Krispy Kreme, Inc. · NASDAQ:DNUT
Krispy Kreme — Q3 2024 Earnings Presentation
23 slides from Krispy Kreme's earnings presentation, Nov 7, 2024
Slide 1: Krispy Kreme, Inc. Third Quarter 2024 Earnings Presentation
KRISPY KREME, INC. THIRD QUARTER 2024 EARNINGS PRESENTATION NOVEMBER 7, 2024 Krispy Kreme | 3Q24 Earnings 1
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Cautionary Note Regarding Forward-Looking Statements This presentation contains forward-looking statements that involve risks and uncertainties. The words “believe,” “may,” “focus,” “expand,” “continuing,” “guidance,” “could,” “will,” “should,” “anticipate,” “estimate,” “e
Slide 3: Krispy Kreme | 3Q24 Earnings
Krispy Kreme | 3Q24 Earnings 3
Slide 4: A Bigger and Better Krispy Kreme
A BIGGER AND BETTER KRISPY KREME BIGGER: • Profitable U.S. DFD expansion 34,500 • Capital light international growth 11,500 BETTER: • Align capital and talent to U.S. 15,811 • Wider adoption of international franchise model 7,793 23,000 8,018 3Q2024 20261 US Rest of World 1) Long-term management est
Slide 5: Business Priorities
BUSINESS PRIORITIES DRIVE CONSUMER EXPAND INCREASE HUB & IMPROVE CAPITAL INSPIRE RELEVANCE AVAILABILITY SPOKE EFFICIENCY EFFICIENCY ENGAGEMENT Give our consumers Bring our joy to more Master the craft Deliver sweet returns Be a sweet place more reasons to markets, channels, of hub & spoke on every i
Slide 6: Drive Consumer Relevance
DRIVE CONSUMER RELEVANCE SPOTLIGHT BUZZWORTHY DELIVERING ON ICONIC INNOVATIVE CONVENIENCE ORIGINAL SPECIALTY VIA DIGITAL GLAZED DOUGHNUTS CHANNEL DOUGHNUT >50% 28B +15% MEDIA DIGITAL SALES1 IMPRESSIONS1 SALES2 Krispy Kreme | 3Q24 Earnings 1) 3Q24 6 2) 3Q24 vs 3Q23
Slide 7: Expand Availability: Successful Start to Nationwide McDonald's Rollout
EXPAND CHICAGO AVAILABILITY SUCCESSFUL START TO NATIONWIDE MCDONALD’S ROLLOUT • Strong operational execution • Positive consumer response • Expanding through the Midwest Krispy Kreme | 3Q24 Earnings 7
Slide 8: Expand Availability: 360 Multimedia Campaign
EXPAND AVAILABILITY 360◦ MULTIMEDIA CAMPAIGN Out of TV Social Home Online Streaming Display Video Audio Krispy Kreme | 3Q24 Earnings 8
Slide 9: Strong Momentum with U.S. DFD Expansion
EXPAND AVAILABILITY STRONG MOMENTUM WITH U.S. DFD EXPANSION ILLUSTRATIVE FINANCIAL LOW HIGH IMPACT1 ANNUALIZED INCREMENTAL +$340 +$430 REVENUE ($MM) ANNUALIZED INCREMENTAL ADJ. +$70 +$100 EBITDA ($MM) 1) Long-term management estimates Krispy Kreme | 3Q24 Earnings 9
Slide 10: Increase Hub & Spoke Efficiency
INCREASE HUB & MODERNIZING FRESH DOUGHNUT SPOKE EFFICIENCY PRODUCTION Krispy Kreme | 3Q24 Earnings 10
Slide 11: Improve Capital Efficiency
IMPROVE CAPITAL EXPAND BETTER WITH THIRD EFFICIENCY PARTY DELIVERY • RFP launched in October INCREASING UTILIZATION • Focus on what we do best: Making OF PRODUCTION HUBS fresh doughnuts ~25% 1 UTILIZATION Krispy Kreme | 3Q24 Earnings 1) 3Q24 11
Slide 12: Inspire Engagement
