Investor Presentation September 2015

Transcription

1 Investor Presentation September 2015

2 Disclaimer The information in this presentation does not contain all of the information that a potential investor should review before investing in our Class A common stock. Potential investors should carefully review in its entirety the Prospectus in the Registration Statement on Form S-1 relating to this offering and provided to you in connection with this presentation. The descriptions of the Company and offering of our Class A common stock in this presentation are qualified in their entirety by reference to the Registration Statement. Certain information in this presentation has been obtained from outside sources. While such information is believed to be reliable for the purposes used herein, no representations are made as to the accuracy or completeness thereof and we take no responsibility for such information. The information in this presentation is current only as of its date and may have changed. We undertake no obligation to update this information in light of new information, future events or otherwise. Forward-Looking Information This presentation contains forward-looking statements. All statements other than statements of historical facts contained in this presentation may be forward-looking statements. The words may, will, should, expects, plans, anticipates, could, intends, targets, projects, contemplates, believes, estimates, predicts, potential or continue and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from expectations are disclosed under the Risk Factors and Cautionary Note Regarding Forward-Looking Statements sections of the Registration Statement. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. You should evaluate all forward-looking statements made in this presentation in the context of these risks and uncertainties. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Non-GAAP Financial Information The non-gaap financial measures contained in this presentation (including, without limitation, EBITDA and Adjusted EBITDA) are not GAAP measures of our financial performance or liquidity and should not be considered as alternatives to net income (loss) as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP. Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Additionally, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow for management s discretionary use, as they do not reflect tax payments, debt service requirements, capital expenditures, Shack openings and certain other cash costs that may recur in the future, including, among other things, cash requirements for working capital needs and cash costs to replace assets being depreciated and amortized. Management compensates for these limitations by relying on our GAAP results in addition to using EBITDA and Adjusted EBITDA supplementally. EBITDA and Adjusted EBITDA are included in this presentation because they are key metrics used by management and our board of directors to assess our financial performance. EBITDA and Adjusted EBITDA are frequently used by analysts, investors and other interested parties to evaluate companies in our industry. Our measures of EBITDA and Adjusted EBITDA are not necessarily comparable to similarly titled captions of other companies due to different methods of calculation. 2

3 Key Shack Leaders Randy Garutti Chief Executive Officer Jeff Uttz Chief Financial Officer Danny Meyer Founder & Chairman of the Board 3

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8 2015 Financial Accomplishments Q1 increase (year-over-year) Q2 increase (year-over-year) Revenue 56% 75% Same-Shack sales 11.7% 12.9% Adjusted EBITDA margin 360 bps 600 bps Shake-level operating profit margin 270 bps 470 bps 8

9 Operational accomplishments in 2015 First Baltimore Shack opened Japan expansion announced, 10 Shacks through 2020 with Sazaby League LA 2016 opening announced 4 th Great American Shake Sale raised $500K Bridgewater, NJ Shack opened First Texas Shack opened in Austin Scottsdale, AZ 2016 opening announced Second Chicago Shack opened at the Chicago Athletic Association Second Central Florida Shack in Orlando inside the I-Drive 360 Second Austin Shack opened at The Domain retail development February March April May June July August Two additional Boston Shacks opened: Legacy Place, Dedham Newbury Street, Downtown Boston Madison Square Park flagship reopened after 7 months of renovation Second UK Shack opened in Stratford Third Russia Shack opened in Moscow ChickenShack test launch in Brooklyn 9

10 What makes Shake Shack special Our culture of Enlightened Hospitality: Taking care of each other Leaders training future leaders Fine Casual: Inspired food and drink Beloved lifestyle brand Versatile real estate model built for growth Shack travels abroad Shack-onomics 10

11 Modern Roadside Burger Stand Classic American menu of all-natural, hormone and antibiotic-free burgers, hot dogs, crinkle-cut fries, shakes, frozen custard, beer and wine 11

12 Culinary innovation ChickenShack ShackMeister Burger Roadside Shack Lockhart Link Burger ParkBurger Surf n Shack 12

13 Where in the world is Shake Shack? Europe/Asia (9) London (2) Moscow (3) Middle East (20) US (45) Istanbul (4) West (1) Midwest (3) Northeast (11) NYC (13) Mid-Atlantic (9) Texas (2) Southeast (6) 74 Shacks worldwide (as of Sept 2015) 40 domestic company-operated 29 international licensed 5 domestic licensed Lebanon (2) Saudi Arabia (1) Kuwait (6) Qatar (1) UAE (10) 13

14 Authentic community focus Shack-wide events support brand awareness and commitment to social causes, integrating the local community along the way Gaien Ginkgo Tree Construction Wall Center City Philly Mural Dedication Annual Great American Shake Sale 14

15 Strong growth trajectory Total Shacks Total revenue ($mm) Domestic company-operated Domestic licensed International licensed 71 $ FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Q $19 $39 $57 $82 $119 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 LTM (7/1/15) 15

16 Versatile real estate model built for growth Domestic company-operated Shacks 450 Tremendous whitespace opportunity Potential for 450 domestic companyoperated Shacks over the long term FY 2013 FY 2014 Q Target Currently 42 domestic locations, 37 of which are company-operated locations Increasing guidance to open at least 12 new domestic company-operated Shacks in 2015, and at least 12 Shacks annually in 2016 & beyond 16

