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Popeyes 2015 Analyst Day
October 13 | Atlanta, GA
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Forward-looking StatementCertain statements in this presentation contain “forward-looking statements” within the meaning of the federal securities laws . Statements regarding future events
developments and our future performance, as well as management’s current expectations, beliefs, plans, estimates or projections relating to the future, are forwa
statements within the meaning of these laws. These forward-looking statements are subject to a number of risks and uncertainties. Examples of such statements
presentation include discussions regarding the Company’s planned implementation of its strategic plan, planned share repurchases, projections and expectation
same-store sales for fiscal 2015 and beyond, expectations regarding future growth and commodity costs, expectations regarding restaurant reimaging, guidance
restaurant openings and closures, effective income tax rate, and the Company’s anticipated fiscal 2015 and long-term performance, including projections regardi
and administrative expenses, capital expenditures and adjusted earnings per diluted share, and similar statements of belief or expectation regarding future event
the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: competition from other resta
concepts and food retailers, continued disruptions in the financial markets, the loss of franchisees and other business partners, labor shortages or increased labo
increased costs of our principal food products, changes in consumer preferences and demographic trends, as well as concerns about health or food quality, insta
avian flu or other disease outbreaks, instances of salmonella or other food-borne illnesses, general economic conditions, the loss of senior management and the
attract and retain additional qualified management personnel, limitations on our business under our 2013 Credit Facility, our ability to comply with the repayment
requirements, covenants, tests and restrictions contained in our 2013 Credit Faci lity, failure of our franchisees, a decline in the number of franchised units, a decl
ability to franchise new units, slowed expansion into new markets, unexpected and adverse fluctuations in quarterly results, increased government regulation, eff
volatile gasoline prices, supply and delivery shortages or interruptions, currency, economic and political factors that affect our international operations, inadequat
of our intellectual property and liabilities for environmental contamination and the other risk factors detailed in the Company’s 2014 Annual Report on Form 10-K
documents we file with the Securities and Exchange Commission. Therefore, you should not place undue reliance on any forward-looking statements.
©Copyright. 2015. Popeyes Louisiana Kitchen, Inc. All rights reserved.
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2015 Analyst Day
Schedule Subject/Event Presen9:00 a.m. – 9:35 a.m. Dare to Serve Cheryl Bachelder
Chief Executive Officer
9:35 a.m. – 10:20 a.m. Inspired Food Amy Alarcon, Vice President of
10:20 a.m. – 10:30 a.m. Passionate People Lynne Zappone
Chief People Experience Office
10:30 a.m. – 10:45 a.m. Coffee Break
10:45 a.m. – 11:30 a.m. Operations Execution John Merkin
Chief Operating Officer
11:30 a.m. – 12:15 p.m. Popeyes International Andy SkehanPresident – International
12:15 p.m. – 1:00 p.m. Lunch
1:00 p.m. – 1:30 p.m. ONE Technology Will Matt
Chief Financial Officer
1:30 p.m. – 2:00 p.m. Capital Structure Will Matt
Chief Financial Officer
2:00 p.m. – 3:00 p.m. Closing Remarks
Dessert Reception
Cheryl Bachelder
Chief Executive Officer
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Cheryl BachelderChief Executive Officer
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Popeyes Story
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Declare a Daring Destination
“The Hottest Concept in Quick Service Res
Declare a Daring Destination
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We created a plan…
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G u e s t s
Shareholders A n a l y s t s
Employees
Management M a n a g
e r s
Vendors
I n v e s
t o r s
B a n k
e r s
CrewFranchisees
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DO YOU
Choose to Serve
LOVETHE PEOPLE YOU LEAD?
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FranchiseSurveyResults
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THERE ARE NO GREAT LEADERS
WITHOUT GREATRESULTS.
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Popeyes Results
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Popeyes Results
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Seven Years of Consistent Result
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The Next Daring Destination
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The Next
Roadmap
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The People
We Serve
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The Next Performance Results
P h o t o
c r e d i t : G .
