Jack In The Box Inc. · NASDAQ:JACK
Jack In The Box — ICR Conference 2023
41 slides from Jack In The Box's conference presentation, January 2023
Slide 1: ICR Conference | January 2023
ICR Conference | January 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may be identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “goals,” “guidance,” “intend,” “plan,” “project
Slide 3: State of the Business and Areas of Investor Focus
• State of the Business & Fundamental Strength • Updates on Areas of Investor Focus o Refranchising o Technology Investments o G&A and Model Visibility o Acquisition Benefits & Synergies 3 Confidential & Proprietary Trade Secret Information—DO NOT DISTRIBUTE
Slide 4: State of the Business & Fundamental Strength
STATE OF THE BUSINESS & FUNDAMENTAL STRENGTH
Slide 5: Confidential & Proprietary Trade Secret Information—DO NOT DISTRIBUTE
Confidential & Proprietary Trade Secret Information—DO NOT DISTRIBUTE
Slide 6: Confidential & Proprietary Trade Secret Information—DO NOT DISTRIBUTE
6 Confidential & Proprietary Trade Secret Information—DO NOT DISTRIBUTE
Slide 7: Confidential & Proprietary Trade Secret Information—DO NOT DISTRIBUTE
7 Confidential & Proprietary Trade Secret Information—DO NOT DISTRIBUTE
Slide 8: Strategic Pillars
ep Improve Stakeholder Returns + Commu FINANCE Increase EBITDA ize Return On Invested Capital Grow Total Revenue Increase Open New a= open = STRATEGIC a= — PILLARS — BUILD DRIVE GROW BRAND OPERATIONS RESTAURANT LOYALTY EXCELLENCE PROFITS PROCESS Leverage Systems Scale to Maximize Supply Quality, Con
Slide 9: Our Strategic Pillars
OUR STRATEGIC PILLARS BUILD BRAND DRIVE GROW EXPAND LOYALTY OPERATIONS RESTAURANT OUR REACH EXCELLENCE PROFITS ek] DET bx te, ‘DETTER MEX:
Slide 10: Build Brand Loyalty priorities
• Enhance the Guest Experience with our C.R.A.V.E.D. Brand Positioning • Accelerate Product Innovation • Continue Our Digital Transformation • Scale Our Restaurant Reimage Program 10
Slide 11: Same-store sales and AUV trends
16.0% $1,873 $1,843 14.0% 12.0% $1,651 $1,543 $1,553 $1,581 $1,510 $1,531 10.0% $1,381 $1,412 8.0% 6.0% 4.0% 2.0% 0.0% 2015 2016 2017 2018 2019 2020 2021 2022 2013 2014 2015 2016 2017 2018 2019 2020 2021 * 2022 1-Year 2-Year 14.0% $1,540 $1,614 12.0% $1,461 $1,433 $1,406 $1,445 10.0% $1,260 $1,340 $
Slide 12: We Are Becoming a Formidable Digital Competitor
WE ARE BECOMING A FORMIDABLE DIGITAL COMPETITOR: 2019 Digital 2022 Digital Sales Sales 3PD Mobile Mobile (GrubHub) App Web 3PD (GrubHub, DoorDash, UberEats) 12 Confidential & Proprietary Trade Secret Information—DO NOT DISTRIBUTE
Slide 13: Drive Operations Excellence priorities
• Build the Capability of Our People & Franchisees with Training & a Consultative Approach • Improve the Guest Experience by Elevating Standards • Simplify Our Operations and Menu 13
Slide 14: Training certification levels
• Strengthened our training program that wasn't TOTAL CERTIFIED being utilized or monitored properly. • Implemented a manager and team member certification requirement. TEAM MEMBERS AND LEADERS CERTIFIED Today, Jack manager and team member training certifications are at record levels: RESTAURANT MAN
