Dine Brands Global, Inc. Common Stock · NYSE:DIN
Dine Brands Global, Inc. Common Stock — Investor Presentation (March 2020)
28 slides from Dine Brands Global, Inc. Common Stock's investor presentation, March 2020
Slide 1: Dine Brands Global, Inc. Investor Presentation
Dine Brands Global, Inc. Investor Presentation March 2020
Slide 2: Disclosures
Disclosures “Dine Br ands”, “Company”, “us” and “our ” r efer to Dine Br ands Global, Inc. and its dir ect and indir ect subsidiar ies. The content of this pr esentation is as of Mar ch 3, 2020. The Company assumes no obligation to update or supplement this infor mation. Statements contained in this
Slide 3: Company Overview
Company Overview Company Overview
Slide 4: 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 $274 margins and cash flow, including international MILLION MILLION s
Slide 5: 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 6: 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 b
Slide 7: Notable Achievements in 2019
Notable Achievements in 2019 Successfully completed a $1.3 billion securitization refinancing of our existing long-term debt 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
Slide 8: IHOP and Applebee's Update
IHOP and Applebee’s Update IHOP and Applebee’s Update
Slide 9: Same-Restaurant Sales Momentum
Same-Restaurant Sales Momentum Quarterly Two-Year Stacked Same-Restaurant Sales (1) Family Dining Category Casual Dining Category 6.1% 5.2% 4.8% 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 10: 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 11: Leveraging Technology for Our Brands
Leveraging Technology for Our Brands • Invested significantly to enable brand Brand initiatives 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 (3)
Slide 12: IHOP Overview
IHOP Overview HOP
Slide 13: 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 ~60 gross restaurants and ~40 net new restaurants annually • Plans to implement new
Slide 14: Growing IHOP's Off-Premise Business
Growing IHOP’s Off-Premise Business Off-Premise Comp Sales Since 2017 Delivery Coverage OFF-PREMISE AVERAGE CHECK 1,587 Restaurants with 1+ DSP 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 Sour ce: Inte
Slide 15: 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 16: Applebee's Overview
IHOP Overview Applebee’s Overview
Slide 17: 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 18: Off-Premise and On-Premise Convergence
Off-Premise and On-Premise Convergence 14
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 15 Sour ce: Inter nal Comp
Slide 20: Applebee's Growth Strategy
Applebee’s Growth Strategy 1. Restaurant Excellence 2. Technology Investment 3. World-Class Marketing 4. Off-Premise Relevance 5. Culinary Innovation and Value 6. Expect to Return to Net Unit Growth Over the Next Year 16
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 55%(2) 46%(2) $63 45% 45% 44% 2
Slide 23: Asset-Light Business Model Generates Robust Margin Profile
Asset-Light Business Model Generates Robust Margin Profile • Highly franchised business model generates impressive Adjusted EBITDA margins with minimal direct exposure to fluctuations in commodity and labor costs • 93% Adjusted EBITDA to free cash flow conversion(1) due to minimal capital expenditur
Slide 24: Historical Financial Performance
Historical Financial Performance System-Wide Units System-Wide Sales(1) ($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 $4.0 2,033 2,016 1,936 1,837 1,787 2015 2016 2017 20
Slide 25: Dine Brands Global, Inc.
Dine Brands Global, Inc. March 2020
Slide 26: Appendix
Appendix Appendix
Slide 27: Adjusted Free Cash Flow Reconciliation
Adjusted Free Cash Flow Reconciliation Twelve Month Period Ended December 31, ($ in millions) 2017 2018 2019 Cash Flows Provided by Operating Activities $65.7 $140.3 $155.2 Receipts from Notes and Equipments Contracts Receivable 10.6 14.9 13.0 Additions to Property and Equipment (13.3) (14.3) (19.4)
Slide 28: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Twelve Month Period Ended December 31, ($ in millions) 2014 2015 2016 2017(1) 2018 2019 Reconciliations: (as adjusted) Net Income (Loss) $36.5 $104.9 $98.0 ($342.8) $80.4 $104.3 Income Tax Provision (Benefit) 15.1 63.7 55.1 (85.6) 30.3 $34.1 Interest Charges 111.8 77.2
Dine Brands Global — Investor Presentation (March 2020) on 6ix