The Cheesecake Factory Incorporated · NASDAQ:CAKE
The Cheesecake Factory — Cheesecake Factory — Investor Presentation (November 2017)
29 slides from The Cheesecake Factory's investor presentation, Nov 14, 2017
Slide 1: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements about our financial condition, results of operations, performance, plans, goals and other matters. These statements are based on our current expectations and involve known and unknown risks and uncertainties that may cause o
Slide 2: A Compelling Investment Opportunity
A Compelling Investment Opportunity • Highly differentiated concepts delivering experience a unique guest • • Diversified growth drivers Sustained track record of consistent financial performance • Robust cash flow to support growth and maximize shareholder value 3
Slide 3: Company Overview and Key Competitive Advantages
Company Overview and Key Competitive Advantages 4
Slide 4: Our Global Footprint
Our Global Footprint High quality, high profile locations worldwide Kuwait Bahra in (2) UAE Saudi China (2) (3) 5 Company-Owned 196 13 1 International - Licensed Middle East13 Mexico3 China25 Mexico Guadalajara Mexico City (2) Shanghai ng Kong Lebanon (1) (3) Qatar (1) Arabia(5) (1) Ho U.S.A. (Compa
Slide 5: The Cheesecake Factory - A Highly Differentiated Concept
The Cheesecake Factory - A Highly Differentiated Concept Bakery 6 Integrated Ambiance, Service and Hospitality Best-in-Class Operational Execution Leader in Menu Innovation
Slide 6: Industry Leader in Menu Innovation
Industry Leader in Menu Innovation Breadth of menu is a key competitive advantage Quality • 250 menu items made fresh from scratch in-house Relevance • No veto vote – something for everyone across price points Menu updated twice a year • Performance • • Drives sales Continued market share gains Prof
Slide 7: Dining With Us Is an Experience
Dining With Us Is an Experience Ambiance, Service and Hospitality Drive Sales 8
Slide 8: Leveraging Technology to Drive Sales
Leveraging Technology to Drive Sales 9 Online ordering expected to be in pilot by the end of fiscal 2017. Online Ordering New Guest Satisfaction Platform Delivery
Slide 9: Integrated Bakery – The "Cheesecake" Magic
Integrated Bakery – The “Cheesecake” Magic • Produces over 70 cheesecakes and other baked desserts Industry-Leading Dessert Sales 16% • Enables creativity and quality control 10
Slide 10: Broad Consumer Appeal
Broad Consumer Appeal A division of Vice Media LLC The women and men behind The Cheesecake Factory reveal the untold story of how a tiny Beverly Hills restaurant known for its brown bread became a global chain mentioned in Drake songs and on “Keeping up with the Kardashians.” With $32 a Moderate Ave
Slide 11: Strong Consumer Engagement Across Channels
Strong Consumer Across Channels Engagement It takes more than 30 minutes to prepare a small batch of our Sake Butter Sauce, and that’s just one of dozens of sauces that we prepare fresh in-house every day. 5M+ fans 370K followers Millions of Viewers 560K followers 12
Slide 12: Best-in-Class Operational Execution
Best-in-Class Operational Execution Average Tenure by Position Industry-Leading Retention Dual Management Structure Above 4-Walls 28 years 19 years 18 years 17 years 12 years 12 Senior VP of Operations Regional Vice President Area Director of Operations Area Kitchen Operations Manager General Manage
Slide 13: Leveraging Technology to Manage Costs
Leveraging Technology to Manage Costs 14 Dashboards Automated Production Call Market-Based Labor Analytics Kitchen Management System
Slide 14: Diversified Growth Drivers
Diversified Growth Drivers 15
Slide 15: The Cheesecake Factory – Returns-Focused Domestic Growth
The Cheesecake Factory – Returns-Focused Domestic Growth Opportunity for 300 domestic locations over time • • Site-based strategy Focused on premier locations – high street, lifestyle centers and A malls Infill and new markets Target 7,500 – 10,000 sq. ft. Expect to open as many as 4 - 6 Company-own
Slide 16: The Cheesecake Factory – Expanding International Licensed Presence
The Cheesecake Factory – Expanding International Licensed Presence • Expect as many as 4 - 5 restaurants to open under licensing agreements internationally in fiscal 2018 Continued expansion within current geographies Potential for additional geographies with current licensees Opportunity to add lic
