Dine Brands Global, Inc. Common Stock · NYSE:DIN
Dine Brands Global, Inc. Common Stock — Investor Presentation (December 2018)
30 slides from Dine Brands Global, Inc. Common Stock's investor presentation, Dec 4, 2018
Slide 1: Dine Brands Global, Inc. Investor Presentation December 2018
Exhibit 99.1 Dine Brands Global, Inc. Investor Presentation December 2018
Slide 2: Disclosures
Disclosures Forward-Looking Information: The content contained in this presentation is as of December 4, 2018. The Company assumes no obligation to update or supplement the information. Statements contained in this presentation may constitute forward-looking statements within the meaning of Section
Slide 3: Business Overview
Business Overview Two iconic brands – IHOP and Applebee’s 3,650 + restaurants 2017 system sales of $7.4 billion(1) #1 in U.S. Family and Casual dining(2) 100% franchised model(3) 2017 revenue of $738mm(4) and EBITDA of $224mm(5) Industry-leading margins and significant cash generation(6) Expanding i
Slide 4: Commitment to Success
Commitment to Success We are implementing a plan to return to growth at both brands We continue to pursue cost optimization opportunities We are committed to making the necessary investments to further strengthen the business for the long-term We expect to generate substantial adjusted free cash flo
Slide 5: Investment Highlights
Investment Highlights Significant Scale in the U.S. Robust EBITDA Margins Substantial Adjusted Cash Flow Generation 100% Franchised Model(1) with Strong and Improving Franchisee Base Leader in U.S. Family and Casual Dining(2) History of Significant Capital Return New Strategy, Culture and Philosophy
Slide 6: Favorable Guest Dynamics
Favorable Guest Dynamics IHOP GUEST AGE DEMOGRAPHICS APPLEBEE’S GUEST AGE DEMOGRAPHICS 41% 26% (2) 19% 14% Family Dining (1) 25% 26% 29% 20% . Under 18 18-34 35-54 55+ 49% of guests are age 34 and below 35% 28% 21% 15% Casual Dining Under 18 18-34 35-54 55+ 27% 28% 30% 15% 45% of guests are age 34 a
Slide 7: 100% Franchised Model
100% Franchised Model(1) % FRANCHISED TODAY VS. AT 2007 MERGER % FRANCHISED VS. FAMILY/CASUAL DINING PEERS (2) 99%(2) 100%(2) 2007 Merger Today 74% 100% 2007 Merger Today 100% Company-operated (1) On October 19, 2018, the Company signed an asset purchase agreement to acquire 69 Applebee’s restaurant
Slide 8: IHOP Overview
HOP | Overview VS
Slide 9: Leader in Family Dining for the Last Years
Leader in Family Dining for the Last 11 Years 2017 SYSTEM-WIDE SALES VS. PEERS #1 in U.S. System Sales(1) $3.1 (1) Annual ranking by Nation’s Restaurant News, “Top 200,” June 18, 2018 issue (IHOP rank based on latest fiscal year U.S. system-wide sales in the family dining category). 8
Slide 10: Consistent Restaurant Development Growth
Consistent Restaurant Development Growth Continued net domestic development growth Non-traditional and small formats Significant growth opportunities in urban/rural areas 1,671 ~1,900 2017 2018 2019 2020 2021 2022 Source: Company’s fiscal 2017 Form 10-K filing and Company projections. 9
Slide 11: Historical Performance vs. Peer Average
Historical Performance vs. Peer Average SYSTEM SALES GROWTH CAGR 2013-2018 (September) (1) NET UNIT GROWTH CAGR 2013-2018 (Spring 2018)(2) 2.8%1.2% Peer Average 1.8%-0.6% Peer Average (1) NPD (2) NPD Recount Peer average comprised of Bob Evans, Cracker Barrel and Denny’s Source: NPD Crest through th
Slide 12: Growing Our Off-Premise Business
Growing Our Off-Premise Business TO-GO AND DELIVERY BUSINESSES TO DRIVE SIGNIFICANT FUTURE GROWTH AVERAGE CHECK FOR ONLINE ORDERS 29% HIGHER THAN CALL-IN OFF-PREMISE COMP SALES 40% 35% 30% 25% 20% 15% 10% 5% 0% Q3 2017 Q3 2018 OFF-PREMISE AVERAGE CHECK $15.92 Q3 2018 Call-in Orders $20.49 Q3 2018 On
Slide 13: Applebee's Grill + Bar Overview
Applebee’s® GRILL+BAR Overview
Slide 14: Leader in Casual Dining for the Last Years
Leader in Casual Dining for the Last 11 Years 2017 SYSTEM-WIDE SALES VS. PEERS #1in U.S. System Sales(1) $4.1 (1) Annual ranking by Nation’s Restaurant News, “Top 200,” June 18, 2018 issue (Applebee’s rank based on latest fiscal year U.S. system-wide sales in the casual dining category). 13
Slide 15: Applebee's Quarterly Comp Sales Improvement
Applebee’s Quarterly Comp Sales Improvement Comp sales improvement due to traffic-driving initiatives -7.2% -7.9% -6.2% -7.7% +1.3% +3.3% +5.7% +7.7% Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Source: Company’s Form 10-Q filing for the fiscal third quarter ended September 30, 20
Slide 16: What's Changed at Applebee's?