Slide 15: Retraining field leaders to focus on process
FOCUSED ON RETRAINING FIELD LEADERS TO FOCUS ON PROCESS: Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 • Jack service Alerts per 10k at lowest level in past five years: FY22 Current Year (FY22) o 3.8 in FY22 vs. 4.9 in FY21 • Jack’s first YOY improvement in Speed of Service in several qtrs.: o 0:08 improv
Slide 16: Dining room hours of operation
• Within one hour of pre-COVID hours of operation levels • Dining room openings & hours are tracking toward pre-COVID levels in late 2022 & YTD 2023 FY23 FY22 FY19 FY23 FY22 FY19 23.0 18.0 16.0 22.5 14.0 12.0 22.0 10.0 21.5 8.0 6.0 21.0 4.0 2.0 20.5 - P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 P13 P1 P2
Slide 17: Grow Restaurant Profits priorities
• Execute Financial Fundamentals • Develop and Implement System Pricing Discipline • Capture Acquisition Synergies 17
Slide 18: Line of sight into 200 bps of four-wall margin
WE NOW HAVE A CLEAR LINE OF SIGHT INTO 200 BPS OF JACK FOUR-WALL MARGIN REDUCTION, THROUGH FINANCIAL FUNDAMENTALS & EQUIPMENT INITIATIVES Equipment Ongoing through Q2 FY23 Simplification & optimization Q3 FY23 Outlier management per restaurant Ongoing FY23 / FY24 Supply chain synergies Ongoing FY23
Slide 19: Expand Our Reach priorities
• Accelerate Existing & New Franchise Awards (Development Agreements) • Continue Building Our New Restaurant Pipeline • Open & Value Engineer Our New, Flexible Prototypes
Slide 20: Store footprint by state
JIB:147 DT:5 JIB:2 DT:3 JIB:41 DT:9 JIB:34 DT:10 DT:10 JIB:78 DT:46 JIB:3 JIB:11 JIB:3 DT:34 JIB:17 DT:20 JIB:5 JIB:39 JIB:15 DT:10 JIB:4 JIB:944 DT:363 JIB: 8 JIB:18 JIB:175 DT:39 DT:12 DT:1 DT:24 JIB:8 JIB:583 DT:4 JIB:16 Jack stores only (10 states) Del Taco stores only (4 states) Jack & Del Taco
Slide 21: Potential store count
• Potential store count in • Potential store count in existing markets: existing markets: • Total potential store count • Total potential store count nationwide: nationwide: 21 Confidential & Proprietary Trade Secret Information—DO NOT DISTRIBUTE
Slide 22: Development agreement commitments
• Jack: 267 restaurant commitments via 68 development agreements since mid-2021 • Del Taco: 79 restaurant commitments via 11 development agreements since 2021 22 Confidential & Proprietary Trade Secret Information—DO NOT DISTRIBUTE
Slide 23: Gross openings and net unit growth
• Guided to positive net unit growth in 2023; first time in 4 years for Jack in the Box • First new franchisee in the Jack system in over a decade • New market openings in 2023 • Expected gross openings in 2023: 25-30 Jack restaurants & 8-12 Del Taco restaurants 27 26 22 17 18 16 20 19 17 19 18 12 1
Slide 24: Updates on Areas of Investor Focus
UPDATES ON AREAS OF INVESTOR FOCUS
Slide 25: Is Refranchising Accretive & What Is the Expected Pace?
IS REFRANCHISING ACCRETIVE & WHAT IS THE EXPECTED PACE?
Slide 26: What Are the Technology Investments & Priorities?
WHAT ARE THE TECHNOLOGY INVESTMENTS & PRIORITIES FOR 2023 AND BEYOND?
Slide 27: What Clarity Can You Provide on G&A?
WHAT CLARITY CAN YOU PROVIDE ON G&A?
Slide 28: What Synergy Benefits Might You Achieve?
WHAT SYNERGY BENEFITS MIGHT YOU ACHIEVE?
