Dine Brands Global, Inc. Common Stock · NYSE:DIN
Dine Brands Global, Inc. Common Stock — Shareholder Meeting (May 2018)
32 slides from Dine Brands Global, Inc. Common Stock's shareholder meeting presentation, May 15, 2018
Slide 1: Annual Meeting of Stockholders May 15, 2018
Dine Brands Global, Inc. Annual Meeting of Stockholders May 15, 2018
Slide 2: Forward-Looking Information
Forward-Looking Information: The content contained in this presentation is as of May 15, 2018, unless otherwise specified herein. The Company assumes no obligation to update or supplement the information. Statements contained in this presentation may constitute forward-looking statements within the
Slide 3: Dine Brands Business Update
Dine Brands Business Update Steve Joyce CHIEF EXECUTIVE OFFICER
Slide 4: Business Overview
Two iconic brands –IHOP and Applebee’s 3,700+ restaurants $7.4 billion in system sales(1) #1 in U.S. Family and Casual dining(2) Expanding international presence 100% franchised model 2017 revenue of $738mm(3) and EBITDA of $224mm(4) Industry-leading margins and significant cash generation(5) Busine
Slide 5: Commitment to Success
Implementing a plan to stabilize and grow performance at both brands High-performance, values-based culture Executing a new strategy Actively supporting our brands, not overseeing them Optimistic about the future Commitment to Success OUR GOAL: RETURN TO GROWTH & CREATE SIGNIFICANT VALUE FOR SHAREHO
Slide 6: Investment Highlights
Investment Highlights • Significant Scale in the U.S. • International Expansion Represents a Meaningful Growth Opportunity • Favorable Guest Dynamics with Approximately 50% of Guests Age 34 and Younger • 100% Franchised Model with Strong and Improving Franchisee Base • Robust EBITDA Margins • Substa
Slide 7: Substantial Cash Flow Generation
FULLY-FRANCHISED AND ASSET-LITE MODEL GENERATES SUBSTANTIAL ADJUSTED FREE CASH FLOW • Investment to drive growth at both brands •Attractive capital return to shareholders •Minimal capex requirements Substantial Cash Flow Generation (1) See appendix for reconciliation of the Company’s cash provided b
Slide 8: History of Significant Capital Return
Fully-franchised and asset-lite model generates substantial cash flow Shareholder-friendly capital return policy via dividends and share repurchases Quarterly cash dividend of $0.63 per share in Q1 2018 (implied yield of ~3.3%(1), attractive vs. industry peers) History of Significant Capital Return
Slide 9: Capital Allocation Priorities
Dividends and Share Repurchases Significant Investment in Existing Brands Scalable Platform Capital Allocation Priorities Dine Brands Overview
Slide 10: Dividends and Share Repurchases
Quarterly cash dividend of $0.63 per share in Q1 2018 ($2.52 per share annualized) Payout ratio of ~44%(1) Reduced dividend provides opportunity for meaningful share repurchases Continuously evaluate timing and attractiveness of share repurchases Dividends and Share Repurchases RETURNING CAPITAL TO
Slide 11: Significant Investment in Existing Brands
Remodels and culinary innovation Enhanced traditional & digital marketing Dedicated training and operations Technology to enable greater guest access New growth platforms (e.g., To-Go, new formats) Data insights and advanced analytics Reassigning key functions to create greater efficiency for both b
Slide 12: Scalable Platform for New Opportunities
Existing platform of corporate infrastructure Extensive experience operating franchised model Strong and well capitalized future franchisee base Proficiency in building and growing brands Robust cash flow for continued investment Scalable Platform for New Opportunities STRATEGIC EXPANSION OF PORTFOL
Slide 13: Strong Projected Financial Performance
Strong Projected Financial Performance REVENUE Low single digit growth(1) –Applebee’s: +3% –IHOP: +2% –International: +15% ADJUSTED EPS(3) 2017A 2022E $63 $175+ 2017A 2022E $4.15 $10.00+ 2017A 2022E $738(1) $900+(1) $492(2) $565+(2) EBITDA(3) Mid single digit growth 10%+ margin expansion 2017A 2022E
Slide 14: Projected Annual Shareholder Growth Algorithm
