Darden Restaurants, Inc. · NYSE:DRI
Darden Restaurants — Investor Day (February 2013)
160 slides from Darden Restaurants's investor day presentation, Feb 26, 2013
Slide 1: Operating Successfully in a New Era
Operating Successfully in a New Era DARDEN SECURIT Y ANALYST S MEETING | FEBRUARY 2013
Slide 2: Agenda
Agenda Tuesday, February 26 8:00 a.m. Matthew Stroud VP, Investor Relations, Darden Restaurants 8:05 a.m. Dave George President, Olive Garden 8:25 a.m. Valerie Insignares President, LongHorn Steakhouse 8:45 a.m. Dave Pickens President, Red Lobster 9:05 a.m. Q&A 9:35 a.m. Break
Slide 3: Agenda
Agenda Tuesday, February 26 9:50 a.m. Gene Lee President, Specialty Restaurant Group Harald Herrmann President, Yard House 10:50 a.m. Jim Lawrence SVP, Purchasing, Darden Restaurants 11:20 a.m. Q&A 11:50 a.m. Wrap-up 12:00 p.m. Adjourn Lunch available (buffet or box) 12:15 p.m. Bus #1 departs for ai
Slide 4: Forward-Looking Statement
Forward-Looking Statement During the course of this presentation, Darden Restaurants’ officers and employees may make forward- looking statements concerning the Company’s expectations, goals or objectives. Forward-looking statements regarding our expected earnings per share and U.S. same-restaurant
Slide 5: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles ("GAAP"), this presentation contains non-GAAP financial measures. The non-GAAP financial measures should not be considered a substitut
Slide 6: A Strong Foundation… Significant New Era Opportunities
A Strong Foundation… Significant New Era Opportunities DARDEN SECURIT Y ANALYST S MEETING | FEBRUARY 2013 Dave George President
Slide 7: A Special Brand and a Special Business
A Special Brand and a Special Business Broadly Appealing Brand Powerful Unit Economics Average Unit Volume $4.6MM 800+ Restaurants $455MM Brand Cash Contribution 7
Slide 8: A Broadly Appealing Brand
A Broadly Appealing Brand Anchored in Three Key Pillars Broadly appealing food Leveraging category Accessible to all benefit of “connection” Rich emotional imagery in an ownable way Generous portion plus unlimited Soup, Salad As powerful internally & Breadsticks as externally Relevant
Slide 9: Bringing the Experience to Life in the Past
Bringing the Experience to Life in the Past “Idealized Italian Family Meal” 9
Slide 10: Where We Stand Today
Where We Stand Today A Strong Foundation… 818 Restaurant Locations Average Unit Volume of $4.6 Million* $3.7 Billion Projected Annual Sales Restaurant Return on Sales of 17+%* * Trailing 4 quarters ending Q2 FY13 10
Slide 11: Where We Stand Today
Where We Stand Today A Strong Foundation… but, Same-Restaurant Sales Declining 1.2% 0.3% -0.7% -1.0% -1.2% FY09 FY10 FY11 FY12 FY13* Olive Garden *FY13 = Q2 Rolling 12 11
Slide 12: Why…
Why… We became overly confident… Our historical competitive advantage has narrowed – Affordability & Value – Lunch We were slow to react to changing guest needs – Menu Variety – Experience takes too long – 400 locations that need updating 12
Slide 13: Where We Go From Here…
Where We Go From Here… Slow new unit growth Increase consistency of high quality experience Elevate brand relevance: What you get… – Menu design & food variety – Better target new guest need states – New lunch appropriate items – Finalize remodel Improve affordability: What you pay… – Core m
Slide 14: Slowing Unit Growth
Slowing Unit Growth Earnings Indexed to Value Creation Hurdle Net New Restaurants 162 38 36 31 141 137 ~15 FY11 FY12 FY13* FY11 FY12 FY13 FY14 *FY13 = Restaurants opened > 13 weeks Est. Enables Focus 14
Slide 15: Increase Consistency of High Quality Experience
