Dine Brands Global, Inc. Common Stock · NYSE:DIN
Dine Brands Global, Inc. Common Stock — DineEquity — Investor Presentation (March 2014)
27 slides from Dine Brands Global, Inc. Common Stock's investor presentation, Mar 4, 2014
Slide 1: Management Presentation March 4-5, 2014
Management Presentation March 4-5, 2014 © 2014 DineEquity, Inc. All rights reserved.
Slide 2: Forward-Looking Information
Forward-Looking Information Statements contained in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by words such as "may," "will," "should," "expect," "anticipat
Slide 3: Management Introduction
3 Julia Stewart Chairman and Chief Executive Officer Tom Emrey Chief Financial Officer Management Introduction
Slide 4: Overview of DineEquity
Great franchisees. Great brands. dineEquity” Overview of DineEquity
Slide 5: Key Highlights of the DineEquity Story
5 99% franchised business model generates strong free cash flow with reduced volatility Transformed asset-lite franchise business model drives strong, consistent cash flow generation DineEquity has reduced its total debt by more than $1.05 billion since the end of 2007 (1) Applebee’s and IHOP are tw
Slide 6: Key Highlights of the DineEquity Story (continued)
6 Committed and diverse franchisee base As of December 31, 2013, there are 61 Applebee’s franchisees operating an average of approximately 33 units each As of December 31, 2013, there are 348 IHOP franchisees operating an average of approximately 5 units each Innovative new product pipeline aimed at
Slide 7: DineEquity's Strategy
Great franchisees. Great brands, dineEquity” DineEquity’s Strategy
Slide 8: DineEquity's Value Creation Strategy
The DineEquity story is one of strong and stable free cash flow 3 2 Maximize the Business Innovate and Evolve Strong Brands Manage Costs/ Minimal CAPEX 1 Facilitate Franchisee Development 2 3 Generate Strong Free Cash Flow 1 DineEquity is focused on generating free cash flow DineEquity’s Value Creat
Slide 9: Innovate and Evolve – Fundamental Approach to Brand Management
1 Innovate and Evolve – Fundamental Approach to Brand Management Innovate and Evolve Effective Media Enhance the Menu Successful Remodel Program Continually Achieve Operational Excellence Optimize Development 9
Slide 10: Innovate and Evolve – Applebee's Operational Excellence
1 Operational Excellence Continually improving operational execution at the restaurant level Testing new service and guest interface models Streamlined the menu, making it easier to execute and a better experience for our guests Marketing Emphasis on promoting unique products and value offerings New
Slide 11: Applebee's – Menu Innovation
1 Bourbon Black & Bleu Burger Roma Pepper Steak Cowboy Burger Napa Chicken & Portobellos See You Tomorrow SM Refreshing Drinks Healthy Halos Every Day Value Bar Meets Grill 11 Innovate and Evolve Applebee’s – Menu Innovation Savory Cedar Salmon Frozen Lemonades
Slide 12: Innovate and Evolve Applebee's – Remodel Program
1 12 Innovate and Evolve Applebee’s – Remodel Program
Slide 13: Innovate and Evolve – IHOP Operational Excellence
1 Operational Excellence Voice of the Guest scores reached all-time highs in December 2013 Improving operations to drive sustainable and positive same-restaurant sales and traffic Marketing Refining our marketing message and guest testimonial creative strategy Communicating our value proposition eff
Slide 14: IHOP – Drive Excitement Through Culinary Innovation and Advertising
1 NEW menu design launched in June 2013 Unveiled the NEW IHOP.com Griddle Melt Breakfast Sandwiches Simple & Fit: Whole Wheat Waffle with Blueberries Combo All You Can Eat Pancakes New Stuffed French Toast 14 Innovate and Evolve IHOP – Drive Excitement Through Culinary Innovation and Advertising
Slide 15: DineEquity Restaurant Count
2 DineEquity Restaurant Count DineEquity is a 99% franchised system Note: As of December 31 2013, DineEquity’s company restaurant operations segment consisted of 23 Applebee's company-operated restaurants and 13 IHOP company-operated restaurants. Source: Company’s Form 10-K filings. IHOP’s franchise
