Slide 1: Second Quarter 2012 Earnings Conference Call
©2012 Oldemark LLC 1 Exhibit 99.1 Second Quarter 2012 Earnings Conference Call August 9, 2012
Slide 2: John Barker, Chief Communications Officer
2 JOHN BARKER CHIEF COMMUNICATIONS OFFICER
Slide 3: Today's Agenda
Today’s Agenda The Wendy’s Company The Wendy’s Company Opening Comments Emil Brolick 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 4 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 concernin
Slide 5: Emil Brolick, President & Chief Executive Officer
5 EMIL BROLICK PRESIDENT & CHIEF EXECUTIVE OFFICER
Slide 6: Quality is our recipe.
The Wendy’s Company The Wendy’s Company 6 Quality is our recipe.
Slide 7: Q2 2012 Highlights - North America restaurants
Q2 2012 Highlights * North America restaurants 7 Fifth consecutive quarter of positive systemwide SSS … +3.2%* Company restaurant margin improved 20 bps to 14.1% Reaffirming 2012 Adjusted EBITDA outlook of $320 to $335 million Image Activation restaurants continue to generate strong sales; expansion
Slide 8: Strategic growth platforms
System Optimization Financial Management Global Growth Image / Experience Activation North America Same-Store Sales Growth The Wendy’s Company Restaurant Utilization & Daypart Expansion New Restaurant Development
Slide 9: Recipe to Win
RECIPE TO WIN The Wendy’s Company PEOPLE PEOPLE 5-Star Athletes 5-Star Athletes PRICE PRICE New QSR Quality at QSR Price New QSR Quality at QSR Price PRODUCT PRODUCT Play a different game. Superior Play a different game. Superior perceived quality, competitive price. perceived quality, competitive p
Slide 10: Steve Hare, Chief Financial Officer
10 STEVE HARE CHIEF FINANCIAL OFFICER
Slide 11: Q2 2012 Financial Highlights
Q2 2012 Financial Highlights Company-Operated +3.2% Franchise +3.2% Systemwide +3.2% Q2 2012 14.1% Q2 2011 13.9% +20 bps Restaurant Labor (115) bps Commodities April May June (70) bps North America Same-Store Sales Company Restaurant Margin Key Negative Margin Variances
Slide 12: Investing in Restaurant Labor to Build the Brand
The Wendy’s Company Investing in Restaurant Labor to Build the Brand 12
Slide 13: Beef: Expect Moderating Costs in Q3 and Q4
Beef: Expect Moderating Costs in Q3 and Q4 The Wendy’s Company Short-Term Impact Demand: ground beef retail demand remains sluggish – impact of “pink slime” on demand Drought: Midwest drought will send cattle to market sooner than normal: helps short-term pricing Expect Q3 and Q4 beef costs to be lo
Slide 14: Potential Savings Opportunities to Offset Commodity Increases
Potential Savings Opportunities Identified to Offset Commodity Increases Potential food and paper cost savings identified; working with suppliers and supply chain Co-Op (Wendy’s QSCC) 19% 18% 63% Wendy’s Commodities as a % of Total Food and Paper Cost Beef Chicken Other
Slide 15: Strategic Pricing Model Expected to Benefit Restaurant Margin
Strategic Pricing Model Expected to Benefit Restaurant Margin 15 Pricing Transactions
Slide 16: Q2 2012 Financial Summary
Q2 2012 Financial Summary ($ in Millions) Q2 2012 Q2 2011 Better/ (Worse) Sales 566.1 $ 544.2 $ 21.9 $ Franchise revenues 79.8 78.2 1.6 Total revenues 645.9 $ 622.5 $ 23.4 $ Adjusted EBITDA from continuing operations* 89.1 $ 89.4 $ (0.3) $ *See reconciliation of Adjusted EBITDA from continuing opera
Slide 17: Income from Continuing Operations and Special Items
Income from Continuing Operations and Special Items ($ in Thousands, except per share amounts) After tax Per share After tax Per share Adjusted income and adjusted earnings per share from continuing operations 19,221 $ 0.05 $ 19,016 $ 0.05 $ (Less) plus: Loss on early extinguishment of debt (15,621)
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Slide 19: Restaurant Portfolio Update Q2 2012
Restaurant Portfolio Update Q2 2012 Company Operated Franchise Operated Total System Conducted review of Company-operated restaurant portfolio, resulting in closure of 15 underperforming restaurants Company acquired 30 franchised restaurants in the Austin, Texas market Key strategic actions in Q2 Op
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Slide 21: Q2 2012 Consolidated Debt
Q2 2012 Consolidated Debt ($ in Millions) Senior Debt 1,361.8 $ Capital Leases and Other Debt 32.5 Total Debt 1,394.3 Less: Cash and Cash Equivalents 435.1 Net Debt 959.2 $ TTM Adjusted EBITDA* 320.9 $ Total Debt / TTM Adjusted EBITDA* 4.3x Net Debt / TTM Adjusted EBITDA* 3.0x July 1, 2012 *See reco