Increase Consistency of High Quality Experience Simplification Staffing & Scheduling Service Standards 15
Slide 16: Making the Experience More Current
Making the Experience More Current “An Italian Gathering Place Where Everyone Feels Like Family” 16
Slide 17: Elevate Brand Relevance
Elevate Brand Relevance Menu Design and Food Variety 17
Slide 18: Elevate Brand Relevance
Elevate Brand Relevance Menu Design and Food Variety 18
Slide 19: Elevate Brand Relevance
Elevate Brand Relevance Targeting Healthy Lifestyles New Lasagna Primavera w/ Grilled Chicken 420 Cal New Seafood Brodetto 480 Cal 19
Slide 20: Elevate Brand Relevance
Elevate Brand Relevance Brand Focused… Need State Influenced 20
Slide 21: Elevate Brand Relevance
Elevate Brand Relevance New Lunch Calzone & Sandwich Combinations Starting at $6.95 21
Slide 22: Elevate Brand Relevance
Elevate Brand Relevance Via Tuscany Remodel 22
Slide 23: Elevate Brand Relevance
Elevate Brand Relevance Via Tuscany Remodel 23
Slide 24: Elevate Brand Relevance
Elevate Brand Relevance Logo / Sign Evolution 24
Slide 25: Improve Affordability
Improve Affordability New Affordable Protein-Forward Core Menu Additions New Parmesan Potato Crusted Chicken $12.95 New Chicken Toscano $12.95 25
Slide 26: Improve Affordability
Improve Affordability Three Course Italian Dinner $12.95 2 for $25 Italian Dinner Prices may vary 26
Slide 27: New 2 for $25 Italian Dinner
New 2 for $25 Italian Dinner Food Focused to Drive Cravability 27
Slide 28: Everyone's Family!
Everyone’s Family! 28
Slide 29: Our People
Our People PRIDE | PA S S I O N | COMMITMENT 29
Slide 30: Becoming America's Favorite Steakhouse
Becoming America’s Favorite Steakhouse DARDEN SECURIT Y ANALYST S MEETING | FEBRUARY 2013 Valerie Insignares President 0
Slide 31: Casual Dining Steak Growth Opportunity
Casual Dining Steak Growth Opportunity Category is Big and Durable Dollar Volume Dollar Volume Distribution TTM Ending Q2FY13 TTM Ending Q2FY13 Major Chains Small Chains Independents $22.4B $5.7B $9.3B $10.5B $22.4B 23% 19% 30% 32% 20% 15% 26% $10.5B $9.3B 81% $5.7B 57% 53% 44% Seafood Italian Steak
Slide 32: Capturing Our Full Growth Potential
Capturing Our Full Growth Potential $2.0 to $2.5 Billion Business 2
Slide 33: Making Significant Progress
Making Significant Progress Last Five Years • Leveraged Darden’s Restaurant Support Platform • Elevated Brand Marketing Capabilities • Invested in Increased Media • Completed Steak House Remodel • Launched New Lunch and Dinner Menus • Accelerated Unit Growth 3
Slide 34: Building on a Strong Foundation
Building on a Strong Foundation Total Sales Growth 13.5% 12.1% 11.6% 3.6% -0.7% FY09 FY10 FY11 FY12 FY13* *FY13: TTM Ending Q2FY13 4
Slide 35: Building on a Strong Foundation
Building on a Strong Foundation Same-Restaurant Sales Growth 5.4% 5.3% 3.1% -1.9% -5.6% FY09 FY10 FY11 FY12 FY13* *FY13: TTM Ending Q2FY13 5
Slide 36: Building on a Strong Foundation
Building on a Strong Foundation Value Creating New Restaurant Growth Number of Net New Restaurants Opened 43 - 45 32 23 16 10 FY09 FY10 FY11 FY12 FY13 6
Slide 37: Building on a Strong Foundation
Building on a Strong Foundation Strong Margins Maintaining Value Creation Restaurant Earnings ROS Index (2009 = 100) 141 135 128 128 100 FY09 FY10 FY11 FY12 FY13* *FY13: TTM Ending Q2FY13 7
Slide 38: Key Priorities Going Forward
Key Priorities Going Forward • Further Differentiate the Brand and Guest Experience • Strengthen Affordability • Continue Our Aggressive Journey Toward National Penetration 8
Slide 39: Our Guest Promise
