fourth quarter 2019 conference call€¦ · global systemwide sales growth of 4.4% na srs 2.8%;...

Fourth Quarter 2019Conference Call

February 26, 2020

© Quality Is Our Recipe, LLC

Greg LemenchickSenior Director – Investor Relations & Corporate FP&A


Forward-Looking Statements and

Non-GAAP Financial Measures

This presentation, and certain information that management may discuss in connection with this presentation, contains certain statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). For all such forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Reform Act.

Many important factors could affect our future results and could cause those results to differ materially from those expressed in or implied by our forward-looking statements. Such factors include, but are not limited to, those identified under the caption “Forward-Looking Statements” in our release issued on February 26, 2020 and in the “Special Note Regarding Forward-Looking Statements and Projections” and “Risk Factors” sections of our most recent Form 10-K / Form 10-Qs.

In addition, this presentation and certain information management may discuss in connection with this presentation reference non-GAAP financial measures (i.e. adjusted revenue, adjusted EBITDA, adjusted earnings per share, free cash flow and systemwide sales). These non-GAAP financial measures exclude certain expenses and benefits. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided in the Appendix to this presentation.

THE WENDY'S COMPANY | 3


AgendaCEO Update

2019 Results

2020 Outlook

IR Calendar

Q&A

Todd PenegorPresident & Chief Executive Officer


Global systemwide sales growth of 4.4%

NA SRS 2.8%; 3.7% on a two-year basis

Global expansion accelerates; opened 182 restaurants

Adjusted EBITDA* of ~$413M

Adjusted EPS* of $0.59

Year-to-Date free cash flow* of $221M

Returned ~$314M of cash to shareholders

System prepared and ready for breakfast launch


Full Year 2019 Highlights

* See reconciliation of non-GAAP financial measures in the Appendix.

9 Years of NA Same-Restaurant Sales Growth


1.6% 1.8% 1.6%

3.3%

1.6%2.0%

0.9%

2.8%

2012 2013 2014 2015 2016 2017 2018 20191-year 2-year

+3.4% +3.6%+3.4%+3.5%

+2.9%

+3.7%

+4.9% +4.9%

Gunther PloschChief Financial Officer



Full Year Financial Highlights

Adjusted Revenue Growth: 8.4%* Company Restaurant Margin: 15.5% Adjusted EBITDA: ~$413M*

Breakfast Investments Scanner Investment

Adjusted EPS: $0.59* Free Cash Flow: $221M*

*See reconciliation of non-GAAP financial measures in the Appendix

Fourth Quarter Financial Results $ Mils (except per share amounts)(Unaudited)


2019 2018 B/(W)

NA System SRS 4.3% 0.2% 2-Year 4.5%

Adjusted Revenues1 $341.7 $316.8 7.9%

Company Restaurant Margin 14.3% 16.0% (170 bps)

G&A Excl. Reserve for FI Case2 $53.9 $43.9 (22.8%)

Adjusted EBITDA1 $83.4 $107.8 (22.6%)

Adjusted EPS1 $0.08 $0.16 (50.0%)1 See reconciliation of non-GAAP financial measures in the Appendix2 Excludes the $27.5 million dollar legal reserve that was recorded in the fourth quarter of 2018 relating to the settlementof the Financial Institutions case