P a s c h
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Dare to ServeThe Atlanta Chorale
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Amy AlarconVice President of Culinary Inno
Inspired Food
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“To bring the heart and
soul of Louisiana cooking
to the fast food world.”
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Louisiana RootsChefs John Folse & Leah Chase
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Our Louisiana heritage inspires
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Our Louisiana heritage inspiresour innovation
The foods
inspire
distinct
ingredie
cooking t
of Lo
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• Family
• Camaraderie
• Savoring Life
• Celebration
• Creativity• Passion for Food
Louisiana values inform our innovat
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Popeyes menu strategy framewor
Objective
Key Strategies
Categories
Foods you love, inspired by theflavors, ingredients and cookintechniques of Louisiana
• Authentic L• Competitiv
• Bonafide: Spicy & Mild• Tenders: Mild, Spicy & Blackened• Seafood: Fish & Shrimp
• Strategic: BIC, Boneless, Seafood, Beverages
• Secondary: Sides, Desserts
• Beverages: Cane S• Signature Sides
• Premium quality products• Freshly prepared in-house• Platform product Innovation
Platforms
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Our Innovation ProcessCROSS-FUNCTIONAL TEAMS WORKING IN HAR
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New product development funnel
Ideas Products48 MarketTests12300
Annual Cycle
Ideas
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The components of successful LTO
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Stories are important
• Every product should tell a story
• The message should create a connection wguest and inspire them to visit the restaur
• All roads lead home, our products need to
distinctive attribute that reflects our herita
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The art of ideation
Food that tells astory
Agency
Marketing
Culinary:internal
andexternal
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Who are the players?
Right people,right place
PopeyesCulinary
Team
SupplierCulinaryTeams
AgencyPartner
ProductMarketing
Team
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Explorers at heart
• Each ideation begins with a journey
• Dine-arounds and city explorationsspark our creativity and provideinspiration
• In search of a good story
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The volume of ideas
Right brain moves to left brain
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Right brain moves to left brain
Action
Feasibility &
ActionBrainstorming
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Consumer Check-ins
CCT CLT SMT
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Following the Path: From ideation tonational launch
RED STICK CHICKEN | AVERY ISLAND, LA
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L ti
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Location as muse
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Ti h d t h i
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Time-honored technique
Th d ti k
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The red stick
Le petit bâton rouge, aka, the little
red stick, is a painted stick that was
used as a color guide for determining
when the peppers were at peak
ripeness and flavor so they could be
picked and started along the process
of making Tabasco® Hot Sauce
Idea turns into concept
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Idea turns into concept
• Features Tabasco as a key ingredient for flavor and heat
• New cut of boneless chicken highlights our expertise at pchicken in fun, new and interesting ways that are a breaair for consumers
• Plays to our strength of hand battering and breading BO
delivers a fresh and handcrafted experience
Popeyes Red Stick Chicken $3 99
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Popeyes Red Stick Chicken $3.99
Tender, juicy, all white meat chicken tenderloin strips (the most tender and juicy
meat chicken), marinated in cayenne and tabasco pepper marinade, hand batter
then cooked until golden brown and crispy. Served with Cajun Fries, buttermil
Smok’n Pepper Ranch for dipping.
Transformation
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Transformation
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Annie Explains
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Great story = Great message
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Going beyond traditional media
• Chicken Staredown app• A great product story provides
paths to communicationbeyond traditional media
Great story = Great message
SXSW launch
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SXSW launch
Did it work?
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Did it work?
Absolutely!
