Slide 1: Investor Presentation Fiscal 2016 Q3 Update
Investor Presentation Fiscal 2016 Q3 Update
Slide 2: Disclaimer
Disclaimer IMPORTANT NOTICE The following slides are part of a presentation by Darden Restaurants, Inc. (the "Company") and are intended to be viewed as part of that presentation (the "Presentation"). No representation is made that the Presentation is complete. Forward-looking statements in this com
Slide 3: Non-GAAP Information
Non-GAAP Information The information in this communication includes financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”), such as adjusted net earnings per diluted share from continuing operations.
Slide 4: Darden Restaurants: An Attractive Investment For 2016 & Beyond
Darden Restaurants An Attractive Investment For 2016 & Beyond Premier full-service restaurant company with unifying mission and compelling strategy for generating attractive shareholder returns Darden’s competitive advantages drive sales and expand margins Differentiated and iconic brands posi
Slide 5: Premier Full-Service Restaurant Company
Premier Full-Service Restaurant Company 1 Mission Be financially successful through great people consistently delivering outstanding food, drinks and service in an inviting atmosphere making every guest loyal. 4 Competitive Significant Scale Extensive Data & Insights Rigorous Strategic Plannin
Slide 6: The Darden Advantage
The Darden Advantage Support best-in-class restaurant brands helping them reach their full Support best-in-class restaurant brands by helping them potential by leverage scale, insight, and experience reach their full potential Significant Scale Extensive Data & Insights Rigorous Strategic Planning
Slide 7: Significant Scale
Significant Scale Enables Supply Chain, G&A, and People Advantages Scale enables deep relationships with vendor partners Use supplier negotiation expertise and leverage Supply Consolidate vendors to achieve meaningful supplier relationships Chain Extend favorable Darden product pricing acros
Slide 8: Significant Scale: Emerging Trends Illustrate Progress
Significant Scale Emerging Trends Illustrate Progress on Scale Advantage Better Guest Proposition Significant Cash Generation Average Annual Restaurant Sales (owned) Adjusted Net Operating Income per ($M) Restaurant (owned and franchised) ~$4.5 $4.4 +1.1 ($ 000s) ~$300 +140 $3.4 $260 $160 FY16 Dar
Slide 9: Scale Drives G&A Advantage
Scale Drives G&A Advantage Important to Measure at Brand Level Darden brands demonstrate G&A advantage as part of Darden, especially the smaller brands This advantage equates to over $60 million in fiscal 2015 G&A savings per year vs. the industry “Norm” Total DRI G&A % of Sales 6.1% Adjusted G&
Slide 10: From a Complex, Centralized Organization
From a Complex, Centralized Organization Complicated Structure Lacking Clear Accountability Darden Executive Team Operating Growth Team Team CMO CROO Concept Marketing Operating Teams Leadership Team Leadership Team Enterprise Enterprise Olive Specialty LongHorn Marketing Operations Garden Restaur
Slide 11: To a Decentralized, Operations-focused Organization
To a Decentralized, Operations-focused Organization Centralized Support Where Scale Matters CEO Specialty Olive Garden LongHorn Restaurant President President Brand Presidents Operations Operations Operations Marketing Marketing Marketing Finance Finance Finance Human Human Human Resources Resourc
Slide 12: Extensive Data and Insights
Extensive Data and Insights Operationalize Data and Insights to Enhance Value Validated, insight-driven decisions Breadth and depth of data leads to Example Insight richer insights Build guest relationships Deep industry and consumer Develop relevant, Action understanding enables turning targeted
Slide 13: Rigorous Strategic Planning
Rigorous Strategic Planning Maximize Value of Business Planning Elevate enterprise value through Corporate Strategy Ensure we have the right portfolio of brands with a compelling logical fit Align strategies and coordinate operations to maximize the portfolio value Capture the available syne
Slide 14: Results-Oriented 'People' Culture
Results-Oriented “People” Culture Grow our Business and our People Focused talent and development strategy Performance Accountability Transparency 1 Superior Set challenging goals Coach employees and provide feedback Let every employee know where they stand Employment Behavior Differentiation Prop
Slide 15: Portfolio of Iconic Brands
Portfolio of Iconic Brands Total Average Annual Restaurant Sales* Restaurant Sales* Locations* $3.9 B $4.5 M 844 $1.6 B $3.3 M 479 $506 M $8.3 M 63 $414 M $7.5 M 54 $257 M $5.9 M 42 $218 M $5.8 M 37 $106 M $6.5 M 16 $7.0 B $4.5 M 1,535 * Twelve months ending February 28, 2016 14
Slide 16: Olive Garden
