Slide 1: First Quarter 2012 Earnings Conference Call
©2012 Oldemark LLC Exhibit 99.1 First Quarter 2012 Earnings Conference Call May 8, 2012
Slide 2: John Barker, Chief Communications Officer
JOHN BARKER CHIEF COMMUNICATIONS OFFICER
Slide 3: Today's Agenda
Today’s Agenda Financial Update Steve Hare CEO Overview Emil Brolick Q&A
Slide 4: Forward-Looking Statements and Non-GAAP Financial Measures
The Wendy’s Company Forward-Looking Statements and Non-GAAP Financial Measures The Wendy’s Company This presentation, and certain information that management may discuss in connection with this presentation, contains certain statements that are not historical facts, including information concerning
Slide 5: Steve Hare, Chief Financial Officer
STEVE HARE CHIEF FINANCIAL OFFICER
Slide 6: Q1 2012 Financial Summary
The Wendy’s Company Q1 2012 Financial Summary Fourth consecutive quarter of positive SSS Q1 2012 system SSS of 0.8% lower than expected Lost momentum from strong +5.1% SSS in 4Q 2011 Margin negatively impacted by product mix and commodities Revising Adjusted EBITDA from continuing operations outlook
Slide 7: Q1 2012 Financial Highlights
Q1 2012 Financial Highlights Company-owned +0.8% Franchise Systemwide Q1 2012 11.8% Q1 2011 13.4% (160) bps Commodities (220) bps January February March +0.7% +0.7% Q1 2012 N.A. Same- Store Sales Company Restaurant Margin Key Margin Variance
Slide 8: Q1 2012 Financial Highlights
Q1 2012 Financial Highlights * See reconciliation of Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), Adjusted Income and Adjusted Earnings per Share from continuing operations attributable to The Wendy’s Company in the appendix. ($ in Millions except per share amoun
Slide 9: Income from Continuing Operations and Special Items
Income from Continuing Operations and Special Items * See reconciliation of Adjusted Income and Adjusted Earnings Per Share from Continuing Operations in the appendix. The Wendy’s Company Reconciliation of Adjusted Income and Adjusted Earnings per Share from Continuing Operations to Income (Loss) an
Slide 10: Q1 2012 Cash Flow
Q1 2012 Cash Flow ($ in Millions) Q1 2012 Net Income 14.7 $ Less: Adjustments (29.8) Cash flow used in operations (15.1) Capital expenditures (47.0) Restaurant acquisitions (2.6) Proceeds from sale of investment 24.4 Dividends paid (7.8) Other financing / investing activities (2.3) Net cash decrease
Slide 11: Slide 11
Slide 12: Q1 2012 Consolidated Debt
Q1 2012 Consolidated Debt * See reconciliation of Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in the appendix ($ in Millions) Senior Debt 1,328.2 $ Capital Leases and Other Debt 24.2 Total Debt 1,352.4 Less: Cash and Cash Equivalents 418.4 Net Debt 934.0 $ TTM Ad
Slide 13: Refinancing: Transaction Summary
Refinancing: Transaction Summary Wendy’s International, Inc. raising $1.125 billion of new secured term loans and $200 million of revolving Credit Facility Improves covenant flexibility, extends maturity and increases liquidity Annual interest savings of $25 million Transaction proceeds will be used
Slide 14: 2012 and Long-Term Outlook
2012 and Long-Term Outlook 2012 outlook for Adjusted EBITDA from Continuing Operations lowered to a range of $320 to $335 million Reaffirming long-term average annual Adjusted EBITDA growth rate in the high-single-digit to low-double-digit range beginning in 2013
Slide 15: 2012 Revised Outlook
2012 Revised Outlook Sales momentum from October 2011 launch of Dave’s Hot ‘N Juicy Cheeseburger line did not carry over into Q1 2012 The “W” Cheeseburger diluted marketing message and cannibalized positive momentum from Dave’s Hot ‘N’ Juicy Q1 marketing calendar did not drive sales Intense competit
Slide 16: 2012 Revised Outlook
2012 Revised Outlook Unfavorable product mix resulted in negative impact on margin The “W” Cheeseburger was mispriced at $2.99 More beef on the “W” (4.5 ounces) than on Dave’s Hot ‘N’ Juicy (4 ounces) Caused trade-down from premium rather than trade-up from value Raising the “W” a la carte price fro
Slide 17: Strategic Actions to Improve Performance
STRATEGIC ACTIONS TO IMPROVE PERFORMANCE
Slide 18: Wendy's Long-Term Strategic Growth Components
Wendy’s Long-Term Strategic Growth Components 2013 & Beyond High-single to low-double digit Adjusted EBITDA growth rate Int’l Franchise Acquisitions/ Sales Financial Mgmt. Breakfast / 24 HR New Restaurant Development Image Activation North American Business Improvement