Slide 22: Refinancing to Generate Ongoing Interest Savings
Refinancing to Generate Ongoing Interest Savings New bank debt borrowing rate of 4.75% today Redeemed $565 million of Wendy’s Restaurants, LLC 10% Senior Notes due 2016 Annual interest savings of approximately $25 million Improves covenant flexibility, extends maturity and increases liquidity Wendy’
Slide 23: Reaffirming 2012 and Long-Term Outlook
Reaffirming 2012 and Long-Term Outlook 2012 Adjusted EBITDA from continuing operations in a range of $320 to $335 million Average annual Adjusted EBITDA growth rate in high-single-digit to low-double-digit range Long-Term, beginning 2013
Slide 24: Emil Brolick, President & Chief Executive Officer
23 EMIL BROLICK PRESIDENT & CHIEF EXECUTIVE OFFICER
Slide 25: Confident in Our Strategies
Confident in Our Strategies 24 “A Cut Above” brand positioning Growth platforms to build sales and profits Wendy’s Recipe to Win
Slide 26: Strategic growth platforms
System Optimization Financial Management Global Growth Image / Experience Activation North America Same-Store Sales Growth The Wendy’s Company System Optimization Financial Management Restaurant Utilization & Daypart Expansion Global Growth New Restaurant Development Image / Experience Activation No
Slide 27: Continuing to generate strong sales growth
Continuing to generate strong sales growth The Wendy’s Company 10 Reimages Operations ratings higher than system average
Slide 28: Philadelphia, PA
The Wendy’s Company 27 Philadelphia, PA Philadelphia, PA July 30 July 30
Slide 29: Orem, UT
Orem, UT Orem, UT July 16 July 16 The Wendy’s Company On track for Company Reimages and 17 New Image Activation Restaurants
Slide 30: First Franchise Image Activation Restaurant
The Wendy’s Company First Franchise Image Activation Restaurant Hershey, PA July 5
Slide 31: 2013: Tiered Design Strategy to Optimize Returns
2013: Tiered Design Strategy to Optimize Returns The Wendy’s Company Targeted Investment * $650 to $700K $500K $300K Sales Lift +25% +15% +5% *Estimates based on Company’s current outlook; excludes maintenance cap ex and other costs TIER I TIER II TIER III
Slide 32: Company and Franchise Reimage and New Restaurant Plans
The Wendy’s Company Company Reimages New Restaurants Majority Tier I ($650 to $700K) Franchise Expect Reimages Majority Tier I Introduce Tier II and Tier III Designs Estimates based on Company’s current outlook
Slide 33: Cumulative Image Activation Cap Ex: $440 to 500M (2013 to 15)
Cumulative Image Activation Cap Ex: $440 to 500M (2013 to 2015) The Wendy’s Company Image Activation Expansion Estimates based on Company’s current outlook Cumulative Image Activation Cap Ex: $440 to 500M (2013 to 2015)
Slide 34: Strategic growth platforms
System Optimization Financial Management Global Growth Image / Experience Activation North America Same-Store Sales Growth The Wendy’s Company Restaurant Utilization & Daypart Expansion New Restaurant Development
Slide 35: 2012 New Restaurant Development
The Wendy’s Company 2012 New Restaurant Development Company North America Company North America Franchised North America Franchised North America International International At least 20 new restaurants 50 reimages (Image Activation) 40 new restaurants 50 franchised and JV restaurants The Wendy’s Com
Slide 36: Strategic growth platforms
System Optimization Financial Management Global Growth Image / Experience Activation North America Same-Store Sales Growth The Wendy’s Company Restaurant Utilization & Daypart Expansion New Restaurant Development
Slide 37: System Optimization to Yield Multiple Benefits
The Wendy’s Company System Optimization to Yield Multiple Benefits; Strengthen Overall System Strong Franchise Base Existing Company- Owned Footprint Long-Term System Needs Optimal System In-market concentration Restaurant performance Optimal franchise mix to maximize value High-quality operators St
Slide 38: Strategic growth platforms
System Optimization Financial Management Global Growth Image / Experience Activation North America Same-Store Sales Growth The Wendy’s Company Restaurant Utilization & Daypart Expansion New Restaurant Development
Slide 39: A reliable and predictable experience every time!
