The Cheesecake Factory Incorporated · NASDAQ:CAKE
The Cheesecake Factory — Cheesecake Factory — Investor Presentation (July 2020)
33 slides from The Cheesecake Factory's investor presentation, Jul 29, 2020
Slide 1: Investor Presentation July 29, 2020
Investor Presentation July 29, 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. This includes, without limitation, financial guidance and projections and state
Slide 3: Initial Response to COVID-19
Initial Response to COVID-19 Pivoted very quickly to maximize sales, manage costs and preserve cash Shifted to an off-premise only model in March, began reopening dining rooms in Mid-May Eliminated non-essential spending and suspended new unit development Reduced board, executive and corporate suppo
Slide 4: Managing Through COVID-19
Managing Through COVID-19 Have taken a deliberate approach in our dining room reopening strategy as the health and safety of our teams and guests remain our top priority Secured adequate PPE; implemented additional safety protocols; and made a number of operational changes and technology upgrades, i
Slide 5: Investment Highlights
Investment Highlights Experiential dining category leader with diversified growth drivers Leveraging the Company’s strong foothold in the off-premise channel to support the business in the COVID-19 environment Durable business over time - sustained track record of consistent financial performance •
Slide 6: The Cheesecake Factory - Global Footprint
The Cheesecake Factory - Global Footprint High quality, high profile locations worldwide Arabia Macau 6 International – Licensed: 26 y Mexico Toronto Company-Owned: 205 Monterre Guadalajara City (3) Beijing Shanghai Hong Kong Kuwait (3) Bahrain (1) Qatar Saudi(3) (4) UAE (6)
Slide 7: The Cheesecake Factory - A Highly Differentiated Concept
The Cheesecake Factory - A Highly Differentiated Concept Service and 7 Ambiance, Hospitality Integrated Bakery Best-in-Class Operational Execution Breadth of Menu & Innovation
Slide 8: Breadth of Menu & Innovation are Key Competitive Advantages
Breadth of Menu & Innovation are Key Competitive Advantages 250 Menu Items - Made Fresh, From Scratch 8
Slide 9: Dining With Us Is an Experience
Dining With Us Is an Experience Ambiance, Service and Hospitality Drive Sales 9
Slide 10: Integrated Bakery – The “Cheesecake” Magic
Integrated Bakery – The “Cheesecake” Magic • Produces over 70 cheesecakes and other baked desserts Enables creativity, quality control Industry-Leading Dessert Sales FY19 16% • and supply chain efficiencies 10
Slide 11: Cult Status & Strong Consumer Engagement
Cult Status & Strong Consumer Engagement A division of Vice Media LLC The Cheesecake Factory’s Latest Cheesecake Flavor is Stuffed With Snickers It’s also made with BROWNIE CRUST By Megan Schaltegger I’m sure you’ve heard once or twice (or a billion times) that we’re living in unprecedented times. A
Slide 12: Broad Consumer Demographic and Appeal
Broad Consumer Demographic and Appeal 2019 #2 Top Large Chain Casual Dining With a Moderate Average Check Highest Unit Volumes ($ in millions) $32 $10.7 $29 $27 $24 $23 $22 $22 $19 $18 $17 $5.5 $5.2 $5.0 $3.7 $3.6 $3.0 $2.9 Maggianos Yard House BJ's Texas Olive Outback LongHorn Bonefish Carrabbas Ya
Slide 13: Leveraging This Differentiation in the Off-Premise Channel
Leveraging This Differentiation in the Off-Premise Channel Off-Premise Sales (% of Total Revenue) 79% 22% 14% 16% 9% 12% 2013 2017 2018 2019 1Q20 2Q20 New Takeout Packaging 13 *Annualized unit volume equivalent based on average weekly sales July 2020: ~$4.2 million per restaurant*
Slide 14: Further Leaning in to Convenience
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Slide 15: On-Brand Marketing Campaigns
On-Brand Marketing Campaigns Leveraging Brand Identity as a Dessert Leader and Menu Breadth to Drive Sales Attain Top of Mind Status 15
Slide 16: Capitalizing on the Power of the Brand
Capitalizing on the Power of the Brand The Cheesecake Factory At Home® 16
Slide 17: Best-in-Class Operational Execution and Industry-Leading Retention
Best-in-Class Operational Execution and Industry-Leading Retention Average Tenure by Position 31 years Senior VP of Operations Regional Vice Presidents 22 years Area Directors of Operations 19 years 18 years Area Kitchen Operations Managers 13 years General Managers Executive Kitchen Managers 13 yea
Slide 18: Looking Ahead: Post-COVID-19
