Wendy's Company (the) · NASDAQ:WEN
Wendy's Company (the) — The Wendy's Company — Q4 2023 Earnings Presentation
34 slides from Wendy's Company (the)'s earnings presentation, Feb 15, 2024
Slide 1: Fourth Quarter 2023 Conference Call
Fourth Quarter 2023 Conference Call February 15, 2024 © Quality Is Our Recipe, LLC
Slide 2: Kelsey Freed, Director – Investor Relations
Kelsey Freed 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 “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act
Slide 4: Agenda
Agenda Business Update 2023 Financial Results 2024 Financial Outlook IR Calendar Q&A THE WENDY'S COMPANY | 4
Slide 5: Kirk Tanner, President & Chief Executive Officer
Kirk Tanner President & Chief Executive Officer © Quality Is Our Recipe, LLC
Slide 6: Delivering Accelerated Global Growth
DIGITAL ACCELERATION SRS FOOTPRINT MOMENTUM EXPANSION Delivering Accelerated GLOBAL GROWTH Restaurant Good Economic Model Done Right THE WENDY'S COMPANY | 6
Slide 7: 2023 Results Set Strong Foundation for Growth Acceleration
2023 Results Set Strong Foundation for Growth Acceleration 13th Consecutive Year of Global SRS Growth Global Digital Sales Mix Accelerated, Reaching a Record High 14.5% in Q4 U.S. Company-Operated Restaurant Margin of 15.3%, Expansion of 100 bps vs. Prior Year Opened 248 New Restaurants and Achieved
Slide 8: Gunther Plosch, Chief Financial Officer
Gunther Plosch Chief Financial Officer © Quality Is Our Recipe, LLC
Slide 9: Fourth Quarter Financial Results
Fourth Quarter Financial Results $ Mils (except per share amounts) 2022 2023 B/(W) Global Systemwide Sales Growth 8.4% 3.2% 2-Yr 11.6% Global System SRS 6.4% 1.3% 2-Yr 7.7% 15.1% 13.5% (1.6)% UPDATE US Company Restaurant Margin G&A $68.5 $65.7 4.1% Adjusted EBITDA1 $123.5 $126.6 2.5% Adjusted EPS1 $
Slide 10: 2023 Full Year Financial Highlights
2023 Full Year Financial Highlights Global Systemwide Sales Growth of 6.1% Global Net Unit Growth 2.0% U.S. Company-Operated Restaurant Margin 15.3% Adjusted EBITDA $536M 1 Adjusted EPS $0.97 1 Free Cash Flow $274M 1 1 See Reconciliation of non-GAAP financial measures in the Appendix THE WENDY'S COM
Slide 11: Kirk Tanner, President & Chief Executive Officer
Kirk Tanner President & Chief Executive Officer © Quality Is Our Recipe, LLC
Slide 12: Incremental Investment in Breakfast to Drive Acceleration
Incremental Investment in Breakfast to Drive Acceleration “Always On” Media Approach to ~$55 M Drive Frequency Incremental Company Investment in Breakfast Advertising in High Quality & Affordable +50% Expected US Breakfast US & Canada in 2024-2025 Everyday Options Avg. Weekly Sales Growth Over 2024-
Slide 13: Will Continue Driving SRS Momentum Across Rest of Day
Will Continue Driving SRS Momentum Across Rest of Day Focus on Quality Differentiation Craveable Innovation Profitable Hot & Juicy Value Burger Expect Global Same-Restaurant Sales of 3-4% in 2024 THE WENDY'S COMPANY | 13 *Fresh beef available in the contiguous U.S., Alaska, and Canada
Slide 14: Digital Investment to Support Step-Change in Capabilities
Digital Investment to Support Step-Change in Capabilities New CRM Platform to Accelerate Personalized Messaging ~$15 M Company Investment in Mobile App Experience and Personalization Capabilities New Loyalty Platform to Enable >$2B Expected Global Digital Sales Segmented Offers In 2024 Improved Mobi
Slide 15: Leveraging Technology to Support Margin Expansion
