Wendy's Company (the) · NASDAQ:WEN
Wendy's Company (the) — The Wendy's Company — Q2 2020 Earnings Presentation
28 slides from Wendy's Company (the)'s earnings presentation, Aug 5, 2020
Slide 1: Second Quarter 2020 Conference Call
Second Quarter 2020 Conference Call August 5, 2020 © Quality Is Our Recipe, LLC
Slide 2: Greg Lemenchick
Greg Lemenchick Senior Director – Investor Relations & Corporate FP&A © Quality Is Our Recipe, LLC
Slide 3: 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 of 1995 (the “Reform Act”). For all such forward-looking s
Slide 4: Agenda
Agenda Business Update Financial Results IR Calendar Q&A THE WENDY'S COMPANY | 4
Slide 5: Todd Penegor
Todd Penegor President & Chief Executive Officer © Quality Is Our Recipe, LLC
Slide 6: We Will Become the World's Most Thriving and Beloved Restaurant Brand
-WE WILL BECOME: THE WORLD'S thriving beleved RESTAURANT ‘BRAND:
Slide 7: Q2 Business Update
Q2 Business Update ▪ Continued Support for Employees, Customers, and Franchisees ▪ Sales Trends Accelerating ▪ Resilient Economic Model ▪ Sustained Breakfast Strength ▪ Growing Digital Business ▪ Strong Liquidity Position ▪ Committed to Long Term Growth Initiatives THE WENDY'S COMPANY | 7
Slide 8: U.S. Restaurant Sales Continuing to Accelerate in July
U.S. Restaurant Sales Continuing to Accelerate in July • Sales trends improve ~8% to high single digits in ~5% July • Customer counts ~-2% continue to improve • Strong average check continues ~-14% April May June July THE WENDY'S COMPANY | 8
Slide 9: Marketing Plans Aimed at Continuing to Drive Growth
Marketing Plans Aimed at Continuing to Drive Growth THE WENDY'S COMPANY | 9
Slide 10: Building our Breakfast Business
Building our Breakfast Business ▪ Weekly sales continue to grow; ~8% of total U.S. sales in Q2 ▪ Company to invest up to $15M in incremental advertising in 2020 ▪ Plan to market breakfast in a big way in the back half ▪ Franchise system fully supportive ▪ Awareness levels remain strong; significant
Slide 11: Digital Sales Growth Continues – Loyalty to Add Another Layer
Digital Sales Growth Continues – Loyalty to Add Another Layer THE WENDY'S COMPANY | 11
Slide 12: Operational Excellence Remains a Key Priority
Operational Excellence Remains a Key Priority ▪ Over 70% of dining rooms open ▪ Speed and taste metrics significantly improved ▪ Strong, accelerating restaurant margin ▪ Evaluating future restaurant operating model efficiencies THE WENDY'S COMPANY | 12
Slide 13: International Markets Are Recovering
International Markets Are Recovering ▪ ~90%* of restaurants now open ▪ Strong recoveries in key markets such as Canada, Puerto Rico, and NZ ▪ U.K. launch remains on track ▪ Fully committed to International growth THE WENDY'S COMPANY | 13 * As of August 2, 2020
Slide 14: Wendy's Creates Joy & Opportunity Through Food, Family & Community
WENDY’S CREATES JOY & OPPORTUNITY THROUGH FOOD, FAMILY & COMMUNITY RESTAURANTS FOOD A place I love to go Food I love CLEAN & WELL MAINTAINED FRESH UP TO DATE HONEST INGREDIENTS EASY & CONVENIENT CRAVEABLE TASTE UPBEAT & COMFORTABLE MADE RIGHT SERVICE VALUE An experience that Worth what I pay brings
Slide 15: Gunther Plosch
Gunther Plosch Chief Financial Officer © Quality Is Our Recipe, LLC
Slide 16: Second Quarter Financial Results
Second Quarter Financial Results $ Mils (except per share amounts) (Unaudited) 2020 2019 B/(W) Global System SRS (5.8%) 1.6% 2-Year (4.2%) Adjusted Revenues1 $324.2 $348.7 (7.0%) Company Restaurant Margin 14.4% 16.5% (210 bps) G&A $48.6 $50.8 4.3% Adjusted EBITDA1 $97.4 $117.8 (17.3%) Adjusted EPS1
Slide 17: 2020 Financial Expectations
2020 Financial Expectations Commodity inflation of ~3% G&A of ~$200 to $210 million Annual tax rate of ~25% to 30% Free Cash Flow Timing THE WENDY’S COMPANY 17
Slide 18: U.S. Franchise Financial Health Update
U.S. Franchise Financial Health Update 2019 US Franchise Economics Sales Growth = ~4% EBITDA $ Growth = ~6% Restaurant Economic Model THE WENDY'S COMPANY | 18
Slide 19: Capital Allocation Policy Remains Unchanged
Capital Allocation Policy Remains Unchanged Continue to Invest in the 1 Business for Growth Sustain an Attractive Dividend; 2 Payout Ratio > 50% Flexibility to Utilize Excess 3 Cash to Repurchase Shares and/or Reduce Debt
Slide 20: Greg Lemenchick
Greg Lemenchick Senior Director – Investor Relations & Corporate FP&A © Quality Is Our Recipe, LLC
Slide 21: Investor Relations Calendar
Investor Relations Calendar • August 18: Virtual Call with Telsey • August 20: Virtual NDR with Barclays (Boston) • August 26: Virtual Call with BMO • September 10: Goldman Global Retailing Conference • September 23: Virtual NDR with Wedbush (LA) • September 24: Virtual NDR with Cowen (SF) THE WENDY
Slide 22: Q&A
Q&A
Slide 23: Appendix
Appendix
Slide 24: 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 no
Slide 25: Reconciliations of Net Income to Adjusted EBITDA and Revenues to Adjusted Revenues
In Thousands (Unaudited) Reconciliations of Net Income to Adjusted EBITDA and Revenues to Adjusted Revenues THE WENDY'S COMPANY | 25
Slide 26: Reconciliation of Net Income and Diluted EPS to Adjusted Income and Adjusted EPS
In Thousands except per-share amounts (Unaudited) Reconciliation of Net Income and Diluted Earnings Per Share to Adjusted Income and Adjusted Earnings Per Share THE WENDY'S COMPANY | 26
Slide 27: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
Reconciliation In Thousands (Unaudited) of Net Cash Provided by Operating Activities to Free Cash Flow THE WENDY'S COMPANY | 27
Slide 28: Slide 28