 Investor
Day 2017 February 16, 2017
© Quality Is Our Recipe, LLC
Exhibit 99.1 Exhibit 99.1 |
 Opening
Video 2 |
 Peter
Koumas Director –
Investor Relations © Quality Is Our Recipe, LLC 3 |
 Time Topic Speaker 8:35 a.m. CEO Overview Todd Penegor 9:05 a.m. 2016 Results, 2017 Guidance, 38-40% Adj. EBITDA Margin, 2020 Free Cash Flow, Capital Allocation Gunther Plosch 9:40 a.m. Break 9:50 a.m. Marketing: The Wendy’s Definition of Winning Kurt Kane 10:20 a.m. Expanding Brand Access & Increasing Brand Relevance Abigail Pringle 10:55 a.m. International: Vision for 2020 Bob Wright 11:30 a.m. Lunch 12:10 p.m. Restaurant Margin Bob Wright 12:35 p.m. Technology: A Deliciously Different Customer Experience David Trimm 12:55 p.m. CEO Wrap-Up Todd Penegor 1:05 p.m. Q&A 2:00 p.m. Departure 4 |
 5 THE WENDY'S COMPANY | 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 not historical facts, including information concerning possible or assumed future results of our operations. Those statements constitute “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act
of 1995 (The “Reform Act”). For all 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, all of which are difficult
or impossible to predict accurately, and many of which are beyond our
control, include but are not limited to those identified under the
caption “Forward-Looking Statements” in our news release
issued on February 16, 2017 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 EBITDA,
adjusted EBITDA margin, adjusted earnings per share, adjusted tax rate
and free cash flow). 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, and are included in our
news release issued on February 16, 2017 and posted on
www.aboutwendys.com.
As used in this presentation, the terms adjusted EBITDA and adjusted
earnings per share refer to adjusted EBITDA from continuing operations and
adjusted earnings per share from continuing operations,
respectively. |
 2017
Investor Relations Calendar: Q1(Tentative) •
Tuesday, February 21: JPMorgan NDR (Boston)
• Wednesday, February 22: JPMorgan NDR (New York) • Wednesday, March 15: Nomura/Instinet NDR (Chicago) • Thursday, March 16: Barclays NDR (Kansas City / Minneapolis) • Thursday, April 6 – Friday, April 7: Evercore NDR (Dallas / Austin / Houston) • Wednesday, May 10 – First Quarter Earnings 6 THE WENDY'S COMPANY | |
 Todd
Penegor President & Chief Executive Officer
© Quality Is Our Recipe, LLC
7 |
 8 THE WENDY'S COMPANY | |
 16
Consecutive Quarters of N.A. SRS Growth 0.7%
0.4% 3.1% 2.9% 1.8% 0.7% 3.2% 0.7% 1.6% 1.6% 3.2% 2.2% 3.1% 4.8% 3.3% 3.6% 0.4% 1.4% 0.8% 1.6% Q1 Q2 Q3 Q4 E Annual E 2013 2014 2015 2016 +6.8% +2.6% +4.5% +5.6% +4.9% 9 THE WENDY'S COMPANY | |
 Completed the Third Phase of System
Optimization; 537 Restaurants Sold,
$435M of Pretax Proceeds
149 Global New Restaurant Openings;
58 Global Net New Restaurant Openings
Highest Global Total and Net New
Restaurant Openings since 2005
Improvement of 630 bps in Adj. EBITDA
Margin to 27.3%* Free Cash Flow Turned Positive; YOY Growth of ~$70M Total Shareholder Return of ~30% 2016 Highlights * See reconciliation of non-GAAP financial measures in the Appendix. 10 THE WENDY'S COMPANY | |
 2012 - Company Restaurants - IA Restaurants 11 1,427 Company Restaurants (~22% Company Ownership) 74 IA Restaurants |
 2013 - Company Restaurants - IA Restaurants System Optimization I Announced 12 |
 2014 - Company Restaurants - IA Restaurants System Optimization II Announced 13 |
 2015 - Company Restaurants - IA Restaurants System Optimization III Announced 14 |
 2016 - Company Restaurants - IA Restaurants 330 Company Restaurants (~5% Company Ownership) 1,933 IA Restaurants 15 |
 N.A. Image
Activation Momentum Continues THE WENDY'S COMPANY |
16 Total System Annual
Reimages & New Builds*
Total System Cumulative
Reimages & New Builds*
~32% of N.A. system Image Activated at the end of 2016 * Counts include Franchise Reimages open or under construction 10 64 234 486 519 620 2011 2012 2013 2014 2015 2016E 10 74 308 794 1,313 1,933 2011 2012 2013 2014 2015 2016E |
 N.A.
Franchisee Composition Progression 17
THE WENDY'S COMPANY |
>100 <10 10-29 30-100 2012 2016 Average N.A. Franchisee Ownership 2012: 11 Restaurants / 2016: 15 Restaurants >100 <10 10-29 30-100 ~440 ~375 |
 THE
WENDY'S COMPANY | 18 Franchisee Attitude and Optimism Supports
Growth 7.4
7.4 8.4 2012 2014 2016 Post Franchise Update Meeting “On a scale of 1 to 10, please rate your overall attitude and optimism regarding the Wendy’s Business”
|
 THE
WENDY'S COMPANY | 19 Franchisee Attitude and Optimism Supports
Growth Source: Wendy’s 2016 Franchise Business Review
Survey +9 pts
+6 pts +5 pts +4 pts +2 pts General Satisfaction Financial Opportunity Franchisee Community Training & Support Leadership Wendy's Food & Beverage Peers |
 Brand
Health Metrics Showing Major Momentum
2 2 0 8 13 2012 2013 2014 2015 2016 THE WENDY'S COMPANY | 20 Source: Wendy’s Consumer Tracking; Number of Brand Health Metrics Showing YOY Improvement |
 THE
WENDY'S COMPANY | 21 Customer Satisfaction is Rapidly
Improving Overall Satisfaction
Taste Friendliness Speed Accuracy Cleanliness North America (last 90 days) 8/5/16-11/2/16 11/3/16-1/31/17 Best In Class |
 THE
WENDY'S COMPANY | 22 Consistency is a Key Focus Area
© 2016 Service Management Group | Confidential | All rights reserved | YTD
2016 Overall Satisfaction
Taste Friendliness Speed Accuracy Cleanliness |
 THE
WENDY'S COMPANY | 23 Higher Quality of Earnings –
Sustained, Predictable Growth
Expect ~78% of our ~670 owned real estate properties to generate rental
income 2017 (E)
~5% Co. Ownership 50% 50% 80% 20% 2012 (A) ~22% Co. Ownership Royalties, Net Rent & Net Fran. Fees Company Restaurants |
 THE
WENDY'S COMPANY | 24 Quality of Earnings Evolution Staying the
Course $ Mils
Adj. EBITDA Margin 13% Adj. EBITDA Margin 32-34% * Adjusted to Reflect Bakery Results as Discontinued Operations Five Year Projected Adj. EBITDA Growth ~ 27% while selling ~1,100 Restaurants $315 $396-404 ~ ($265) ~ $90 ~$85 ~$70 ~$60 ~$20 ~$10 ~$15 2012 Adj. EBITDA * Disposed Restaurant EBITDA "Core" Earnings Growth Net Rental Income (S.O.) Royalties (S.O.) G&A Savings (S.O.) G&A Savings (2014 Resource Realignment) 2017 Buy and Flip Income (Net) 2017 G&A Efficiencies (ZBB) 2017 Estimated Adj. EBITDA |