During the Red Stick Chicken LTO westablished a new all-time weekly record for the Brand
Louisiana-inspired FoodPassionResult
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Lynne ZapponeChief People Experience Office
Passionate People
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“If you are any good a
all, you know you can
do better.” - L. Bucking
Restaurant General Managers exp
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g p
BSimplify Work
Two key areas of focus for enhanced RGM success 360 suppor
clarification
Cultural transformation model
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Cultural transformation model
Source: Essential Marketing Models http://bit.ly/smartmodels
Leadership Development Framewo
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Leadership Development Framewo
Lead from the HeartDay One
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ay 1:
The Leader in You
• Explore Leadership• Servant Leadership at
Popeyes• Your Values• StandOut™ Strengths
Assessment
• Your Personal Purpose• Identify Your Actions and
Bring it to Life at Popeyes
Day One
Lead from the HeartDay Two
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ay 2:
Leading the Business
• Know the Popeyes• Your Role in Leading the
Business
Day Two
Lead from the HeartDay Three
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ay 3:
Skills for Leading Your Team
• Getting to Know Your• Setting Clear Expectations• Coaching and
• Follow-up and
Day Three
Early adopter status
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a y adopte status
Franchise Engagement Employee Engagement Guest Engagemen
Action plans to drive results
Franchise EFranchise D
Franchise CFranchise B
Franchise A
Above
Store
Leader
RGM
Crew
Voice of the Gue
Next steps
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p
• Capture Early Adopter feedback on each tool and p
– Ease of use and impact
• Monitor impact on performance
– Targeting employee engagement
• Field team providing follow up and coaching
• Revise tools and launch phased roll out in 2016
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John MerkinChief Operating OfficerOperations Execution
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“We are what we repeatedo. Excellence, then, is no
an act, but a habit.” – William Durant, historian, philosopher and founder of Gene
What we’ve learned by listening t
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• Our Team: Spread too thin to make the most effe
• Franchisees: “Please help me become great” • RGM’s: Simplify operations; build my skills
• Team Members: Set me up for success
• Guests: Make the service as good as the food
Moving performance
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Elevating consistency of execution must hapayoff for our franchisees
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BrandSupport
FranchiseeCompetency
Restaurant
General Manager
Engagement
Improved GuesExperience
ImprovedFranchise
Profitability
High impact opportunities
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DriveProfitableSales &Traffic
CreateCommonStandards
&
Processes
Train &Prepare
Coach &Inspire
Measure&
Celebrate
Leverage TechnologyLeverage Technology
Consistent
Execution
Consistent
ExecutionConsistent
Execution
Consistent
Execution
Structure and Systems
Brand supportWhat is being planned to win?
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Structure Improvement
• Increase restaurant visits• Introduce multi-level training
• Increase consultative skills
• Look for incremental successopportunities
Process Improveme
• Introduce multi-level Rdevelopment
• Deliver a standards m
• Drive evaluation proc
• Create consequencescompliance shortfalls
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Update
COMPANY RESTAURANTS
Highly-franchised business model
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Restaurant Count 2010 2014
Company 38 65Franchise 1,504 1,740
International 397 509
Global 1,939 2,314
% Franchisee global restaurant 98% 97%
Company restaurant goals
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“What a great
Popeyes
looks like”
“What a great
Popeyes
looks like”
Maximize shareholde
Optimize developme
operations excellence
Control testing platfo
People Practices
Company marketsRecent development in Indianapolis & Charlotte
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New Orleans
New company marketIndianapolis, IN
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Company restaurant growth
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38
53
65 67
4045
Company restaurant sales & profit g
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* Company operated restaurant operating profit is not a GAAP measure, includes rent expenses. Please refer to definitions and recon
the appendix.
Improvement planNew market restaurants
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• Assessed leadership and team members
• Re-established standards and training
• Utilized expertise from Heritage Markets
• Defined New Market goals
• Created market timing maps for development
Actions taken
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Strong growth in new domestic op
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* 2012 included 2 rest. and 2013 included 24 rest. related to 2012 acquisition
* *
New restaurant openings
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30% opened since 2008
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Andrew (Andy) SkehanPresident - International
International Update
“No matter how many
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No matter how many
goals you have achieved,you must set your sights
a higher one.” - Jessica Sa
We’re growing
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Crossed the 500 restaurant threshold
Four years of steadily increasing sales and unit
Roadmap strategies proven and effective
Domestic success generating increased interest
Over 530 International restaurant
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Restaurant count as of 2015 Q2
Latin
77 in 10 countries
and 2 territories
Canada 87
Middle East 71
in 5 countries
Europe
141 in 6
countries
North Asia123 in 2 Countries
and 1 territory
Q2 summary metrics
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Q2 Actual Q2 YTD
Comp Sales 4.4% 5.3%
Openings 19 43
Closings 2 13
International same store sales
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2.6%
4.7%5.0% 5.3%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2012 2013 2014 2015 Q2 YTD
International growth2012-2015 (as of Q2)
100Forecast 85-9
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5771
81
43
0
10
20
30
40
50
60
70
80
90
100
2012 2013 2014 2015YTD + Fcs
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Roadmap
INTERNATIONAL
L
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2 0
1 5 I N T E R N A T
I O N A
Build Distinctive BrandDefine and Differentiate
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Grow Same Store Sales and Average Unit Volumes
Utilize local cultural insights to develop unique and memadvertising creative. Build awareness and generate triaearly television advertising through co-investment.