Our Guest Promise A Guaranteed Cut Above Experience FOOD SERVICE AT M O S P H E R E Steak Done Right Service that Over-Delivers Natural & Warm Setting 9
Slide 40: Further Differentiate the Brand
Further Differentiate the Brand Evolve Advertising Campaign 10
Slide 41: Further Differentiate the Brand
Further Differentiate the Brand Evolve Advertising Campaign 11
Slide 42: Further Differentiate the Guest Experience
Further Differentiate the Guest Experience New Core Menu 12
Slide 43: Further Differentiate the Guest Experience
Further Differentiate the Guest Experience New Core Menu 13
Slide 44: Further Differentiate the Guest Experience
Further Differentiate the Guest Experience Distinctively LongHorn Steak Offerings Porterhouse for Two and Tableside Steak Sauce Rancher’s Sirloin 14
Slide 45: Further Differentiate the Guest Experience
Further Differentiate the Guest Experience New LongHorn Guarantee 15
Slide 46: Differentiate the Guest Experience
Differentiate the Guest Experience Service that Over-Delivers Friendly Passionate Don’t Quit Until & Attentive About Our Food the Guest Smiles 16
Slide 47: Differentiate the Guest Experience
Differentiate the Guest Experience Contemporary Expression of Western Warmth 17
Slide 48: Strengthen Affordability
Strengthen Affordability Promotion Strategy 18
Slide 49: Strengthen Affordability
Strengthen Affordability Core Menu Strategy 19
Slide 50: Our Aggressive Journey Toward National Penetration
Our Aggressive Journey Toward National Penetration 5 2 1 6 1 6 14 2 4 1 5 2 25 2 16 10 27 11 1 3 10 2 12 9 14 9 19 18 3 2 2 13 6 14 59 Legacy Markets 19 5 Emerging Markets 57 Growth Opportunity 20
Slide 51: Capturing Our Full Growth Potential
Capturing Our Full Growth Potential Current Future Number of Restaurants 416 700 Average Unit Volumes $3.0MM $3.6MM Total Sales $1.2B $2.4B Incremental Op Profit +$175MM Marketing Spend ~$50MM ~$120MM Memo Items: Assumes today’s dollars 21
Slide 52: Thank You!
y, (J LONGHORN STEAKHOUSE THANK /UG!
Slide 53: Building a Bright Future
Building a Bright Future DARDEN SECURIT Y ANALYST S MEETING | FEBRUARY 2013 Dave Pickens President
Slide 54: Our Vision
Our Vision “To Be The Undisputed Choice For Seafood In Casual Dining” 1
Slide 55: Value-Creating Business Model
Value-Creating Business Model Trailing Four Quarters as of November 2012 Annual Revenue $2.6 (Billions) Average Unit Volume $3.8 (Millions) Restaurant Return on Sales (ROS) * 14% to 17% Remodeled Restaurant Exceeding Earnings Performance ** Hurdle Generates Over $375 Million in Brand Cash Contributi
Slide 56: Dominate Market Share with Significant Growth Opportunity
Dominate Market Share with Significant Growth Opportunity Red Lobster’s Current Market Share… …of Seafood Specialists …of Total Casual Dining Sales Red Lobster 3% Red Lobster 43% All Others All Others 57% 97% Source: Darden Market Map Value $5.7B Source: Crest Data Value $84.6B Significant opportuni
Slide 57: Same-Restaurant Sales Growth
Same-Restaurant Sales Growth Inconsistent Over the Last Three Years 10.7% 6.8% 6.0% 3.8% 0.1% -1.7% -1.6% -2.6% -2.7% -3.9% -7.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Projected FY11 FY12 FY13 4
Slide 58: Same-Restaurant Sales Growth
Same-Restaurant Sales Growth Same-Restaurant Sales Growing on a Cumulative Basis 4.6% 2.3% 0.3% -2.6% FY11 FY12 FY13 Outlook Cumulative 5
Slide 59: Driven by a Comprehensive Multi-year Plan
Driven by a Comprehensive Multi-year Plan “Simply Great” operating discipline “Today’s Fresh Fish” menu Wood-Fire Grill platform Bar Harbor Remodel program Affordable “price certainty” in promotions “Sea Food Differently” advertising campaign 6
Slide 60: Brand Equity Continues to Strengthen
