2012 Investor & Analyst Day Dunkin’ Brands Group, Inc. May 8, 2012 Exhibit 99.1 |
Forward-looking statements o 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. o 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. o 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 provided on our website. 2 Confidential information: Copying, dissemination or distribution of this information is strictly prohibited. |
A strong platform for continued growth 2012 DNKN Investor & Analyst Day Nigel Travis CEO, Dunkin’ Brands & President, Dunkin’ Donuts |
Highly experienced, aligned management team Name Title Past experience Nigel Travis Chief Executive Officer, Dunkin’ Brands and President, Dunkin’ Donuts U.S. President & Chief Executive Officer of Papa John’s, President & Chief Operating Officer of Blockbuster and SVP Burger King Neil Moses Chief Financial Officer Executive Vice President / Chief Financial Officer of Parametric Technology Corporation John Costello Chief Global Marketing & Innovation Officer Executive Vice President of Merchandising and Marketing at Home Depot, Senior Executive Vice President of Sears, Senior Vice President of Marketing & Sales at Pepsi-Cola USA and Chief Global Marketing Officer of Yahoo! Paul Twohig Chief Operating Officer, Dunkin’ Donuts U.S. & Canada Senior Vice President of Starbucks; Executive Vice President and Chief Operating Officer of Panera Bread Company John Dawson Global Development Officer Vice President of Worldwide Restaurant Development for McDonald’s Corporation Giorgio Minardi President, International Managing Director, Europe and the Middle East, for Autogrill; vice President of Asia Pacific, Burger King; and Vice President and Chief Marketing Officer for Greater China for McDonald’s Corporation Bill Mitchell Senior Vice President & Brand Officer, Baskin- Robbins U.S. & Canada President of Global Operations for Papa John’s Richard Emmett Senior Vice President & General Counsel Former Executive Vice President and Chief Legal Officer of Quiznos, Senior Vice President and General Counsel of Papa John’s Ginger Gregory Senior Vice President, Chief Human Resources Officer Global Head of HR for consumer business arm of Novartis AG Karen Raskopf Senior Vice President, Chief Communications Officer Senior Vice President of Corporate Communications for 7 – Eleven and Blockbuster Paul Carbone Vice President, Strategy & Finance Senior Vice President / Chief Financial Officer for Tween Brands |
Focused growth strategies across each segment 1 Represents percentage of LTM reportable segment revenues through 3/31/2012 74% of LTM revenue¹ 7% of LTM revenue¹ 19% of LTM revenue¹ Increase comparable store sales and profitability in DD U.S. Continue DD U.S. contiguous store expansion Increase comparable store sales growth of BR U.S. Drive accelerated international growth across both brands |
Three Pillars Franchisee Relationships Operations Focus Franchisee Profitability |
Franchising Relationships o It’s all about making our franchisees profitable o “Pluralistic frame of reference” o Requires great communication and listening skills o A positive approach to every problem o Willingness to be flexible while maintaining the course o Collaborative approach |
Operations Focus o Develop people and guest-first culture o Instill retail mindset across Dunkin’ Brands system o Select the right franchisees; offer the best training and support o Intensely focus on unit economics o Enhance guest experience by focusing on satisfaction |
Franchise Profitability – a cross-functional approach MAXIMIZE profitability for All Stakeholders INCREASED franchisee profitability enables increased new store development INCREASED store penetration enables increased sales, customer convenience and frequency (ad fund) INCREASED beverage sales enables increased franchisee profitability INCREASED customer convenience and frequency enable increased beverage sales |
Public Company Transformation • Continued focus on corporate governance • Shareholder outreach • Succession planning Pre-IPO o 94% Private Equity Owned Post-IPO o 75% Private Equity Owned Post-Nov. ‘11 Follow-on Offering o 55% Private Equity Owned Post-March ‘12 Follow-on Offering o 30% Private Equity Owned |
