Wingstop Inc. · NASDAQ:WING
Wingstop — Investor Presentation (January 2017)
30 slides from Wingstop's investor presentation, Jan 10, 2017
Slide 1: Investor Presentation January 2017
R 161 G 153 B 88 R 0 G 105 B 56 R 128 G 38 B 41 R 218 G 215 B 187 R 136 G 170 B 136 R 191 G 191 B 191 Investor Presentation JANUARY 2017
Slide 2: Forward-Looking Statements
1 Confidential Information - Do Not Distribute Forward-Looking Statements This presentation contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact or relating to present facts or current conditions included in this pre
Slide 3: A Category of One
A CATEGORY OF ONE
Slide 4: 2016 – Another Strong Year!
3 2016 – ANOTHER STRONG YEAR! $2.90/share Special Dividend (2) 10% Return of Market Cap (2) 104 New Openings (Net) Q3 YTD (1) 18% Unit Growth Rate (1) 3.9% Domestic (1) SSS Growth Q3 YTD 2016 will be the 13th Consecutive Year of SSS Growth Note: (1) Thirty-Nine Weeks ended September 24, 2016 (2) Spe
Slide 5: Continues a Long Track Record of Delivering Outstanding Results
4 CONTINUES A LONG TRACK RECORD OF DELIVERING OUTSTANDING RESULTS Note: (1) Three year period ended September 24, 2016 (2) Refer to Adjusted EBITDA reconciliation in Appendix 3 Year CAGR (1) Unit Development 18% System-Wide Sales 19% Revenue 16% Adjusted EBITDA (2) 20%
Slide 6: Industry Leading Development
5 11.3% 13.2% 17.1% 16.7% 58.2% 49.2% 36.8% 27.9% 22.2% 21.2% 18.5% 14.3% 9.5% 8.6% Source: Company filings 2015 2014 2013 58% Unit Growth since 2013 (Domestic) INDUSTRY LEADING DEVELOPMENT… Notes: Q3 2016 (1) Domestic system-wide (2) Dunkin U.S. segment only (1) (1) (2) (1) (1) (1) (1) (1) (1) (1)
Slide 7: And Industry Leading SSS
6 13.8% 9.9% 12.5% 7.9% 3.9% 48.0% 38.2% 37.7% 35.7% 26.2% 24.0% 23.6% 16.0% 13.9% 12.0% 8.1% 8.0% Source: Company filings 2014 2013 2012 2012 – YTD Q3 2016 Stacked Same Store Sales AND INDUSTRY LEADING SSS Notes: (1) (2) (3) (5) (1) (2) (2) (1) (2) (4) (6) 2015 (1) (1) Domestic system-wide (2) Dome
Slide 8: Shareholder Friendly Model
7 98.1 96.9 94.2 88.4 87.1 DIN DNKN WS DPZ PLKI Q4 2013 Q4 2014 Q1 2015 Post Recap. Q2 2016 Q2 2016 Pro-Forma Q3 2016 SHAREHOLDER FRIENDLY MODEL Notes: 3. Leverage = Net Debt / LTM Adjusted EBITDA (Refer to appendix for reconciliation) 4. Primary proceeds were used to pay a $2.90 per share special c
Slide 9: With Significant Growth Opportunity
8 WITH SIGNIFICANT GROWTH OPPORTUNITY DOMESTIC INTERNATIONAL • 882 Restaurants in 40 states (1) • 17% Unit Growth Rate • Compelling Economic Model • Strong Pipeline • 2,500 unit potential Note: (1) Restaurant count as of 9/24/16 • 67 Restaurants in 5 countries (1) • Growing brand awareness • Acceler
Slide 10: Domestic Development
_Domestie De velopment ® Oreu ay)
Slide 11: Differentiated Brand
10 DIFFERENTIATED BRAND • Simple concept • Efficient operating model • Coveted consumer • Compelling economic model
Slide 12: Passionate & Engaged Fans
11 PASSIONATE & ENGAGED FANS Source: Netbase 2016 Industry Report: US Restaurants 40% 65% 90% 115% 0 1,000 2,000 3,000 4,000 B ra n d Se n ti me n t (% P o s it iv e S o c ia l C omments ) Brand Conversation Volume (Mentions per $1MM in Revenue) LOW HIGH LOW HIGH Brand Sentiment & Conversation Volum
Slide 13: Franchisees Love Our Model
12 Franchisee Year 2 Target (1) Domestic System Average (4) Unit Economics AUV $890k $1.1M Investment Cost (2) $370k Unlevered Year 2 COC Return (3) 35% - 40% 50% + Notes: (1) AUV based on year 2 sales volumes for the 2014 vintage years (2) Investment cost based on last 2 fiscal years actual costs;
Slide 14: Healthy Franchisee Base and Continue to Invest
13 1 2012 2013 2014 2015 20162011 2012 2013 2014 2015 LTM Q3 2016 Domestic Gross New Unit Openings Domestic Restaurant Opening Commitments 79% of current domestic pipeline is from existing franchisees as of 12/31/16 Mix of small and large franchisees Healthy Franchisee Base … AND CONTINUE TO INV
Slide 15: Proven Portability
14 PROVEN PORTABILITY 40 State Footprint with Room to Grow in All Markets (1) Note: (1) Restaurant count as of 9/24/16 Total Domestic Store Count – 882 Averaging 3 Domestic Closures Per Year Since 2013 Opened restaurants in 28 states YTD Q3 2016