What’s Changed at Applebee’s? Menu improvements, which provide our guests with abundant value and variety Enhancing our guest demographic Enhanced relevance, appeal and health of the brand Dramatically improved overall guest satisfaction scores(1) All-time high overall guest satisfaction score achie
Slide 17: Off-Premise Relevance
Off-Premise Relevance TO-GO COMP SALES Sustainable off-premise growth driven by traffic Growth engine, highly incremental Ongoing optimization (technology, packaging, service) Best-positioned brand in CDR Actively implementing delivery 0.2% Q3 2017 37% Q3 2018 Source: Internal Company data and proje
Slide 18: Buzzworthy Social Media-Driven Drink Promotions
Buzzworthy Social Media-Driven Drink Promotions 17
Slide 19: Strong Asset Base
Strong Asset Base 92% of restaurants remodeled between 2012-2015 Closing under-performing, non-viable restaurants Expect to begin traditional and non-traditional development again in 2019 Our growth plans have resulted in a stronger asset base RESTAURANT COUNT 1,782 ~1,750 2017A 2018E 2019E 2020E 20
Slide 20: Financial Overview
Noy ABplebees Financial Overview BRANDS
Slide 21: Adjusted EBITDA Margin Improvement
Adjusted EBITDA Margin Improvement 45% Q3 2017 50% Q3 2018 Highly Franchised Peer Median(2) Family / Casual Dining Peer Median(3) 100% franchised(1) business model generates significant profit on new revenue and industry-leading margins Source: FactSet, Company’s Form 10-Q filings for the three mont
Slide 22: Substantial Cash Flow Generation
Substantial Cash Flow Generation ADJUSTED FREE CASH FLOW(2) ($mm) Investment to drive growth at both brands Attractive capital return to shareholders Minimal capex requirements Includes $30M in corporate Ad fund contributions for Applebee’s $106 - $121 Guidance $123 $63 2016A 2017A 2018E (1) On Octo
Slide 23: History of Significant Capital Return
History of Significant Capital Return Shareholder-friendly capital return policy via dividends and share repurchases Quarterly cash dividend of $0.63 per share in Q3 2018 (implied yield of ~2.8%(1), attractive vs. industry peers) Returned an average of nearly $100 million to shareholders each year s
Slide 24: Projected Annual Shareholder Growth Algorithm
Projected Annual Shareholder Growth Algorithm WE ARE COMMITTED TO CREATING SIGNIFICANT FUTURE VALUE FOR SHAREHOLDERS ADJUSTED EPS GROWTH(1) DIVIDEND YIELD EXPECTED TOTAL SHAREHOLDER RETURN High teens + ~2.8%(2) = 20%+ (1) Company’s internal data and projections for compound annual growth rate betwee
Slide 25: Commitment to Success
Commitment to Success We are implementing a plan to return to growth at both brands We continue to pursue cost optimization opportunities We expect to generate substantial cash flow and earnings going forward We are committed to making the necessary investments to further strengthen the business for
Slide 26: Dine Brands Global, Inc.
NE Applebees Dine Brands Global, Inc. BRANDS
Slide 27: Appendix
Appendix
Slide 28: Appendix: Adjusted Free Cash Flow
Appendix: Adjusted Free Cash Flow Adjusted free cash flow is a non-GAAP financial measure. Reconciliation of the cash provided by operating activities to adjusted free cash flow is as follows:($ in 000s) 2016 2017 Cash flows provided by operating activities $118,110 $65,733 Receipts from notes and e
Slide 29: Appendix: Adjusted Earnings per share
Appendix: Adjusted Earnings per share Adjusted earnings per share is a non-GAAP financial measure. Reconciliation of net income available to common stockholders to the diluted net income available to common stockholders, as adjusted, is as follows: 2017 Net Income Available to Common Stockholders Ne
Slide 30: Appendix: EBITDA
Appendix: EBITDA Reconciliation of U.S. GAAP income before taxes to EBITDA ($ in thousands) Q3 2017* Q3 2018 Total revenue $174,903 $194,099 Excluding advertising revenue (56,218) (71,017) Adjusted revenue $118,685 $123,082 Adjusted EBITDA: Income (loss) before taxes ($506,291) $31,247 Interest expe
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