Leveraging Technology to Support Margin Expansion ~$30M Continued VoiceAI Enabled Investment in Digital Menu Board Rollout & Drive-Thru Test Enhanced Capabilities for US System Dynamic Pricing & Menu Upsell Offerings Capabilities Improved Speed, Accuracy & Customer Satisfaction THE WENDY'S COMPANY |
Slide 16: Expect to Drive Meaningful Margin Expansion
Expect to Drive Meaningful Margin Expansion Digital Capability Step Change Accelerated Breakfast Growth Cost Management THE WENDY'S COMPANY | 16
Slide 17: Expect Improved Returns & Financial Health Will Drive Footprint Expansion
Expect Improved Returns & Financial Health Will Drive Footprint Expansion Alongside Company Investment Improved New Build Paybacks 2 %+ Global Net Unit Growth >90% Incremental Expected in 2024 Build to Suit Funding 3 to 4% of 2024-2025 Investment in Global Pipeline Under Development Agreements Compa
Slide 18: Gunther Plosch, Chief Financial Officer
Gunther Plosch Chief Financial Officer © Quality Is Our Recipe, LLC
Slide 19: 2024 Outlook: Systemwide Sales Growth
2024 Outlook: Systemwide Sales Growth 5-6% Growth ~$14.1B THE WENDY'S COMPANY | 19
Slide 20: 2024 Outlook: Adjusted EBITDA
2024 Outlook: Adjusted EBITDA $535M to $545M ~$536M 6-8% Growth THE WENDY'S COMPANY | 20
Slide 21: 2024 Outlook: Free Cash Flow
2024 Outlook: Free Cash Flow $280M to $290M ~$274M THE WENDY'S COMPANY | 21
Slide 22: 2024 Financial Outlook
2024 Financial Outlook Global Systemwide Sales Growth 5% to 6% Adjusted EBITDA $535M to $545M Free Cash Flow $280M to $290M Adjusted EPS $0.98 to $1.02 Capital Expenditures $90M to $100M THE WENDY'S COMPANY | 22
Slide 23: Capital Allocation Policy Remains Unchanged
Capital Allocation Policy Remains Unchanged 1 Continue to Invest in the Business for Growth 2 Sustain an Attractive Dividend Quarterly dividend rate held at $0.25 per share Expect $1 per share dividend for FY 20241 3 Utilize Excess Cash to Repurchase Shares and/or Reduce Debt $500M Share Repurchase
Slide 24: Kirk Tanner, President & Chief Executive Officer
Kirk Tanner President & Chief Executive Officer © Quality Is Our Recipe, LLC
Slide 25: Delivering Accelerated Global Growth
DIGITAL ACCELERATION SRS FOOTPRINT MOMENTUM EXPANSION Delivering Accelerated GLOBAL GROWTH Restaurant Good Economic Model Done Right THE WENDY'S COMPANY | 25
Slide 26: Kelsey Freed, Director – Investor Relations
Kelsey Freed Director – Investor Relations © Quality Is Our Recipe, LLC
Slide 27: Investor Relations Calendar
Investor Relations Calendar March 7: NDR with Piper Sandler (Boston) March 13: UBS Conference (NYC) March 21: Citi Conference (Orlando) May 2: Q1 2024 Earnings Release & Conference Call THE WENDY'S COMPANY | 27
Slide 28: Q&A
Q&A
Slide 29: Appendix
Appendix
Slide 30: 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 presented certain non-GAAP financial measures (i.e., adjusted revenues, adjusted EBITDA, adjusted earnings per share, free cash flow, and systemwide sales). These n
Slide 31: Reconciliations of Net Income to Adjusted EBITDA and Revenue to Adjusted Revenues
Reconciliations of Net Income to Adjusted EBITDA and Revenue to Adjusted Revenues THE WENDY'S COMPANY | 31
Slide 32: 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 THE WENDY'S COMPANY | 32
Slide 33: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow THE WENDY'S COMPANY | 33
Slide 34: The Wendy's Company
The Wendy’s Company