Olive Garden The Essence Italy Family Value The Purpose Olive Garden is where people of all ages gather to enjoy the abundance of great Italian food and wine and be treated like family The Advantage Never-ending abundance Welcomed by people who treat you like family Craveable Italian foo
Slide 17: Olive Garden: Brand-Building Imperatives
Olive Garden Brand-Building Imperatives Culinary Innovation & Execution Attentive Service Craveable Italian food Flawless execution of with a passion for wine the guest experience Engaging Atmosphere Integrated Marketing Modern, relaxing & Disruptive, real-time family-friendly environment & person
Slide 18: Olive Garden: Growth Drivers
Olive Garden Growth Drivers Consistently Great Experiences More Relevant Occasions Operations Excellence To-Go Catering Delivery Large Parties Beverage Focus Everyday Value Restaurant Openings & Refresh Breakthrough Communications Customized Refresh Package Unique Activations 360-Degree
Slide 19: LongHorn Steakhouse
LongHorn Steakhouse The Essence Steak Spices Fire Steel The Purpose LongHorn is the place for people who crave a flavorful, boldly seasoned steak in a down-to-earth setting that feels like a rancher’s home The Advantage Steak expertise Bold, unique proprietary seasonings Industry-leadi
Slide 20: LongHorn Steakhouse: Brand-Building Imperatives
LongHorn Steakhouse Brand-Building Imperatives Culinary Innovation & Execution Attentive Service Steak that is perfectly Guest loyalty through seasoned and expertly grilled service that over delivers Engaging Atmosphere Integrated Marketing Natural, warm setting Powerful campaign pulled of a ranch
Slide 21: LongHorn Steakhouse: Growth Drivers
LongHorn Steakhouse Growth Drivers Executional Improvements Enhanced Guest Experience Quality through simplification Convenience through Convenience through technology technology New Restaurants Targeted Communications Value-creating expansion Market-specific activations 20
Slide 22: The Capital Grille
The Capital Grille The Essence A private club open to the public The Purpose The Capital Grille is the ultimate relationship brand offering a welcoming and club-like dining experience The Advantage Exceptional and personalized service Hand-carved steaks, dry aged in-house Distinctive wine pl
Slide 23: Eddie V's
Eddie V’s The Essence The modern-day Gatsby The Purpose Eddie V’s is the destination for a glamourous night-out The Advantage Food as art Seafood flown in daily from around the world Vibrant, high-energy lounge with live jazz Stylish, yet sophisticated atmosphere Genuinely attentive serv
Slide 24: Yard House
Yard House The Essence Great Food Classic Rock 100+ Beer Taps The Purpose Yard House is the modern American gathering place where beer and food lovers unite The Advantage Eclectic, food-forward culture Broad and innovative beer and drink offering Relevant, lively atmosphere with carefull
Slide 25: Seasons 52
Seasons 52 The Essence Celebrating living well The Purpose Seasons 52 is the restaurant of choice for conscientious adults celebrating the goodness of life without compromise The Advantage Seasonally inspired, artisanal food, wine and spirits Nationally sourced local treasures 52 wines by th
Slide 26: Bahama Breeze
Bahama Breeze The Essence Your island oasis from the everyday The Purpose Bahama Breeze is the destination to disconnect, lighten up and have fun The Advantage Accessible, island-style cuisine Cocktails and music inspired by a Caribbean way of life Unique marketing initiatives tied to cultur
Slide 27: International Franchising
International Franchising The Brands Olive Garden LongHorn The Capital Grille The Purpose Leverage Darden’s iconic brands with select Olive Garden, Puerto Rico world class partners The Advantage Vibrant brand portfolio with global appeal Global supply chain economies Olive Garden, Malaysia
Slide 28: International Franchise Partners
International Franchising International Franchise Partners Jordan Lebanon Kuwait Mexico Bahrain Dominican Egypt SaudiQatar Republic Arabia UAE Oman Guatemala Honduras El Salvador Nicaragua Puerto Rico Costa Rica Malaysia Panama Colombia Peru Brazil Americana (U.A.E., Qatar, Bahrain, Kuwait, Jordan
Slide 29: Value Creating Business Model
Value Creating Business Model An Attractive Investment For 2016 & Beyond History of Stable and Growing Cash Flows Strong Balance Sheet with Investment Grade Profile Significant Return of Capital Improving Financial Performance Fiscal 2016 Annual Outlook Commitment to Superior Long-Term
Slide 30: History of Stable and Growing Cash Flows
History of Stable and Growing Cash Flows Adjusted EBITDA1 from Continuing Operations ($M) $911 $749 $698 $679 $655 $630 Fiscal 2011 Fiscal 2012 Fiscal 2013 Fiscal 2014 Fiscal 2015 Fiscal 2016 TTM Q3 CapEx $398 $458 $510 $415 $297 $239 Adjusted EBITDA / 1.6x 1.5x 1.3x 1.5x 2.5x 3.8x CapEx 1 Exclude
Slide 31: Strong Balance Sheet – Investment Grade Profile
