Wendy's Company (the) · NASDAQ:WEN
Wendy's Company (the) — The Wendy's Company — Q4 2020 Earnings Presentation
34 slides from Wendy's Company (the)'s earnings presentation, Mar 3, 2021
Slide 1: Fourth Quarter 2020 Conference Call
Fourth Quarter 2020 Conference Call March 3, 2021 © 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 2020 Financial Results 2021 Outlook 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: CEO Business Update
CEO Business Update ▪ 10 Consecutive Years of U.S. SRS Growth ▪ #2 QSR Hamburger Chain in U.S.* ▪ Highly Successful Breakfast Launch ▪ Digital Acceleration ▪ Restaurant Margin Acceleration ▪ Opened ~150 Restaurants in ‘20 ▪ Committed to Long Term Growth Initiatives * In the 12 months ended December
Slide 7: 10 Years of US Same-Restaurant Sales Growth
10 Years of US Same-Restaurant Sales Growth 5.1% 4.9% 4.9% 3.7% 3.4% 3.5% 3.4% 3.5% 2.4% 3.5% 2.9% 1.8% 1.9% 2.0% 1.6% 1.7% 1.5% 0.6% 2012 2013 2014 2015 2016 2017 2018 2019 2020 1-year 2-year Q1 U.S. SRS Outlook: ~10% THE WENDY'S COMPANY | 7
Slide 8: Gunther Plosch
Gunther Plosch Chief Financial Officer © Quality Is Our Recipe, LLC
Slide 9: Fourth Quarter Financial Results
Fourth Quarter Financial Results $ Mils (except per share amounts) 20201 2019 B/(W) Global System SRS 4.7% 4.3% 2-Yr 9.0% Adjusted Revenues2 $382.1 $341.7 11.8% Company Restaurant Margin 17.6% 14.3% 330 bps G&A $59.3 $54.0 (10.0)% Adjusted EBITDA2 $114.5 $83.4 37.3% Adjusted EPS2 $0.17 $0.08 112.5%
Slide 10: Full Year Financial Highlights
Full Year Financial Highlights1 ▪ Global System SRS: 1.2% ▪ Adjusted EBITDA: ~$420M2 ▪ Adjusted EPS: $0.572 ▪ Free Cash Flow Excluding FI Case: ~$182M2,3 ▪ Net Unit Growth ▪ Image Activation: 64% complete 1 Please note that the Company benefitted from a 53rd week in 2020. Please see the appendix for
Slide 11: Todd Penegor
Todd Penegor President & Chief Executive Officer © Quality Is Our Recipe, LLC
Slide 12: Growth Pillars Built on Solid Foundation
Growth Pillars Built on Solid Foundation Investing in Accelerated Global Growth Build Our Digital Expand Our Breakfast Acceleration Footprint Daypart Fast Food Operational Good Done Done Right Excellence Right Restaurant Economic Model THE WENDY'S COMPANY | 12
Slide 13: Expect Breakfast to Accelerate in '21 and Beyond
Expect Breakfast to Accelerate in ’21 and Beyond ▪ Highly successful launch in 2020 ▪ Breakfast remains strong at ~7% of total sales ▪ Breakfast remains highly profitable for the system ▪ Breakfast to meaningfully accelerate in 2021 ▪ ~30% growth in breakfast sales in ‘21 ▪ Increased marketing spend
Slide 14: Digital Poised for Meaningful Acceleration
Digital Poised for Meaningful Acceleration ▪ More than doubled digital sales in 2020 ▪ Successful Loyalty launch grew active app users to ~3M by year- end ▪ Expect digital to reach 10% sales mix by end of 2021 ▪ Continue to build 1:1 relationships with our customers THE WENDY'S COMPANY | 14
Slide 15: Expanding our Global Footprint is a Top Priority
Expanding our Global Footprint is a Top Priority ▪ 2020 exceeded expectations with positive net unit growth ▪ Development team driving growth across the Globe ▪ Wendy’s remains a leader in innovative restaurant designs ▪ Strong pipeline to drive 2%+ net unit global growth in ’21 and 3%+ in ‘22 ▪ Exp
Slide 16: International Returning to Double Digit Unit Growth in 2021
International Returning to Double Digit Unit Growth in 2021 ▪ Strong sales recovery throughout 2020 ▪ ~10% Digital sales in Philippines 2020 ▪ 10%+ net new unit growth expected in 2021 ▪ UK launch remains on track for 2021 UK THE WENDY'S COMPANY | 16
Slide 17: We Will Become the World's Most Thriving, Beloved Restaurant Brand
-WE WILL BECOME: THE WORLD'S thriving beleved RESTAURANT ‘BRAND:
Slide 18: Gunther Plosch
Gunther Plosch Chief Financial Officer © Quality Is Our Recipe, LLC
Slide 19: 2021 Outlook
2021 Outlook Metric Outlook Global Systemwide Sales Growth 6% to 8%* Adjusted EBITDA ~$445M to $455M Adjusted EPS ~$0.67 to $0.69 Capital Expenditures ~$80M to $90M Free Cash Flow ~$230M to $240M THE WENDY'S COMPANY | 19 * Please note that this excludes the impact from a 53rd week in 2020.