 QSR is
the Place to Be… Wendy’s Stands Out in the Crowd
Convenience Value Quality THE WENDY'S COMPANY | 25 1 2 3 73.9% 74.8% 75.5% 76.1% 76.8% 77.9% 78.7% 79.7% 80.8% Source: The NPD Group / CREST ® Y/E February QSR Traffic Share of All Restaurant Meals |
 Wendy’s 2020 Goals
THE WENDY'S COMPANY | 26
Global Restaurant Sales
~$12 billion Global Restaurant Count ~7,500 Global Image Activation 70%+ Adj. EBITDA Margin 38-40% Free Cash Flow ~$275 million |
 Wendy’s 2020 Goals
New Comprehensive Target Encompassing
North America and International
North America: ~$11 billion
International: ~$1 billion
~$10 billion of Global Restaurant Sales in 2016
Key Drivers: SRS Growth Image Activation Net New Restaurant Openings Global Restaurant Sales* ~$12 billion THE WENDY'S COMPANY | 27 * Constant Currency, excludes Venezuela |
 Wendy’s 2020 Goals
Net New Restaurant Openings in North America
and International are imperative to our growth
algorithm Ended 2016 with 6,537 Global Restaurants Key Drivers: Improving Sales to Investment Ratio Optimizing Incentives Enhancing Restaurant Level Margins Restaurant Designs to Support All Trade Areas Global Restaurant Count ~7,500 THE WENDY'S COMPANY | 28 |
 Wendy’s 2020 Goals
Key Brand Priority in North America and
International ~32% Image Activated at the end of 2016 Compelling Economics and Consumer Response Driving Franchisee Adoption Opportunity to Drive People Activation to Enhance Customer Experience Global Image Activation 70%+ THE WENDY'S COMPANY | 29 |
 Wendy’s 2020 Goals
>25pp improvement since 2012
Driven by System Optimization and Converting
Restaurant EBITDA into Rents and Royalties;
Continued Tight G&A Management
All components of P&L must contribute:
N.A. SRS & Net Unit Growth
International Growth
Company Restaurant Margin Growth
Accelerated G&A Savings
Adj. EBITDA Margin* 38-40% THE WENDY'S COMPANY | 30 * Adj. EBITDA divided by total revenue; does not include potential effects of changes in accounting standards |
 Wendy’s 2020 Goals
Driven by System Optimization and Converting
Restaurant EBITDA into Rents and Royalties;
Continued Tight G&A Management
Capital Expenditure Reductions
Brand Transformation provides resiliency and better
predictability Allows continued focus on returning significant amounts of cash to shareholders while still Investing for Growth Free Cash Flow* ~$275 million THE WENDY'S COMPANY | 31 * Cash from Operations Less CAPEX; does not include potential effects of changes in accounting standards |
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WENDY'S COMPANY | 32 c |
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WENDY'S COMPANY | 33 c |
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WENDY'S COMPANY | 34 c |
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 THE
WENDY'S COMPANY | 39 |
 David Trimm Chief Information Officer Kurt Kane Chief Concept & Marketing Officer Abigail Pringle Chief Development Officer Scott Weisberg Chief People Officer Bob Wright EVP, Chief Operations Officer & International Todd Penegor President & CEO Gunther Plosch Chief Financial Officer Liliana Esposito Chief Communications Officer Leadership Team Now In Place E.J. Wunsch Chief Legal Officer & Secretary 40 |
 It all
comes back to the basics: SERVE
customers the best tasting FOOD at a good VALUE in a clean, comfortable
RESTAURANT and they’ll keep coming back. 41 |
 Gunther
Plosch Chief Financial Officer
© Quality Is Our Recipe, LLC
42 |
 2016
Preliminary Results 2017 Guidance
38-40% Adj. EBITDA Margin
2020 Free Cash Flow Capital Allocation Agenda THE WENDY'S COMPANY | 43 |
 2016 4Q
Preliminary Results THE WENDY'S COMPANY | 44
2016E (13 weeks) 2015* (14 weeks) B/(W) N.A. System SRS 0.8% 4.8% 2-Year 5.6% N.A. Co. Rest. Margin 18.8% 19.2% (40) bps G&A $61.2 $72.4 15.5% Adjusted EBITDA** $91.1 $107.6 (15.3%) Adjusted EBITDA Margin** 29.4% 23.2% +620 bps Adjusted EPS** $0.08 $0.12 (33.3%) $ Mils (except per share amounts) (Unaudited) ** See reconciliation of non-GAAP financial measures in the Appendix. * Due to the May 2015 sale of its bakery business, the Company has presented its bakery results as discontinued operations in its financial statements. |
 2016
Full Year Preliminary Results THE WENDY'S COMPANY |
45 2016E (52 weeks) 2015* (53 weeks) B/(W) N.A. System SRS 1.6% 3.3% 2-Year 4.9% N.A. Co. Rest. Margin 19.1% 17.7% +140 bps G&A $245.9 $256.6 4.2% Adjusted EBITDA** $391.9 $392.4 (0.1%) Adjusted EBITDA Margin** 27.3% 21.0% +630 bps Adjusted EPS** $0.40 $0.33 21.2% Free Cash Flow $30.9 ($39.1) +$70.0 $ Mils (except per share amounts) (Unaudited) ** See reconciliation of non-GAAP financial measures in the Appendix. * Due to the May 2015 sale of its bakery business, the Company has presented its bakery results as discontinued operations in its financial statements. |
 Delivering G&A Commitments THE WENDY'S COMPANY | 46 * Adjusted to Reflect Bakery Results as Discontinued Operations $ Mils (Unaudited) $257 $246 $4 $11 ($4) ($3) $3 2015 G&A* Legal / Professional Services Other 53rd Week Incentive Compensation System Optimization 2016 Preliminary G&A |
 Improved Quality of Earnings
$ Mils (Unaudited) * Adjusted to Reflect Bakery Results as Discontinued Operations * Adj. EBITDA Margin 21.0% Adj. EBITDA Margin 27.3% $392 $392 $65 $17 $10 $8 ($1) ($7) ($92) 2015 Adj. EBITDA Royalties, Net Franchise Fees & Net Rental Income Restaurant EBITDA (incl IA) Lease Buyout G&A (Excl. 53rd wk) Other Lapping 53rd Week Sold Restaurant EBITDA (S.O. II & III) 2016 Preliminary Adj. EBITDA 47 THE WENDY'S COMPANY | |
 Adjusted EPS Growth * Adjusted to Reflect Bakery Results as Discontinued Operations * (Unaudited) +21% Growth 2015 Share Repurchases Depreciation Tax Rate Interest Expense 2016 Preliminary Adj. EPS $0.33 $0.40 0.02 $0.03 $0.08 0.06) $ ($ 48 THE WENDY'S COMPANY | Adj. EPS |
 Free
Cash Flow Turns Positive $ Mils
(Unaudited) Earnings 2016 Preliminary Results * Mainly due to deferred income taxes, excess tax benefits from share-based compensation, and taxes related to the Arby's dividend