ObjectiveObjective
Strategy
Description
Strategy
Description
Build Distinctive BrandDefine and Differentiate
MARKET TURKEY
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MARKET TURKEY
Marination =
WellMannered
Marination =
WellMannered
InsightInsight
BrandConnection
BrandConnection
Local Adaptation
Local Adaptation
12 Hours ofMarination12 Hours ofMarination
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Build Distinctive BrandDefine and Differentiate
MARKET TURKEYMIDDLE
EAST
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MARKET TURKEYEAST
Marination =
WellMannered
Marination =
WellMannered
InsightInsight
BrandConnection
BrandConnection
Local Adaptation
Local Adaptation
12 Hours ofMarination12 Hours ofMarination
Bolder,Flavorful
Food
Bolder,Flavorful
Food
A Man Eats
as much asHe Does
A Man Eats
as much asHe Does
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MIDDLE EAST
Build Distinctive BrandDefine and Differentiate
MARKET TURKEYMIDDLE
EAST
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MARKET TURKEYEAST
Marination =
Well-Mannered
Marination =
Well-Mannered
InsightInsight
BrandConnection
BrandConnection
Local Adaptation
Local Adaptation
12 Hours ofMarination12 Hours ofMarination
Bolder,Flavorful
Food
Bolder,Flavorful
Food
A Man Eats
as much asHe Does
A Man Eats
as much asHe Does
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SINGAPORE
Build Distinctive BrandDefine and Differentiate
MARKET TURKEYMIDDLE
EAST
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EAST
Marination =
Well-Mannered
Marination =
Well-Mannered
InsightInsight
BrandConnection
BrandConnection
Local Adaptation
Local Adaptation
12 Hours ofMarination12 Hours ofMarination
Bolder,Flavorful
Food
Bolder,Flavorful
Food
A Man Eats
as much asHe Does
A Man Eats
as much asHe Does
Create memorable experiencesPopeyes Delivers
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Grow sales through the introductiosupport of home delivery
Build a comprehensive Delivery suproviding solutions addressing calmanagement, online ordering, opeexecution, marketing support and mechanisms
ObjectiveObjective
Strategy
Description
Strategy
Description
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Development
INTERNATIONAL
O ti i d l t tE i ti
Growth channels
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• Optimize development agreements
• Pursue new or additional franchise partnfill market gaps
ExistingMarkets
• Leverage regional infrastructure
• Build on regional interest and awarenes
AdjacentMarkets
• Target high potential QSR markets• Seek best in class partners
• Consider equity as a growth catalystNew Markets
Development considerations
G l d l t i t t i hi k QSR
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• General and prevalent interest in chicken QSR
• Domestic success driving quality interest in Popeyes
• International improvement reinforcing that interest
• PLKI seen as a highly competitive alternative
SummaryInternational
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Brand and product travel well
Advertising support is working well and will c
Steady and improving sales and unit growth
Popeyes is an attractive CQSR option
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Why ONE Technology?