Building brand awareness & driving new restaurant sales Marketing & Product Innovation John Costello Chief Global Marketing & Innovation Officer |
o Relevant Strategic Priorities: Designed to drive growth in all parts of the system; particularly effective in new markets o Efficient National Marketing: National media buys put the right level of advertising into a market at the right time o Effective Local Marketing: Local markets retain flexibility to personalize marketing and messaging to reach our key customers o Franchisee Profitability: Marketing focus on product innovation and accelerating beverage growth early in a restaurant’s life cycle US Marketing and Product Innovation efforts support US store development goals by focusing on four key priorities |
Relevant Strategic Priorities: Designed to maximize growth and drive new US market expansion 1) Drive comp sales and brand differentiation 2) Increased focus on growing our beverage and total coffee business 3) Protect and grow our critical AM day-part 4) Grow the PM day-part 5) Maintain our strong value position How does strategy drive expansion? o Differentiated food and beverage products help introduce the brand in new markets o High margin beverages build ritual and maximize franchisee profitability o Builds ritual and brand loyalty and drives franchisee profitability o Broadens customer appeal and drives incremental sales and profit for franchisee o Reinforces brand positioning of offering customers great products at a great value |
Efficient National Marketing: Builds brand awareness and drives sales early in market entry period Leading Programs Customized Sponsorships Times Square National advertising builds brand awareness even in markets with few restaurants |
Efficient National Marketing: Traditional media supplemented with targeted digital and social efforts Relevant digital partnerships Social: Facebook & Twitter Gaming Media vehicles and sponsorships are selectively chosen to connect with customers, reinforce the brand and drive sales |
Efficient National Marketing: Our mobile solution has a multi-faceted approach with very focused objectives • Drive Comps • Improve Speed of Service • Improve Profitability • Drive DD Card Sales • Enhance Loyalty Efforts |
Effective Local Marketing: Builds the brand, connects with local customers and drives sales We use relationships with targeted major partners to provide differentiated messages in select markets |
Effective Local Marketing: Builds the brand, connects with local customers and drives sales All markets have access to tools and templates that can be applied locally |
Franchisee Profitability: Strong menu of differentiated national products, supplemented regionally as appropriate National menu drives brand differentiation, customer loyalty, franchisee sales and profitability Selectively supplemented with regional products where needed |
Drive beverage growth at the local level through localization of WAYD and in-store tactics Campaign drives beverage awareness in all markets, targets key demographics and helps differentiate our beverage lineup Franchisee Profitability: Focus on growing beverages early in restaurant life-cycle enhances franchisee profitability “What are you drinkin’?” advertising is effective and flexible |
Franchisee Profitability: Focus on growing beverages early in restaurant life-cycle enhances franchisee profitability “What are you drinkin’?” advertising is effective and flexible o Coffee Leadership – Taste Passion o Coffee Leadership – Iced Coffee Customization o Iced Coffee – Boston Sports Pride o Hispanic – America’s Favorite |
Franchisee Profitability: K-Cups continue to build the brand, accelerate beverage growth, and drive profitability We are leveraging K-Cups to build the brand and accelerate beverage rituals o K-Cups have been a key driver of both sales and profitability and we are pleased with the launch of the category o Brewer and K-Cup sales are solid and in line with our projections, with penetration increasing o We have a solid plan in place for the rest of the year with advertising, merchandising and LTOs. o K-Cups are particularly important in new and emerging markets where they have provided even greater incremental sales and profit for franchisees |
