Wendy's Company (the) · NASDAQ:WEN
Wendy's Company (the) — Wendy's/Arby's Group — Q3 2009 Earnings Presentation
32 slides from Wendy's Company (the)'s earnings presentation, Nov 5, 2009
Slide 1: Third Quarter 2009 Earnings Call
Third Quarter 2009 Earnings Call November 5, 2009
Slide 2: Opening Comments
Opening Comments John Barker SVP and Chief Communications Officer
Slide 3: Agenda
n Third Quarter Highlights - Roland Smith − Business overview − Third quarter financial highlights − Key profit drivers n Financial Results - Steve Hare − Consolidated financial overview − Brand operating results − Dividend and stock repurchase program n Brand Updates, Growth Opportunities and Outlo
Slide 4: Wendy's/Arby's Group Reported Today
Wendy’s/Arby’s Group Reported Today: n Third Quarter and YTD Results − Q3 2009 and YTD are not comparable to 2008 due to the merger n Balance Sheet Highlights n Adjusted EBITDA Compared to Pro-Forma Adjusted EBITDA n Selected Financial Highlights for Each Brand n Form 10-Q Third Quarter 2009
Slide 5: Forward-Looking Statements and Regulation G
Forward-Looking Statements and Regulation G This presentation, and certain information that management may discuss in connection with this presentation, may contain statements that are not historical facts, including, importantly, information concerning possible or assumed future results of our oper
Slide 6: Third Quarter 2009 Highlights
Third Quarter 2009 Highlights Roland Smith President & Chief Executive Officer
Slide 7: First Year Accomplishments
n Wendy’s/Arby’s Group: 3 rd Largest QSR Company in the U.S. n Solid Earnings Growth in a Challenging Market n Margin Improvement at Wendy’s − Ahead of plan to generate $100 million in incremental annual EBITDA by improving Wendy’s restaurant margins by 500 basis points by end of 2011 n Cost Savings
Slide 8: Third Quarter Business Overview
n Adjusted EBITDA Grew 9.1% to $124.4 million* n Strong Performance at Wendy’s − Positive systemwide same-store sales, excluding breakfast removal − 400 basis points improvement in company-operated margin n Sales and Margins Declined at Arby’s − Launched 1 st Phase of Arby’s Everyday Value Platform
Slide 9: Wendy's Third Quarter Results: North America Same-Store Sales
Wendy’s Third Quarter Results North America Same-Store Sales n Third Quarter Same-Store Sales, Excluding the Impact of Breakfast, were Positive Company excl breakfast Franchise
Slide 10: Wendy's Third Quarter Results: Restaurant Margin
Wendy’s Third Quarter Results Restaurant Margin n Q3 2009 Company-Operated Restaurant Margin was +400 bps vs. Year Ago Q3 Q3
Slide 11: Arby's Third Quarter Results
Q3 2009 Arby’s Third Quarter Results North America Same-Store Sales n Same-store Sales Impacted by Significant Competitor Discounting n Margins Decreased Driven Primarily Due to Significant Deleveraging Restaurant Margin Q3 12.1% 16.6% -6.5% -10.2% Company Franchise Q3
Slide 12: Wendy's Restaurant Margin
n Delivered 400 bps Improvement in Q3 and +300 bps YTD n Expect to Exceed +250 bps for the Full-Year 2009 n Remain Confident in Our Ability to Achieve +500 bps by 2011 Original Margin Improvement Targets by Year 150-170 bps 2008 2009 2010 2011 2011 Target Target Target Target 11.7% 16.7% 160-180 bps
Slide 13: G&A Synergies and Efficiencies
$60 million Target Additional Savings n Ahead of Schedule to Achieve Cost Savings Goal of $60 Million through Synergies and Efficiencies n Key Projects Under Way − Shared Services Center in place − Completing IT rationalization projects − Signed agreement to form Wendy’s purchasing co-op n Working o
Slide 14: Financial Overview