($39) 2015 CapEx Working Capital Arby's Dividend Other Tax Items* $67 ($55) ($40) $102 ($4) $31 ~$70M YOY Improvement 49 THE WENDY'S COMPANY | |
 2016
Preliminary Results 2017 Guidance
38-40% Adj. EBITDA Margin
2020 Free Cash Flow Capital Allocation Agenda THE WENDY'S COMPANY | 50 |
 2017
Guidance THE WENDY'S COMPANY | 51
3.3% 1.6% 2-3% 2015 2016E 2017E 17.7% 19.1% Flat 2015 2016E 2017E N.A. System SRS Growth N.A. Company Restaurant Margins |
 2017
Guidance G&A
Adjusted EPS +21% +13 -+18% $ Mils (except per share amounts) * Adjusted to Reflect Bakery Results as Discontinued Operations $257 $246 2015* 2016E 2017E $210-$220 Adj. EBITDA -0.1% Adj. EBITDA +1%-+3% 33¢ 40¢ 45-47¢ 2015* 2016E 2017E 52 THE WENDY'S COMPANY | |
 2017
Adj. EBITDA Guidance $ Mils
$392 $396-404 ~$30 ~$30 ~$20 ($12) ~($60) 2016 Preliminary Adj. EBITDA SOIII Royalties & Net Rental Income G&A Savings NA Growth (SRS + Development) 2016 Lease Buyouts Disposed Restaurant EBITDA 2017 Estimated Adj. EBITDA Adj. EBITDA Margin 27.3% Adj. EBITDA Margin 32-34% 53 THE WENDY'S COMPANY | |
 Rental
income streams become predictable post SOIII Rental Income
Net Rental Income $143 ~$175 $75 ~$95 $10 $21 $ Mils * * $15 $95 $113 $6 $48 $62 2012 2016E 2017E and Beyond Owned Leased $4 $27 $33 $6 $48 $62 2012 2016E 2017E and Beyond Owned Leased 54 THE WENDY'S COMPANY | |
 2017
Guidance Capital Expenditures
Free Cash Flow* * Cash From Operations Less CAPEX $172 $ Mils $263 $0 $252 $149 2015 2016E 2017E $80-$90 ($39) $31 2015 2016E 2017E SOIII Proceeds $160-$185 55 THE WENDY'S COMPANY | |
 THE
WENDY'S COMPANY | 56 2017
Guidance Flat Commodity Market Basket (Chicken quality investment of ~35bps) Labor Inflation of ~4% Depreciation of ~$120 million (incl. Accel. Dep of ~$2 million) Interest Expense of ~$115 million Adjusted Tax Rate of 32-34% |
 2016
Preliminary Results 2017 Guidance
38-40% Adj. EBITDA Margin
2020 Free Cash Flow Capital Allocation Agenda THE WENDY'S COMPANY | 57 |
  Multiple
Growth Levers Drive to 38-40% Adj. EBITDA Margin THE WENDY'S
COMPANY | 58 G&A
Efficiencies 2020E 2015 2016 Preliminary Results 2017E NA Growth (SRS + Net New Units) International Growth Company Restaurant Margin Expansion 21% 38% to 40% 32% to 34% 27% |
 North
America Growth International Growth
Company Restaurant Margin Expansion 2-3% N.A. System SRS; Focus on Strengthening Quality Advantage, Continuing to Drive Value and Improving Consistency of Customer Experience Net New Restaurant Development in North America New 2020 Goals Drive International System Sales to $1 billion and EBITDA to ~$20 million in 2020 Drive Additional Profits on Path to 20%; Grow Customer Counts / Mitigate Labor Pressures / Leverage Technology THE WENDY'S COMPANY | 59 |
 THE
WENDY'S COMPANY | 60 G&A as a % of Global Restaurant
Sales 3.1% 2.7% 2.6% 2.5% 2.1% - 2.2% ~1.5% 2013 2014 2015 2016E 2017E 2020E >$100M of Cumulative G&A Reduction Since 2013 |
 2016
Preliminary Results 2017 Guidance
38-40% Adj. EBITDA Margin
2020 Free Cash Flow Capital Allocation Agenda THE WENDY'S COMPANY | 61 |
 THE
WENDY'S COMPANY | 62 ($44)
($39) $31 $160-$185 ~$275 2014 2015 2016E 2017E 2020E $ Mils Free Cash Flow Growth through 2020 and Beyond *Does not include any charges related to G&A Initiative * |
 THE
WENDY'S COMPANY | 63 $ Mils
*Does not include any charges related to G&A Initiative
Free Cash Flow Growth Drivers ~$275 10 $160 to $185 2016 $31 Preliminary Results CapEx Taxes 2020E Net Earnings Working Capital 2017E* Net Earnings CapEx Working Capital ~17% CAGR |
 Diligence on CAPEX Continues THE WENDY'S COMPANY | 64 2014 2015 2016E 2017E 2020E $ Mils ~$65 $80-90 $299 $252 $149 |
 2016
Preliminary Results 2017 Guidance
38-40% Adj. EBITDA Margin
2020 Free Cash Flow Capital Allocation Agenda THE WENDY'S COMPANY | 65 |
 Strong
Track Record of Shareholder Returns
THE WENDY'S COMPANY | 66
$ Mils (except per share amounts)
225% Growth in Quarterly Dividend Rate $0.02 in 2011 to $0.065 in Q4 2016 ~$2.3B of Cumulative Cash Returned to Shareholders 0 100 200 300 400 500 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 2011 2012 2013 2014 2015 2016 Dividends Share Repurchases Shares Outstanding |
 Flexible Capital Structure
Supports Growth Initiatives
THE WENDY'S COMPANY | 67
1/1/2017 Leverage Ratio (excl. Cap leases): 5.4x
Target Leverage Ratio: 5-6x
$875 $900 $500 $100 *Notional amounts shown as of issuance date; 1% amort is paid per annum FY16 Estimated Net Debt: $2.1B (excl. Cap Leases) / FY16 Estimated Adj. EBITDA: $391.9M
3.371%
2015 Notes (Callable 6/2018) 4.080% 2015 Notes (Callable 6/2019) 4.497% 2015 Notes (Callable 6/2021) 7.0% 1995 Debentures $ Mils 2017 2018 2019 2020 2021 2022 2023 2024 2025 Securitized Notes* Revolver Debentures $150 |
 Invest
in the Business Sustain an Attractive Dividend;
Payout Ratio > 50%
Utilize Excess Cash to
Repurchase Shares Improvement in ROIC Over Time Balance Sheet Aligned Behind Strategy 4 5 1 2 3 68 |
 Arby’s Equity Stake • ~18.5% Equity Stake • Received ~$100 million in dividends since 2012 • Estimated Fair Market Value as of 1/1/17: ~$320 million – Increased from ~$294 million at the end of Q3 – Valuation Methodology: Apply multiple (discount to public peer group) to TTM EBITDA • Potential source of incremental cash if a liquidation event were to occur – Any liquidation event would be fully taxable THE WENDY'S COMPANY | 69 |
 Dividend
Increase and New Share Repurchase Authorization
• Announced ~8 percent increase in quarterly dividend rate, in addition to ~8 percent increase in Q4 2016 – From 6.5 cents per share to 7 cents per share • Board has authorized a new $150 million Share Repurchase Authorization – Expires 3/4/2018 – Plan to purchase shares through the open market THE WENDY'S COMPANY | 70 |
 In
Summary… •
Solid 2016: Held Adjusted EBITDA flat YOY, despite selling 310 Company-operated
Restaurants; 2-year N.A. System SRS acceleration continued through year end • Improved ‘17 Guidance – N.A. System SRS guidance accelerating versus ‘16 results – Raised Adjusted EBITDA expectations versus prior guidance • “Flattish” to 1-3% growth – G+A efficiencies driving guidance lower • ~$230 million to ~$210 to $220 million – Free Cash Flow Guidance anticipates ~$140 million YOY increase • Very good visibility to our 2020 Financial Goals – G+A reductions accelerating further to achieve ~1.5% of Global Restaurant Sales by 2020