Summary: Marketing and Innovation efforts support US store development goals by focusing on 4 key priorities 15,000 Restaurants 7,000 Restaurants Relevant Strategic Priorities Effective Local Marketing Efficient National Marketing Driving Franchisee Profitability |
Supporting new and existing franchisees Enabling Successful New Restaurants Paul Twohig Chief Operating Officer, Dunkin’ Donuts U.S. & Canada |
Team Priorities Consistent, focused, and execution driven PEOPLE GUEST EXPERIENCE PROFITABLE TOPLINE SALES |
Support Structure o FIELD OPERATIONS is led by 4 Regional Vice Presidents (RVP) and 25 Operations Directors (OD) that act as the maître d’ for their areas o OPERATIONS SERVICES TEAM supports development of systems and processes to enable restaurant operations o LEARNING TEAM focused on training franchisees and Restaurant Managers and field support team Core connections with marketing, development, construction, franchising and financial planning |
People Teaching and coaching is the foundation: o Operations Team Development o Franchisees and Restaurant Managers Ratio of Field Support to restaurants is critical to success Enabling Successful New Restaurants: o Improved focus on selecting the best franchisees – cross functional vetting process o New Franchisee Learning Path o Developing a support system – franchisee mentorship |
Guest Experience Focus on Restaurant Operations o RORs and Restaurant Visitation Process (at least 4 visits per year) o Upcoming Franchisee Rating & Reward System o Action Planning is critical Guest Focused Operating Systems o LEAN Diagnostics o Simple and clear processes Enabling Successful New Restaurants: o Grand Openings – Community Connection – Loud and Proud o Ensuring regional relevance |
Guest Experience Guest Satisfaction Survey (GSS): o Focus of understanding the guest experience o National overall satisfaction scores have continuously improved o 20% improvement in overall satisfaction scores over past two years |
Profitable Topline Sales o Remodels and relocations o Average age of restaurants is less than 5 years o Guest Service Diagnostic Tool o Sandwich Station enhancements o POS o Back-Office Systems: inventory, food cost, labor and cash management o Loss Prevention systems and education o Mobile/Loyalty program UPDATED Retail Technology LEAN Solutions Asset TRANSFORMATIONS |
Team Priorities Consistent, focused, and execution driven PEOPLE GUEST EXPERIENCE PROFITABLE TOPLINE SALES |
Significant opportunity for profitable growth Doubling the Footprint of Dunkin’ Donuts U.S. John Dawson Global Development Officer, Dunkin’ Brands |
Significant Opportunity for Profitable Growth 1. As of 3/31/2012 REGION POPULATION (MM) STORES (1) PENETRATION Core 36.0 3,775 1:9,540 Established 53.8 2,245 1:23,950 Emerging 88.7 910 1:97,500 West 130.0 130 1:1,000,300 |
Strong unit economics maximize profitability for all stakeholders and drive Dunkin’ Donuts U.S. development MAXIMIZE profitability for All Stakeholders INCREASED franchisee profitability enables increased new store development INCREASED store penetration enables increased sales, customer convenience and frequency (ad fund) INCREASED beverage sales enables increased franchisee profitability INCREASED customer convenience and frequency enable increased beverage sales |
Development Strategy is Delivering Positive Results NET NEW STORES 2009 – 2011 RESTAURANT BASE DIVERSITY SDA SALES KEEPING RESTAURANT BASE CONTEMPORARY STRENGTHENING UNIT ECONOMICS o 640 Net Openings o Emerging markets grew 49%; West region grew 27% o 85% Traditional locations; 15% Gas & Convenience and Alternative Points of Distribution o Nearly 50% of restaurants include a drive-thru o 25% increase in SDA sales from 2010 to 2011 o Majority of 2012 SDA sales West of Mississippi River o 636 remodels in 2011; guidance of 600 – 650 in 2012 o 60% of asset base will be newest restaurant image by end of 2012 o Average age of restaurant base is less than 5 years o 2010 Cohort of Traditional Openings: $855,000 AUVs ; $474,000 average capex o 2011 Cohort of Traditional Openings: $858,000 AUVs ; $461,000 average capex |