Brand Equity Continues to Strengthen Remodels Enhancing Brand Health Atmosphere Perceptions (RL Dinner P3M Users) 40% 38% Rank : 3 35% 33% Rank : 5 Top Box % Rank : 5 30% Rank : 7 28% Rank : 4 25% Rank : 6 23% 20% FY08 FY09 FY10 FY11 FY12 Cleanliness Atmosphere I Like Up-to-date Rankings of Red Lobs
Slide 61: Brand Equity Continues to Strengthen
Brand Equity Continues to Strengthen Future Visit Intent Strong Overall Strength (RL Dinner P3M Users*) 43% Rank : 3 Rank : 1 41% Top Box % 38% 36% 33% FY08 FY09 FY10 FY11 FY12 P3M Future Visit Intent Rankings of Red Lobster for FY08 and FY12 represent RANKING among a group of 12 brands during the c
Slide 62: Fiscal 2014 Growth Priorities
FISCAL 2014 GROWTH PRIORITIES 9
Slide 63: Aggressively Address Affordability Opportunity
Aggressively Address Affordability Opportunity 10
Slide 64: Further Leverage Core Menu to Broaden Appeal
Further Leverage Core Menu to Broaden Appeal Preference Growth on Items Under $15 % of Menu Items by Price % Preference by Price 44 49 60 59 >$15 < $15 56 51 40 41 Pre CMT Post CMT Pre CMT Post CMT CMT = Core Menu Transformation 11
Slide 65: Evolve Our "Sea Food Differently" Advertising Campaign
Evolve Our “Sea Food Differently” Advertising Campaign 12
Slide 66: Continue Bar Harbor Remodel Program
Continue Bar Harbor Remodel Program Average investment $400-$430M Average guest count lift 4%-5% 13
Slide 67: Elevate In-Restaurant Execution
Elevate In-Restaurant Execution 14
Slide 68: Leverage New Spanish-Language Advertising Campaign
Leverage New Spanish-Language Advertising Campaign 15
Slide 69: 16
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Slide 70: Longer-Term Growth Opportunities
Longer-Term Growth Opportunities Further explore opportunities to increase relevance with Hispanic consumers Identify and pursue strategic opportunity to increase market share at lunch Leverage growing consumer interest in health and wellness by creating a direct link with Red Lobster and the
Slide 71: Thank you!
Thank you! 18
Slide 72: Businesses that Add Breadth and Growth
Businesses that Add Breadth and Growth DARDEN SECURIT Y ANALYST S MEETING | FEBRUARY 2013 Gene Lee President
Slide 73: Strong Businesses Well Positioned to Deliver Growth in the New Era
Strong Businesses Well Positioned to Deliver Growth in the New Era Annual total sales excluding Yard House exceed $680 million – FY14 sales including Yard House are expected to exceed $1.2 billion Annual cash contribution excluding Yard House was approximately $115 million before capital expendi
Slide 74: Delivering on Commitments (Excluding Acquisitions)
Delivering on Commitments (Excluding Acquisitions) Annualized sales growth of 17% the past two years… Fueled by annualized same-restaurant sales growth of 4.1%... And growing the number of restaurants from 84 to 105 Also delivered annual restaurant earnings growth of 26%... Driving annual
Slide 75: Our Growth is Even Stronger with Our Acquisitions
Our Growth is Even Stronger with Our Acquisitions Acquired two well-positioned growth brands Increased annual sales growth rate to 30% Increased annual restaurant earnings growth to 38% Raised annual operating profit growth to 122% Inclusion means a near doubling in the number of restauran
Slide 76: Acquisitions Make SRG a Meaningfully Bigger Part of Darden
Acquisitions Make SRG a Meaningfully Bigger Part of Darden 7% 12% 14% 34% 14% 31% 45% 43% *Pre-Yard House sales data as of FY12; Post-Yard House sales data represents Q2 FY13 YTD 4
Slide 77: Even with Our Significant Growth…The Group is Self-Funding