Slide 20: 2021 Outlook: Systemwide Sales Growth
2021 Outlook: Systemwide Sales Growth 6% to 8% Growth ~$11.3B ~ ($0.2B) ~$11.1B 2020 Global 53rd Week 2020 System Sales SRS Development 2021 Global Systemwide Sales (excl. 53rd week) Systemwide Sales THE WENDY’S COMPANY 20 Note: All 2021 growth rates exclude the impact of the 53rd week in 2020.
Slide 21: 2021 Outlook: Adjusted EBITDA Growth
2021 Outlook: Adjusted EBITDA Growth High Single Digit Growth $445M to $455M ~$420M ~($8M) ~$412M THE WENDY’S COMPANY 21 Note: All 2021 growth rates exclude the impact of the 53rd week in 2020.
Slide 22: 2021 Outlook: Adjusted EPS Growth
2021 Outlook: Adjusted EPS Growth ~20-23% Growth $0.67 to $0.69 $0.57 ($0.01) $0.56 THE WENDY’S COMPANY 22 Note: All 2021 growth rates exclude the impact of the 53rd week in 2020.
Slide 23: 2021 Outlook: Free Cash Flow Growth
2021 Outlook: Free Cash Flow Growth ~27-32% Growth ~$230 to $240M ~$182M THE WENDY’S COMPANY 23 Note: 2020 FCF excludes the $18.3M tax effected payment related to the settlement of the Financial Institutions Case.
Slide 24: 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 25: Greg Lemenchick
Greg Lemenchick Senior Director – Investor Relations & Corporate FP&A © Quality Is Our Recipe, LLC
Slide 26: Investor Relations Calendar (All Virtual)
Investor Relations Calendar (All Virtual) • March 10: UBS Conference • March 11: J.P. Morgan Conference • March 16: NDR with Piper Sandler (NYC) • March 18: Conference Call with Gordon Haskett • March 24: Virtual HQ Visit with Alliance Bernstein • May 12: First Quarter Earnings Release & Conference
Slide 27: Q&A
Q&A
Slide 28: Appendix
Appendix
Slide 29: 53rd Operating Week Impacts
53rd Operating Week Impacts The fourth quarter and full-year results include the favorable impact of a 53rd operating week, which affects all fourth-quarter and full year comparisons to 2019. The 53rd week resulted in the following impacts in 2020: • ~7% and ~2% increase to Global systemwide sales i
Slide 30: 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 31: Reconciliations of Net Income to Adjusted EBITDA and Revenues
In Thousands (Unaudited) Reconciliations of Net Income to Adjusted EBITDA and Revenues to Adjusted Revenues THE WENDY'S COMPANY | 31
Slide 32: Reconciliation of Net Income and Diluted EPS to Adjusted EPS
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 | 32
Slide 33: 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 | 33
Slide 34: The Wendy's Company