Todd PenegorPresident & Chief Executive Officer



Pillars of Accelerated Growth

Continue Expansion of U.S. Restaurant Footprint

Restaurant Economic Model

Accelerate U.S.Same-Restaurant Sales

1 More Visit, 1 More Dollar

Digital Acceleration

Operational ExcellenceAccelerate International

Expansion

Accelerate Global Restaurant Expansion

Breakfast


One More Visit, One More Dollar to Drive Further Growth


Breakfast Set to Launch Across the U.S. on March 2

THE WENDY'S COMPANY |

Poised for Continued Digital Growth in 2020

16

Delivery Partner Expansion

Enhance Mobile Ordering Capabilities

Increase Digital Awareness

THE WENDY'S COMPANY |


Focus on Speed & Great Tasting Food to Drive Operational Excellence


SYSTEMOPTIMIZATION

NEW RESTAURANTS

IMAGE ACTIVATION

U.S. Development Remains a Key Priority


International to Accelerate Growth in 2020

© Quality Is Our Recipe, LLC THE WENDY'S COMPANY | 20

WENDY’S CREATES JOY & OPPORTUNITY THROUGH FOOD, FAMILY & COMMUNITY

A place I love to go

CLEAN & WELL MAINTAINEDUP TO DATE

EASY & CONVENIENTUPBEAT & COMFORTABLE

FOODFood I love

FRESHHONEST INGREDIENTS

CRAVEABLE TASTEMADE RIGHT

VALUEWorth what I pay

COMPETITIVE PRICEWENDY’S QUALITYGREAT EXPERIENCE

SERVICEAn experience that

brings me back

FRIENDLYACCURATE

FAST

Q U A L I T Y I S O U R R E CI P E T R E A T P E O P L E W I T H R E S P E CT D O T H E R I G H T T H I N G P R O F I T M E A N S G R O W T H G I V E S O M E T H I N G B A CK

RESTAURANTS

Gunther PloschChief Financial Officer



Metric Outlook

Global Systemwide Sales ~$12.0 to $12.5B

Adjusted EBITDA ~$425 to $435M

Adjusted EPS ~$0.60 to $0.62

Capital Expenditures ~$75M

Free Cash Flow* ~$230M to $240M

2020 Outlook

*Excluding the approximately $20M settlement of the Financial Institutions Case. In 2020, we expect cash flows from operations of ~$305 to $315 million, also excluding the FI case.


2020 Outlook: Systemwide Sales Growth

~$10.9B

~4 - 5%

~6 - 8%~2% ~$12.0 – $12.5B


2020 Outlook: Adjusted EBITDA

~$413M

~$425 - $435M

THE WENDY’S COMPANY 25

2020 Outlook: Adjusted EPS Growth

$0.59

$0.60 - $0.62

26ACCELERATING GROWTH

2020 Outlook: Free Cash Flow

Free Cash Flow*~$230-$240 million

Capital Expenditures~$75 million

*Excluding the approximately $20M settlement of the Financial Institutions Case.

Capital Allocation Policy

Invest in the Business for Growth

Sustain an Attractive Dividend; Payout Ratio > 50%

Flexibility to Utilize Excess Cash to Repurchase Shares and/or Reduce Debt

1

2

3

Greg LemenchickSenior Director – Investor Relations & Corporate FP&A


Segment Reporting Overview


United StatesBusiness Unit

International Business Unit

Global Real Estate & Development

Investor Relations Calendar• March 3: BAML NDR (NYC)

• March 4: UBS Global Consumer & Retail Conference (Boston)

• March 12: JPM Gaming, Lodging, Restaurant & Leisure Forum (Las Vegas)

• May 6: First Quarter Earnings Release & Conference Call


Appendix

Reconciliation of Non-GAAP Financial MeasuresIn addition to the GAAP financial measures included in this presentation, the Company has presented certain non-GAAP financial measures (i.e., adjusted revenues, adjusted EBITDA, adjusted earnings per share, free cash flow and systemwide sales). These non-GAAP financial measures exclude certain expenses and benefits as detailed in the accompanying reconciliation tables.

This presentation also includes forward-looking guidance for certain non-GAAP financial measures, including systemwide sales, adjusted EBITDA, adjusted earnings per share and free cash flow. The Company excludes certain expenses and benefits from adjusted EBITDA, adjusted earnings per share and free cash flow, such as the impact from our advertising funds, including the net change in the restricted operating assets and liabilities and any excess or deficit of advertising funds revenues over advertising funds expenses, impairment of long-lived assets, reorganization and realignment costs, system optimization (gains) losses, net, loss on early extinguishment of debt, the gain on the sale of our investment in Inspire Brands, the impact of the proposed settlement of the Financial Institutions case and the timing and resolution of certain tax matters. Due to the uncertainty and variability of the nature and amount of those expenses and benefits, the Company is unable without unreasonable effort to provide projections of net income, earnings per share or net cash provided by operating activities or a reconciliation of those projected measures.


Reconciliations of Net Income to Adjusted EBITDA and Revenues to Adjusted Revenues


In Thousands (Unaudited)

Reconciliation of Net Income and Diluted Earnings Per Share to Adjusted Income and Adjusted Earnings Per Share


In Thousands except per-share amounts (Unaudited)

Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow


In Thousands (Unaudited)

fourth quarter 2019 conference call€¦ · global systemwide sales growth of 4.4% na srs 2.8%;...

Documents