– Free Cash Flow grows to ~$275 million (with CAPEX of ~$65 million) by 2020 • Fully committed to return all excess cash to Shareholders THE WENDY'S COMPANY | 71 |
 Kurt
Kane Chief Concept and Marketing Officer
© Quality Is Our Recipe, LLC
72 |
 To
consistently grow restaurant profitability through increased sales and
customer counts. THE WENDY'S COMPANY | 73
|
 THE
WENDY'S COMPANY | 74 Why Are We Consistently
Driving Sales Growth? Consumers tell us our food, value, and advertising are more relevant today than many other QSR players. |
 Marketing Sizzle Reel 75 |
 Source: Wendy’s Brand Health Tracking, Y/E December
Strengthening our Quality Advantage 76 |
 Turned
the Corner on Value 2013
2014 2015 2016 Source: Wendy’s Brand Health Tracking, Y/E December Worth What You Pay 77 |
 We Have
Fully Regained Consumer Momentum # of Brand Health Metrics Showing
Improvement THE WENDY'S COMPANY | 78
0 2014 2016 13 2015 8 |
 Go
more often High quality food
Freshly prepares when ordered
Favorite menu item Great value for the money Worth what you pay Friendly, courteous employees Fills orders accurately Completely satisfied Food you feel good about eating Are honest and trustworthy Use real ingredients – not processed Are growing more popular 1 2 3 4 5 6 7 8 9 10 11 12 13 THE WENDY'S COMPANY | 79 |
 Fans Visit Wendy’s for >30% of QSR Occasions Spectators Visit Wendy’s for <30% of QSR Occasions Our Job Is To Create Even More Fans THE WENDY'S COMPANY | 80 |
 Our Fuel
for Continued Growth Reinforce Undisputed Leadership in
Hamburger Quality Reinforce Undisputed Leadership in Hamburger Quality Raise Consumer Expectations for How Good Chicken Can Be Raise Consumer Expectations for How Good Chicken Can Be Drive Unique Visits Through Proprietary Salads and Beverages Drive Unique Visits Through Proprietary Salads and Beverages Continue Helping Customers With Multi-Faceted Approach to Price/Value Continue Helping Customers With Multi-Faceted Approach to Price/Value Communicate in a Relentlessly Modern Way Communicate in a Relentlessly Modern Way 81 |
 Living
Our Strategy in Everything We Do 82 |
 Hamburgers Continue to be a Massive
Opportunity 3 out of 4 Americans eat a hamburger every week Source: Datassential, ‘On The Menu’, March 2016 83 |
 Fresh/Never Frozen Beef
Craveable Taste Two Key Reasons Our Hamburgers Win 84 |
 85 |
 Super
Bowl Commercial 86 |
 “In a sea of entertainment, humor, and special
effects and starts this stands out as artful hard sell.”
THE WENDY'S COMPANY | 87 |
 88 |
 LTOs Must
Build “Craveable” Perception 89
|
 THE
WENDY'S COMPANY | 90 Official Hamburger of the
NCAA |
 THE
WENDY'S COMPANY | 91 Continuing to Raise the Bar on
Chicken |
 Other
brands talk about wanting more tender
chicken…someday. Wendy’s has already taken action by limiting bird size to 20% smaller than many other QSR brands. THE WENDY'S COMPANY | 92 |
 93 Wendy’s Max 7.5 lbs. Industry Max > 9.7 lbs. |
 94 |
 A
great, fresh salad does NOT have to cost a fortune or take
forever 95 |
 Wendy’s Salads Are:
Fresh Made Unique Great Value THE WENDY'S COMPANY | 96 |
 Trying
Is Believing Trying Is Believing
Source: 2015 Product Testing Data, Top 2 Box Ratings Among Millennial
Female Respondents
91% Repurchase Intent 97 |
 Driving
Incidence With Unique Beverages 98 |
 Our Value
Programs Win In Two Ways They get a lot of people to show up
Create profitable checks
99 |
 New
People Are Showing Up Young Adult
(13-34) Lower Income (<$50K) Smaller Household Size (Single) Over Indexes with AA and Hispanic 100 |
 THE
WENDY'S COMPANY | 101 News Has Proven Effective With 4 for
$4 |
 THE
WENDY'S COMPANY | 102 THE WENDY'S COMPANY |
Excitement Drove Instant Impact |
 THE
WENDY'S COMPANY | 103 Daypart
Value Creates New Occasions |
 Premium
Value Has High Appeal 104 |
 Relentlessly Modern Communications
105 |
 106 THE WENDY'S COMPANY | |
 THE
WENDY'S COMPANY | 107 “
I couldn’t remember the last time a brand was actually featured in
our All Hands meeting. Cheers, Wendy’s.
- Adam Bain, COO, Twitter “ Today we are are making this new immersive ad format available…we have seen some pretty creative submissions, like Wendy’s masterpiece the ‘deconstructed cheeseburger.’ - Chris Cox, Chief Product Officer, Facebook “ Wendy’s LIVE broadcast was a standout example of using the authentic and social nature of live content to engage with people and build their brand. - Chris Jones, Head of Creative Technology, Facebook “ The results are fantastic and you guys have truly been a pioneer in measurement. - Snapchat, October 2016 |
 Our
Fuel for Continued Growth Reinforce Undisputed Leadership in
Hamburger Quality
Reinforce Undisputed Leadership in
Hamburger Quality Raise Consumer Expectations for How Good Chicken Can Be Raise Consumer Expectations for How Good Chicken Can Be Drive Unique Visits Through Proprietary Salads and Beverages Drive Unique Visits Through Proprietary Salads and Beverages Continue Helping Customers With Multi-Faceted Approach to Price/Value Continue Helping Customers With Multi-Faceted Approach to Price/Value Communicate in a Relentlessly Modern Way Communicate in a Relentlessly Modern Way 108 |
 Abigail Pringle Chief Development Officer 109 |
 Accelerating Image Activation to
Delight Even More Customers Expanding Brand Access with North America New Restaurants Strengthening Franchise System and Fueling Investment with System Optimization 110 1 3 2 North America Development: Expanding Brand Access & Increasing Brand Relevance |
 32% New Image 2016 YE REIMAGING NEW DEVELOPMENT 111 |
 112 IMAGE ACTIVATION ACCELERATING Delighting More Customers Through Reimaging 2016: 521 reimages Franchisees ahead of schedule 4+ year track record of delivering on goals 95% of sales lift is customer count growth Healthy 2017 pipeline of 650+ projects |
 THE
WENDY'S COMPANY | 113 IMAGE ACTIVATION
ACCELERATING Growing a Healthier Brand with New Restaurants 2016: 99 new restaurants 22 net new openings New restaurant sales ~$1.8M Closed restaurant sales ~$1.1M Healthy 2017 Pipeline of 170+ projects |
 N.A.
