Wendy's Company (the) · NASDAQ:WEN
Wendy's Company (the) — Q3 2017 Earnings Presentation
28 slides from Wendy's Company (the)'s earnings presentation, Nov 8, 2017
Slide 1: Third Quarter 2017 Conference Call
Third Quarter 2017 Conference Call November 8, 2017 © Quality Is Our Recipe, LLC Exhibit 99.1
Slide 2: Peter Koumas, Director – Investor Relations
Peter Koumas Director – Investor Relations © Quality Is Our Recipe, LLC
Slide 3: Forward-Looking Statements and Non-GAAP Financial Measures
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 not historical facts, including information concerning possible or assumed future results of ou
Slide 4: Agenda
THE WENDY'S COMPANY | Agenda CEO Update Financial Update Q&A
Slide 5: Todd Penegor, President & Chief Executive Officer
Todd Penegor President & Chief Executive Officer © Quality Is Our Recipe, LLC
Slide 6: Q3 Highlights
THE WENDY'S COMPANY | Q3 Highlights * See reconciliation of non-GAAP financial measures in the Appendix. 19th consecutive quarter of positive NA SRS NA SRS increase 2.0%; 3.4% on a two-year basis Global expansion continues; 42 global restaurant openings in Q3, 110 YTD Global systemwide sales increas
Slide 7: North America Same-Restaurant Sales
THE WENDY'S COMPANY | North America Same-Restaurant Sales 4.5% 3.4%
Slide 8: Global Footprint Expansion Continues
Global Footprint Expansion Continues THE WENDY'S COMPANY | 0.08% North America Restaurant Openings International Restaurant Openings ’17E Net New Growth Rate ~14% ’17E Net New Growth Rate ~0.5 to 1%
Slide 9: Image Activation
THE WENDY'S COMPANY | Image Activation *Represents Total System Cumulative Reimages & New Builds and includes Franchise Reimages open or under construction 118 Buy & Flip transactions completed in Q1. On track to achieve target of 400 ~42% 39%
Slide 10: Systemwide Sales Growth
Systemwide Sales Growth THE WENDY'S COMPANY | *Excludes Venezuela; systemwide sales growth is calculated on a constant currency basis
Slide 11: Transforming Our Franchise System Through Buy & Flips
Transforming Our Franchise System Through Buy & Flips THE WENDY'S COMPANY | ~34% of Global System Image Activated at the end of Q1 2017 ~500 to 550 144 0
Slide 12: CLEAN & WELL MAINTAINED. FRESH
CLEAN & WELL MAINTAINED. FRESH P TO DATE HONEST INGREDIENTS CRAVEABLE TASTE MADE RIGHT EASY & CONVENIENT UPBEAT & COMFORTABLE A PLACE | LOVE TO GO FOOD | LOVE j Delight every customer. COMPETITIVE PRICE WENDY'S QUALITY GREAT EXPERIENCE FRIENDLY ACCURATE FAST AN EXPERIENCE THAT WORTH BRINGS ME BACK W
Slide 13: Franchisee Attitude and Optimism Continues to Grow
THE WENDY'S COMPANY | Franchisee Attitude and Optimism Continues to Grow Source: Wendy’s 2017 Franchise Business Review Survey +13 pts +9 pts +6 pts +9 pts +10 pts Wendy’s outperformance versus peer group increased year-over-year… General Satisfaction +4 pts Financial Opportunity +3 pts Franchise Co
Slide 14: Gunther Plosch, Chief Financial Officer
Gunther Plosch Chief Financial Officer © Quality Is Our Recipe, LLC
Slide 15: Third Quarter Financial Highlights
Third Quarter Financial Highlights THE WENDY'S COMPANY | 2017 2016 B/(W) Company Restaurant Margin 16.7% 18.4% (170) bps G&A $53.0 $58.9 10.1% Adjusted EBITDA* $96.9 $100.2 (3.3)% Adjusted EBITDA Margin* 31.5% 27.5% +400 bps Adjusted EPS* $0.09 $0.11 (18.2)% YTD Free Cash Flow $123.0 $28.6 330.6% $
Slide 16: Q3 2017 vs. Q3 2016 Adjusted EBITDA
THE WENDY'S COMPANY | Q3 2017 vs. Q3 2016 Adjusted EBITDA $ Mils Adj. EBITDA Margin 27.5% Adj. EBITDA Margin 31.5% (Unaudited)
Slide 17: Q3 2017 vs. Q3 2016 Adjusted EPS
THE WENDY'S COMPANY | Q3 2017 vs. Q3 2016 Adjusted EPS (Unaudited)
Slide 18: Returning Cash to Shareholders
THE WENDY'S COMPANY | Returning Cash to Shareholders Repurchased 2.5 million shares for $38.4 million in Q3 ~$59 million remained against the $150 million share repurchase authorization at the end of Q3 Q3 ending cash balance of $187 million
Slide 19: Flexible Capital Structure Supports Growth Initiatives
Flexible Capital Structure Supports Growth Initiatives THE WENDY'S COMPANY | Q3 TTM Leverage Ratio*: 5.3x Target Leverage Ratio: 5-6x $875 $900 $500 $100 *Q3 2017 Net Debt (excl. Capital Leases): $2.1B / TTM Adj. EBITDA: $393.3M **Notional amounts shown as of issuance date (6/1/15); 1% annual amorti
Slide 20: Updated Reaffirmed 2017 Outlook
THE WENDY'S COMPANY | Updated Reaffirmed 2017 Outlook CAPEX of ~$80 to $85M Free Cash Flow of ~$170 to $180M North America SRS of ~2.0 to 2.5% Interest Expense of ~$115 to $120M Commodity Inflation of ~3% to 4% G&A Expense at Low End of Previously Issued Range of ~$210 to $220M Labor Inflation of ~4
Slide 21: Peter Koumas, Director – Investor Relations
Peter Koumas Director – Investor Relations © Quality Is Our Recipe, LLC
Slide 22: Investor Relations Calendar (Tentative)
Investor Relations Calendar (Tentative) November 13: Stifel NDR (Boston) November 14: Morgan Stanley Global Consumer & Retail Conference (New York) February 22, 2018: Preliminary Fourth Quarter/Full Year 2017 Earnings and 2018 Outlook THE WENDY'S COMPANY |
Slide 23: Q&A
Q&A
Slide 24: Appendix
Appendix
Slide 25: 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 included certain non-GAAP financial measures (i.e., adjusted EBITDA, adjusted EBITDA margin, adjusted earnings per share, adjusted tax rate, free cash flow and syst
Slide 26: Reconciliation of Net Income to Adjusted EBITDA
THE WENDY'S COMPANY | Reconciliation of Net Income to Adjusted EBITDA In Thousands (Unaudited)
Slide 27: Reconciliation of Net Income and Diluted EPS to Adjusted Income and Adjusted EPS
Reconciliation of Net Income and Diluted Earnings Per Share to Adjusted Income and Adjusted Earnings Per Share In Thousands except per-share amounts (Unaudited) THE WENDY'S COMPANY |
Slide 28: Slide 28