Wendy's Company (the) · NASDAQ:WEN

Wendy's Company (the) — Q3 2011 Earnings Presentation

52 slides from Wendy's Company (the)'s earnings presentation, Nov 9, 2011

1. Slide 1: Third Quarter 2011 Earnings Call

   Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri Third Quarter 2011 Earnings Call November 9, 2011

2. Slide 2: Opening Comments

   Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri Opening Comments John Barker SVP and Chief Communications Officer

3. Slide 3: Agenda

   Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 3 Agenda Business Overview Emil Brolick Financial Results and Outlook Steve Hare Q&A

4. Slide 4: Forward-Looking Statements and Regulation G

   Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 4 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 f

5. Slide 5: Business Overview

   Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri Business Overview Emil Brolick President & Chief Executive Officer

6. Slide 6: Primary Font: Calibri

   Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri

7. Slide 7: Wendy's Convention

   Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 7 Wendy's Convention

8. Slide 8: Primary Font: Calibri

   Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 8

9. Slide 9: Asiago Ranch Chicken Club

   Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 9 Asiago Ranch Chicken Club

10. Slide 10: Primary Font: Calibri

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 10

11. Slide 11: Primary Font: Calibri

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 11

12. Slide 12: Primary Font: Calibri

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 12

13. Slide 13: 80% of QSR traffic growth since 2005 – Quick Casual

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 13 80% of QSR traffic growth since 2005 – Quick Casual (new QSR) …100% of non-breakfast growth Panera, Pei Wei, Noodles, Chipotle, Five Guys logos

14. Slide 14: Primary Font: Calibri

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 14

15. Slide 15: What We Were in 1969

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 15 WHAT WE WERE IN 1969

16. Slide 16: Wendy's Strategy

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 16 Building our Brand Building our Sales Building our Profits Wendy's Strategy

17. Slide 17: Bringing the vision to life

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 17 Bringing the vision to life… PRICE PRODUCT PROMOTION PLACE PERFORMANCE PEOPLE Strategy

18. Slide 18: Price: Superior Value

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 18 PRICE Same Product Lower Price Only two ways to deliver superior value Superior Product Competitive Price

19. Slide 19: 5-Star Quality 3-Star Price

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 19 5-Star Quality 3-Star Price P RIC E

20. Slide 20: Product

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 20 PRODUCT

21. Slide 21: Breakfast Driving QSR Traffic Growth

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 21 Breakfast Driving QSR Traffic Growth* Snack 13% Snack 17% Supper 27% Lunch 7% Lunch 35% Morning Meal 92% Morning Meal 21% Contribution to Growth All Traffic * YE June ‘11 vs. YE June ‘06

22. Slide 22: Wendy's New Breakfast

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 22 Wendy’s New Breakfast

23. Slide 23: Overall Attributes Ratings

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 23 Overall Attributes Ratings Question: How would you rate breakfast at Wendy’s on the following… Variety 9.0 Taste 9.2 Freshness 9.2 Quality 9.2 Convenience 9.3 Location 9.2 Price 9.0 Value 9.1 10-POINT

24. Slide 24: Primary Font: Calibri

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 24

25. Slide 25: Primary Font: Calibri

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 25

26. Slide 26: Promotion

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 26 P R OM O TIO N Message Creative Media BUILD BIG BRAND, SELL MESSAGE

27. Slide 27: Place

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 27 PLACE

28. Slide 28: Bethel Road, Columbus, Ohio

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 28 Bethel Road, Columbus, Ohio

29. Slide 29: Tiffany Lane, Virginia Beach, Virginia

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 29 Tiffany Lane, Virginia Beach, Virginia

30. Slide 30: Tatum Blvd, Phoenix, Arizona

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 30 Tatum Blvd, Phoenix, Arizona

31. Slide 31: West Liberty, Pittsburgh, Pennsylvania

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 31 West Liberty, Pittsburgh, Pennsylvania

32. Slide 32: Primary Font: Calibri

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 32

33. Slide 33: People

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 33 Our greatest asset… Our greatest source of difference… PEOPLE

34. Slide 34: Performance

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 34 32.5% 24.8% 83.5% 0.9% A & B F Q3 2011 2008 Q3 2011 2008 PERFORMANCE

35. Slide 35: International Wendy's - Tomorrow

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 35 1,000 Restaurants 44 Countries International Wendy’s - Tomorrow