INSPIRE ENGAGEMENT KRISPY KREMERS ARE THE HEART OF THE JOYFUL MOMENTS WE CREATE FOR CONSUMERS KRISPY CONSUMER KREMER SATISFACTION ENGAGEMENT 75% 1 78%2 1) Engagement Score – Glint Survey results as of August 2024 Krispy Kreme | 3Q24 Earnings 12 2) Consumer Satisfaction Score – OSAT Global Score as o
Slide 13: Financial Update
FINANCIAL UPDATE Krispy Kreme | 3Q24 Earnings 13
Slide 14: Financial Results Reflect a More Focused Business
FINANCIAL RESULTS REFLECT A MORE FOCUSED BUSINESS IN PREPARATION FOR ACCELERATION OF U.S. GROWTH ORGANIC REVENUE ADJ EBITDA ADJ EBITDA MARGIN +3.5% (20.7)% (160) bps $376 $44 10.7% $35 $364 9.1% 3Q23 3Q24 Krispy Kreme | 3Q24 Earnings All metrics are $MM except Adjusted EBITDA margin 14
Slide 15: U.S. Segment
U.S. SEGMENT DFD DOORS 3Q22 3Q23 3Q24 7,711 6,506 5,720 POINTS OF ACCESS 6,249 7,049 8,018 SALES PER HUB ($MM) $4.4 $4.8 $4.9 NET REVENUE ($MM) $246.8 $260.2 $228.4 ORGANIC GROWTH % 8.9% 10.2% 2.5% AVERAGE REVENUE PER DOOR PER WEEK $613 ADJ EBITDA ($MM) $20.5 $22.3 $13.9 $592 $549 ADJ EBITDA MARGIN
Slide 16: International Segment
INTERNATIONAL SEGMENT 1 DFD DOORS 3Q22 3Q23 3Q24 4,867 3,588 POINTS OF ACCESS 3,662 4,128 5,440 3,163 SALES PER HUB ($MM) $9.8 $9.9 $10.1 NET REVENUE ($MM) $107.6 $126.1 $130.7 AVERAGE REVENUE PER DOOR ORGANIC GROWTH % 16.6% 11.7% 4.2% PER WEEK $775 $762 ADJ EBITDA ($MM) $19.9 $25.0 $22.8 $629 ADJ E
Slide 17: Market Development Segment
MARKET DEVELOPMENT SEGMENT 1 3Q22 3Q23 3Q24 POINTS OF ACCESS 2,353 POINTS OF ACCESS 1,792 2,217 2,353 2,217 1,792 NET REVENUE ($MM) $23.1 $21.2 $20.8 ORGANIC GROWTH % 25.9% (6.7)% 8.6% ADJ EBITDA ($MM) $10.2 $9.8 $11.3 ADJ EBITDA MARGIN 44.0% 46.5% 54.2% 3Q22 3Q23 3Q24 1) Reflects move of Canada and
Slide 18: Earnings Per Share
EARNINGS PER SHARE 3Q23 3Q24 ADJ EBITDA $43.7 $34.7 DEPRECIATION & (24.6) (23.6) AMORTIZATION INTEREST & TAX (14.5) (15.6) NONCONTROLLING (0.2) 2.0 INTEREST WEIGHTED AVERAGE 170.6 169.6 SHARES OUTSTANDING ADJ DILUTED EPS $0.03 $(0.01) All metrics are $MM, except Adjusted Diluted EPS ($s) and Weighte
Slide 19: Positive Operating Cash Flows
POSITIVE OPERATING CASH FLOWS FY 2023 YTD 2024 CASH, CASH EQUIVALENTS & NET LEVERAGE RATIO RESTRICTED CASH AT BEGINNING OF $35.7 $38.6 THE FISCAL YEAR 4.2x 4.2x 4.1x 4.2x 4.2x 3.9x 4.0x 3.9x NET CASH PROVIDED BY 45.5 18.8 OPERATIONS NET CASH (USED FOR)/PROVIDED BY (112.6) 44.7 INVESTING NET CASH PRO
Slide 20: Updated 2024 Guidance
UPDATED 2024 GUIDANCE PREVIOUS UPDATED 2024 FULL YEAR GUIDANCE1 GUIDANCE NET REVENUE $1,650 – $1,685 $1,650 – $1,685 GROWTH ORGANIC REVENUE 5 – 7% 5 – 7% GROWTH ADJ EBITDA $215 – $220 $205 – $210 GROWTH ADJ DILUTED $0.24 – $0.28 $0.18 – $0.22 EPS ASSUMPTIONS INCOME TAX RATE 28 – 30% CAPITAL EXPENDIT
Slide 21: Krispy Kreme | 3Q24 Earnings CONFIDENTIAL
Krispy Kreme | 3Q24 Earnings CONFIDENTIAL 21
Slide 22: Key Messages
KEY MESSAGES BUILDING A BIGGER AND BETTER KRISPY KREME SUCCESSFUL LAUNCH, ACCELERATING NATIONWIDE DFD ROLLOUT CONFIDENT IN PROFITABLE U.S. DFD GROWTH STRATEGY PURSUING THIRD PARTY MANAGED DELIVERY Krispy Kreme | 3Q24 Earnings 22
Slide 23: Q&A
Q&A Krispy Kreme | 3Q24 Earnings 23