JANUARY 2020 MICHAEL SKIPWORTH Chief Financial Officer
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INVESTOR DAY JANUARY 2020 MICHAEL SKIPWORTH Chief Financial Officer INVESTOR DAY 1 FORWARD-LOOKING STATEMENTS NON-GAAP FINANCIAL MEASURES This presentation contains forward-looking statements that are subject to risks and This presentation contains certain non-GAAP financial measures. The Company has uncertainties. All statements other than statements of historical fact or relating to provided a reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to net present facts or current conditions included in this presentation are forward-looking income in the Appendix to this presentation. Adjusted EBITDA is used by investors as a statements. Forward-looking statements give Wingstop Inc.’s (the “Company”) current supplemental measure to evaluate the overall operating performance of companies in expectations and projections relating to its financial condition, results of operations, the Company’s industry, but you should not consider it in isolation, or as a substitute for plans, objectives, future performance and business. These statements may include analysis of results as reported in accordance with GAAP. The Company’s calculation of words such as “anticipates,” “believes,” “continues,” “estimates,” “expects,” “goal,” Adjusted EBITDA may not be comparable to that reported by other companies. For “objectives” “intends,” “may,” “opportunity,” “plans,” “potential,” “near-term,” “long-term,” additional information about the Company’s non-GAAP financial measures, see the “projections,” “assumptions,” “projects,” “guidance,” “forecasts,” “outlook,” “target,” Company’s filings with the SEC. “trends,” “should,” “could,” “would,” “will” and similar expressions and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. PRELIMINARY FINANCIAL AND The forward-looking statements contained in this presentation are based on OPERATIONAL RESULTS assumptions that the Company has made in light of its industry experience and This presentation sets forth certain preliminary estimates of financial and operating perceptions of historical trends, current conditions, expected future developments and results that we expect to report for the fourth quarter and full year 2019. We have not other factors it believes are appropriate under the circumstances. As you read and yet completed customary closing procedures for this preliminary financial and consider this presentation, you should understand that these statements are not operational data, and our independent registered public accounting firm has not yet guarantees of performance or results. They involve risks, uncertainties (many of which reviewed or audited such results. Accordingly, these preliminary results are subject to are beyond the Company’s control) and assumptions. The Company believes these change pending finalization, and actual results could differ materially as we finalize factors include, but are not limited to, those described under the sections “Risk Factors” such results. and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in its Annual Report on Form 10-K and subsequent periodic reports filed with the Securities and Exchange Commission (the “SEC”). Any forward-looking statement made by the Company in this presentation speaks only as of the date on which it is made. Factors or events that could cause the Company’s actual operating and financial performance to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement except as may be required by law. INVESTOR DAY 2 PRE-RELEASE OF PRELIMINARY 2019 RESULTS +10.6% unit growth to 1,385 worldwide locations with 45 net openings in Q4 and 133 net openings for the year. +12.2% domestic same store sales growth for Q4, +11.1% for the year – marking our 16th consecutive year of positive same store sales growth. +21.2% system-wide sales growth to approximately $397.2 million in Q4 and +20.1% on an annual basis to approx. $1.5 billion. Invested $1.6 million in Q4 in connection with management consulting engagement, and incurred $1.1 million in organizational-related changes. INVESTOR DAY 3 CHARLIE MORRISON Chairman & CEO INVESTOR DAY 4 WELCOME TO INVESTOR DAY TODAY’S OBJECTIVES Anchor everyone on our strategic path forward Get to know new members of WING senior leadership team! Experience innovative ideas that will ensure a successful delivery of our strategy See our revised International strategy and outlook INVESTOR DAY 6 STEADFAST IN OUR MISSION AND VISION OUR MISSION OUR VISION TO SERVE THE WORLD TO BECOME A TOP 10 FLAVOR GLOBAL RESTAURANT BRAND INVESTOR DAY 7 INVESTOR DAY BEST-IN-CLASS RESULTS SINCE 2015 IPO GLOBAL MARKET PRESENCE 500+ 13.1% 10 Net new Unit development Countries of locations1 4-yr CAGR1 operations TRACK RECORD OF PERFORMANCE 31.3% 16.5% 17.7% Stacked domestic System-wide sales Adjusted EBITDA same-store sales 4-yr CAGR1 4-yr CAGR4 growth1 93% 406% $338M Average cash Total