Image Activation Momentum Continues THE WENDY'S COMPANY |
114 Total System Cumulative
Reimages & New Builds |
 Elevating Customer Experience:
Reimaging Existing Restaurants
Compelling Economics • $300K+ investment • 7-10% sales lift • 10-15% return on investment Incentives & Flexibility Fuel Acceleration • 1% royalty abatement for 12 months • Upgrades available to tailor to trade area Customer Focused Experience • Enhanced brand visibility & dining experience • Focus on food, people and service 115 |
 THE JOURNEY FORWARD …TOGETHER Organizational Goals Landlord / Lease Review and Strategy New Build and Relocation Opportunities Joint Capital Plan Lenders and Financial Capacity Development Experience Pace and Sequencing Existing Restaurants Restaurant Maintenance Plan THE JOURNEY FORWARD Joint Capital Planning 116 |
 CUSTOMER CONVENIENCE BRAND AWARENESS SALES & PROFITS RESTAURANTS BRAND ACCESS NEW 117 THE WENDY'S COMPANY | |
 2016
STARTED NEW TREND: Expanding Footprint with
+Net New Growth THE WENDY'S
COMPANY | 118 -28
-46
-37
22 2013 2014 2015 2016E 40% increase in new restaurants v. 2015, 99 openings in 2016 90% increase in franchise driven investments v. 2015 60% of new restaurants driven by organic growth, 40% by system optimization 25% fewer closures v. 2015 |
 THE
WENDY'S COMPANY | 119 The Power of the Wendy’s Brand
Regained and growing consumer
momentum…increasing brand relevance QSR is the place to be …convenience,
value and Wendy’s
Quality Wendy’s has a unique brand story…
communities want us in their neighborhoods Relentless focus on economics and highly
engaged franchise system wants to
win |
 THE
WENDY'S COMPANY | 120 1:26K
1:49K 1:54K 1:56K Major QSR U.S. Penetration Today Major QSR U.S. Penetration Today Wendy’s Has Plenty of Headroom to Grow U.S. Population: 319 M 1:75K Current High Potential Markets Current High Potential Markets |
 121 Wendy’s Knows Where and How to Grow Mapped and Prioritized Markets >50% Growth Opportunity in Top 20 Markets Identified ~4,000 Untapped Trade Areas (All Markets) Strategic Data Driven Analysis Local Insights, Partnerships and Experience Multiple Growth Platforms Creates Agility & Flexibility |
 Market
Mapping and Trade Area Discipline
Drive Results THE WENDY'S COMPANY | 122 Evaluate Crucial Trade Area Dynamics: • Demographics • Population growth • Traffic generators and patterns • Competitor performance • Share of stomach • Other development drivers Evaluate Site Specific Features: • Economics • Site Quality • Visibility and Accessibility |
 Top 20
U.S. Market Discipline Drives Results
High Potential Growth Market
• 1 Wendy’s / 67,000 People • Potential: 20 Untapped Trade Areas • 2020 Target: 10 to 15 New Wendy’s Delivering On Our Strategy • 2 open to date • 2-3 to open in 2017 • More planned to open in 2018+ THE WENDY'S COMPANY | 123 |
 124 |
 © Quality Is Our Recipe, LLC
Smart Designs THE WENDY'S COMPANY | 125 Reduced Investment by ~$300K Improved Economics & Operations - Reduced energy use by ~20% - Technology integration (e.g., kiosk) - Smaller footprint and site - Optimized capacity and throughput - Reduced build time, drive sales sooner Expanded Real Estate Opportunities 50%+ of 2017 Pipeline |
 End
Cap Co-Development
Conversion Transportation Center Bank Conversion Inline Conversion Thinking Differently Drives Strong Sales to Investment Ratio 126 |
 YR2 4% ABATEMENT 1% ROYALTY 3% ADVERTISING YR1 5.5% ABATEMENT 2% ROYALTY 3.5% ADVERTISING New Incentive* 2017 - 2018 3 YRS 2% ROYALTY ABATEMENT Previous Incentive < 2016 *Net New Development Only 127 |
 THE
WENDY'S COMPANY | 128 WENDY’S
IS GROWING • 2017 Growth Rate ~1% • Rate of 2–3% for 2018 to 2020 2015 2016E 2017E 2018E 2019E 2020E 500 – 550 -0.6% ~0.5% |
 THE
WENDY'S COMPANY | 129 Wendy’s Recipe to Win: New Restaurant
Growth Company
System Optimization Commitments (I, II, III) Buy and Flips (‘15 – ‘17) Organic Franchise Growth & Additional Buy and Flip Commitments Compelling Economics with target of >1.3:1 Sales to Investment Ratio We Know Where to Grow: Trade Area
Mapping & Multi Urbanicity
Strategy Real Estate Procurement Program &
Canadian Build to Suit power a healthy pipeline Development Commitments:
Refranchising
and Buy and Flip and Highly Engaged Franchisees Multiple Growth Platforms and
Innovative Designs Create Agility and Flexibility Redesigned New Restaurant Incentives
and Franchise Development Support 40% |
 Transforming Our Franchise System
• Buy and Flip: Company facilitated franchisee-to-franchisee transaction – We match pre-approved
buyer with
selling franchisee – Buyer receives new 20 year agreements – Grow & transform market – Recruit new high potential franchisees and grow existing franchise leaders – TAF Income ~$40K/Restaurant • Franchise Transfer: Subject to Company approval and Company has ROFR – Administrative fee, existing agreements
THE WENDY'S COMPANY | 130
200 200 200 200 71 144 400 200 2015 2016E 2017E '18-'20 E Franchise Transfers (Non-Facilitated) Franchise Transfers (Non-Facilitated) Buy and Flip (Facilitated) Buy and Flip (Facilitated) |
 © Quality Is Our Recipe, LLC
THE WENDY'S COMPANY | 131
13 Franchise Organizations
Collectively own ~1,000 restaurants
Individually own from 4 to 200+ Wendy’s
New Franchisees & Seasoned Operators
~40% Image Activated Our Franchise Family In Their Own Words (Video) |
 Development Video 132 |
 Accelerating Image Activation,
Achieve 42% in 2017, 70%+ by 2020
Open 1000 New Restaurants,
Thinking Differently with Compelling
Economics, New Platforms, Incentives
Expand Brand Footprint & Access,
add 500 to 550 Net New, 2017 to 2020
THE WENDY'S COMPANY | 133
Transform Franchise
System: 400 Buy and Flips in 2017 & 200 Transfers 1 Wendy’s is Committed to Growth 2 3 4 |
 Bob
Wright EVP, Chief Operations Officer and International
© Quality Is Our Recipe, LLC
134 |
 Wendy’s International:
A Growth Engine Foundation For Growth Is Strong Significant Success In 2016 Strategic Balance Focused on Growth Accelerating Growth Through 2020 & Beyond THE WENDY'S COMPANY | 135 |
 THE
WENDY'S COMPANY | 136 29 Countries
439 Restaurants |
 2016
Performance Recap •