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20 Domain Austin, TX

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23 Scottsdale, AZ

24 West Hollywood, CA

25 Licensing approach International 29 Internationally licensed Shacks Alshaya UK, Middle East, Russia The Sazaby League - Japan Highly-respected and experienced retail and restaurant teams that are aligned with Shake Shack s vision and brand Domestic 5 Domestic Licensed Shacks Sporting venue locations operated by Union Square Events: Citi Field, Nationals Park, Saratoga Race track JFK locations licensed to SSP Approach and selection process Locations target brand awareness Opportunistic approach to new locations London, United Kingdom Tokyo, Japan Citi Field 25

26 Stratford, UK

27 Tokyo, Japan

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29 Total Shacks and system-wide sales Total Shacks System-wide Sales ($mm) Domestic company-operated Domestic licensed International licensed $ $ FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Q $21 $53 $81 $140 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 LTM (7/1/15) 29

30 Total revenue and adjusted EBITDA Total revenue ($mm) Adjusted EBITDA ($mm) $153 $29 $119 $19 $82 $14 $19 $39 $57 $3 $6 $10 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 LTM (7/1/15) FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 LTM (7/1/15) 30

31 Adjusted EBITDA margin Adjusted EBITDA margins over time Commentary 20.0% 18.0% 17.5% 17.5% 15.9% 18.8% 1H 2015 adjusted EBITDA margin improved 500 bps over the previous period 16.0% 14.0% 14.5% 16.0% Positive increase in Same Shack Sales Operational efficiencies 12.0% 10.0% FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 LTM (7/1/15) Leverage over labor & other operating expenses 31

32 Same Shack Sales overview Domestic company-operated Shacks open for 24 months or longer* Commentary 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% # of Shacks 8.2% 5.9% 0.8% Line % 11.7% 7.2% 6.8% 4.5% 3.9% 1.2% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2' Strong same-shack sales in 2Q 2015 driven by: 4.3% increase in traffic 8.6% increase in ticket (price and mix) 1H 2015 same-shack sales of 12.4% driven by: 3.4% increase in traffic 9.0% increase in ticket (price and mix) ¹ Excludes 53 rd week in fiscal

33 New market successes Las Vegas, NV Chicago, IL Baltimore, MD Austin, TX Successfully entered two new markets Maryland (Baltimore) and Texas (Austin) since the IPO Strong volume and operating performance in new markets underscore the portability of the concept Plans to enter Los Angeles, CA and Phoenix, AZ in

34 1H 2015 key metrics Revenue System-wide sales $86,258 $138,247 $51,933 $98,416 1H' 14 1H '15 Shack-level operating profit 1H '14 1H '15 Adjusted EBITDA % Shack-level operating profit margin % adjusted EBITDA margin $23,395 $18,207 $11,898 $8, % 28.3% 16.1% 21.1% $ in thousands 1H '14 1H '15 1H '14 1H '15 34

35 Domestic company-operated Shack-onomics Target shack-onomics New Shack target Domestic company-operated Shack count 12 annually Average Shack volume ($mm) 1 $2.8 - $3.2 Increased from 10 annually Shack-level operating profit margin 2 18% - 22% Average Shack investment costs ($mm) 3 $1.5 - $2.5 Cash-on-cash return 4 30% - 33% ¹ AUVs are calculated by dividing total sales from domestic company-operated Shacks by the number of domestic company-operated Shacks open during that period; for Shacks not open during the entire period, fractional adjustments are made to the number of Shacks open such that it corresponds to the period of associated sales; 2 Defined as Shack sales less operating expenses, including food and paper costs, labor and related expenses, other operating expenses and occupancy and related expenses as a percentage of Shack sales 3 Excludes pre-opening expenses; 4 Defined as third year operating profits for domestic company-operated Shacks open for at least three full years, divided by their life-to-date associated build-out costs, excluding any pre-opening expenses 35

36 Updated 2015 Outlook For the fiscal year ending December 30, 2015, the Company provides the following guidance: Total revenue between $171 million and $174 million Same-Shack sales growth in the mid to high single digits At least 12 new domestic company-operated Shacks to be opened throughout the year At least 5 international licensed Shacks to be opened under the Company's current license agreements in the U.K. and Middle East 36

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38 Investor Presentation September 2015

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40 a Represents non-cash equity-based compensation expense. For the twenty-six weeks ended July 1, 2015, amount relates solely to stock options granted in connection with the IPO. b Represents amounts accrued under a bonus agreement we entered into with an executive pursuant to which we agreed to a pay a bonus in a future. c Non-capital expenditures associated with opening new Shacks exclusive of deferred rent incurred prior to opening. d Reflects the extent to which our rent expense is greater than or less than our cash rent payments. e Includes the loss on disposal of property and equipment in the ordinary course of business. f Non-recurring compensation expense incurred in connection with the IPO, including expense recognized in settlement of outstanding awards under the Unit Appreciation Rights Plan, the related employer withholding taxes and the accelerated vesting of outstanding restricted Class B units. g Costs incurred in connection with our initial public offering, including legal, accounting and other related expenses. 8 For periods presented, represents non-cash charges related to certain employee benefits. 40