Projected Annual Shareholder Growth Algorithm ADJUSTED EPS GROWTH DIVIDEND YIELD WE ARE COMMITTED TO CREATING SIGNIFICANT FUTURE VALUE FOR SHAREHOLDERS EXPECTED TOTAL SHAREHOLDER RETURN High teens ~3.3%(1) 20%+ Source: Internal Company data and projections (1) Assumes a common stock price of $77.25
Slide 15: First Quarter 2018 Summary
BRANDS First Quarter 2018 Summary
Slide 16: First Quarter 2018 Performance Update
First Quarter 2018 Performance Update GAAP EPS of $0.92 Adjusted-EPS of $1.11 Positive Same-Restaurant Sales Applebee’s Q1 SRS: +3.3% IHOP Q1 SRS: +1.0% Returned over $27 million to shareholders $17.5 million in Dividend Payments $10.0 million in Share Repurchases December 29, 2017 Closing Price: $5
Slide 17: IHOP
IHOP Overview
Slide 18: IHOP Business Overview
SCALE • Founded in 1958 •Leader in Family Dining category •1,671 IHOP locations domestically •301 domestic franchisees in the system Business Overview BRAND OVERVIEW DINING OCCASIONS Late Night 7% Breakfast 49% Dinner 16% Lunch 28% Source: Company’s fiscal 2017 Form 10-K filing and fourth quarter fi
Slide 19: Growing Our Off-Premise Business
TO-GO AND DELIVERY BUSINESSES TO DRIVE SIGNIFICANT FUTURE GROWTH Growing Our Off-Premise Business OFF-PREMISE COMP SALES OFF-PREMISE AVERAGE CHECK 0% 5% 10% 15% 20% 25% Q1’17 Q2’17 Q3’17 Q4’17 $15.22 $15.36 $20.43 $22.12 Q3’17 Q4’17 Q3’17 Q4’17 Online Orders Call-in Orders Source: Internal Company d
Slide 20: IHOP Projected Financial Performance
SEGMENT REVENUE(1) Projected Financial Performance 2017A 2018E 2019E 2020E 2021E 2022E Franchise Revenue Rental + Financing Revenue $314 $340+ Source: Company’s fiscal 2017 Form 10-K filings, fourth quarter fiscal 2017 earnings press release dated February 20, 2018 and Company projections (1) Exclud
Slide 21: Applebee's
Applebee’s Overview
Slide 22: Applebee's Business Overview
SCALE Founded in 1980 Leader in Casual Dining category 1,782 Applebee’s locations domestically 35 domestic franchisees in the system Business Overview BRAND OVERVIEW DINING OCCASIONS Source: Company’s fiscal 2017 Form 10-K filing and fourth quarter fiscal 2017 earnings press release dated February 2
Slide 23: Brand in Transition
2017 •was a transition year for Applebee’s Growth plan underway • Enhanced relevance — Sustained profitable growth — Early momentum in •2018 Focusing on highly incremental off —premise sales Partnership, structure, strategy and execution • Brand in Transition
Slide 24: Strong Asset Base
92% of restaurants remodeled between 2012-2015 Closing under-performing, non-viable restaurants (~60 in 2018) Begin traditional and non-traditional development again in 2020 Strong Asset Base RESTAURANT COUNT 1,782 ~1,750 2017A 2018E 2019E 2020E 2021E 2022E Source: Internal Company data and projecti
Slide 25: Applebee's Projected Financial Performance
Projected Financial Performance APPLEBEE’S REVENUE 2017A 2018E 2019E 2020E 2021E 2022E $161 $180+ 3%+ CAGR APPLEBEE’S PROFITABILITY 98% 2017A 2018E 2019E 2020E 2021E 2022E 82% ($mm) Note: Excludes advertising revenue Source: Internal Company data and projections
Slide 26: Dine Brands is Positioned for Success
Dine Brands is Positioned for Success
Slide 27: Conclusion
Dine Brands is well-positioned to be an even stronger company with growth potential across key metrics Meaningful margin expansion opportunities An improving adjusted free cash flow profile with significant return to shareholders Projected adjusted EPS growth in the high teens over the next five yea
Slide 28: Annual Meeting of Stockholders May 15, 2018
Dine Brands Global, Inc. Annual Meeting of Stockholders May 15, 2018
Slide 29: Appendix
Appendix
Slide 30: Appendix: Adjusted Free Cash Flow
Appendix: Adjusted Free Cash Flow Source: Company Form 10-K filings and earnings press releases See non-GAAP financial measures disclosure 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: ($
Slide 31: 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: Appendix: Adjusted Earnings per Share Fiscal 2017 Net Income Available to Common Stockhol
Slide 32: Appendix: EBITDA
Appendix: EBITDA Definitions of all components used in calculating the above ratios are found in the Base Indenture and the related Series 2014-1 Supplement to the Base Indenture, dated September 30, 2014, filed as Exhibits 4.1 and 4.2, respectively, to our Current Report on Form 8-K filed on Octobe