A reliable and predictable experience every time! 38 The Wendy’s Company The Wendy’s Company
Slide 40: TM
The Wendy’s Company TM The Wendy’s Company
Slide 41: My Wendy's: A Culture of Service
My Wendy’s: A Culture of Service Months implemented North America Company-operated restaurants The Wendy’s Company 18+ 12-17 7-11 4-6 1-3 Not Implemented 70% 69% 64% 58% 48% 49% Pays off in Customer Loyalty Complaints, Problems and Revisit Intent Scores
Slide 42: Customer Service Scores Improving in 2012
Customer Service Scores Improving in 2012 North America Company-operated restaurants The Wendy’s Company
Slide 43: Heightened Restaurant-Level Execution Drives Sales
Heightened Restaurant-Level Execution Drives Sales Every additional 10 points of CPR correlates to $46,000 in additional sales. Complaint, Problem and Revisit Intent Score Improvement Correlates to Sales Growth North America Company-operated restaurants The Wendy’s Company
Slide 44: Play a Different Game
Play a Different Game 43 HIGH PERCEIVED QUALITY … CORE DESTINATION … ONLY AT WENDY’S LTO … SPECIAL TASTE
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44
Slide 46: Creative, Message, Media
The Wendy’s Company 45 CREATIVE MESSAGE MEDIA
Slide 47: Building Equity and Relevance with a Two-Tiered Advertising Campaign
Building Equity and Relevance with a Two-Tiered Advertising Campaign Brand Offering Brand Promise Family values Quality / Fresh Better choices New products 46 The Wendy’s Company
Slide 48: Encouraging Consumer Response to Advertising Campaign
Encouraging Consumer Response to Advertising Campaign 80 to 120 average range Source: Ameritest Overall Best QSR Fresh Ingredients High Quality 80 to 120 average range 80 to 120 average range
Slide 49: Mobile App is Increasing Consumer Engagement
Mobile App is Increasing Consumer Engagement My Wendy’s App 26,000 users since July 16 launch Time spent on app 3x longer than website
Slide 50: Wendy's Recognized for Progress in Digital
Wendy’s Recognized for Progress in Digital Ranked #2 in QSR Social Media by Nation’s Restaurant News – July 10, 2012 More than 100,000 twitter followers
Slide 51: Wendy's Share is Underdeveloped in Hispanic Market
Wendy’s Share is Underdeveloped in Hispanic Market Hamburger Category Non-Hispanic Hispanic Hamburger Category Source: NPD Group / CREST Hispanic Study, 2011 = 21% = 13% Of Traffic Of Traffic
Slide 52: Strategic growth platforms
System Optimization Financial Management Global Growth Image / Experience Activation North America Same-Store Sales Growth The Wendy’s Company Restaurant Utilization & Daypart Expansion New Restaurant Development
Slide 53: Late Night Marketing Support
LATE NIGHT MARKETING SUPPORT 52
Slide 54: Late Night Business is Growing
LATE NIGHT BUSINESS IS GROWING Data based on Late Night launch 5/28/12 through 8/5/12 compared to same weeks in 2011 +7% NATIONALLY 53
Slide 55: Refining A.M. Access
Refining A.M. Access Wendy’s remains committed to a long-term solution
Slide 56: Redhead Roasters Campaign Launched in NYC
Redhead Roasters™ Campaign Launched in NYC Redhead Roasters launched in 185 NYC restaurants during July Marketing support across non-traditional channels:
Slide 57: Recipe to Win
RECIPE TO WIN The Wendy’s Company PEOPLE PEOPLE 5-Star Athletes 5-Star Athletes PRICE PRICE New QSR Quality at QSR Price New QSR Quality at QSR Price PRODUCT PRODUCT Play a different game. Superior Play a different game. Superior perceived quality, competitive price. perceived quality, competitive p
Slide 58: John Barker, Chief Communications Officer
57 JOHN BARKER CHIEF COMMUNICATIONS OFFICER
Slide 59: Q&A
Q&A
Slide 60: A Cut Above
The Wendy’s Company ©2012 Oldemark LLC A CUT ABOVE A CUT ABOVE
Slide 61: Appendix
60 Appendix
Slide 62: Reconciliation of Adjusted EBITDA from Continuing Operations to Net (Loss) Income
Reconciliation of Adjusted EBITDA from Continuing Operations to Net (Loss) Income Attributable to The Wendy’s Company (In Thousands) (Unaudited) Adjusted EBITDA from continuing operations 89,073 $ 89,415 $ 152,954 $ 163,140 $ (Less) plus: Depreciation and amortization (35,947) (29,842) (68,258) (60,
Slide 63: Reconciliation of Adjusted Income and Adjusted Earnings per Share
Reconciliation of Adjusted Income and Adjusted Earnings per Share from Continuing Operations to Net (Loss) Income and Earnings per Share Attributable to The Wendy’s Company (a) (b) Adjusted earnings per share amounts, for the second quarter of 2012, include the dilutive effect of stock options and r