Looking Ahead: Post-COVID-19 Diversified growth drivers once the restaurant industry operating environment normalizes *The following targets assume full capacity conditions are ultimately permitted by state and local jurisdictions 1188
Slide 19: An Experiential Dining Category Leader
An Experiential Dining Category Leader Culinary forward. First class hospitality. Concepts like no other. 19
Slide 20: Returns-Focused Opportunity for Domestic & Canadian Growth
The Cheesecake Factory – Returns-Focused Opportunity for 300 Domestic & Growth 8 - 10 Canadian Locations Over Time * Illustrative example of target returns for new restaurant openings. 20 Philadelphia Average Unit Economics* ($ millions) Sales $10.7 ~18% $8+ 20% - 25% Restaurant-Level Margin % Cash
Slide 21: Expanding International Licensed Presence
The Cheesecake Factory – Expanding International Licensed Presence • Anticipated continued expansion within current geographies Potential for additional geographies with current licensees Opportunity to add licensees and territories • • Shanghai 21 $0 Capital Expenditure +1¢ Per Restaurant in EPS, o
Slide 22: Filling White Space for an On-Trend, Contemporary Italian Offering
Filling White Space for an On-Trend, Contemporary Italian Offering • Potential for 200 domestic locations over time - 23 locations in 11 states & Washington D.C. currently All dishes handmade from scratch daily Serving lunch, dinner, weekend brunch & weekday happy hour • • • • Average check: $25 - $
Slide 23: Fox Restaurant Concepts Will Serve as an Incubation Engine
Fox Restaurant Concepts Will Serve as an Incubation Engine Innovating Concepts of the Future 23 Boutique Brands Potential Growth
Slide 24: The Future CAKE: Post-COVID-19
The Future CAKE: Post-COVID-19 real estate 24 ¹Illustrative example of target returns for new restaurant openings | ²Steady-state restaurant-level margin typically reached by year three of operations Leveraging brand power, operational excellence, scale, supply chain and development expertise ²² Tar
Slide 25: Track Record of Consistent Financial Performance
Track Record of Consistent Financial Performance factory -------------
Slide 26: History of Outperforming the Industry
History of Outperforming the Industry Comparable Sales - Historical 2-year Stack 2008 2009 2010 2011 4.0% 2012 4.2% 2013 2014 2015 4.1% 2016 3.8% 2017 2018 2019 2.5% 1.4% 0.5% 0.4% (0.6)% (0.9)% (1.6)% (2.2)% (4.2)%(4.3)% (6.1)% (6.8)% (8.7)% Knapp-Track Index 26 1.0% 3.3% 2.6% 2.0% 0.8% 0.9% (0.4)%
Slide 27: Durable Business Over Time
Durable Business Over Time ($ in millions) ($ in millions) $2.83 $163 $163 64,009 61 $158 $2.51 44,545 $107 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Capex / Inve
Slide 28: Stable, Agile Brands With Scale Best Equipped to Weather Volatility
We Believe Stable, Agile Brands With Scale Will Be Best Equipped to Weather Volatility Shifting Industry Dynamics Continuing to Build Strong Off-Quick Service1 Independents 36% Casual Dining1 Chains 14% Increased Supply Eases Premise Sales Volumes 5 Labor Pressure4 ($ millions) $4.2 ~$4 15% Chains 6
Slide 29: Investment Highlights
Investment Highlights Experiential dining category leader with diversified growth drivers Leveraging the Company’s strong foothold in the off-premise channel to support the business in the COVID-19 environment Durable business over time - sustained track record of consistent financial performance •
Slide 30: Appendix
Appendix
Slide 31: Non-GAAP Reconciliations
Non-GAAP Reconciliations In addition to the results provided in accordance with the Generally Accepted Accounting Principles (“GAAP”) in this presentation, the Company is providing non-GAAP measurements which present diluted net income per share excluding the impact of certain items and free cash fl
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation The Cheesecake Factory Incorporated Reconciliation of Non-GAAP Financial Measures ($ in thousands, except per share data) Fiscal Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Net Income (GAAP) After-tax impact from: - Impairment of assets and lease terminat
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation The Cheesecake Factory Incorporated Reconciliation of Non-GAAP Financial Measures ($ in millions) Fiscal Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Cash flow from operations (1) Capital expenditures / investments Free cash flow $ 170 85 $ 200 37 $ 170 42
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