Slide 29: How we are thinking about Del Taco refranchising
• HOW WE ARE THINKING ABOUT DEL TACO REFRANCHISING: o Long-term: Asset-light model, reduce business volatility o Medium-term: Incremental development o Short-term: EBITDA preservation • WE ARE IN A FAVORABLE POSITION TO BE SELECTIVE AND PATIENT: o Accretive transactions with incremental development,
Slide 30: Is Refranchising Del Taco Accretive?
IS REFRANCHISING DEL TACO ACCRETIVE? ABSOLUTELY & HERE IS HOW: Restaurants 120 Average Unit Volume (AUV) ~$1.5 Sales $180 Restaurant Level Margin ($32) Franchise Level Margin $9 G&A Reduction(1) ($3) Advertising Reduction ($9) EBITDA Impact ($11) Depreciation Reduction(2) $4 EBIT Impact ($6) EPS (As
Slide 31: Technology: Uninterrupted Operations, Rebuild, Rapid Innovation
Uninterrupted Rebuild Rapid Operations the Foundation Innovation 31
Slide 32: Uninterrupted Operations
Increased investment to stabilize core technology platforms resulting in: • Reduced monthly Help Desk calls • Improved systems availability • Retirement of outdated legacy applications Uninterrupted • Stablized restaurant payment Operations 32
Slide 33: Rebuild the Foundation
• Strong leadership focused on building team/capabilities for the future • Developed multi-year integrated technology roadmap o Corporate systems to efficiently run the enterprise o Restaurant technology to increase operations excellence o Digital tech platforms to maximize top-line potential Rebuil
Slide 34: Rapid Innovation
Modernization investments will unlock innovation opportunities to grow store profitability and enterprise value: • Digital menu boards to deliver content effectively to guests at the right time • Artificial intelligence to predict behaviors and improve order accuracy Rapid • Machine learning models
Slide 35: 2023 G&A guidance
2023 G&A guidance (~2.3-2.5% of systemwide sales, including needed investments) • Fair ongoing run rate, as we continue to assess & implement synergy & integration savings, ERP & tech spend • Aided by synergies and shared services, we don’t anticipate G&A expense acceleration at same levels in 2024
Slide 36: One-time benefits and Hawaii transaction
• Reminder of one-time benefits to OpEPS in 2022 not recurring in 2023 o Share-based compensation ($5M increase vs. 2022) o 2022 chicken settlement ($2.2M benefit in 2022) o Insurance adjustments ($1.7M increase vs. 2022) • Hawaii transaction already reflected in guidance but will be a $7.3M benefit
Slide 37: Benefits of combining the two brands: synergy opportunity
THERE ARE MEANINGFUL BENEFITS ASSOCIATED WITH COMBINING THE TWO BRANDS INCLUDING: Synergy Opportunity During Each Fiscal Year • Supply chain consolidation and Consolidated EBITDA Benefits scale FY22 FY23* FY24** • Elimination of public company Restaurant Level Margin ~$0M ~$2M ~$7M costs & labor red
Slide 38: Summary and updates on investor focus areas
• FUNDAMENTALS EXTREMELY STRONG HEADING INTO 2023 • UPDATES ON AREAS OF INVESTOR FOCUS: o Refranchising: Strong position to be selective with accretive transactions o Technology Investments: Focused on stabilization, modernization, then innovation o G&A and Model Visibility: Proactively provide insi
Slide 39: Q1 2023 earnings date
Q1 2023 earnings to be reported on February 22, 2023 39
Slide 40: 2023 Investor Day
2023 Investor Day! • Management team presentations, new finance leadership • Strategy updates • Further visibility on long-term earnings and overall outlook for the business Stay tuned for info on dates and location! 40
Slide 41: Investor Relations contact
Investor Relations: chris.brandon@jackinthebox.com Chris Brandon, VP of IR 619.902.0269