Dine Brands Global, Inc. Common Stock · NYSE:DIN
Dine Brands Global, Inc. Common Stock — SFIG Conference 2020
29 slides from Dine Brands Global, Inc. Common Stock's conference presentation, Feb 25, 2020
Slide 1: Dine Brands Global, Inc. SFIG Conference Presentation
Dine Brands Global, Inc. SFIG Conference Presentation February 2020
Slide 2: Disclosures
Disclosures “Dine Brands”, “Company”, “us” and “our” refer to Dine Brands Global, Inc. and its direct and indirect subsidiaries. “Barclays” refers to Barclays Capital Inc. The content of this presentation is as of February 25, 2020. The Company assumes no obligation to update or supplement this info
Slide 3: Agenda
Agenda Company Overview IHOP and Applebee’s Update Financial Performance Appendix 2
Slide 4: Company Overview
Company Overview Company Overview
Slide 5: Business Overview
Business Overview Founded 1958 Founded 1980 $7.5 BILLION #1 98% 3,628 in system-wide sales as of 2019 in U.S. Family and Casual dining(1) Franchised Model(2) Total Restaurants Industry-leading Diversified sources of Expanding $910 $281 cash flow, including margins and international MILLION MILLION s
Slide 6: Dine Brands Highlights
Dine Brands Highlights #1 U.S. Family & Casual Dining Brands(1) with Significant Scale Favorable Guest Dynamics with Nearly 50% of Guests Age 34 and Younger Strong Franchisee Base Stable EBITDA Growth Drives Delevering Consistent IHOP Unit Growth Driving System-Wide Sales Growth Predictable, Recurri
Slide 7: Our Two Iconic Brands at a Glance
Our Two Iconic Brands at a Glance Founded in 1958 Founded in 1980 #1 among Family Dining restaurants in the U.S.(1) #1 among Casual Dining restaurants in the U.S.(1) IHOP system has 1,841 locations globally Applebee’s system has 1,787 locations globally 2019 system-wide sales: $3.5 bil
Slide 8: Dine Brands Highlights since 2019-1 WBS
Dine Brands Highlights since 2019-1 WBS IHOP posted its 8th consecutive quarter of positive same-restaurant sales growth, lapping over its strongest quarterly same-restaurant sales increase in 3 years IHOP marked at least 14 years of positive net unit development with an average of 42 net new units
Slide 9: IHOP and Applebee's Update
IHOP and Applebee’s Update IHOP and Applebee’s Update
Slide 10: Same-Restaurant Sales Momentum
Same-Restaurant Sales Momentum Quarterly Two-Year Stacked Same-Restaurant Sales (1) Family Dining Category Casual Dining Category 6.1% 4.8% 5.1% 5.1% 4.1% 2.6% 2.7% 2.5% 2.2% 1.9% 1.2% 1.5% 1.0% 0.3% 0.3% 0.6% 0.2% 0.5% 0.3% (1.2%) Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 ‘18 ‘19
Slide 11: Favorable Guest Dynamics
Favorable Guest Dynamics IHOP Guest Age Demographics Applebee’s Guest Age Demographics 24% 26% 37% 44% 25% 27% 27% 25% 31% 51% of guests 30% 47% of guests 21% 18% are age 34 are age 34 13% 20% and below 15% 17% and below (1) (2) Family Dining . Casual Dining Under 18 18-34 35-54 55+ Under 18 18-34 3
Slide 12: Leveraging Technology for Our Brands
Leveraging Technology for Our Brands • Invested significantly to enable brand initiatives Brand Overview — Server tablets to allow table-side ordering — Enhanced website and mobile app functionality — Carside arrival notification — Enabling guests to pay in-restaurant on their own device Dining — Mo
Slide 13: IHOP Overview
IHOP Overview Hop
Slide 14: IHOP's Consistent Restaurant Development
IHOP’s Consistent Restaurant Development • Continued domestic development with plans to grow units ~2% to Traditional Urban ~4% annually — Over the last decade through 2019, IHOP’s franchisees developed an average of ~61 gross restaurants and ~40 net new restaurants annually • Plans to implement new
Slide 15: Growing IHOP's Off-Premise Business