Systemwide Sales* ~$420 million • AUV* ~$1.1 million • Gross New Opens 50 • Net New Opens 36 • Number of Countries with Opens 13 • Market Closures 0 • % Image Activated ~40% *Excludes Venezuela 137 |
 Growth
Focused Blueprint Existing Markets
Execute Plan For Accelerated Growth
Market Development High Opportunity “Narrow and Deep” 138 |
 ~75% Of
New Restaurants Coming From 7 Existing Markets
ARGENTINA BRAZIL CHILE MEXICO MIDDLE EAST INDONESIA JAPAN 139 THE WENDY'S COMPANY | |
 Narrow
and Deep New Market Entry QSR Category
Consumers Real Estate Economic inputs Suppliers/Service providers Regulatory Metrics & benchmarks Table stakes Cons. model hypotheses Economic model hypotheses Concept prototyping Brand assessment research Consumer model • Place • Product • Price • Promotion • People • Performance Site selection Site specific plan Permitting Bid Build Launch Measure Track Consumer insights Refine 18 - 24 MONTHS CONCEPT DISCOVERY DESIGN & COMM. PLAN & BUILD OPEN & EVALUATE 140 |
 Latin
America & Caribbean (LAC) Region ESTABLISHED
UNDER DEVELOPMENT AGREEMENT
141 THE WENDY'S COMPANY | BRAZIL PANAMA BAHAMAS ARGENTINA / CHILE BRAZIL GUYANA SURINAME ECUADOR PANAMA HONDURAS EL SALVADOR GUATEMALA CAYMAN BAHAMAS MEXICO JAMAICA VENEZUELA TRINIDAD ARUBA / CURACAO USVI PUERTO RICO DOM. REPUBLIC ST. VINCENT ST. MAARTEN ST. LUCIA GRENADA BARBADOS ANTIGUA & BARBUDA 19 countries 260 restaurants |
 Argentina & Chile: Rapid Growth
THE WENDY'S COMPANY | 142
• Increased footprint in 2016 from 5 to 13 – 5 new opens in Chile – 3 new opens in Argentina • Plan for 7 new restaurants in 2017 • Strong AUVs, +$2M in Argentina |
 Brazil: Strong Opening
THE WENDY'S COMPANY | 143
• JV Structure: Wendy’s has 20% Share • First 2 restaurants opened in July • On track for +$2.5M AUV • 5 new restaurants planned in 2017 |
 Asia
Pacific (AP) Region GUAM
JAPAN INDONESIA NEW ZEALAND MALAYSIA PHILIPPINES INDIA ESTABLISHED THE WENDY'S COMPANY | 144 JAPAN INDIA INDONESIA 7 countries 153 restaurants |
 Japan:
Conversion Hybrid Format
THE WENDY'S COMPANY | 145
• Wendy’s Franchisee purchase of First Kitchen – Opened door to growth through conversions • ~30% average sales lift on first conversions • ~$1.3M AUV on first conversions • 15 planned conversions in 2017 • Sub-franchising growth opportunity |
 Europe,
Middle East, Africa (EMEA) Region REPUBLIC OF GEORGIA
UAE ESTABLISHED UNDER DEVELOPMENT AGREEMENT KUWAIT THE WENDY'S COMPANY | 146 3 countries 26 restaurants UNITED ARAB EMIRATES GEORGIA AZERBAIJAN BAHRAIN EGYPT SAUDI ARABIA JORDAN QATAR SYRIA TUNISIA KUWAIT ALGERIA OMAN MOROCCO LEBANON |
 Middle
East: New Expansion THE WENDY'S COMPANY | 147
• UAE: First flagship restaurant planned for 2017 • Kuwait: Opened first restaurant in Q4 2016 • Saudi Arabia: Rights granted, Q4 2017 Market Launch • Qatar: New sub-franchise planned for 2017 |
 148 Balanced International Business Strategy THE WENDY'S COMPANY | |
 Customer Driven Systems Focused THE WENDY'S COMPANY | 149 |
 Become the preferred QSR brand by creating a category disrupting experience that leverages Wendy’s brand strengths of food quality and superior experience Vision 150 |
 THE
WENDY'S COMPANY | 151 CASUAL DINING BURGER
MINUS QSR PLUS+ |
 THE
WENDY'S COMPANY | 152 QSR Plus+ Experiences Deliver
|
 Quality
Burgers Since 1969 153 |
 Differentiated Customer Journey
154 |
 Operating Systems Breed Consistency
THE WENDY'S COMPANY | 155 |
 Food
Quality & Value Drive Marketing Following the
U.S. Calendar (LTO) Regional Marketing Program Local Marketing Program # MKTS PROGRAMS 8 10+ 15+ 156 |
 Restaurant Unit Level
Economics Franchisee Business Economics THE WENDY'S COMPANY | 157 |
 Range
of: •
AUV • Food, Paper, Labor Costs • Rent/Occupancy Costs • Investments Focus Is Always Unit Level Economics 158 |
 159 Multiple Asset Types To Drive Success |
 Engaged Ownership Growth Oriented THE WENDY'S COMPANY | 160 |
 161 Foundation Of Great Partners • Proven track record of operating a multi-unit restaurant, retail, or other
hospitality business in the market of interest
• Financial capacity to achieve
expansion plan •
Shared vision for market development
between franchise leadership, applicable
investors, and Wendy’s
• Existing business infrastructure that can be
leveraged to support Wendy’s
• Exceptional
access to key real estate THE WENDY'S COMPANY | |
 162 INTERNATIONAL IS GROWING : 9% 12.5% 2016 2017 2018 2019 2020 • ‘16 Net New Growth Rate 9% • ‘17 Net New Growth Rate 12.5% • Net 400+ openings by 2020 ~20% Growth Per Year 2020E ~850 Accelerating Development Plan THE WENDY'S COMPANY | |
 163 Wendy’s International 2020 Goals Restaurant Sales* ~$1 Billion Restaurant Count ~850 Image Activation 70%+ EBITDA ~$20 Million *Excludes Venezuela 163 |
 Kurt
Kane Chief Concept and Marketing Officer
© Quality Is Our Recipe, LLC
164 |
 Today’s Deliciously Different Lunch
165 |
 Bob
Wright EVP, Chief Operations Officer and International
© Quality Is Our Recipe, LLC
166 |
 Restaurant Margins as an Engine for Growth • Multi-year history of margin expansion • Recent favorability of commodities • External pressures of cost and availability of labor • Wendy’s systems & initiatives in place to manage pressure 167 |
 Performance Over Time Situation Assessment Margin Enhancement Strategies & Outlook 1 3 2 168 |
 Performance Over Time Situation Assessment Margin Enhancement Strategies & Outlook 1 3 2 169 |
 Significant N.A. Company Restaurant Margin Growth
170 14.0% 15.3% 15.8% 17.7% 19.1% 2012 2013 2014 2015 2016E +130bps +50bps +190bps +140bps THE WENDY'S COMPANY | |
 171 Food Cost % +290 bps favorable vs 2012 • Well-positioned to leverage favorable market conditions for key commodities • Strong collaboration with purchasing Co-Op (QSCC) • Investment in quality and value without over- burdening cost structure Labor +170 bps favorable vs 2012 • 5% wage inflation, overall labor costs increased by 20 bps vs 2015 with evolving employment landscape translating to staffing challenges • Sales growth and rollout of new optimized labor model helped mitigate labor pressure • Extraction of 31 hours over last 2 years through task labor efficiency and right sizing service staff Other operating cost +50 bps favorable vs 2012 • Improvement in spite of inflation THE WENDY'S COMPANY | 33.2% 32.8% 32.7% 32.0% 30.3% 30.1% 29.7% 29.0% 28.2% 28.4% 22.7% 22.2% 22.5% 22.1% 22.2% 2012 2013 2014 2015 2016E Food Labor Other Costs |