36. Slide 36: International Leaders

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 36 Alex Kovaler Russia Ernie Higa Japan

37. Slide 37: Primary Font: Calibri

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri

38. Slide 38: 3rd Quarter Financial Highlights

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 38 3rd Quarter Financial Highlights • Positive transactions • 1.8% North America Company-operated same-store sales growth • 30 bps of Company-operated restaurant margin expansion • 6.5% Adjusted EBITDA*

39. Slide 39: Q3 2011 Results & Full-Year Outlook

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri Q3 2011 Results & Full-Year Outlook Steve Hare Chief Financial Officer

40. Slide 40: Q3 2011 Marketing Calendar and Same-Store Sales

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 40 Wendy’s Q3 2011 Marketing Calendar Sept Aug July Local Options Spicy Chicken Q3 2011 N.A. Same-Store Sales Company-owned +1.8% Franchise +0.7% Systemwide +0.9% Company Restaurant Margin Q3 2011 13.7%

41. Slide 41: Q3 2011 Results

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 41 Q3 2011 Results ($ in Millions) Q3 2011 Q3 2010 Better/ (Worse) Sales 534.5$ 525.1$ 9.4$ Franchise revenues 76.9 75.6 1.3 Total revenues 611.4$ 600.7$ 10.7$ EBITDA 63.2$ 73.9$ (10.7)$ Plus: Transactio

42. Slide 42: Income from Continuing Operations and Special Items

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 42 Income (Loss) from Continuing Operations and Special Items ($ in Millions) Pre-tax After-tax EPS Pre-tax After-tax EPS Income (loss) from continuing operations 4.3$ 2.5$ 0.01$ (8.6)$ (0.8)$ 0.00$ Tran

43. Slide 43: Corporate G&A and Arby's Transition

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 43 Corporate G&A and Arby’s Transition • Completed transition of G&A services to Arby’s for all departments other than IT • Full cost of services ($5.9 million) reimbursed – The full cost of services and

44. Slide 44: Cash Flow Q3 YTD 2011

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 44 Cash Flow Q3 YTD 2011 ($ in Millions) 2011 Cash flow from operations 182.1$ Capital expenditures (91.9) Proceeds from sale of business, net of costs 103.2 Repurchases of common stock (152.7) Dividends

45. Slide 45: Consolidated Debt

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 45 Consolidated Debt ($ in Millions) 1/2/2011 Senior Debt 1,328.5$ 1,347.5$ Capital Leases and Financing Obligations 28.3 224.9 Total Debt 1,356.8 1,572.4 Cash and Cash Equivalents 488.8 512.5 Net Debt 8

46. Slide 46: Stock Repurchases and Dividends

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 46 Stock Repurchases and Dividends (In Millions, Except Per Share Amounts) 2011 2009-2011 YTD* YTD* Cumulative Shares Purchased 30 82 Average Price Per Share $5.09 $4.84 Principal Spending $152 $398 Rema

47. Slide 47: 2011 Outlook

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 47 2011 Outlook • Reconfirm $330-340 million adjusted EBITDA1 • Key Assumptions: – Wendy’s same-store sales growth in the middle of the +1% to +3% range – Wendy’s company-operated restaurant margin2 down

48. Slide 48: Investor Day

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 48 Investor Day • Planning for late January 2012 • Content – Preliminary 2011 results – 2012 outlook – Overview of strategic growth plans • More details in the coming weeks

49. Slide 49: Q&A

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri Q&A

50. Slide 50: Appendix

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri Appendix

51. Slide 51: EBITDA Reconciliation Third Quarter and Nine Months

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 51 (In Thousands) Third Quarter Nine Months (Unaudited) 2011 2010 2011 2010 EBITDA $ 63,206 $ 73,850 $ 207,075 $ 234,753 Depreciation and amortization (30,816) (32,639) (90,972) (96,452) Impairment of lo

52. Slide 52: Quarterly EBITDA Reconciliation

    Color Palette 212-53-69 255-192-0 138-212-227 23-55-94 72-55-92 228-108-10 Primary Font: Calibri 52 First Quarter Second Quarter Third Quarter Fourth Quarter Year First Quarter Second Quarter Third Quarter EBITDA 70,093$ 90,810$ 73,850$ 68,864$ 303,617$ 66,228$ 77,641$ 63,206$ Depreciation and amort

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