Document
false0001357204 0001357204 2020-02-06 2020-02-06

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

FORM 8-K
 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 6, 2020
 

DUNKIN’ BRANDS GROUP, INC.
(Exact name of registrant as specified in its charter)
 

Delaware
(State or Other Jurisdiction of Incorporation)
 
 
001-35258
20-4145825
(Commission
File Number)
(IRS Employer
Identification Number)
130 Royall Street
Canton, Massachusetts 02021
(Address of registrant’s principal executive office)
(781) 737-3000
(Registrant’s telephone number)


 Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.001 par value per share
DNKN
Nasdaq Global Select Market
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
Emerging Growth Company   
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Selection 13(a) of the Exchange Act.  




Item 7.01. Regulation FD Disclosure.

Beginning on February 6, 2020, Dunkin’ Brands Group, Inc. intends to use the presentation furnished herewith, or portions thereof, in one or more meetings with investors and analysts. The presentation will also be available online at http://investor.dunkinbrands.com as of February 6, 2020. A copy of the presentation is furnished as Exhibit 99.1 and is incorporated herein by reference.

The information contained in this report, including the exhibit attached hereto, is being furnished and shall not be deemed “filed” for any purpose, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, regardless of any general incorporation language in any such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
 
99.1
 
 
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
DUNKIN’ BRANDS GROUP, INC.
 
 
By:
/s/ Katherine Jaspon
 
Katherine Jaspon
 
Chief Financial Officer
Date: February 6, 2020
 



exh991_investordeck
Q4 & FY 2019 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+ 100% Years Of Brand Significant U.S. & Global Franchised Business Global Channel Heritage Growth Opportunity Opportunities Defensive, Predictable Business Model


 
% 16% 78 Of 2019 Segment Of 2019 Revenue Segment Revenue 6% Of 2019 Segment Revenue


 
FY 2019 Performance Highlights +2.1% +211 +385 Dunkin’ U.S. Dunkin’ U.S. Net Global Net Unit Comps Development Development FY 2019 Financial Highlights ~$12B +3.7% Systemwide Sales Revenue Growth +8.2% +9.3% Adjusted Operating Diluted Adjusted EPS Income Growth Growth 5


 
DUNKIN’ U.S.


 
Dunkin’ is a Leading Brand Across QSR 14 consecutive years of 5 billion+ cups of Dunkin’ being named #1 Coffee 9,600+ coffee consumed in 2019 (2) (1) chain by consumers U.S. Stores #1 seller of total drip coffee #2 seller of total espresso $9.2B #1 seller of iced brewed coffee #2 seller of cold brew coffee U.S. Systemwide #1 seller of donuts #2 seller of breakfast sandwiches (3) Sales in 2019 #1 seller of bagels (3) Broad DD product accessibility: Ready-to- drink bottled iced coffee, Cold Brew, 7-years of growth in breakfast espresso, K-cups, and bagged coffee in sandwich servings grocery and retail (1) Totalcupsofcoffeein U.S.restaurantsandCPGchannels (2) Source: BrandKeys, Dunkin’ named#1 brandfor CustomerLoyalty in the Out-Of-Home Coffee category,and #1 brand in the PackagedCoffee category (3) Source: The NPD Group/CREST for the year ending December2019 in QSR (includes total QSR and retail foodservice); Breakfastsandwichservings include wraps/burritos


 
OUR FOCUS: BEVERAGE-LED, ON-THE-GO


 
Broad Accessibility UnparalleledUnparalleled RestaurantRestaurant ConvenienceConvenience ExcellenceExcellence MenuMenu BrandBrand InnovationInnovation RelevanceEvolution BLUEPRINT FOR GROWTH: MOST LOVED BEVERAGE-LED ON-THE-GO BRAND


 
MENU INNOVATION


 
Beverage-Led Innovation Fueling Growth GROW AND PROTECT THE CORE EXPAND PRODUCT INNOVATION OFFER CONSISTENT, COMPELLING VALUE CREATE SECOND DAYPART


 
UNPARALLELED CONVENIENCE


 
Providing Guests with Unparalleled Convenience LEVERAGING PARTNERSHIPS DRIVING MOBILE AND EXPANDING DELIVERY TO GROW CPG DIGITAL INNOVATION THROUGH PARTNERSHIPS BROAD ACCESSIBILITY ON-THE-GO SUPER CONVENIENCE


 
Building Brand Beyond Traditional Four Walls BREW-AT-HOME BREWED GRAB AND GO NEW PARTNERSHIPS CONVENIENCE ON-THE-GO AND OCCASIONS $940M in CPG Retail Sales in FY 2019 Source: IRI, 52 weeks ending 12/29/2019; $940M represents total retail sales in CPG across Dunkin’ and Baskin-Robbins brands.


 
Unlocking DD Perks Program 13.6M 13% 5% 80% DD Perks Loyalty DD Perks On-the-Go On-the-Go Mobile Ordering Total Members Loyalty Member (2) Retrial Rate Spend(1) Increasing Engagement and Driving Incremental Sales via 1:1 Marketing (1) Representedas a % of Dunkin’ U.S. salesin Q4 2019. (2) Representedas a % of transactionsin Q4 2019.