T h l i it t t t i i di t
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• Technology in its current state is an impediment
• Information distribution across multiple systems is ineff
• Without ONE Technology, it is impossible to achieve ouaspirational vision of world-class customer service and $AUVs
The next horizon…
ONE Technology is a BOLD transformational initiative to upgrade technology in all
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Engagedfranchisee,RGM, crew
Engagedfranchisee,RGM, crew
Superiorguest
experience
Superiorguest
experience
ConsistentexecutionConsistentexecution
Highoperatingstandards
Highoperatingstandards
C R I T I C A L E N A
B L E R S
ONE TechnologyONE Technology
ONE Technology: The challengeOver 40 different POS systems in place today
POS standardization is a prerequisite
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Each color segment rep
ONE TechnologyMore than just POS
One of each component is optimal Two or more of each is unm
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Keeping it manageable
Balancing three key areas
1 2
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Employee
Experience
Guest
Experience
Technology prov
hire, train and co
peo
Seismic Technology shifts are
affecting how consumers transact
and obtain brand information
Essential systems for the RGM to
lead consistent execution, efficiency
and ease of operation
RGM Experience
3
The What
C t li
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• Leverage our cobest pricing on and services
• Eliminate the neto fend for the tmarketplace
• Modular, best-of-breed approach;allows us to focus on and solve for oneset of integrations
• Includes all in-restaurant technology;not just POS
• Provides common infrastructureneeded for online ordering, mobile-payment, etc.
• Popeyes-dedicated resources focusedon optimizing all systems for Popeyesoperations
• One-push deployment of updates andenhancements to all restaurantssimultaneously
• Get franchisees out of the I.T. businessso they can focus on running greatrestaurants
One Standardized
Technology Platform
Centralized Data Management,
Configuration & Support
Centraliz
Pro
Total alignment between our business goals and our technology
Future possibilities Project
ONE Technology
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techn
G
•
•••••
•
Employee Experience
• Training• Online Work Schedules• Paperless Applications• News Updates• Performance and
Talent Tracking
• Real-Time Feedback
• Daily Routines
Provide new ways to hire,
train and communicate
with our people
RGM Experience
• Labor Scheduling• Production Planning• Inventory
Management
• Paperless OrderingProcess
• Integrated Dashboards
and Analytics• Support Service Speed
Simplify and support the
role of Restaurant General
Manager
Franchisee Experience
• Integrated technologyPlatform
• Data Management andSupport
• One-Push Deploymentof Updates
• Centralized
Procurementfor Best Pricing
Provide world-class
service to our Franchisee
Partners
What to expect next
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ScopeScopeRFP
ProcessRFP
ProcessTalentTalent TT
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Capital Structure
FINANCIAL UPDATE
Organic growth initiatives funded financial strategies as a suppleme
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Inspired FoodPassionate
People
Operations
Execution
ONE Technology
Ca
Driver
Supplemental toBusiness Drivers
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Balancing investment time horizo
Short-term
Investor
Long-term
Investor
Popeyes
Franchisor
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1-5 years 5-10 years 10 years
Must balanceinterests betweenOur shareholders
• Our highly-franchised model (97%) results in an investment that is very attractive t
• With our franchisees investing approximately $1.4 to $2mm per location, signing 20agreements and typically providing personal guarantees, our investors enjoy an "as
• All these favorable investment characteristics are predicated on the continued long-tfranchisees
• We have to balance the interests of our shareholders with that of our number one cfranchisees
Our franchised model deliverssteady, free cash flow ($M)
$60.0
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$23.7$26.3
$28.5
$36.7
$42.0
$48.0
$24.2
$-
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
2009 2010 2011 2012 2013 2014 YTD Q2 20
Cash usage history
Share Repurchases ($M)
$191
$250Total Debt Outst
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In addition to the special dividend in 2005 ofapproximately $350 million, we have repurchased
over $215 million of outstanding shares since 2005
$15.4 $20.3
$39.4
$19.0
$- $-
$22.3$15.2
$19.9
$40.0
$26.0
$-
$10.0
$20.0 $30.0
$40.0
$50.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD
Q2
2015
$191
$134 $133$119
$83$66 $
$-
$50
$100
$150
$200
2005 2006 2007 2008 2009 2010 20
Total Leverage Ratio wathe end of Q2 2015. Ou
average interest rate wa
Capex investment historyCapex increased during 2013 and 2014 as we have funded comp