o Phase 1: Deliberate spacing - focus on traditional formats o Phase 2: Coffee convenience o Phase 3: Driving deep penetration through in-fill locations o Sophisticated sales forecasting model o Continuous focus on driving down capex investments o Primary focus on driving high margin beverage sales o Supply chain efficiencies - reduced COGs o Rigorous franchisee selection o Operational experience and financial stability o Customized SDA sales models & incentives o Developing national and regional lender relationships o Cross-functional approach to market plans o Identify top tier trade areas o Continuous assessment of market potential o High internal hurdles for site approvals Accelerating Growth with Cross-Functional Approach RIGOROUS Market Planning QUALITY Franchisees Phased Market DEVELOPMENT FOCUS on Unit Economics |
Franchisee Base is a Major Asset Background of Dunkin’ Donuts U.S. 2011 SDA Purchasers Existing 69% New 31% G&C Retail - QSR 28% Restaurant - QSR 48% Other 24% |
2011 SDA Commitments Sold by Market Type Dunkin’ Donuts SDA sales in 33 DMAs in 2011 o Reaching sell-out levels in Established markets: • Washington , DC • Chicago • Baltimore • Tampa o Strong early recruitment success in New Markets released in 2010 & 2011: • Arkansas • Louisiana • Iowa • Denver Emerging 28% Established 33% West 39% |
2012 Development Production: Forecasted SDA Sales and Openings by Market Type Forecasted 2012 Net Openings by Market Type Forecasted 2012 SDA Sales by Market Type Emerging 19% Established 38% West 12% Core 31% Emerging 40% Established 2% West 58% Continuing to penetrate Core and Established markets while selling SDAs for future growth |
Contiguous, Strategic Growth Westward Selling in-fill locations & SDAs to existing franchisees Selling SDAs to new and existing franchisees Future markets |
Accelerating Dunkin’ Donuts U.S. Growth o SIGNIFICANT opportunity for profitable growth o COMPELLING, articulated philosophy on franchising o ENHANCED development strategy that is demonstrating strong results o ATTRACTIVE unit economic model generating quality demand from new and existing franchisees o DISCIPLINED contiguous approach to doubling footprint in U.S. |
Enhancing unit economics to drive accelerated growth Dunkin’ Donuts New Store Economics Neil Moses Chief Financial Officer, Dunkin’ Brands |
Focus on Store-Level Unit Economics to Drive Accelerated growth o Significantly increased national media driving brand awareness and high-margin beverage sales o Intense focus on accelerating new market beverage sales o K-Cups boosting franchisee profitability o Agreement with franchisee-owned supply chain cooperative to provide flat cost of goods to back door of the restaurant across system by 2015 o $245 million reduction in franchisee costs since 2008 from strategic sourcing and operational efficiencies o 24% reduction in upfront capex for new end-cap, drive-thru restaurants since 2008 90% of 2011 new store development with existing franchisees; 69% of 2011 SDA sales with existing franchisees |
Our Dunkin’ Donuts U.S. Regions REGION Core Established Emerging West |
New Restaurant Sales & Profitability Strong & Consistent Across Regions 1. As of 4/11/2012 2. Standalone Traditional Dunkin’ Donuts Restaurants only 3. 2011 data is projected based upon partial year results 4. 2011 COGs and EBITDA impacted by commodity inflation o First year sales and first year EBITDA % improving in all regions o West & Emerging first year sales surpassed Core & Established past two years o Core & Established first year sales up from $14,000 to 16,400 or 17% growth from 2008 to 2011; West & Emerging first year sales up from $13,400 to $17,500 or 30% growth from 2008 to 2011 o West & Emerging first year EBITDA % grew from 4% to 13% from 2008 to 2011; now consistent with Core & Established First Year EBITDA % First Year Sales |
Consistent Improvement in First Year in West & Emerging Markets 8.5% CAGR 1. As of 4/11/2012 2. Standalone Traditional Dunkin’ Donuts Restaurants only 3. 2011 data is projected based upon partial year results 4. 2011 COGs and EBITDA impacted by commodity inflation o West & Emerging first year sales up from $13,400 to $17,500 or 30% growth from 2008 to 2011; West & Emerging first year EBITDA % grew from 4% to 13% from 2008 to 2011 o Enhanced site selection improving first year sales o Increased beverage dollars helping to drive improved EBITDA % o Maintained EBITDA margin in 2011 despite commodity pressure $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000 2008 (76 Sites) (38 Sites) 2010 (42 Sites) 2011 (49 Sites) West & Emerging First Year Sales 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 2008 (76 Sites) (38 Sites) 2010 (42 Sites) 2011 (49 Sites) West & Emerging First Year EBITDA % 2009 2009 |