 
Enabling Speed and Convenience Through Digital Channels DELIVERY MULTI-TENDER GUEST CHECKOUT APP UPGRADES Frictionless Experience For Our Guests


 
UNPARALLELED CONVENIENCE: RESTAURANT EXPANSION


 
Different Development Strategies for Different Markets TRANSFORM / OPTIMIZE EXISTING ASSETS INCREMENTAL GROWTH TO DRIVE CONVENIENCE Region Store Count Penetration Northeast 4,690 1:9,352 East 4,285 1:33,825 West 654 1:189,925 ACCELERATE GROWTH TO Not Yet Selling 1 1:15,889,479 ESTABLISH BRAND Total 9,630 1:34,154 PRESENCE Dunkin’ U.S. Store Footprint as of YE 2019. [Not pictured: Hawaii has 12 Dunkin’ U.S. restaurants as of YE 2019].


 
DD U.S. NET DEVELOPMENT One of the fastest-growing QSR brands by unit count in the U.S. FY 2019 Highlights: • Released NextGen image for new builds and remodels • 100% of 2019 net development outside of core markets • New restaurants contributed ~$140M to systemwide sales


 
Compelling Unit Economics Driving Accelerated Growth Outside of Core Markets 2017 Top 10 Developing Markets • 90% of future growth outside of core markets • Top 10 developing markets represent 60% of future growth AVERAGE INITIAL AVERAGE UNIT AVERAGE BEVERAGE CASH-ON-CASH CAPEX (1) VOLUMES (2) MIX: RETURNS (3) ~$550K ~$950K ~40% 20% - 25% Note: As of April 2019. Based on standalone, traditional Dunkin' Restaurants. Not disclosing specific markets for competitive reasons; these are the expected returns. (1) Number is rounded; represents the approximate initial capex for cohort (2) Number is rounded; represents the approximate unit volume for cohort (3) Number is rounded; represents the approximate cash-on-cash return for cohort


 
RESTAURANT EXCELLENCE


 
Restaurant Excellence Centered on Improving Guest Experience Restaurant Speed of Service Crew Training Simplification “Great Coffee….Fast”


 
BRAND RELEVANCE


 
Increasing Brand Relevance Transitioning From Foam to Released Dunkin’ U.S. NextGen Unveiled New Relaunched Espresso Double Walled Paper Cup Store Image Brand Identity Platform


 
NextGen Improving Guest and Crew Experience Dedicated Mobile Order Front-Facing Tap System to Serve Iced Pick-up Area Bakery Cases Beverages 525 NextGen Restaurants Open Across U.S. System Dunkin’ U.S. NextGenRestaurant Count as of YE 2019.


 
BASKIN-ROBBINS U.S.


 
Premium Products, Premium Experience “Raising the Bar” Initiatives: • Deliver premium guest experience to match premium products • Expand national value program • Enhance convenience: • Grow eCommerce • Home delivery with DoorDash • Expand test of Moments store design; 19 Moments stores open in the U.S. • Optimize restaurant base through strategic closures and transfers #1 Seller of Hard Serve Ice Cream (1) (1) Source: The NPD Group/CREST for the year ending December 2019 in QSR (includes 27 total QSR and retail foodservice)


 
INTERNATIONAL


 
International Focus on Strategic Markets and Long- Term Growth Opportunities ENHANCING IN-STORE EXPERIENCE ESTABLISHING STRONG GROWING NON-TRADITIONAL DELIVERY INFRASTRUCTURE AND CHANNEL TO INCREASE TRANSACTIONS TO INCREASE BRAND ACCESSIBILITY TO ENHANCE BRAND RELEVENCE & AND BUILD SALES AND CONVENIENCE OPTIMIZE BRAND PENETRATION


 
FINANCIAL TARGETS


 
2020 Guidance DUNKIN’ U.S. • Low-single digit percent comparable store sales growth FINANCIAL TARGETS • Open between 200-250 net new units (excluding Speedway closures) • Low-to-mid single digit percent revenue growth • >$140 million in systemwide sales for new units • Mid-single digit percent operating and adjusted opened in 2020 operating income growth BASKIN-ROBBINS U.S. • Low-single digit percent growth G&A expense • Low-single digit percent comparable store sales (1) growth • ~27% effective tax rate • ~25 net unit closures • $2.96 - $3.05 GAAP Diluted EPS • $3.16 - $3.21 Non-GAAP Diluted EPS • ~84 million full-year weighted-average shares INTERNATIONAL outstanding • Flat ice cream margin dollars compared to 2019 • ~$121 million net interest expense • Flat JV net income compared to 2019 • ~$40 million capital expenditures (1) Tax guidance excludes any potential future impact from material excess tax benefits in 2020.


 
Long-Term Targets (Through 2021) Financial Targets • Low-single digit percent comparable sales growth for Dunkin' U.S. • 200 - 250 net new units for Dunkin’ U.S. • Low-to-mid single digit percent revenue growth • Low-single digit percent G&A expense growth • Mid-to-high single digit percent operating and adjusted operating income growth Dunkin' Brands announced its long-term targets on February 7, 2019.


 
The “Perks” of Investing in Dunkin’ Brands • Reliable and diversified financial results • Asset-light, 100% franchised model • Strong free cash flow conversion