Slide 16: Long-Term Domestic Roadmap
15 882 1,645 855 Q3 2016 (actual) Existing Market Potential New Market Potential Long-Term Domestic Potential 827 791 2,500 2,500 Unit Domestic Potential Existing Markets New Markets (1) Note: (1) Includes 818 restaurants in existing markets and 64 restaurants in new markets as of 9/24/16. LONG-TERM
Slide 17: Strengthening the Model
Strengthening the Model
Slide 18: Online Sales Growth
17 32% Restaurants > 20% Online Sales(2) ONLINE SALES GROWTH 23 24 Poised for Continued Growth (1) Olo (2) As of quarter ended 9/24/2016 Sources: Q3’15 Q3’16 13.5% 14.0% 14.5% 15.0% 15.5% 16.0% 16.5% 17.0% 17.5% 18.0% 0 50 100 150 200 250 300 350 400 2015 2016 2016 2016 Q4 Q1 Q2 Q3 T o tal O n lin e
Slide 19: Launching Ordering with Amazon Alexa
18 LAUNCHING ORDERING WITH AMAZON ALEXA • First voice-activated ordering with menu item customization • Builds on order channel innovation Facebook Messenger Twitter “Alexa, ask Wingstop to order an 8 piece classic wing combo with lemon pepper, fries and ranch.”
Slide 20: 2017 National Advertising Launch
19 2017 NATIONAL ADVERTISING LAUNCH 23 24 Television Digital & Social National digital delivering high ROI & driving online orders More national digital delivering high ROI & driving online orders 2016 2017 (~60% of system sales) (100% of system sales) 22 Weeks of TV Ad Fund 1% National / 3% Local 3
Slide 21: Introductory Message Focus: Key Brand Attributes
20 INTRODUCTORY MESSAGE FOCUS: KEY BRAND ATTRIBUTES Young Adult (18-34 Skew) Male & Female (50/50) Multicultural (Hispanic & AA Skew) FLAVOR CRAVER AUDIENCE
Slide 22: Television and Digital Targeted Media Properties
21 21 TELEVISION TARGETED MEDIA PROPERTIES Flavor Craver Cable Mix Diverse Sports Universe Univision Partnership DIGITAL Social Activation Performance Digital Online Video
Slide 23: International Development
International Development
Slide 24: Strong Business Performance
23 STRONG BUSINESS PERFORMANCE Market/Date open Restaurant (1) Mexico (11/09) 39 Indonesia (6/14) 13 Philippines (7/14) 11 Singapore (12/13) 2 UAE (4/15) 2 Saudi Arabia (2017) - Colombia (2017) - Panama (2017) - Totals 67 Note: 1. Unit data as of Q3’16 2. As of 12/31/16 Current Footprint Business Pe
Slide 25: Adaptive Format to Meet Local Market Needs
24 ADAPTIVE FORMAT TO MEET LOCAL MARKET NEEDS Sports theme design Table service Full bar 20+ TV monitors & audio 150-200 seats Contemporary design Order at counter Table delivery and beer (optional) Digital menu boards 50-70 seats Sports – Casual Dining Fast Casual
Slide 26: International Potential
25 Asia A North America Middle East South America Strong Interest from Potential Franchisees INTERNATIONAL POTENTIAL U.S. Consumption: 44kg Europe Market Consumption European Union 21kg Africa Market Consumption South Africa 31kg Americas Market Consumption Latin America and Caribbean 30kg Brazil 39
Slide 27: Uniquely Positioned Franchise Model: Long-Term Financial Targets
26 UNIQUELY POSITIONED FRANCHISE MODEL LONG-TERM FINANCIAL TARGETS* 10%+ annual unit growth ~2,500 domestic unit potential Growing international opportunity Disciplined Unit Growth Attractive Business Model Long-Term Growth Targets *These are not projections; they are goals and are forward-loo
Slide 28: Appendix
#Appendix PS ausy 2
Slide 29: Historical Adjusted EBITDA Reconciliation
28 HISTORICAL ADJUSTED EBITDA RECONCILIATION Notes: 1. One-time fee of approx. $3.3 million paid in consideration of termination of management agreement with Roark Capital Management, LLC 2. Includes management fees and other out-of-pocket expenses paid to Roark Capital Management, LLC 3. Represents
Slide 30: Net Debt Reconciliation
29 NET DEBT RECONCILIATION In $000s Adjustments for Q2 Pro-Forma June 25, 2016 Refinance and Dividend (1) Ending Balance September 24, 2016 Total debt 85,500 79,500 165,000 158,000 Cash and cash equivalents 10,014 (3,684) 6,330 3,828 Net debt 75,486 83,184 158,670 154,172 Notes: 1. Adjusted for proc