Even with Our Significant Growth…The Group is Self-Funding Cash Contribution ($Millions) 140 100 60 20 FY11 FY12 FY13 Cash Contribution excl CapEx Capital Spend Cash Contribution Now Funds Investment in Growth * All data is based on TTM ended Q2 FY13 and includes Yard House starting Q2 FY13 (excludi
Slide 78: Strong, Fully Dedicated Leadership Team
Strong, Fully Dedicated Leadership Team SRG PRESIDENT BRAND SRG SRG SRG SRG HUMAN MARKETING PRESIDENTS (5) DEVELOPMENT FINANCE RESOURCES & CULINARY BRAND SPECIFIC RESOURCES DARDEN RESOURCES Strong Platform to Manage Growth Effectively 6
Slide 79: Current Business Dynamics
Current Business Dynamics Delivering significant sales growth Achieving high average unit volumes Building value-creating new restaurants Driving strong margins Continuing Positive Momentum 7
Slide 80: Delivering Significant Sales Growth
Delivering Significant Sales Growth Total Sales Growth 76.5% 27.8% 26.9% 26.4% 25.0% 18.9% 19.3% 20.7% 19.1% 14.6% 11.4% 11.7% 1.3% -1.5% -1.8% -4.8% -9.8% -8.8% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY09 FY10 FY11 FY12 FY13 FY09 adjusted for the 53rd week 8
Slide 81: Delivering Significant Sales Growth
Delivering Significant Sales Growth SRG Same-Restaurant Sales Trends (Excludes Yard House) 6.5% 5.3% 5.8% 4.7% 5.1% 3.9% 2.7% 2.2% 1.9% 2.0% 0.7% -3.6% -6.6% -6.0% -8.4% -11.0% -12.8% -14.3% -15.2% Est Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY09 FY10 FY11 FY12 FY13 9
Slide 82: Achieving High Annual Sales Per Restaurant
Achieving High Annual Sales Per Restaurant Fine Dining Steak and Seafood Average Unit No. of Units Volumes $12.5 9 $6.8 48 $6.2 8 $4.8 134 $3.9 72 $3.9 64 SRG Brand AUVs are based on a trailing twelve months ended Q2 FY13. Competitor Data was derived from the Nation’s Restaurant News 2012 Top 100 Re
Slide 83: Achieving High Annual Sales Per Restaurant
Achieving High Annual Sales Per Restaurant Varied Menu Casual Dining Average Unit No. of Units Volumes $10.1 158 $8.4 41 $5.7 130 $5.6 32 $2.8 1,549 $2.6 854 SRG Brand AUVs are based on trailing twelve months ended Q2 FY13 with Yard House AUVs presented Pro-Forma. Competitor Data was derived from th
Slide 84: Achieving High Annual Sales Per Restaurant
Achieving High Annual Sales Per Restaurant Polished Casual Dining Average Unit No. of Units Volumes $6.3 25 $5.0 52 $4.5 222 $3.8 22 $3.7 73 $3.7 19 $3.0 167 SRG Brand AUVs are based on a trailing twelve months ended Q2 FY13. Competitor Data was derived from the Nation’s Restaurant News 2012 Top 100
Slide 85: Portfolio Has a Range of Market Opportunities for Growth
Portfolio Has a Range of Market Opportunities for Growth Urban – Capital Grille (primary) – Eddie V’s (primary) High-End Suburban Retail – Seasons 52 (primary) – Bahama Breeze (primary) – Yard House (primary) – Capital Grille (secondary) – Eddie V’s (secondary) Garden City, NY Mid-Range Suburb
Slide 86: Group Footprint in 2007
Group Footprint in 2007 Bahama Breeze Seasons 52 The Capital Grille 14 14
Slide 87: Current Footprint
Current Footprint Bahama Breeze Eddie V’s Seasons 52 The Capital Grille Yard House 15 15
Slide 88: Value-Creating New Restaurants
Value-Creating New Restaurants Number of New Restaurants 12 11 7 FY11 FY12 FY13 Q2 YTD Note: Excludes acquired restaurants Earnings 35% Above Hurdle 16
Slide 89: Driving Strong Margins
Driving Strong Margins Restaurant Return on Sales (ROS%) 17%+ 17%+ 17%+ 14-17% 14-17% Superior Strong Value Creation Value Creation Note: All results reported for TTM ending Q2 FY13. YH presented in Pro-Forma. 17
Slide 90: Leading as a Premier Relationship Brand