Growing First Year Beverage Dollars & Lower Build Costs Driving Improved EBITDA & Cash-on-Cash Returns 1. As of 4/11/2012 2. Standalone Traditional Dunkin’ Donuts Restaurants only 3. 2011 beverage dollars projected based upon partial year results o West & Emerging first year beverage dollars up from $4,950 to $6,250 or 26% percent growth from 2008 to 2011 o West & Emerging average restaurant build cost down nearly $60,000 or 12% from 2008 to 2011 $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 2008 (76 Sites) (38 Sites) 2010 (42 Sites) (49 Sites) West & Emerging First Year Beverage Dollars $- $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 2008 (76 Sites) (38 Sites) 2010 (42 Sites) (49 Sites) West & Emerging Average Restaurant Build Cost by Open Year 2009 2009 2011 2011 |
Strengthening New Market Cash-on-Cash Returns 1. As of 4/11/2012 2. Standalone Traditional Dunkin’ Donuts Restaurants only 3. 2011 projected based upon partial year results 4. Profitability Numbers are franchisee reported and do not include G&A o West & Emerging first year cash-on-cash returns up from 5% in 2008 to 27% in 2011 o West & Emerging first year cash-on-cash returns cleared 25% target in 2010 and remained above 25% despite commodity pressures in 2011 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 2008 (76 Sites) 2009 (38 Sites) 2010 (42 Sites) 2011 (49 Sites) West & Emerging First Year Cash-on-Cash Returns |
Year-Over-Year Improvement in Beverage Dollars and Cash-on-Cash Returns in New Markets 1. As of 4/11/2012 2. Standalone Traditional Dunkin’ Donuts Restaurants only 3. 2011 projected based upon partial year results o Restaurants opened in 2010 & 2011 have much stronger first year beverage dollars and cash-on-cash returns than restaurants opened in 2008 and 2009 o Restaurants opened in 2008 and 2009 showing steady year-over-year progress $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 2008 (76 Sites) 2009 (38 Sites) 2010 (42 Sites) 2011 (49 Sites) West & Emerging - Beverage Dollars Progression by Open Year Year 1 Year 2 Year 3 Year 4 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 2008 (76 Sites) 2009 (38 Sites) 2010 (42 Sites) 2011 (49 Sites) West & Emerging – Cash-on-Cash % Progression by Open Year Year 1 Year 2 Year 3 Year 4 |
Supporting contiguous expansion Dunkin’ Donuts U.S. Supply Chain |
Dunkin’ Donuts U.S. Supply Chain Footprint Central Manufacturing Locations (CMLs) National DCP (NDCP) DD Approved Suppliers o 100+ franchisee-owned bakeries o Make donuts, baked goods o Receives supplies from NDCP o Supply 4,500 restaurants o Daily delivery to restaurants o Consolidation opportunities being investigated o Franchisee owned purchasing & distribution co-op, non-profit o Competitively bid products o Overseen by franchisees & DNKN o Ships 50mm cases/year to stores o Weekly deliveries to restaurants o 450 QA approved suppliers o $1.3B in annual shipments o DNKN approves suppliers, products and owns specs; NDCP negotiates price with approved suppliers U.S. Dunkin’ Donuts Restaurants o 99% of needs supplied by NDCP o Donuts from CMLs, Full Producers, or Just Baked on Demand |
NDCP Distribution Footprint WA Phoenix, AZ (Oct 2012) Mokena, IL Colonie, NY Bellingham, MA Westampton, NJ Greensboro, NC Groveland, FL |
Enabling Contiguous Expansion 1. Merging regional co-ops into national distribution and procurement cooperative (NDCP) 2. Implementing “flat pricing” across U.S. in three years 3. Reducing franchisee COGs through sourcing & operational efficiencies OUR MISSION: Ensure continuity of supply of high quality food, beverage & equipment, while improving franchisee profitability to enable Westward expansion |
Recently Merged 4 Regional Co-ops into Single NDCP Entity o Signed long-term, performance agreement with NDCP for procurement and distribution in U.S. o Merged 4 regional cooperatives into single entity • Eliminating redundant jobs • Consolidating duplicate functions: IT, Finance, Call Centers • Standardizing service levels and processes across system o Approaching vendors with “one voice” as a unified $1.3B purchasing and distribution entity o Installing new NDCP Board with improved governance • “1 Member, 1 Vote” principle ensures new markets are represented 6 distribution centers located in 4 formerly autonomous regions now financially merged and centrally controlled |