Slide 19: Emil Brolick, President & Chief Executive Officer
EMIL BROLICK PRESIDENT & CHIEF EXECUTIVE OFFICER
Slide 20: 1st Quarter Below Expectations
The Wendy’s Company 1 st Quarter Below Expectations Refining marketing messages Dynamic consumer & market environment Restaurant execution improving Big brand image building 2012: Transition year
Slide 21: We Remain Confident in Our Strategies
The Wendy’s Company We Remain Confident in Our Strategies “A Cut Above” brand positioning “Recipe to Win” Growth platforms to produce shareholder value Financial resources Building people capabilities Iron-willed determination
Slide 22: "A Cut Above"
“A CUT ABOVE”
Slide 23: A Cut Above
A CUT ABOVE The Wendy’s Company Why it will work Reimaging the Restaurants Reimaging the People Reimaging the Experience Reimaging the Food Reimaging the Brand Communications
Slide 24: The Wendy’s Company The Wendy’s Company
The Wendy’s Company The Wendy’s Company
Slide 25: Wendy's Advertising Awareness Levels Have Spiked to Highest Levels in Over 2 Years
Wendy’s Advertising Awareness Levels Have Spiked to Highest Levels in Over 2 Years Jan ‘09 Jul ‘09 Jan ‘10 Jul ‘10 Jan ‘11 Jul ‘11 Feb ‘12 TV Advertising (Aided)
Slide 26: Since Launch of Dave's Hot 'N Juicy, Wendy's Has Made Gains in Hamburger Attributes
Since the Launch of Dave’s Hot ‘N Juicy Cheeseburgers, Wendy’s has Made Gains in Hamburger Attributes Source: Millward Brown. Data based on Q3 2011, Q4 2011, Q1 2012. Great Tasting Hamburgers Use Fresh, Never Frozen Beef Q3 ‘11 Q4 ‘11 Q1 ‘12 Competitor B Competitor A Competitor B Competitor A
Slide 27: Recipe to Win
The Wendy’s Company RICE RODUCT ROMOTION LACE ERFORMANCE EOPLE RECIPE TO WIN P P RICE P P RODUCT P P ROMOTION P P LACE P P ERFORMANCE P P EOPLE
Slide 28: Price: Price/Value Imbalance
P RICE: Price/Value Imbalance +$3.10 - $2.50 Gap Company Stores In 2011, Single transitioned to include cheese in standard build. 2011 pricing reflects blended cheese/no cheese price, prior years show pricing for Single no cheese. $4.09 $2.49 $3.49 $1.69 $0.99 $0.99 Annual Price Trends Annual Price
Slide 29: Price: Everyday Value Menu
The Wendy’s Company P EVERYDAY VALUE MENU The Wendy’s Company RICE Right Price … Right Size … Right Quality … Moving to a tighter 99-cent value menu JR. CHEESEBURGER ? CRISPY CHICKEN SANDWICH ? 5-PC. SPICY CHICKEN NUGGETS ? VALUE NATURAL-CUT FRIES ? VALUE SOFT DRINK ? SMALL FROSTY ? Testing products
Slide 30: Image Activation
IMAGE ACTIVATION • • Customer reaction extremely positive • P Ten 2011 prototypes exceeding sales expectations LACE Elevates customer experience with innovative interior and exterior designs
Slide 31: Image Activation Performance
IMAGE ACTIVATION PERFORMANCE Consumer Insights on Restaurant Design Consumer Insights on Restaurant Design All Interiors are a “WOW” customer experience Welcoming, Positive Ambiance: Fireplaces, Lounge Seating, Booths, TVs Separation Between Order Placement and Pick Up New Queue and Front Counter ar
Slide 32: Image Activation Progress
IMAGE ACTIVATION PROGRESS • 2012 • 50 reimages • 20 new builds • Testing with select franchisees • 2013 • Plan to accelerate with tiered investment approach • Developing financing sources for franchisees
Slide 33: Improving Reliability and Predictability
Improving Reliability and Predictability Deliver “A Cut Above” customer experience Provide a Fast Casual experience at traditional QSR price P EOPLE
Slide 34: Executive Leadership
Executive Leadership: Hired Craig Bahner, Chief Marketing Officer Hired Scott Weisberg, Chief People Officer Promoted John Peters, SVP of Operations P EOPLE
Slide 35: Performance
P ERFORMANCE Sparkle Operators Evaluation (SOE) scores at all-time highs “A” Restaurants “F” Restaurants SOE Score 2.1% 3.6% 6.3% 13.3% 16.2% 25.1% 29.3% 17.4% 1.0% 0.3% 0.5% 0.4% 75.3% 79% 82% 85% 85% 86% 66% 70% 74% 78% 82% 86% 0% 10% 20% 30% 40% 2007 2008 2009 2010 2011 Q1 '12 A F SOE
Slide 36: Promotion: Advertising
P ROMOTION: Advertising New advertising campaign and strategy: Began April 2 Features two consumer champions: Consumer advocate Wendy Thomas Smartly challenges consumer food choices and promotes the benefits of choosing Wendy’s
Slide 37: Promotion: Advertising "Now, That's Better"