Leading as a Premier Relationship Brand Classic steakhouse with fine dining attributes and personalized service that engenders loyalty – Dry aged steaks, fresh seafood and innovative accompaniments Proven Brand Well-Positioned in the Luxury Category 18
Slide 91: Peppercorn Steak
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Slide 92: Ivory King Salmon
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Slide 93: Leading as a Premier Relationship Brand
Leading as a Premier Relationship Brand Classic steakhouse with fine dining attributes and personalized service that engenders loyalty – Dry aged steaks, fresh seafood and innovative accompaniments – World-class wine list served by knowledgeable professionals – Trusted service culture (EDGE) – Hig
Slide 94: Luxury Spending Recovering Much Faster Than Sales Overall
Luxury Spending Recovering Much Faster Than Sales Overall ICSC Chain Store Sales % Y/Y 24 20 16 12 Luxury 8 4 0 -4 Overall -8 -12 -16 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Note: Data represents calendar year information Source: Market Outlook Source: International Council of Shoppi
Slide 95: Business Travel and Entertainment Continues to Improve
Business Travel and Entertainment Continues to Improve Business Travel and Entertainment Spending Index Q205=100 120 115 110 105 100 95 90 Q109 Q409 Q310 Q211 Q112 Q412 Note: Data represents calendar year information Source : Market Outlook 23
Slide 96: Luxury Hotel RevPar Growth Remains Strong
Luxury Hotel RevPar Growth Remains Strong Luxury RevPar vs. Prior Year 12.7% 12.2% 11.0% 11.7% 11.5% 10.8% 10.6% 8.6% 9.1% 8.4% 5.2% -3.7% -17.0% -25.9% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY10 FY11 FY12 FY13 Source: Smith Travel Research 24
Slide 97: Building the Modern Luxury Seafood Experience
Building the Modern Luxury Seafood Experience “Inverted Steakhouse” inspired by the storied seafood restaurants of New Orleans, San Francisco and Boston Classic fine dining service in a sleek, contemporary and vibrant atmosphere Luxury Brand Positioned for Growth 25
Slide 98: Dining Room and Lounge
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Slide 99: Building the Modern Luxury Seafood Experience
Building the Modern Luxury Seafood Experience “Inverted Steakhouse” inspired by the storied seafood restaurants of New Orleans, San Francisco and Boston Classic fine dining service in a sleek, contemporary and vibrant atmosphere Fresh seafood flown in daily, extensive oyster bar and prime stea
Slide 100: Jumbo Lump Crab Cake
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Slide 101: Building the Modern Luxury Seafood Experience
Building the Modern Luxury Seafood Experience “Inverted Steakhouse” inspired by the storied seafood restaurants of New Orleans, San Francisco and Boston Classic fine dining service in a sleek, contemporary and vibrant atmosphere Fresh seafood flown in daily, extensive oyster bar and prime stea
Slide 102: Establishing a Compelling Lifestyle Brand
Establishing a Compelling Lifestyle Brand Fresh grill and wine bar serving artistically-presented food with a modern calorie promise On-Trend Brand that Generates Guest Loyalty 30
Slide 103: Maui Tuna
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Slide 104: Establishing a Compelling Lifestyle Brand
Establishing a Compelling Lifestyle Brand Fresh grill and wine bar serving artistically-presented food with a modern calorie promise Seasonally-inspired culinary platform – Menu offerings and ingredients that fit and change with time of year – Flexibility to adapt to commodity cost pressures F
Slide 105: Well-Positioned Next Generation Bar and Grill Brand