Slide 17: Incremental Growth Opportunities
Incremental Growth Opportunities North Italia and Flower Child investment Bringing The Cheesecake Factory to Canada Further leveraging the power of The Cheesecake Factory brand in the CPG channel Measured growth of Grand Lux Cafe and RockSugar Internal development of a fast casual concept 18
Slide 18: Track Record of Consistent Financial Performance
Track Record of Consistent Financial Performance 19
Slide 19: Continuing to Outperform the Industry
Continuing to Outperform the Industry 2010 2011 2012 2013 2014 2015 2.6% 2016 3Q17 YTD 2.2% 2.0% 2.0% 1.5% 1.5% 1.2% 1.1% 1.0% 0.5% (0.2)% (0.5)% (0.8)% (1.2)% (1.4)% (1.4)% Knapp-Track Index 20
Slide 20: Managing Costs to Support Profitability
Managing Costs to Support Profitability Adjusted Earnings Per Share* $1.97 2010 2011 2012 2013 2014 2015 2016 2017E** 2018E** * Please see Appendix for GAAP to non-GAAP reconciliations. ** Midpoint of guidance ranges provided November 1, 2017. 21 $2.83 $2.59$2.63 $2.37 $2.10 $1.88 $1.64 $1.42
Slide 21: Our Restaurants Generate Significant Cash Flow
Our Restaurants Generate Significant Cash Flow Cash Flow and Strong Balance Sheet Provide Significant Financial ($ millions) $172 Flexibility $173 $148 ~$145 2010 2011 2012 2013 2014 2015 2016 2017E* 2018E* Free Cash Flow Proceeds from Exercise of Stock Options Free cash flow defined as cash flow fr
Slide 22: Effective Capital Allocation Supports Our Financial Objectives
Effective Capital Allocation Supports Our Financial Objectives ~$1 Billion in Share Repurchases Reducing WASO 3% Per Year Committed to Continuing ($ millions) to Grow Dividend 60,446 $13 2010 2011 2012 2013 2014 2015 Dividend 2016 2017E* Capex / Investment Share Repurchases WASO 23 *2017 guidance pr
Slide 23: Creating Value for Shareholders
Creating Value for Shareholders Long-Term Objective: Mid-Teens Total Return to Shareholders (EPS + Dividend) • 2017-2018 represents down cycle impact on margins Historical average of 8% - 8.5% operating margin Targeting recapture of 1%+ comparable sales growth at The Cheesecake Factory Support opera
Slide 24: A Compelling Investment Opportunity
A Compelling Investment Opportunity • Highly differentiated concepts delivering experience a unique guest • • Diversified growth drivers Sustained track record of consistent financial performance • Robust cash flow to support growth and maximize shareholder value 26
Slide 25: A Compelling Investment Opportunity
A Compelling Investment Greate Opportunity ¢ Highly differentiated concepts delivering a unique guest experience ¢ Diversified growth drivers ¢ Sustained track record of consistent financial performance * Robust cash flow to support growth and maximize shareholder value
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation In addition to the results provided in accordance with the Generally Accepted Accounting Principles (“GAAP”) in this presentation, the Company is providing non-GAAP measurements which present diluted net income per share excluding the impact of certain items and free cash flo
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation The Cheesecake Factory Incorporated Reconciliation of Non-GAAP Financial Measures ($ in thousands, except per share data) Fiscal Year 2010 2011 2012 2013 2014 2015 2016 Net Income (GAAP) After-tax impact from: - Impairment of assets and lease terminations (1) - Partial IRS se
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation The Cheesecake Factory Incorporated Reconciliation of Non-GAAP Financial Measures ($ in millions) Fiscal Year 2010 2011 2012 2013 2014 2015 2016 Cash Flow from Operations Capital Expenditures / Investments Free Cash Flow $ 167 42 $ 196 77 $ 195 86 $ 205 106 $ 240 114 $ 235 15
Slide 29: Non-GAAP Reconciliation
Non-GAAP Reconciliation The Cheesecake Factory Incorporated Reconciliation of Non-GAAP Financial Measures (8 in millions) Fiscal Year 2010 2011 2012 2013 2014 2015 2016 Cash Flow from Operations $ 167 $ 19% $ 19% $ 205 240 235 «=$ «303 Capital Expenditures / Investments 42 7 86 106 114 154 158 Free
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