Strong Balance Sheet – Investment Grade Profile Total Debt to Adjusted EBITDA Adjusted Debt to Adjusted EBITDAR1 Investment grade credit profile provides meaningful competitive advantages Flexible access to cost-effective debt financing 3.6x Better pricing on leases supporting efficient new
Slide 32: History of Returning Significant Capital
History of Returning Significant Capital Fiscal 2005-2015 Cumulative Capital Returns Cumulative Share Repurchase $ 2.8B 62% $781 Cumulative Dividends Paid $ 1.7B 38% $599 $560 $493 FCPT $502 Spin-Off $437 Yard House $415 $375 Acquisition RARE Acquisition 2007 $325 $385 $311 $140 $289 $434 $260 $25
Slide 33: Improving Financial Performance
Improving Financial Performance Strong Disciplined Value Creating Total Sales Growth Cost Management Earnings Growth Total Sales1 ($B) Adjusted EBIT Margin2 Adjusted EPS1,2 $6.90 9.5% $3.44 $6.54 6.6% $2.10 FY15 FY16 FY15 FY16 FY15 FY16 TTM Q3 TTM Q3 TTM Q3 +3.9% +290 bps 64% Same Restaurant Sales
Slide 34: FY2016 Annual Outlook
FY2016 Annual Outlook Same-Restaurant Total +3.0 to +3.5% Sales Restaurant Openings New Restaurant Openings 18 to 22 Tax Rate Annual Effective Rate 23% to 25% Adjusted Earnings Total $3.48 to $3.52 per Diluted Share1 Growth2 36% to 38% Total $230 - $255 Capital Expenditures New Restaurants $85 ($
Slide 35: Long-Term Value Creation Framework
Long-Term Value Creation Framework Annual Target, Over Time Same-Restaurant Sales 1% - 3% Business Performance New Restaurant Growth 2% - 3% 7% - 10% (EAT Growth) EBIT Margin Expansion 10 - 40bps Return of Dividend Payout Ratio 50% - 60% 3% - 5% Cash Share Repurchase ($millions) $100 - $200 Total
Slide 36: Value Creating Business Model
Value Creating Business Model An Attractive Investment For 2016 & Beyond History of stable and growing cash flows Significant free cash flow after healthy investment in underlying business Strong balance sheet with investment grade profile Flexible access to cost-effective debt financing
Slide 37: Results-Oriented 'People' Culture
Results-Oriented ‘People’ Culture “Our ‘Back-to-Basics’ operating philosophy exemplifies a value creating culture. This simple approach acknowledges that our brands come to life every day through our 150,000 team members. In our business, every guest matters and every employee matters.” Gene Lee CEO
Slide 38: Darden Restaurants: An Attractive Investment For 2016 & Beyond
Darden Restaurants An Attractive Investment For 2016 & Beyond Darden’s competitive advantages drive sales and expand margins Premier full-service restaurant company with unifying mission and compelling strategy for generating attractive shareholder returns Differentiated and iconic brands posi
Slide 39: Additional Information
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Slide 40: Large and Stable Casual Dining Industry
Large and Stable Casual Dining Industry $87B industry – 20% of the total restaurant industry Quick Service Full Service % of total 48% 7% 6% 20% 13% 5% $210 $87 $58 $30 $25 $23 Traditional QSR QSR retail Fast casual Midscale Casual dining Fine dining Casual dining industry is expected to show stable
Slide 41: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Non‐GAAP Reporting - General and Administrative Expenses and Net Operating Income - Slides 7 and 8 As described on slide 2, certain measures in this presentation are non-GAAP financial measures. The schedule below reconciles Net Earnings to adjusted Net Operating Inc
Slide 42: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Non‐GAAP Reporting - Slide 29 As described on slide 2, certain measures in this presentation are non-GAAP financial measures. The schedule below reconciles Earnings from Continui ng Operations to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
Slide 43: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Non‐GAAP Reporting - Credit Profile - Slide 30 As described on slide 2, certain measures in this presentation are non-GAAP financial measures. The schedule below reconciles Net Earnings for periods presented to Net Earnings before Interest, Taxes and Depreciation and
Slide 44: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Non‐GAAP Reporting - Financial Performance Indicators - Slide 32 As described on slide 2, certain measures in this presentation are non-GAAP financial measures. The schedule below reconciles Sales, Earnings Before Interest and Taxes (EBIT) and Net Earnings as reporte
Slide 45: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Non‐GAAP Reporting - Slide 33 As described on slide 2, certain measures in this presentation are non-GAAP financial measures. The schedule below reconciles Diluted Net Earnings Per Share from Continuing Operations from reported to adjusted. Fiscal 2015 Annual* Report
Slide 46: JX DARDEN
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