Well-Positioned Next Generation Bar and Grill Brand Socially driven, island-inspired experience with strong appeal for Gen-X, Millennial and Multi-cultural demographics Continued menu evolution to enhance relevance while cuing fresh, flavorful and fun Broadly-Appealing Brand that Consumers Use f
Slide 106: Chipotle Beef Rice Bowl
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Slide 107: Ahi Tuna Stack
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Slide 108: Well-Positioned Next Generation Bar and Grill Brand
Well-Positioned Next Generation Bar and Grill Brand Socially driven, island-inspired experience with strong appeal for Gen-X, Millennial and Multi-cultural demographics Continued menu evolution to enhance relevance while cuing fresh, flavorful and fun Energizing experience with high alcoholic
Slide 109: Yard House
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Slide 111: Long Beach
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Slide 112: Our Name
Slide 113: Where We Live
Slide 114: Design
Slide 115: Stage
Slide 116: Our Hook
Slide 117: Slide 117
Slide 118: Chalkboards
Slide 119: Our Soul
Slide 120: Chef
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Slide 121: Scratch Kitchen
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Slide 122: Culinary Bridge
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Slide 123: Come As You Are, No Veto, Value
Slide 124: Our Vibe
Slide 125: Music Playlist Library
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Slide 128: No Separation
Slide 129: Energy
ENERGY
Slide 130: Our Glue
Slide 131: Servant Leadership
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Slide 133: Yard House Website
Yard House RESTAURANT LOCATIONS MENU ABOUT NOW OPEN in TOWN CENTER OF VIRGINIA BEACH SHOP HAPPY HOUR #208 TAP ROOMS ROSEVILLE RESTAURANT WEEK, April 18-24 Come to our location in The Fountains and enjoy a $20 prix-fixe menu. MOTHER'S DAY MENU, May 13 Available in all locations! No reservations neede
Slide 134: Our Guests
Slide 135: Core Age
CORE AGE 25°45
Slide 136: Percent Women
50 PERCENT WOMEN
Slide 137: MS S &, ~
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Slide 138: Innovate or Die
INNOVATE OR DIE.
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Slide 140: Superior Financial Results Through Industry Leading Sales
Superior Financial Results Through Industry Leading Sales Competitively superior average Diverse sales mix led by strong unit volumes of $8.4 million alcoholic beverage sales of 39% driven by four distinct day parts Daypart Diversification Sales Mix Happy hour 22% Food 57% Dinner Alcohol 39% 46%
Slide 141: Phased Integration Strategy on Track
Phased Integration Strategy on Track PEOPLE Retained all Key Operational Leaders PROCESS Anticipate Full Supply Chain Integration by the First Quarter of Fiscal 2014 SYSTEMS Migrating Transactional Activity to Darden’s Systems 69
Slide 142: Specialty Restaurant Group's Long-Term Growth Expectations
Specialty Restaurant Group’s Long-Term Growth Expectations Total annual sales growth of 17% to 19% – Same-restaurant sales growth of 2% to 4% – New restaurant growth of 15% Contributing 35% to 40% of Darden’s annual sales growth With expanding margins as we leverage the group’s operating platf
Slide 143: Specialty Restaurant Group…a Significant Growth Opportunity
Specialty Restaurant Group…a Significant Growth Opportunity Projected Growth by Fiscal 2018 RESTAURANTS: ANNUAL SALES: ANNUAL OPERATING PROFIT: 71
Slide 144: Darden Specialty Restaurant Group
J DARDEN Specialty Restaurant Group CAPITAL oA G-R:I-L-L-E PRIME SEAFOOD NOURISH & DELIGHT Everyone We Serve.
