Attached files
| file | filename |
|---|---|
| 8-K - 8-K - DUNKIN' BRANDS GROUP, INC. | a8kinvpresoct2016.htm |
Q3 2016
Dunkin’ Brands
Investor Presentation
1
Forward-Looking Statements
• Certain information contained in this presentation, particularly information regarding future economic performance, finances, and
expectations and objectives of management constitutes forward-looking statements. Forward-looking statements can be identified by the
fact that they do not relate strictly to historical or current facts and are generally contain words such as “believes,” “expects,” “may,” “will,”
“should,” “seeks,” “approximately,” “intends,” “plans,” “estimates” or “anticipates” or similar expressions. Our forward-looking statements are
subject to risks and uncertainties, which may cause actual results to differ materially from those projected or implied by the forward-looking
statement.
• Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions
nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which speak only as
of the date hereof. We do not undertake to update or revise any forward-looking statements after they are made, whether as a result
of new information, future events, or otherwise, except as required by applicable law. For discussion of some of the important factors that
could cause these variations, please consult the “Risk Factors” section of the Company’s most recent Annual Report on Form 10-K. Nothing
in this presentation should be regarded as a representation by any person that these targets will be achieved and the Company undertakes
no duty to update its targets.
• Regulation G
This presentation contains certain non-GAAP measures which are provided to assist in an understanding of the Dunkin’ Brands Group, Inc.
business and its performance. These measure should always be considered in conjunction with the appropriate GAAP measure.
Reconciliations of non-GAAP amounts to the relevant GAAP amount are available on www.investor.dunkinbrands.com.
2
YEARS OF BRAND
HERITAGE
SIGNIFICANT U.S. &
GLOBAL GROWTH OPPORTUNITY
ASSET-LIGHT, NEARLY
60+ 100%
FRANCHISED BUSINESS
Dunkin’ Brands is unique in the QSR space
3
76% 18
%
6%
OF 2015
SEGMENT
REVENUE
OF 2015
SEGMENT
REVENUE
OF 2015
SEGMENT
REVENUE
Focused Strategies to Drive Incremental Profitable
Growth for Dunkin’ Brands and Franchisees
INCREASE COMPARABLE STORE
SALES AND PROFITABILITY
IN DD U.S.
INCREASE COMPARABLE
STORE SALES AND DRIVE STORE
GROWTHFOR BR U.S.
CONTINUE DD U.S.
CONTIGUOUS STORE
EXPANSION
DRIVE ACCELERATED
INTERNATIONAL GROWTH
ACROSS BOTH BRANDS
ENHANCE GLOBAL BRAND
RELEVANCE THROUGH CPG
5
Capitalizing on Near-Term Growth;
Laying Groundwork for the Future
6
GROW comp store
sales growth of BR U.S.
DRIVE accelerated international
growth across both brands
SHORT-TERM
GROWTH DRIVER
MEDIUM-TERM
GROWTH DRIVER
LONG-TERM
GROWTH DRIVER
ENHANCE global brand relevance through CPG
ACCELERATE DD U.S. contiguous store expansion
GROW comp store sales and profitability in DD U.S.
INCREASE COMPARABLE STORE SALES
AND PROFITABILITY IN DD U.S.
7
Strong Dunkin’ Donuts U.S. Comp Growth Momentum
Resilient Comp Performance Throughout Economic Cycles
8
Notes:
• Fiscal year end changed from August to December starting in 2006.
• Beginning in Q3 2015, DD U.S. comparable store sales growth is calculated using only sales from franchisee- and
company-operated restaurants that have been open at least 78 weeks and that have reported sales in the
current and comparable prior year week. Prior to that period, DD U.S. comparable store sales growth was
calculated including only sales from franchisee- and company-operated restaurants that had been open at least
54 weeks and that had reported sales in the current and comparable prior year week. There is a reconciliation of
78 week vs. 54 week comparable store sales growth available on the Company’s website.
45
CONSECUTIVE QUARTERS
OF COMPARABLE STORE
SALES GROWTH
Dunkin’ Donuts U.S. Strategies: Continuing the evolution
9
Building our
Coffee Culture
Faster and Improved
Product Innovation
Becoming a Digital
Leader
Improving Restaurant
Experience
Targeted Value and
Smart Pricing
Building a strong Dunkin’ Donuts U.S.
digital ecosystem to power targeted 1:1 engagement
10
21M+
Mobile App
Users
7M+
Email
Subscribers
5.4M
DD Perks
Members
15M+
Social
Connections
CONTINUE DD U.S.