Both Parties Benefit in New Agreement FRANCHISEE BENEFITS DNKN BENEFITS o Improved NDCP Board Governance o Guaranteed flat pricing by year 3 o Performance-based contract, requiring top-quartile results o Dedicated, franchisee-owned supply chain requiring no capital investment from DNKN o Long-term role in supply chain o Early inclusion in R&D o Access to multiple suppliers to improve RFP results o Ability to consolidate regions Both sides will benefit from enhanced franchisee profitability that will enable Westward expansion |
Implementing “Flat Pricing” Across U.S. New DNKN / NDCP Contract Requires “Flat Pricing” Sourcing and Operations Savings Will Enable Flat Pricing Supports Westward Expansion o New markets will have same product costs as Core markets o Eliminates need for DNKN supply chain subsidies in new markets o All members should see reduction over time o No region (including Core) should see an increase o Significant (2-3%) reductions in food cost for Western markets o All members across U.S. will pay same price for goods o Will be phased in over 3 years, with 6-month increments o Potential to accelerate if additional savings are uncovered Flat pricing for product costs is key enabler of contiguous growth strategy |
Reducing Costs Franchisee COGs Plan to capture another $100M over next 3 years o RFPs o 2nd suppliers o Specification optimization o Operational efficiencies o Lightweight packaging o Backhauls Key Levers: $115 $47 $41 $42 $245 mm $0 $50 $100 $150 $200 $250 $300 2008 2009 2010 2011 4 Year Total 4 Year Cost Reduction Results |
Additional $100M to Enable Flat Pricing By End of Year 3 o All regions will see a reduction o Higher cost regions will see the most benefit o Assumes successful capture of $100M+ in additional savings across system FLAT PRICING MECHANICS New England Chicago Mid- Atlantic Southeast Southwest 2012 Savings as a % of Sales 0.1% 0.1% 0.4% 1.1% 2.0% 2013 Savings as a % of Sales 0.2% 0.2% 0.6% 0.8% 3.4% 2014 Savings as a % of Sales 0.3% 0.4% 0.7% 0.9% 3.7% Projected 3-year Average Food Cost Savings 0.2% 0.2% 0.6% 0.9% 3.1% |
Significant long-term growth opportunities outside U.S. Growing Our Brands Globally Giorgio Minardi President, International, Dunkin’ Brands |
o 24 cities in 60 days o 90% of partner organizations o 2 global summits First 90 Days in Office STRONG, ENGAGED partners to grow with the brands |
Note: Unit count as of 3/31/12 Both brands have strong international presence… Store count: BR International was 11% of FY11 segment profit; DD International was 3% of FY11 segment profit |
…with significant long-term growth opportunity MATURE: Drive growth and increase penetration in established markets • Korea • Middle East • Japan EMERGING: Continue growth momentum in markets with significant opportunity and early presence • Russia, Germany • China • Latin America NEW: Leverage brands’ strengths to grow in high-potential markets • Mexico • Vietnam • India Dunkin’ Donuts Baskin Robbins Both Brands 350 – 450 net new International units in 2012 |
State of the business • Comps in Q1 2012 were 7.6% in Baskin-Robbins International and 2.3% in Dunkin’ Donuts International • DB International had over $1.9B franchisee reported sales in 2011. The segment grew by approx 9% to $424M in Q1 2012 • Q1 2012 profits were over $10M. Investment in the brands to continue with additional resources being added to accelerate growth Points of Distribution Franchisee Reported Sales |
My initial observations o Reinforce and integrate international team o Become more operations focused o Strengthen infrastructure with development, operations, marketing and supply chain resources o Leverage domestic strengths to grow awareness globally and ensure local relevance to optimize impact o Baskin-Robbins has universal appeal |
We have a common approach for each brand Happy 1.0 Indulgence Celebration Refreshment We Make People Happy DD Store design Premium Donuts Beverage Acceleration Bakery Stretch What Are You Drinkin’? Leverage US Expertise Global & Local Innovation Relevant Traffic drivers |