Slide 145: Market Outlook and Darden Supply Chain Implications
MARKET OUTLOOK AND DARDEN SUPPLY CHAIN IMPLICATIONS DARDEN SECURIT Y ANALYST S MEETING | FEBRUARY 2013 James Lawrence Chief Supply Chain Officer
Slide 146: Our Supply Chain Mission
Our Supply Chain Mission Support Our Growth Strategy by Providing a Competitive Advantage in Quality, Service, Innovation and Cost 2
Slide 147: Our Competitive Advantages
Our Competitive Advantages • Scale Advantages • Experience and Expertise • Sophisticated Tools and Processes • Consistent Cost Reduction Capability • Transformation and Automation Provides Us the Ability to Buy Better than the Market 3
Slide 148: A Robust Global Supply Chain
A Robust Global Supply Chain • $2.6 billion in purchases – 3,000 SKU’s – 1,500 suppliers – 20 countries • Global focus - Purchasing and Total Quality – TQ inspectors in 9 Countries • Move 34 million cases of product from 11 distribution centers operated by 3 distribution partners • Supplying over 2,
Slide 149: Annual Cost of Goods Drivers
Annual Cost of Goods Drivers % Total Food Cost Est FY13 Categories Spend Spend ($M) Considerations Seafood 24% $600 Lobster, shrimp, crab Beef 12% $300 Feed (corn, soy) costs / demand Produce 11% $260 Weather, trade issues Beverage 10% $250 Regulatory landscape Dairy 7% $180 Feed (corn, soy) costs &
Slide 150: Supply Chain Strategies
Supply Chain Strategies Implemented new organizational structure and process; “Integrated Sourcing Model” • New systems tool provides greater visibility to buying decisions and contract management – Enhanced buyer training – Improved price forecasting sophistication – Contract length reviews to opti
Slide 151: Supply Chain Strategies
Supply Chain Strategies • Supplier segmentation • Sourcing diversity… involving multiple domestic & international sources to increase price competition and supply security • Food Safety standards • Ever-increasing visibility and automation enables: – Optimized production – Increased freight and logi
Slide 152: Our Competitive Advantages Matter...
Our Competitive Advantages Matter... Darden’s Supply Chain vs. Key Benchmarks Darden PPI Index (CY07=100): Darden Indexed Cost per Guest vs. PPI (weighted by Darden basket of Goods) 125 120 115 110 105 100 95 90 Darden PPI - Darden Basket 85 J S D M J S D M J S D M J S D M J S D M J S D 2007 2008 20
Slide 153: Cumulative Food & Energy Cost Changes
Cumulative Food & Energy Cost Changes % Since Fiscal 2004 6% Cost Increase 4% 2% 0% -2% -4% Cost Decrease -6% FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 Est. Annual Impact Cum. Impact Annualized Food and Energy Inflations Less than 1% Since 2004 9
Slide 154: Megatrends Affecting Long Term U.S., Global Food and Agricultural Markets
Megatrends Affecting Long Term U.S., Global Food and Agricultural Markets Net takeaway: Strong growth in food demand from emerging markets will be the central megatrend over the next decade, keeping global prices strong • Global economic growth and the rise of the “middle class” in developing countr
Slide 155: Near-Term Outlook: Cattle / Beef
Near-Term Outlook: Cattle / Beef Drought has deteriorated pasture conditions and, coupled with high feed costs, is increasing herd liquidation • Beef production is expected to decline 3% to 4% in 2013 • Beef cattle industry is decentralized with an average of under 100 head per owner and owner age i
Slide 156: Near-Term Outlook: Seafood
Near-Term Outlook: Seafood Overall seafood costs are expected to rise nominally FY14 after record production and low prices in FY13 • Increased competition for shrimp and various other seafood items from developing economies will continue to keep upward pressure on costs • World shrimp supply is for
Slide 157: Near-Term Outlook: Energy
Near-Term Outlook: Energy Energy price volatility has declined during FY13. Supply shocks have been limited as the global markets continue to struggle with economic momentum • Crude Oil / Petroleum Products – World crude oil stocks are tightening, but signs of increased demand from China are being o
Slide 158: Darden Food / Energy Estimates for FY14
Darden Food / Energy Estimates for FY14 Price Annual Impact Categories Direction ($M) Comments Low seafood prices in FY13 will limit expansion and support prices. Seafood +1% to +3% Aquaculture shrimp markets are being followed closely regarding yield constraints. Alaskan snow crab quota reduced Hig
Slide 159: Contract Coverage -- Major Cost Components
Contract Coverage -- Major Cost Components Major Cost Components Coverage Coverage Category Q4 FY13 Jun-Dec FY14 Seafood 100% 35% Beef 80% 40% Chicken 100% 100% Dairy/Oil 18% 10% Pasta/Bread 100% 0% Produce 95% 95% Total Food 79% 37% 15
Slide 160: Summary
Summary • Commodity cost volatility will continue • Crop yields must continue to increase to keep pace with growing world demand • Weather will be primary price determinant over the next 12 to 24 months • High feed costs ensure livestock, poultry and aquaculture will remain constrained in the short