CONTIGUOUS STORE EXPANSION
11
Opportunity to Double Dunkin’ Donuts U.S. Footprint
1 As of end Sept. 2016 12
REGION STORES1 PENETRATION1
Core 4,099 1:8,800
Established 2,836 1:18,900
Emerging 1,282 1:69,000
West 412 1:315,000
TOTAL 8,629 1:35,700
Significant Long-Term Expansion
Opportunity for Dunkin’ Donuts U.S.
13
DD PRO FORMA LONG-TERM PENETRATION
8,629
~17,000+
1:8,200 1:14,600 1:23,000 1:25,000 1:18,300
Proven Track Record of Accelerating Growth
14
206
243
291
371
DUNKIN’ DONUTS U.S. NET DEVELOPMENT
405
3.1% 3.6% 4.1% 5.1% 5.3%
1 Excludes the closing of 81 Speedway self-serve coffee stations
5.3%
Compelling Unit Economics
Driving Accelerated Growth
15
AVERAGE UNIT VOLUMES
$900,000
CASH-ON-CASH RETURNS
20%
AVERAGE INITIAL CAPEX
$485,000
2014 West & Emerging Cohort Store-Level Economics – Traditional Stores
As of Sept. 2016
Standalone, Traditional Dunkin Donuts Restaurants only
DRIVE ACCELERATED
INTERNATIONAL GROWTH
ACROSS BOTH BRANDS
.
16
Note: Unit count as of end of Sept. 2016
Both brands have strong international
presence with significant growth potential
17
Store count:
5,939
684
583
100
1,316
6,000
Growing our international business in
highest-profit potential markets
DD Europe off to good start;
promising future
DD & BR Middle East consistent strong
performers
Excitement for DD & BR in China after
reformatting
DD & BR steady growth in Southeast Asia
DD Latin America has upside potential
18
INCREASE COMPARABLE
STORE SALES AND DRIVE STORE
GROWTH FOR BR U.S.
19
(0.9)% Q3 2016 comps
Expecting slightly positive comp
store sales in 2016
Driving topline sales with
technology
Attractive franchising offers
Growing with top-performing
franchisees
20
Restaurant base optimization
complete
Growing brand advertising
fund
20
Returning Baskin-Robbins U.S. to Growth
Expecting 5 to 10 net
new restaurants in 2016
Improving unit economics Opened 19 net new restaurants
in 2015
ENHANCE GLOBAL BRAND
RELEVANCE THROUGH CPG
21
Strong Dunkin’ K-Cup Launch in Retail –
300M+ Dunkin’ K-Cups sold in 1st year totaling nearly $220M in retail sales1
22
Enhancing and growing brand awareness
1 As reported by IRI retail scanner data
CAPITAL STRUCTURE &
SHAREHOLDER RETURNS
23
Franchisee-Model Enables Leveraged
Capital Structure and Financial Flexibility
24
Deleverage
EBITDA growth & required
amortization payments
Share Repurchase
Offset dilution from exercising of stock
options & other opportunistic repurchases
Dividends
Raised quarterly dividend by 13% from
$0.265 in 2015 to $0.30 in Q1 2016
4.6
• COMPLETED $2.6B REFINANCING OF EXISTING LONG-TERM DEBT
THROUGH SECURITIZATION IN Q1 2015
• PROVIDES STABILITY OF FIXED INTEREST RATE FOR NEXT SEVERAL YEARS
* Estimated pro-forma net-debt-to-Adjusted-EBITDA ratio following Q1 2015 refinancing. Does not include excess cash
proceeds from refinancing expected to be used under Company's existing authorized share buyback program.
5.0*
GROWTH TARGETS
25
2016 Guidance
26
DUNKIN’ DONUTS U.S.
0 – 2% comp store sales growth
Expect to be at low end of 430 – 460 total net unit
development (excluding Speedway closures)
INTERNATIONAL (DD & BR)
Approximately 200 total net unit development
BASKIN-ROBBINS U.S.
Slightly positive comp store sales growth
5 – 10 total net unit development
BUSINESS SEGMENTS DUNKIN’ BRANDS
Approximately 2% revenue growth (53-rd week
worth app. 100 basis points)
27 – 30% GAAP operating income growth
8 – 10% adjusted operating income growth
$2.02 – 2.08* GAAP EPS on 53-week basis
$2.20 – 2.22* Adjusted EPS on 53-week basis
* Fiscal Year 2016 is a 53-week year. The projected impact of the 53rd week is approximately $0.03.
Q3 2016
Dunkin’ Brands
Investor Presentation
27