Financial Overview Steve Hare Chief Financial Officer
Slide 15: Q3 Consolidated Operating Results
Q3 Consolidated Operating Results
Slide 16: Q3 EBITDA and Adjusted EBITDA
*See Appendix. Q3 EBITDA and Adjusted EBITDA*
Slide 17: Cash Flow - 2009 YTD
(1) Includes $1.1 million of net cash from exchange rate changes and discontinued operations Cash Flow - 2009 YTD
Slide 18: Debt Capitalization
* Represents trailing twelve month pro-forma adjusted EBITDA Debt Capitalization
Slide 19: Q3 Wendy's Brand Operating Results
*See Appendix Q3 Wendy’s Brand Operating Results
Slide 20: Q3 Arby's Brand Operating Results
Q3 Arby’s Brand Operating Results
Slide 21: Wendy's New Purchasing Co-op
n Will Manage Food and Related Product Purchases and Distribution Services n Offers Cost Savings Opportunities While Maintaining the Quality of the Wendy’s Brand n Company Committed $15.5 Million for Initial Startup − Expensed in the fourth quarter − Paid over the next 18 months n Operating Costs Of
Slide 22: Recent Board Actions
n Board Amended Stock Repurchase Program and Increased Authorization to $100 million − Company purchased $49 million of common stock as of October 26, 2009; 10.3 million shares for approximately $4.77 per share − Authorization will remain in effect through January 2, 2011 − Company will repurchase a
Slide 23: Brand Updates, Growth Opportunities and Outlook
Brand Updates, Growth Opportunities and Outlook Roland Smith President & Chief Executive Officer
Slide 24: Re-Energizing the Wendy's Brand
n Unveiled New Advertising Campaign in October − “You Know When It’s Real™” − Reinforces Wendy’s quality brand positioning Re-Energizing the Wendy’s Brand
Slide 25: Re-Energizing the Wendy's Brand
n Launched New Bacon Deluxe Cheeseburger in October n Full Pipeline of New Products in Various Test Phases Re-Energizing the Wendy’s Brand
Slide 26: Arby's: Balancing Premium and Value
n Launched 1st Phase of Everyday Value Strategy – $5.01 Combos: One of 5 full-sized sandwiches + fries & drink n 2nd Phase will Feature Expansion of $1 Menu Arby’s: Balancing Premium and Value
Slide 27: International Growth
n Announced New SVP of International, Andy Skehan n Wendy’s and Arby’s are Under-Penetrated in International Markets n Potential for 8,000 Restaurants Outside of North America n 1st International Dual-branded Restaurant Expected to Open in Dubai in Early 2010 *Artist rendering (not actual restaurant
Slide 28: Financial Outlook Summary
n 2009 Financial Outlook n 10% Growth in 2009 Year-to-Date Adjusted EBITDA* n Strong Performance at Wendy’s n Implementing Everyday Value Strategy at Arby’s n Key Profit Drivers Ahead of Plan n Strong Free Cash Flow n Growth Opportunities in International n Average Annual Adjusted EBITDA Growth in t
Slide 29: Wendy's/Arby's Group
\ WENDY'S ARBY'S GROUP SERVING FRESH IDEAS DAILY.
Slide 30: Wendy's/Arby's Group
\ WENDY'S ARBY'S GROUP SERVING FRESH IDEAS DAILY.
Slide 31: Calculation of EBITDA and Reconciliation to Income from Continuing Operations
WENDY'S .\ ARBY'S GROUP ‘Wendy"s/Arhy's Group, Inc. and Subsidiaries Calculation of EBITDA and a Recouciliation of EBITDA to Income (1L0ss) from Continuing Operation Compared to Pro-forma! 2008 Kesults (in Thousands) Third Quarter Nine Months (oaudited) Pro-Forma ProForm ano 2008 2009 2008 EBITDA 31
Slide 32: Reconciliation of EBITDA to Adjusted EBITDA
WENDY'S ARBY'S GROUP Reconciliation of EBITDA to Adjusted EBITDA (in Thousands) ‘Third Quarter ‘Nine Wonths (Unaudited) Pro-Forma Tre Forma 2009 200 2009 200 ERITDA Fea 3 as ow Te hus: ‘Facilities relocation and corporate restmcturing 13s mT 8.899 33M Integration costs in general and adnistrtive 329