500 3000 1500 | l | I Experienced development leadership team ; i ao PE | US China UK India Mexico South Spain Chile Peru Canada All Other Korea Significant development whitespace relative to peers
Slide 35: Transform International
TRANSFORM INTERNATIONAL NARROW AND DEEP FOCUS ON MOST IMPACTFUL MARKETS GOAL: Target higher average unit volumes and greater penetration of key regions Refocus Grow UK, China Korea, Spain Re-establish a Drive long-term sustainable growth in well- established markets with a solid foundation operating
Slide 36: Financial
FINANCIAL Ravi Thanawala Chief Financial Officer & Executive Vice President, International + 35
Slide 37: My Passion for the Pizza Business
Ml MY PASSION FOR THE PIZZA BUSINESS Significant opportunity for improved V Financial structure that supports our unit economics growth options Clarity on where we have highly accretive Brand and financial models are very resilient transaction opportunities Meaningful domestic market share to captur
Slide 38: Revenue and Operating Income Breakdown
REVENUE AND OPERATING INCOME BREAKDOWN Net Revenue* Adjusted Operating Income* We have a solid operating income hase with more than 75% driven by consistent revenue sources. 1 Domestic Company- North America North America International Ml Other Owned Restaurants Franchise Commissary *TTM ending 9/29
Slide 39: Historical North America Comparable Sales Trends
HISTORICAL NORTH AMERICA COMPARABLE SALES TRENDS PAPAJOHNS: 15% 10% 5% oe | rs ee af. 5% 3-yr Stack* 2-yr Stack* 2023 9 mos 2024 ™@pzzA =‘ MlindustryPeer Ml Industry Peer Papa Johns has a track record of growth. The investments we are making today are improving transaction trends, which we expect to
Slide 40: Historical North America Comparable Sales Trends
HISTORICAL NORTH AMERICA COMPARABLE SALES TRENDS 15% N N 10% \ N : Vy \ en | De eee = » \ | | \ Total Comp Sales Ml Total CompTickets lll Total Comp Transactions We will focus on driving highly profitable transaction growth to support comparable sales and development. PAPAJOHNs: + 39
Slide 41: Returning to a Balanced Pricing Strategy
RETURNING TO A BALANCED PRICING STRATEGY a Price vs. Inflation: 2023 Price vs. Inflation: 2024 Q12023 Q22023 Q3 2023 Q4 2023 FY 2023 Q12024 Q22024 Q3 2024 Q4 2024E* Wi inflation -Corporate Ml Effective Price- Franchise ll Effective Price - Corporate As we make adjustments to improve our value percep
Slide 42: Sharpening Pricing to Improve Value Perception and Frequency
SHARPENING PRICING TO IMPROVE VALUE PERCEPTION AND FREQUENCY Sales hy Pricing Strategy* Sales hy Fulfillment Channel* National promotion drives value perception to win the hearts and minds of our customers, and we optimize margin by serving their needs through all fulfillment channels. National Mi B
Slide 43: Scale Drives Highest Margins Despite Higher Food Costs
SCALE DRIVES HIGHEST MARGINS DESPITE HIGHER FOOD COSTS Domestic System Margins* Restaurant Quartiles Total Avg Avg Rest. Sales Weekly Per Rest. Avg $31,474 $22,866 $18,433 $13,334 $21,618 Avg Rest. Orders Weekly Per Rest. Avg 1,168 844 676 498 800 Avg Ticket Weekly Per Rest. Avg $26.95 $27.10 $27.28
Slide 44: Unifying Franchise Data
3 UNIFYING FRANCHISE DATA Initial Domestic Franchise output): For FY2023, ~25% of traditional Domestic franchisee = Investing in franchise analytics restaurants’ data has been uploaded into the platform to deliver actionable insights platform and "harmonized." across the system to drive profitabilit
Slide 45: Strong Balance Sheet Supports Growth Investments
STRONG BALANCE SHEET SUPPORTS GROWTH INVESTMENTS Outstanding Debt § Leverage Total Liquidity $in millions $in millions 35x 32x 3.0x $510 2.4) 2.6x = $344 Z a Ox $395 $344 $732 $605 $236 $273 70 $350 $130 $71 $28 $47 $41 $18 2019 2020 2021 2022 2023 Q3'24 2019 2020 2021 2022 2023 Q3'24 —®— Gross Leve
Slide 46: Disciplined Capital Allocation
DISCIPLINED CAPITAL ALLOCATION PAPAJOHNs Uses of Cash $376 $in millions $345 $258 $133 $81 2020 2021 2022 2023 Q3 2024 TIM Micapex "Dividends Mi Buybacks ‘ll Preferred Repurchase We strive to strike the right balance hetween investing in the business and returning capital to shareholders, with $850+
Slide 47: Driving Increased Long-Term Shareholder Value
DRIVING INCREASED LONG-TERM SHAREHOLDER VALUE PAPAJOHNS: Investing in Growth = Invest in strategic initiatives generating positive cash flow = Prudently invest in growth opportunities and strategic partnerships Maintaining a Strong Balance Sheet = Use of free cash flow to pay down debt, reduce lever
Slide 48: Fireside Chat
FIRESIDE CHAT Ravi Thanawala, Kevin Vasconi, Joe Sieve and Jenna Bromberg
Slide 49: Key Takeaways From Today
MH KEY TAKEAWAYS FROM TODAY Our #1 priority is to for our customers and team members in our restaurants - ensuring the Focusing on our core strength of crafting high-quality, traditional pizza to consistently meet and exceed customer expectations and investing to amplify our brand promise Building i
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