Slide 16: International: An Exciting Development Opportunity
@ International: An Exciting Development Opportunity Mees Applebee's has 150 tranchised restaurants internationally as of 120172013, + Expandedinto Egypt ‘andthe Dominican Republic in 2013 + IHOP hasS6 franchised restaurants internationally asof 1203172013, + Expandedinta the Middle Eastand the Phil
Slide 17: General & Administrative Expenses
3 General & Administrative Expenses Source: Company’s Form 10-K filings. Comprised of actual IHOP G&A expenses plus pro forma Applebee’s G&A expenses as disclosed in the Company’s 2007 Form 10-K, less certain one-time costs primarily related to additional stock-based compensation triggered by the Ap
Slide 18: Minimal Cap Ex – Refinancing Opportunity
Source for capital expenditures, 9.5% Senior Notes, and Senior Secured Credit Facility (Term Loan): Company’s 2013 Form 10-K filing. 18 Manage Costs Minimal Cap Ex – Refinancing Opportunity Capital expenditures of only $7 million in 2013 Refinancing opportunity Current debt structure: $761 million i
Slide 19: We Have Delivered What We Promised
Refranchised 479 Applebee’s company-restaurants, increasing the Applebee’s system from 74% to 99% franchised Initiated a capital allocation strategy, returning significant cash to shareholders in dividend payments and share repurchases Restored same-restaurant sales momentum at both brands Re-engine
Slide 20: We Have Delivered What We Promised (G&A and costs)
Reduced G&A by more than 25% from $193 million(1) in 2007 to approximately $144 million in 2013 Implemented a Shared Services model to be more effective and efficient Capitalized on the opportunity to reduce commodity costs through an independent purchasing co-op, which further differentiates our br
Slide 21: We Have Delivered What We Promised (debt and cash flow)
Reduced total debt(1) from $2.4 billion at the end of 2008 to $1.4 billion at the end of 2013 Consolidated leverage ratio(2) has declined from 6.8x at the end of 2008 to 4.8x at the end of 2013 Generated approximately $700 million of free cash flow(3) since the beginning of 2008 Reduced capital expe
Slide 22: Summary: Strategy and Implementation Produces Results
Completion of the refranchising program in October 2012 resulted in a less capital intensive business model At 99% franchised, the business model generates strong free cash flow with reduced volatility Returned approximately $87 million of free cash flow to shareholders in 2013 in cash dividends and
Slide 23: What Lies Ahead
Evolve and innovate to drive consistent and sustainable positive same-restaurant sales and traffic Extend the reach of DineEquity’s brands by expanding the international footprint and developing incremental franchised locations Managing the capital structure to position the Company for long-term suc
Slide 24: Background and Historical Financial Performance
Background and Historical Financial Performance
Slide 25: Chain Overview
25 Chain Overview Founded in 1958, IHOP is an American icon Family dining restaurant leader with differentiated brand As of December 31, 2013, the IHOP system had: 1,551 U.S. franchised and area licensed locations (96%) 56 international franchised locations (3%) 13 U.S. company-operated locations (1
Slide 26: Dominant Presence Across All 50 States
26 Source: Company’s 2013 Form 10-K filing. Applebee’s and IHOP are powerful brands with leading positions in the Casual Dining space Dominant Presence Across All 50 States 6 6 150 29 76 21 49 36 20 1 4 1 57 17 7 8 31 21 3 5 8 32 188 229 40 24 19 31 20 7 2 5 5 9 11 23 53 12 14 27 15 28 22 30 60 7 3
Slide 27: Consistently Strong Financial Performance
% Franchised Number of Restaurants System-Wide Sales Franchise Revenue EBITDA Source: Company’s Form 10-K filings and press releases. (1) 2007 Franchise Revenue is shown pro forma to reflect full year results for both Applebee’s and IHOP. 27 Consistently Strong Financial Performance ($ in millions)