shareholder Capital Returned conversion3 return since IPO2 since IPO2 Notes 1. From fiscal year 2015 to end of fiscal year 2019 2. As of 12/28/2019 3. From end of fiscal year 2015 to 2019 Q3 TTM. Defined as Adj. EBITDA less CapEx (excludes one time investments such as restaurant acquisitions and 2019 purchase of new headquarters) 4. From end of fiscal year 2015 to 2019 Q3 TTM (proxy for 2019 fiscal year) INVESTOR DAY 9 INDUSTRY-LEADING PERFORMANCE IN 2019 GLOBAL MARKET PRESENCE DOMESTIC 1,385 10.6% 133 Global Unit development Net new 16 locations growth units CONSECUTIVE YEARS OF SAME-STORE SALES GROWTH TRACK RECORD OF PERFORMANCE 20.1% 94% 39% INTERNATIONAL System-wide Delivery Digital sales 8 sales growth coverage 2 mix1 CONSECUTIVE YEARS OF 11.1% 17.6% $1.25M SAME-STORE SALES GROWTH 1-Yr domestic 2-Yr domestic Average unit SSS growth SSS growth volume Notes: Results as of 12/28/2019. 1. For period ending 12/28/2019 2. % of domestic restaurants with delivery as of 12/28/2019 INVESTOR DAY 10 THE SECRET TO OUR SUCCESS Average Unit Volumes 1 $1.5MM 2009 2010 2011 2012 $1.0MM 2013 2014 2015 2016 $0.6MM YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 Note: 1. Average unit volumes shown for each 52 week period since restaurant opening for their respective year. Results through 12/28/19. INVESTOR DAY 11 WE HAVE NOT FOUND A POINT OF MATURATION 16% 14% 12% 2019 Domestic SSS of 11.1% 10% 8% 6% Original 4% Restaurant > $3.5M AUV 2% 0% 1994 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Note: Domestic same store sales growth as of fiscal year end 12/28/19. Vintage defined as year restaurant opened. INVESTOR DAY 12 THUS, IF YOU BUILD THEM… THEY WILL GROW! $1,510 $1,215 $905 2012 2015 2019 LESS THAN 1% CLOSURE RATE LAST 5 YEARS Notes: Based on Restaurants (465 count) operating in 2012 or earlier for each time period shown and have a full 52 weeks of sales starting in 2012. AUV $ in thousands, based on fiscal year ending 12/29/2012, 12/26/2015, and 12/28/2019, respectively INVESTOR DAY 13 RESULT: LASTING VALUE FOR OUR BRAND PARTNERS Brand Partner 1 Brand Partner 2 Brand Partner 3 AUV Annualized Sales Size of bubble determined by unit counts EXAMPLES OF BRAND PARTNER EVOLUTION AND GROWTH PROGRESSION (2012-2019) INVESTOR DAY 14 CONFIDENCE IN OUR LONG-TERM POTENTIAL GLOBAL RESTAURANT POTENTIAL Domestic Market International Markets 1,231 restaurants 154 restaurants 44 states 9 countries 3,000+ 3,000+ Domestic restaurant potential International restaurant potential Note: As of 12/28/19. INVESTOR DAY 15 TOP 10 GLOBAL RESTAURANT BRAND SUSTAIN SSS VIA BRAND MAINTAIN BEST-IN-CLASS EXPAND AWARENESS AND INNOVATION UNIT ECONOMICS GLOBAL FOOTPRINT National Cost of Goods Fortress Key Advertising Mitigation U.S. Markets Operating Digital Enter Non-Traditional Efficiencies Restaurant Locations Advantages Continue International Delivery of Scale Expansion INVEST IN PEOPLE AND INFRASTRUCTURE TO BUILD THE ORGANIZATION FOR THE NEXT LEVEL INVESTOR DAY 16 TOP 10 GLOBAL RESTAURANT BRAND SUSTAIN SSS VIA BRAND MAINTAIN BEST-IN-CLASS EXPAND AWARENESS AND INNOVATION UNIT ECONOMICS GLOBAL FOOTPRINT National Cost of Goods Fortress Key Advertising Mitigation U.S. Markets Operating Digital Enter Non-Traditional Efficiencies Restaurant Locations Advantages Continue International Delivery of Scale Expansion INVEST IN PEOPLE AND INFRASTRUCTURE TO BUILD THE ORGANIZATION FOR THE NEXT LEVEL INVESTOR DAY 17 BEST TEAM IN THE INDUSTRY! CHARLIE MORRISON MICHAEL SKIPWORTH MAHESH SADARANGANI CHRISTINA CLARKE Chairman & CEO Chief Financial Officer Chief Operating Officer Chief Marketing Officer NICOLAS BOUDET MADISON JOBE DONNIE UPSHAW REBECCA MINOR MARISA CARONA President International Chief Development Officer SVP of People General Counsel VP of Strategy and Chief of Staff INVESTOR DAY 18 DONNIE UPSHAW Senior Vice President, People INVESTOR DAY 19 A WINNING BRAND Fortune Fast Casual Nation's Restaurant Top 50 of 100 Top 100 Movers News Top 200 (#89) Fastest Growing and Shakers QSR Magazine Great Place to Oncon Icon Best Franchise Deals Work Certified Award 2019 DFW Best and FSTEC Franchise Direct Brightest Accelerator Top Franchises (#81) Companies “National Chain” INVESTOR DAY 20 PEOPLE AS THE COMPETITIVE ADVANTAGE Top 10 Global Brand People Process Building our Talent Advance Top Talent to Key Roles 6 5 from our Competitors our from Differentiated Talent Talent Differentiated Develop Critical Skills Coach Performance 4 Engage and Retain 3 Culture Alignment 2 Assess Potential & Management Strategy Management Integrated Talent Talent Integrated Bench Strength Attract Top Talent 1 INVESTOR DAY 21 INVESTING IN ORGANIZATION HEALTH Our journey with The Table Group Holding one another accountable focused on the following: for behaviors and actions, focusing on collective results Building a Cohesive Leadership Team • Building trust and eliminating politics Established meeting Create Clarity and communication • Intellectually aligned.