Growing IHOP’s Off-Premise Business Off-Premise Comp Sales Since 2017 Delivery Coverage OFF-PREMISE AVERAGE CHECK Online Average Check 35% 28% Higher 32.3% 30% $21.23 $16.57 25% 20% 15% 11.1% 10% Q4 2019 Q4 2019 FY 2017 FY 2019 Call-in Orders Online Orders Source: Internal Company data. DART domesti
Slide 16: Building on IHOP's Positive Performance
Building on IHOP’s Positive Performance We began this journey on a foundation of 4 strategic initiatives; as we transition to a growth story, we continue to invest in all 4 initiatives Running great Being where Reinventing the Driving traffic restaurants the Guest is Guest experience • Achieved all-
Slide 17: Applebee's Overview
IHOP Overview Applebee’s Overview
Slide 18: Applebee's Performance Update
Applebee’s Performance Update • Marked improvement in the health of our Applebee’s franchisees, with virtually no bad debt by the end of 2019 • 4-wall EBITDA margins in the low double-digits after royalties and advertising fees are paid • Franchisee leverage ratios have returned to the levels of 201
Slide 19: Off-Premise Relevance
Off-Premise Relevance To-Go Comp Sales • Sustainable off-premise growth driven by traffic 22.9% • Growth engine, highly incremental • Ongoing optimization (technology, packaging, service) 11.1% • Best-positioned brand in CDR • Actively implementing delivery FY 2017 FY 2019 14 Source: Internal Compan
Slide 20: Applebee's Sustained Growth Strategy
Applebee’s Sustained Growth Strategy 1. Restaurant Excellence 2. Technology Investment 3. World-Class Marketing 4. Off-Premise Relevance 5. Culinary Innovation 6. Expect to Return to Net Unit Growth Over the Next Year 15
Slide 21: Historical Financial Performance
Historical Financial Performance
Slide 22: Improved Margin Performance and Cash Flow Generation
Improved Margin Performance and Cash Flow Generation 98% franchised, asset-lite business model generates significant profit on new revenue, industry-leading margins and substantial adjusted free cash flow Adjusted EBITDA Margin(1) Adjusted Free Cash Flow(5) $149 $141 57%(2) 54%(2) 51% 46% 45% $63 20
Slide 23: Asset-Light Business Model Generates Robust Margin Profile
Asset-Light Business Model Generates Robust Margin Profile • Highly franchised business model generates impressive Adj. EBITDA margins with minimal direct exposure to fluctuations in commodity and labor costs • 93% Adj. EBITDA to free cash flow conversion(1) due to minimal capital expenditure requir
Slide 24: Historical Financial Performance
Historical Financial Performance System-Wide Units System-Wide Sales(1) ($bn) $8.0 $7.7 $7.6 $7.5(2) 3,716 3,749 3,722 3,668 $0.0 $7.4 3,628 Company-Op. $0.0 $0.0 $0.0 $0.1 $3.2 $3.2 $3.4 $3.3 $3.5 1,683 1,733 1,786 1,831 1,841 $4.7 $4.4 $4.1 $4.2 $4.0 2,033 2,016 1,936 1,837 1,787 2015 2016 2017 20
Slide 25: Appendix
2 ApBibges | HOP GRILL + BAR Appendix BRANDS
Slide 26: Sources of Securitization Collections
Sources of Securitization Collections 2019 Company Restaurant Royalties & Securitization Net Collections IHOP Applebee’s Total % Financing Operations Other Securitization Cash Flow Income, Net Domestic Franchised Restaurants Revenue $139.2 $154.8 $294.0 76% 4% 1% Product Profitability Company Restau
Slide 27: Adjusted Free Cash Flow Reconciliation
Adjusted Free Cash Flow Reconciliation Twelve Month Period Ended December 31, ($ in millions) 2017 2018 2019 Cash Flows Provided by Operating Activities $65.7 $140.3 $155.2 Receipts from Notes and Equipments Contracts Receivable 10.6 14.9 13.0 Additions to Property and Equipment (13.3) (14.3) (19.4)
Slide 28: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Twelve Month Period Ended December 31, 2015 2016 (1) 2017 (1) 2018 2019 Reconciliations: Net income (loss) $ 104,923 $ 101,002 $ (342,750) $ 80,354 $ 104,346 Income tax expense (benefit) 63,726 56,850 (85,559) 30,254 34,142 Interest Charges 77,226 73,7
Slide 29: Dine Brands Global, Inc.
Dine Brands Global, Inc. February 2020