 Performance Over Time Situation Assessment Margin Enhancement Strategies & Outlook 1 1 3 3 2 2 172 |
 Access to & Cost of Labor
is Primary Margin Concern
THE WENDY'S COMPANY | 173
• Commodities favorability leveling off • Legislated & market dynamics driving average wage rates & rate of increase • Staffing becoming challenging with evolving employment landscape • Turnover trends approaching industry highs • ~4% Labor inflation expected in 2017 |
 Performance Over Time Situation Assessment Margin Enhancement Strategies & Outlook 1 3 2 174 |
 Investing in the Customer to drive traffic & increase loyalty Mitigation of labor risk and elevation of Employee
experience Design to Value mitigates commodity risk Leveraging Technology as enabler for efficiency and improved experience Margin Enhancement Strategies 175 1 3 2 4 THE WENDY'S COMPANY | |
 176 2. Resulting in lower cost burden 1. Increased Traffic 3. Improved Restaurant Profitability The Power of Sales Leverage • Management and Fixed costs spread over larger sales base • Crew becomes more efficient, product flow more consistent THE WENDY'S COMPANY | |
 The
best way to make money in this business
is to make your labor
costs and your rent a
smaller percent of your
sales. That means getting your sales up. 177 |
 Sales
Growth: Invest in what Customers Demand to Drive
Traffic & Increase Loyalty
• Compelling Quality and Value 178 • Differentiated Restaurant Facilities • Improved Experiences that Drive Loyalty THE WENDY'S COMPANY | |
 Execution is Strategy:
Delight Every Customer
Operations Initiatives
• Full Implementation of New Voice of the Customer Program in May 2016 • Over 1 million points of feedback directly from customers • 14% Improvement in “Delighted Experiences” in 1 year • Delighted customers 260% more likely to return and 390% more likely to recommend than satisfied • 4 hour response time to all customer comments 179 PD 1 2016 PD 2 PD 3 PD 4 PD 5 PD 6 PD 7 PD 8 PD 9 PD 10 PD 11 PD 12 PD 1 2017 Wendy's Best In Class Overall Satisfaction Overall Satisfaction Taste Friendliness Speed Accuracy Cleanliness North America (last 90 days) 8/5/16-11/2/16 11/3/16-1/31/17 Best In Class THE WENDY'S COMPANY | |
 Consistency is Key to Success • Restaurant by Restaurant • Dayparts • Day of the Week • Strength is Market by Market • Franchisee engagement is critical and has been robust 180 OSAT Taste Friendliness Speed Accuracy Cleanliness North America Range of Performance Wendy’s Internal Data YE 2016 THE WENDY'S COMPANY | |
 Customer Experience Cycle
Drives Improvement Voice of the Customer 100% restaurant participation Best in Class internal Customer Care Center Customer Experience Evaluation 5 Audits/Restaurant/Year Directly links to customer feedback Customer Experience Playbook 100% franchisees and restaurants trained Used as coaching at restaurant level Escalation process for failing restaurants 181 |
 Mitigation of Labor Risk
and Elevation of Employee Experience THE WENDY'S COMPANY | 182 • Continued focus on labor optimization and effective deployment to build sales • Management staffing model to optimize leadership & efficiency |
 Labor
Guide Optimization Key Offset to Inflation
• 31 Hours per week reduced over 2 years • ~$20,000 per restaurant/year • Future Focus • CSO Kiosks • Automation • Management Administrative Tasks • Repetitive Production & Non- Production Tasks 183 |
 • Appealing career path to attract, retain and reward top talent THE WENDY'S COMPANY | 184 Management Staffing Model Optimizes Leadership & Efficiency • Simplify operational focus, leading to better operations and enhanced customer experience • Enhanced restaurant economic model |
 Mitigate Commodity Risk via DTV Approach
THE WENDY'S COMPANY | 185
Design to Value (DTV) that builds value into things that customers value the most,
while extracting costs from the things they value the least.
Focus Items 1. Commoditized Ingredients 2. Paper and Packaging 3. Supplier Complexity 4. Inventory Management 5. Process Improvement Guiding principle Does an item or attribute meaningfully and positively impact… 1. The consumer experience? 2. Operators or ability to deliver the consumer experience, food safety, or otherwise impact internal metrics? 3. Operator margins? 4. Fuel for growth in other areas? |
 THE
WENDY'S COMPANY | 186 Customer Facing
Technology as Enabler for
Improved Experience &
Efficiency • Customer facing technology to improve experience & margins • Technology enables automation opportunities for least desirable tasks • Technology enables energy efficiencies Order Here • Meets needs of QSR consumer with speed, convenience and affordability |
 THE
WENDY'S COMPANY | 187 2017 Co. Restaurant Margins
Anticipated to be Flat
Commodities flat 1 3 2 Continued pressure in labor Design to Value principles improve margins and enable reinvestment 14.0% 15.3% 15.8% 17.7% 19.1% Flat 2012 2013 2014 2015 2016E 2017E +130 bps +50 bps +190 bps +140 bps |
 David
Trimm Chief Information Officer
© Quality Is Our Recipe, LLC
188 |
 Why
and What Where We Are
Where We’re Going
Our Digital Story THE WENDY'S COMPANY | 189 |
 THE
WENDY'S COMPANY | 190 Our overall goal for
technology… Allow customers to have a deliciously different experience |
 We
Believe The Digital Experience Should...
Drive Brand Relevance Build Customer Loyalty Deliver Operational Efficiencies 1 2 3 191 |
 Where our digital story
comes to life… Founded in June 2015 Next to OSU campus Products Are: Web; Apps; Kiosks THE WENDY'S COMPANY | 192 “A Tech Source of Competitive Advantage” |
 Agile Rapid Development Highly Customer Centric Change As We Learn THE WENDY'S COMPANY | 193 |
 Collaborative Room For Teams To Form Bring Customers In Re-Configurable Workspace Wendy’s Kitchen Setup Cross-Functional Work Expected! THE WENDY'S COMPANY | 194 |
 Different It’s Wendy’s… …with a startup feel THE WENDY'S COMPANY | 195 |
 Our
Digital Story Is A Perfect Fit To Our Brand Customization : Made
Fresh 196 |
 It’s in our DNA...