development and completed the opportunistic purchase of two
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$1.4 $3.2
$7.6
$26.2
$32.8
$27.8
$7.9
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
2009 2010 2011 2012 2013 2014 YTD Q2
2015
Debt• $110MM Outstanding
Equity• Common Stock ~23.0
Popeyes current capital structure
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• Total debt capacity under the current facility $250MM
• 5 yr. All Bank Revolving Credit Facility
o Maturity Date Dec. 2018
• Weighted Average Interest Rate Base ~(2.50%)
• 80% fixed, 20% floating interest currently
• Interest rate locked on fixed portion 2015-2017
• Limited, flexible covenant package
o Total Leverage Ratio (TLR) < 3.5 to 1.0
o Minimum Fixed Charge Coverage Ratio > 1.25 to 1.0
o We can repurchase shares when the TLR < 3.0 to 1.0
outstanding
• Market Cap Q2 2015 ~
Capital Structure decision principl• Support the operating needs of the business
O i th i iti ti f d d fi t d h d bt
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• Organic growth initiatives are funded first and any excess cash or debt
be used to return cash to shareholders
• We provided guidance we would increase our leverage to 2.5x to 3.5x o
from 2015 to 2017
• Capital structure strategies are used to support the business and are no
of the business
• Credit facility decisions are primarily based on: 1) Flexibility, 2) Total Co
Simplicity and 4) Fit with the size and operating characteristics of the b
Share repurchase decision princip
Share repurchases are currentlyfavored over dividends due to:
Share repurchase decisguided by consideration
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favored over dividends due to:
• EPS benefit of share repurchases
• Our current growth trend would favorreinvestment to support organic growth
guided by consideration
• Availability of excess ca
• Intrinsic value
• Share price (P/E multip
• Interest rates
• EPS accretion
Share repurchases have been consistently made in the past andto continue to make share repurchases in the future
Share repurchase general guidelinesIncorporating share price, interest rate and EPS accretion
• Consider repurchasing shares when the share price and rate could generate a positive EPS
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rate could generate a positive EPS
• Evaluate repurchase decisions to serve the best interestshareholders and the company
• Determine the amount and timing of levered share repubased on market conditions
Capital StructureChanges planned during 2016-2017
• Plan to go into the traditional bank markets and negotiate a new credit
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• Could supplement share repurchases from excess operating cash flows wrepurchases from borrowed funds
• Seeking Board approval of our 2016 Plan, including planned capital struc
• Plan to issue guidance in early 2016
Significant market cap growthsince 2008
Improvements in Earnings and increasing our P/E Multiplehave driven our Market Cap and Share Price
$56 03$1 400
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P/E 5.8 11.3 16.4 15.3 20.0 26.8 34.0
$4.37$8.38
$14.76 $14.88
$24.83
$38.55
$56.03
$111
$213$378 $363
$596
$916
$1,300
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
2008 2009 2010 2011 2012 2013 Q4 201
October 5, 2015 Update:
• Share Price $56.29• Market Cap $1.3B
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Closing Remarks2015 Analyst Day
October 13, 2015
• Highly-franchised system
G i k t h
Key investment highlights
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• Growing market share
• Consistent, reliable cash flow• Strong unit economics
• Collaborative relationship with franchisees
• Steadily growing restaurant development
• Opportunity to double U.S. restaurants
• Untapped International growth
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The Next Horizon: Your Quest
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Non-GAAP Reconciliations
APPENDIX
Adjusted earnings per diluted share, Operating EBITDA and Free cash flowGAAP financial measures. The Company uses Adjusted earnings per diluteEBITDA and Free cash flow in addition to net income, operating profit and
Reconciliation of Non-GAAP Financial M
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operating activities to assess its performance and believes it is important fable to evaluate the Company using the same measures used by managembelieves these measures are important indicators of its operational strengtperformance of its business. Adjusted earnings per diluted share, OperatinFree cash flow as calculated by the Company are not necessarily comparabtitled measures reported by other companies. In addition, Adjusted earninshare, Operating EBITDA and Free cash flow: (a) do not represent net incofrom operations or earnings per share as defined by GAAP; (b) are not necof cash available to fund cash flow needs; and (c) should not be considere
to net income, earnings per share, operating profit, cash flows from operaother financial information determined under GAAP.
