Q2 2018 Investor Presentation - Dunkin' Brands Investor Relations
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Q2 2018 Investor Presentation
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.
ASSET-LIGHT
70
YEARS OF BRAND SIGNIFICANT U.S. &
100%
FRANCHISED
HERITAGE GLOBAL GROWTH BUSINESS
OPPORTUNITY
Dunkin’ Brands is unique in the QSR space
76% 18%
OF 2017
OF 2017 SEGMENT
SEGMENT REVENUE
REVENUE
6%
OF 2017
SEGMENT
REVENUE
Dunkin’ Donuts U.S.
Dunkin’ is a Brand that can Win
12 consecutive
Over 5 billion cups of years of being
9,000+ Dunkin’ coffee
consumed in 2017*
named #1 Coffee
chain by
U.S. Stores consumers
$8.5B
#1 seller of donuts
#1 seller of bagels #2 seller of muffins
#1 seller of hot flavored coffee #2 seller of iced espresso**
Systemwide #1 seller of iced brewed coffee**
Sales in 2017
Broad DD product accessibility:
5-year growth in
Ready-to-drink bottled iced coffee,
breakfast sandwich
K-cups, and bagged coffee in
servings
grocery and retail
*Total cups coffee in U.S. restaurants and CPG channels **Source: NPD/CREST for LTM May 2018
OUR FOCUS: BEVERAGE-LED, ON-THE-GO
Broad
Accessibility
Unparalleled Broad
Unparalleled Restaurant
Convenience Accessibility
Convenience Excellence
Menu
Menu Brand
Brand
Innovation
Innovation Evolution
Evolution
AMERICA’S
MOST LOVED
BEVERAGE-LED,
ON-THE-GO
BRAND
8
Menu Innovation: Menu Strategy
MENU STRATEGY
• Grow and protect the core
• Expand product innovation
• Beverage-led
• Flavor news
• Food pairings
• Premium pours
• Create second daypart
• Drive traffic with value
10Unparalleled Convenience: Mobile and Digital Innovation
INDUSTRY LEADING DIGITAL & MOBILE INNOVATION • ~9 million DD Perks Members • On-the-Go Mobile Ordering represents ~3% of transactions • Strong retrial rate of 80% • Navigating balance between loyalty member recruitment and meaningful engagement • Integrating mobile ordering with Google Assistant and GM Marketplace delivering unparalleled convenience, broad accessibility to guests
Broad Accessibility: Restaurant Growth & Consumer Packaged Goods (CPG)
DD U.S. NET DEVELOPMENT
1,000 net new restaurants by end of 2020
90%+ outside northeast markets
Growth to accelerate ~50 NextGen concept
Greater than 275 net
with NextGen design restaurants open by
new restaurants in 2018
release YE 2018*
14
*Between new builds and remodels2016 NEW MARKET
UNIT ECONOMICS
• Traditional restaurants in top developing markets
• Includes markets such as FL, CA, GA, & TN
AVERAGE BEVERAGE AVERAGE UNIT
MIX: VOLUMES
~40% $850K – 950K
AVERAGE INITIAL CASH-ON-CASH
CAPEX RETURNS
As of April 2018
Standalone, traditional Dunkin Donuts Restaurants only
$450K – 550K 20% - 25%
*Not disclosing specific markets for competitive reasons; these are the expected returns
1 Number is rounded; represents the average initial capex for cohort
2 Number is rounded; represents the average unit volume for cohort
3 Number is rounded; represents the average cash-on-cash return for cohortLeveraging CPG to Build Brand in New Markets
• $860M in retail sales in 2017
• $710M CPG SKUs
Grab and Our
• $150M Dunkin’ RTD Coffee Go Brands/
• Dunkin’ Donuts Iced Coffee Your Home
named #3 best-selling new brand
in 2017 by IRI, within food and
beverage category
• 6 out of every 10 cups of Dunkin’ Brewed
coffee consumed in the U.S. came On-the-Go
from a Dunkin’ CPG product
• Opportunity for new product
innovation across brandsRestaurant Excellence: Menu Simplification
MENU SIMPLIFICATION:
Making Room for
Future Innovation
• Rolled out nationally in Q1 2018
• Eliminated 10% of required menu
items
• Slow-moving, complex, off-strategy
items
• Improved menu consistency across
the country
• Key benefits: Guest and crew
satisfaction, speed of service,
accuracy, labor efficiency,
franchisee profitability 18Brand Evolution: Next Generation Restaurant
Dunkin’ Donuts
NextGen Restaurant
Corona, CA
20Dunkin’ Donuts
NextGen Restaurant
Quincy, MA
21Baskin-Robbins U.S.
Modernizing to attract younger guests
Key initiatives include:
• New premium products (e.g.
Sundae Shakes, Cookie Cakes)
• Enhancing convenience with
new ways to order:
• Digital in-store ordering
• New e-Commerce website
• Home delivery
• Testing conceptual next
generation store design
23International
Focusing on strategic markets and long-term
growth opportunities
• Stabilizing Dunkin’ Donuts International by
positioning it as coffee-focused while
maintaining strong donut and bakery equity
• Opened ~60 newly-designed restaurants
across 8 international markets
• Baskin-Robbins International is focused on ice
cream gallon consumption across the business:
through stores, delivery, and consumer
packaged goods
• Delivery continues to be opportunity with tests
underway across a number of key markets
Baskin-Robbins is the #1 quick-service brand in the Middle East Baskin-Robbins 25
UKFinancial Targets
Our Financial Targets
2018 Long-Term (Through 2020)
DUNKIN’ DONUTS U.S. DUNKIN’ DONUTS U.S.
• ~1% comp store sales growth • Low-single digit comp store sales growth
• >275 net new unit development • 1,000 net new unit development
BASKIN-ROBBINS U.S.
BASKIN-ROBBINS U.S.
• Low-single digit comp store sales growth
• Low-single digit comp store sales growth
• 0-10 net unit development
• 0-10 net unit development
Low-to-mid single digit % revenue growth
Low-to-mid single digit % revenue growth
Mid-single digit % operating and adjusted
Mid-to-high single digit % operating and adjusted
operating income growth*
operating income growth
Low-single digit reduction to 2017 G&A expense*
G&A 2%-3% annual growth
25% effective tax rate
~28% effective tax rate
$2.48- $2.56 GAAP Diluted EPS*
$2.68 - $2.72 Non-GAAP Diluted EPS*
*Guidance reflects update as of July 26, 2018The “Perks” of
Investing in Reliable and diversified
Dunkin’ Brands financial results
Asset-light, 100%
franchised model
Strong free cash flow
conversionYou can also read