Fresh, Customized, Made to Order
Order via any digital channel –
take your time and explore
Order triggered when you
arrive at the restaurant Our food is
always prepared fresh specifically for you – customization is “built in” 197 |
 2016
Foundational Work
Single POS System 90° Labs and Unified Ordering Operationalizing our solution… Operating model, products and tech truly Delight Every Customer. 198 THE WENDY'S COMPANY | |
 Unified Ordering Consistent experience across channels Efficient to maintain Agile for new developments Single application… …but appropriate to each platform THE WENDY'S COMPANY | 199 Order Here “The Beating Heart of Digital” |
 Where
We Are Kiosks Available to Franchisees
…and Ramping Up
Kiosks now in Canada too
400+ locations on mobile ordering
Payments solution in deployment
Back stage: Analytics
“Capitalizing On The Investment”
200 THE WENDY'S COMPANY | |
 NEVER
STOP LEARNING. TRY TO LEARN
SOMETHING NEW, AND GET A LITTLE BETTER EVERY DAY. 201 |
 Kiosks Preferred by Many Customers Unlocking Kitchen Capacity 3 Kiosks Cost ~$12k to $15k Payback <2 Years Gateway to Mobile “Customers Love Them and So Do We” 202 THE WENDY'S COMPANY | |
 Kiosks
Give Us The Opportunity To Innovate… 203
|
 Mobile:
Bold, Clean Imagery; Optimized Journey 204
|
 Where
We’re Going in 2017 Kiosks: >1,000 Restaurants
Mobile Ordering: >Half Restaurants
Focused Development Roadmap
Payments Analytics “Bold Goals – Moving Fast” 205 THE WENDY'S COMPANY | |
 Making
IT Happen in 2017
Clear Vision and Ability to Execute
(technically and operationally)
Foundation Laid … Now to Capitalize
Digital Speed plus Food Quality & Freshness…
…Only Wendy’s Can Deliver Both
206 |
 Todd
Penegor President & Chief Executive Officer
© Quality Is Our Recipe, LLC
207 |
 Gunther
Plosch: Finance THE WENDY'S COMPANY | 208
• 2016 Results: N.A. System SRS solid despite tough compares and macro headwinds,
Adj. EBITDA held steady in final year of SO, Free Cash Flow turned
positive •
2017 Outlook: First full year at 5% company ownership, anticipate Adj. EBITDA, Adj.
EPS, and Free Cash Flow acceleration with N.A. System SRS of
2-3% •
Path to 38-40% Adj. EBITDA Margin in 2020 is driven by growth and productivity
gains; Accelerated G&A savings will be key
• Free Cash Flow continues to accelerate through 2020, culminating at ~$275 million
• Returning cash to shareholders continues to be a priority: additional 8% dividend increase
and new $150 million share repurchase authorization approved by Board of
Directors |
 Kurt Kane:
Marketing •
We have regained consumer momentum; 13 key brand health metrics showed
improvement in 2016 vs. 0 in 2014
• Our job is to convert “Spectators” to “Fans”; communicating how we are
“Deliciously Different” from other QSR players is how we will do
this •
We are playing offense on our fresh beef message and it’s working
well •
Chicken and Salads will grow through focus on taste and trial efforts
• Our approach to value is multi-faceted and a new source of strength; 4 for $4,
$0.50 Frosty, $5 Grilled Chicken; testing afternoon daypart value
THE WENDY'S COMPANY | 209 |
 Abigail
Pringle: Development •
Accelerating Image Activation and new builds to delight even more customers sooner, 70%+
by 2020 –
Compelling economics – Joint capital planning / partnership with our franchise community – Flexible design solutions – Meaningful incentives & support • Committed to expand footprint by 500-550 net new restaurants in North America from 2017 to 2020
– +1% net new in 2017 – Accelerating to 2-3% between ‘18 and ‘20 • Strengthening franchise system and fueling growth with continued Buy and Flip transactions
– ~400 B&F’s in ‘17 – ~200 B&F’s annually between ‘18 and ‘20 THE WENDY'S COMPANY | 210 |
 Bob Wright:
International •
Highest net openings in 20 years, no market exits and record unit count of 439
restaurants
• Relentless focus on superior customer experience, attractive economic model and development of robust Franchise Partnerships • Narrow & Deep Strategy continues to be successful and will build foundation for
future growth • 2020 Goal to achieve International Systems Sales of $1 billion and Restaurant Count of approximately 850 THE WENDY'S COMPANY | 211 |
 Bob Wright:
Restaurant Margin •
Strong Restaurant margin growth during last 5 years (from 14% in ‘12 to 19% in
‘16) •
Labor Cost is a known headwind – systems in place to manage – Profitable Customer Count Growth and Sales Leverage – Continue to Leverage Technology – Further Labor Guide optimization – Elevating Employee Experience • Focused Commodity Cost Management – Strong Partnership with our Purchasing Co-Op (QSCC) – Design to Value Initiatives THE WENDY'S COMPANY | 212 |
 David Trimm:
Technology •
Digital experience builds customer loyalty and delivers operational
efficiency •
100% aligned with our core strengths: fresh food, made-to-order,
customization •
Foundation and execution capability in place -- now capitalizing on it – Moving to single POS System – 90 Degree Labs delivered Unified App – Solutions operationalized • Where We’re Going – More than 1,000 N.A. restaurants with Kiosks installed and more than half of N.A.
restaurants with Mobile Ordering by the end of 2017
– Innovative Technology Solutions complimenting our Restaurant Operating System – Payments solution gives access to payment innovation – Use data and analytics to connect better to our Customers THE WENDY'S COMPANY | 213 |
 2017
and Beyond It’s All About Growth
The Foundation has been Built
Leverage “The Wendy’s Way” to Delight Every Customer.
Bring “Deliciously Different” to Life in all we do
Drive Profitable Customer Count
Growth Expand Brand Access Globally Relentlessly Focus on Restaurant Level Economics Utilize Technology to Enhance the Customer Experience Diligently Manage our G&A Cost Structure THE WENDY'S COMPANY | 214 |
 Wendy’s 2020 Goals
THE WENDY'S COMPANY |
215 Global Restaurant Sales ~$12 billion Global Restaurant Count ~7,500 Global Image Activation 70%+ Adj. EBITDA Margin 38-40% Free Cash Flow ~$275 million |
 Q&A E-mail questions to: peter.koumas@wendys.com 216 |
 Appendix 217 |
 Reconciliation of Non-GAAP Financial Measures
In addition to the GAAP financial measures included in this presentation, the Company has
included certain non-GAAP financial measures (i.e., adjusted EBITDA,
adjusted EBITDA margin, adjusted earnings per share, adjusted tax rate and
free cash flow). 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
adjusted EBITDA, adjusted earnings per share and adjusted tax rate. The Company excludes
certain expenses and benefits from adjusted EBITDA, adjusted earnings per
share and adjusted tax rate, such as impairment of long-lived assets,
reorganization and realignment costs and system optimization gains, net. 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
reported tax rate or a reconciliation of projected adjusted EBITDA,
adjusted earnings per share or adjusted tax rate to projected net income,
earnings per share or reported tax rate. 218
THE WENDY'S COMPANY | |
 The
Wendy’s Company and
Subsidiaries Consolidated Statements of Operations In Thousands 219 |
 THE
WENDY'S COMPANY | 220 Reconciliation of Net
Income to Adjusted EBITDA from Continuing Operations In Thousands (Unaudited) |
 221 Reconciliation of Income and Diluted Earnings Per Share from Continuing Operations to Adjusted Income and Adjusted Earnings Per Share from Continuing Operations In Thousands except per-share amounts (Unaudited) THE WENDY'S COMPANY | |
 222 |