• The Company defines adjusted net i ncome for the periods presented as the Company’s reported net income after adjusting for certain non-operating items consisting of the foll owin
a) other expense (income), net, which included $0.1 million net loss on disposals of fixed assets for the twenty eight weeks ended July 12, 2105 and July 13, 2014, $0.2 and $0.4 millioexpenses in the twenty eight week period ended July 12, 2105 and July 13, 2014, respectively, and
• Other income of $0.4 million for recoveries under the Deepwater Horizon Economic and Property Damages Settlement Program for the twenty eight week period ended July 12, 2these adjustments at the effective statutory rates.
b) fiscal 2014, $0.5 million in tax expense for an out-of-period adjustment to the Company’s deferred tax liability associated with its indefinite lived intangible assets as discussed in NotConsolidated Financial Statements;
c) fiscal 2013, $0.4 million in interest expenses from the retirement of the 2010 Credit Facility fiscal 2012, $0.5 million in legal fees related to licensing arrangements;
d) fiscal 2011, $0.5 million in accelerated depreciation related to the Company’s relocation to a new corporate service center;
e) fiscal 2010 $0 6 million in interest charges associated with the retirement of the Company’s 2005 Credit Facility and a $1 4 million tax audit benefit related to the completion of a fe
Adjusted Earnings Per Diluted Sh
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e) fiscal 2010, $0.6 million in interest charges associated with the retirement of the Company s 2005 Credit Facility, and a $1.4 million tax audit benefit related to the completion of a feyears 2004 and 2005;
f) fiscal 2009, $1.9 million in interest charges associated with the Company’s 2005 Credit Facility amendment; and
g) the tax effect of these adjustments.
• Adjusted earnings per diluted share provides the per share effect of adjusted net income on a diluted basis. The following table reconciles on a historical basis for fiscal years 2009 tsixteen week periods ended April 19, 2015 and April 20, 2014, the Company’s adjusted earnings per diluted share on a consolidated basis to the line on its consolidated statement oincome, which the Company believes is the most directly comparable GAAP measure on it s consolidated statement of operations:
Fiscal Fiscal Fiscal F
(in millions, except per share data) 2015 2014 2014 2013 2012 2
Net Income 23.9$ 19.4$ 38.0$ 34.1$ 30.4$ $
Other expense (income), net (0.2) 1.5 1.2 0.3 (0.5) Interest expense associated with credit facility retirements and amendments - - - 0.4 -
Legal fees related to licensing arrangements - - - - 0.5
Accelerated deprecia tion related to the Com pany's relocation to a new Global
Service Center - - - - - Tax audit benefit - - 0.5 - -
Tax effect 0.1 (0.6) (0.5) (0.3) -
Adjus ted earn ings 23.8$ 20.3$ 39.2$ 34.5$ 30.4$ $
Adjus ted earn ings per di luted s hare 1.02$ 0.85$ 1.65$ 1.43$ 1.24$ $
Weighted average diluted shares outstanding 23.3 23.8 23.8 24.1 24.5
YTD Q2 2015
The Company defines operating EBITDA as earnings before interest expense, taxes, depreciatiamortization, and other expenses (income), net. The following table reconciles on a historical bdate period through the second quarter 2015 and year to date period through the second quarCompany’s operating EBITDA on a consolidated basis to the line on its condensed consolidatedoperations entitled net income, which the Company believes is the most directly comparable GOperating EBITDA margin is defined as operating EBITDA divided by total revenues.
Operating EBITDA
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Q2
($M) 2015
Net income$23.9
Interest expense, net 1.9
Income tax expense14.8
Depreciation and amortization 5.2
Other expenses (income), net(0.2)
Operating EBITDA $45.6
Total revenues$138.9
Operating EBITDA margin32.8%
©Copyright. 2015. Popeyes Louisiana Kitchen, Inc. All rights reserved.