P ROMOTION: Advertising Product / Promotion “Now, That’s Better” • Contemporizes brand • Sets expectations for the Wendy’s experience • 76% positive sentiment in social media; 18,000+ new campaign conversations; mentioned every 132 seconds. Advocate for consumers
Slide 38: Promotion: Advertising Brand Promise
P ROMOTION: Advertising Brand Promise • Demonstrates brand values: Quality, Fresh preparation, Honest Food • Sets expectation for Wendy’s quality Brand heritage and ambassador: Wendy Thomas
Slide 39: Product
P RODUCT Spicy Chicken Guacamole Club
Slide 40: Product: Strengthen The Core
The Wendy’s Company P RODUCT: Strengthen The Core Hamburgers: Promotional LTO Heritage Products: Baked Potato, Frosty and Chili Salads: Seasonal favorite
Slide 41: Product: Direct Mail Coupons
P RODUCT Direct Mail Coupons
Slide 42: Brand Access and Asset Utilization
The Wendy’s Company Brand Access and Asset Utilization Breakfast is most rapidly growing QSR daypart past five years & next five years Breakfast is 22% of QSR traffic, 17% of QSR sales Puts Wendy’s in position to serve 24 hours
Slide 43: Breakfast Menu Strategy
The Wendy’s Company Breakfast Menu Strategy Premium ingredients and authentic preparation Distinctive Artisan Egg Sandwich Mornin’ Melt Panini Biscuit Sandwiches Coffee Credibility Red Head Roasters Orange Juice Soft Drinks Differentiation Home-Style Potatoes Steel-Cut Oatmeal Fruit Cup Everyday Aff
Slide 44: Breakfast Next Steps
The Wendy’s Company Breakfast Next Steps Focused on improving breakfast sales and profitability Expand to Northeastern U.S. market in summer 2012 Adding breakfast to certain reimaged and new restaurants Evaluating optimal expansion strategy
Slide 45: International Opportunity
INTERNATIONAL OPPORTUNITY
Slide 46: International Update
The Wendy’s Company International Update Buenos Aires, Argentina Development Update Total (open / commitments) ~ 1,000 restaurants Opened 4 restaurants in Q1, increasing total restaurant count to 354 Added 37 new restaurant commitments increasing total commitments to 636 Signed development agreement
Slide 47: International Update
International Update Following Recipe to Win: 6 P’s Refining menu architecture to drive “A Cut Above” positioning Launching Dave’s Hot ‘N Juicy in many markets in May and June Translating and activating “Now That’s Better” campaign Premium Porcini Mushroom Chicken Sandwich in Japan
Slide 48: Wendy's Long-Term Strategic Growth Components
Wendy’s Long-Term Strategic Growth Components Int’l New Restaurant Development Image Activation 2013 & Beyond High-single to low-double digit Adjusted EBITDA growth rate Franchise Acquisitions/ Sales Financial Mgmt. Breakfast / 24 HR North American Business Improvement
Slide 49: Summary
The Wendy’s Company Summary We know what we want to be…“A Cut Above” We know how to get there…“The Recipe to Win” We have the growth platforms to produce shareholder value We have the financial resources We are building the people capability We have great franchise partners We have iron-willed deter
Slide 50: John Barker, Chief Communications Officer
JOHN BARKER CHIEF COMMUNICATIONS OFFICER
Slide 51: Upcoming Investor Calendar
Upcoming Investor Calendar May 23: Morgan Stanley Retail Conference May 24: The Wendy’s Company Annual Meeting June 28: Investor Day in Dublin, OH August 9: 2Q Earnings Release
Slide 52: June Investor Day
The Wendy’s Company JUNE INVESTOR DAY The Wendy’s Company Restaurant Support Center June 28, 2012 8:00 am – 4:00 pm • Management Presentations • Image Activation restaurant tours • Formal invitations will be e-mailed Thursday, June 28 in Dublin, OH
Slide 53: ©2012 Oldemark LLC
©2012 Oldemark LLC
Slide 54: Appendix
Appendix
Slide 55: Reconciliation of Adjusted EBITDA from Continuing Operations to Net Income
Reconciliation of Adjusted EBITDA from Continuing Operations to Net Income (Loss) Attributable to The Wendy’s Company (Unaudited) 2012 2011 Adjusted EBITDA from continuing operations 63,881 $ 73,725 $ (Less) plus: Depreciation and amortization (32,311) (30,314) Impairment of long-lived assets (4,511
Slide 56: Reconciliation of Adjusted Income and Adjusted Earnings per Share
Reconciliation of Adjusted Income from Continuing Operations and Adjusted Earnings per Share to Income (Loss) from Continuing Operations and Earnings per Share Attributable to The Wendy’s Company (Unaudited) (In thousands, except per share amounts) per share per share Adjusted income and adjusted ea