Baskin-Robbins International Continues to Perform Well, Driven by Innovative, Differentiated Guest Experience S. Korea Russia Saudi Arabia United Arab Emirates Oman Bahrain Vietnam 400 Happy 1.0 Design Locations Singapore Malaysia Australia Mexico Canada China United Kingdom Ecuador Puerto Rico Indonesia NEXT |
World-class design that makes product the star, celebrates brand heritage and is a happy, social gathering place • Partners actively remodeling existing restaurant base • AWS lift from remodels and new stores in Happy 1.0 design • Reduced build-out costs in certain markets • Expect more than 600 Happy 1.0 restaurants by end of 2012 |
The most effective menus blend both global and local products BR customers expect a menu that offers both Western and local choices Begins with core menu items o Hard Scoop, Sundaes, Shakes, Blasts, Smoothies, Cakes Supported by treats and beverages tailored to local tastes o Moon Cakes – China o Emlaaq Scoops – Middle East BR International team driving results o Solid marketing and menu support o World class Culinary team o Strong supply chain expertise |
For Dunkin’ Donuts, a flexible format enables a relevant customer experience for different markets |
Dunkin Donuts International - Store Design Global (Freestanding) Regional (Self Serve Donuts) Local (Kiosk) • New store design to be released in Q3. • Universal signage and in store design elements, flexibility on format and profile • Self serve donut case proving very successful |
Customer Appreciation Coffee and Tea Time Afternoon Break Thai Flower Festival Fruit Chewy Relevant local marketing and local products to appeal to the local consumers and effectively drive sales |
• Dunkin Donuts and Baskin-Robbins possess a strong international presence with a proven ability to grow in new markets • Brands have ability to leverage domestic strengths to grow awareness globally and ensure local relevance to optimize impact • Leveraging key elements of our international development strategy • Growing in existing core markets • Capitalizing on markets with major growth potential • Further developing our franchisee support structure Significant International growth opportunities International business poised for significant, long-term growth opportunities |
Rejuvenating a Beloved Brand Bill Mitchell Senior Vice President & Brand Officer, Baskin-Robbins U.S. & Canada “Back to basics” to drive BR U.S. comp store sales growth |
Rejuvenating a beloved 65-year old brand (5.2%) 0.5% (2.8%) 1.7% 5.8% 0.5% 9.4% (6.0%) (4.0%) (2.0%) 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% FY'10 Q1'11 Q2'11 Q3'11 Q4'11 FY'11 Q1'12 o Steadily increasing comp store sales growth o Q1 2012 -- highest quarterly increase since Q4 2001 o 2012 Guidance: 2 – 4% comp store sales growth o Optimizing store base Comp Store Sales Momentum Turning around Baskin-Robbins U.S. despite challenging U.S. ice cream market |
Increasing comp store sales growth for BR U.S. PINK SPOON DRIVEN PROFITABLE TOPLINE SALES RETURN TO GROWTH |
Pink Spoon Driven “Pink Spoon” plan is all about Operational Execution o Focusing on the basics • Setting stores to brand standards o Measuring what matters • Guest Satisfaction Survey o Standardizing the POS in all BR U.S. restaurants o Engaging crew with rallies and incentives o Strengthening franchisee partnerships with hands on approach Steadily increasing guest satisfaction scores |
Profitable Topline Sales: Core Marketing Priorities DRIVE profitable traffic through strong value proposition and differentiated products INCREASE ticket inside the four walls to build profits GET ‘EM IN IMPROVE relevance, differentiation and consistency BUILD THE AND |
Profitable Topline Sales: Strong value proposition and differentiated products |
Return to Growth: Optimizing restaurant base Case Study: Burbank, CA |
Return to Growth: New Store Design |
Strong Platform for Continued Growth • Brands have unique mix of heritage and consumer buzz • Track record of driving strong comps • Both domestic and international white space growth opportunities • Experienced management team focused on disciplined and profitable growth by franchisees • Committed to strong long-term earnings growth and cash flow generation with an asset-light business model |