• The Company defines free cash flow as net income plus depreciation and amortization plus stock-based compensation expense min
expenditures which includes:
a) for the twenty eight weeks ended July 12, 2015, $06 million of information technology and other corporate assets, and $0.4 millionmaintain, replace and extend the lives of Company-operated restaurant facilities and equipment; and
b) for the twenty eight weeks ended July 13, 2014, $0.6 million in Company-operated restaurant reimaging, $1.4 million of informatiocorporate assets, and $0.7 million in other capital assets to maintain, replace and extend the lives of Company-operated restaurant
c) for fiscal 2014, $0.6 million in company-operated restaurant reimages, $0.8 million of information technology hardware and softwarcapital assets to maintain, replace and extend the lives of company-operated restaurant and corporate facilities and equipment;
d) for fiscal 2013 $2 2 million in company-operated restaurant reimages $0 9 million of information technology hardware and softwar
Free Cash Flow
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d) for fiscal 2013, $2.2 million in company operated restaurant reimages, $0.9 million of information technology hardware and softwarcapital assets to maintain, replace and extend the lives of company-operated restaurant facilities and equipment;
e) for fiscal 2012, $0.6 million in Company-operated restaurant reimages, $1.1 million of information technology projects and $1.5 mi
maintain, replace and extend the lives of Company-operated restaurant facilities equipment,
f) for fiscal 2011, $1.5 million in Company-operated restaurant reimages, $0.8 million of information technology projects and $0.5 mimaintain, replace and extend the lives of Company-operated restaurant facilities and equipment.,
g) for fiscal 2010, $1.4 million for information technology projects, $1.2 million for reopening a company-operated restaurant in New Oreimaging and corporate office construction, and $0.6 million in other capital assets to maintain, replace and extend the lives of comequipment and facilities; and
h) for fiscal 2009 $0.3 million for information technology projects, and $1.1 million in other capital assets to maintain, replace and extoperated restaurant facilities and equipment.
• The following table reconciles on a historical basis for year to date period through the second quarter 2015, the year to date period2014 and fiscal years 2009 through 2014 the Company’s free cash flow on a consolidated basis to the line on its condensed consoloperations entitled net income, which the Company believes is the most directly comparable GAAP measure on its condensed cons
operations. Free cash flow margin is defined as free cash flow divided by total revenues
Fiscal Fiscal Fiscal Fiscal
(in millions) 2015 2014 2014 2013 2012 2011
Net income 23.9$ 19.4$ 38.0$ 34.1$ 30.4$ 24.2$
Depreciation and amortization 5.2 4.6 8.7 6.7 4.6 4.2
Stock-based compensation expense 3.2 2.9 5.3 5.4 4.9 2.9
Maintenance capital expenditures (1.0) (2.7) (4.0) (4.2) (3.2) (2.8
Free cash flow 31.3$ 24.2$ 48.0$ 42.0$ 36.7$ 28.5$
YTD Q2
The Company defines Company-operated restaurant operating profit as sales by Company-opminus restaurant food, beverages and packaging minus restaurant employee, occupancy and The following table reconciles on a historical basis for the twelve week and twenty-eight week
Company Operated RestaurantOperating Profit
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The following table reconciles on a historical basis for the twelve week and twenty eight week July 12, 2015 and July 13, 2014 , respectively, Company-operated restaurant operating profiton its condensed consolidated statement of operations entitled sales by Company-operated re
the Company believes is the most directly comparable GAAP measure. Company-operated resprofit margin is defined as Company-operated restaurant operating profit divided by sales by restaurants.
YTD Q
($M) 2015
Sales by Company-operated restaurants $59.8
Restaurant food, beverages and packaging 19.4
Restaurant employee, occupancy and other expenses28.0
Company-operated restaurant operating profit$12.4
Company-operated restaurant operating profit margin20.7%
©Copyright. 2015. Popeyes Louisiana Kitchen, Inc. All rights reserved.