May 2015 Matters discussed in this presentation and during our 2015 - PowerPoint PPT Presentation

May 2015

Matters discussed in this presentation and during our 2015 Annual Meeting of Stockholders, whether written or oral, relating to future events or our future performance, including any discussion, express or implied, on our anticipated growth, operating results, plans, objectives, future earnings per share, investments, and the impact of our investments in sales-building initiatives and operational capabilities on future sales and earnings, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. These statements are often identified by the words “believe,” “positioned,” "estimate,” “project,” “target,” “plan,” “goal,” “assumption,” “continue,” “intend,” “expect,” “future,” “anticipate,” and other similar expressions, whether in the negative or the affirmative, that are not statements of historical fact. These forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict, and you should not place undue reliance on our forward-looking statements. Our actual results and timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those discussed from time to time in our reports filed with the Securities and Exchange Commission, including our annual report on Form 10-K for the fiscal year ended December 30, 2014 and our quarterly reports on Form 10-Q. All forward-looking statements and the internal projections and beliefs upon which we base our expectations included in this presentation or during our 2015 Annual Meeting of Shareholders are made only as of the date of this presentation and may change. While we may elect to update forward-looking statements at some point in the future, we expressly disclaim any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. 2

Panera Today 3

1,880 Bakery-cafes  80,000 Employees  45 States & Canada  $2.5 million AUVs  $4.5B System Sales  Multiple Consumer  Solutions As of FY2014 end 4

 We offer multiple consumer solutions for diverse needs, spanning day-parts, under one roof  We own the “better” soup, salad and sandwich category, serving food people trust and crave  We are an authority in fresh-baked bread, allowing us to serve an elevated dining experience  Our bakery-cafe environment is a key part of the guest experience 5

Panera…A Track Record of Success 6

System-Wide Average Weekly Sales 38,318 39,150 38,668 39,239 39,926 42,852 44,313 46,676 47,403 47,655 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 7

System-Wide Comps (1 year) 9.1% 7.9% 7.8% 5.8% 5.5% 5.7% 4.1% 4.0% 3.6% 2.7% 2.3% 2.2% 1.6% 1.1% 0.2% Note: 2000 – 2007 system-wide comps based on sales from bakery-cafes that had been in operation or owned for 18 months, 2008 – Present system-wide comps based on sales from bakery-cafes that had an open date or had been owned 12 months prior to the start of the fiscal year 8

New Store Approval Mature Store Base Framework - 2nd Year Average Returns (a) (b) (In Millions) Return Avg Net Sales/Unit $2.6 $2.4 Unit EBITDA $0.5 $0.4 Unit Margin 17.4% 15.9% Invested Capital Investment before OH $0.9 $1.4 Capitalized OH $0.1 $0.1 Investment including OH $1.0 $1.5 Cash-on-cash ROI (c) Mid-point Corporate ROI (before OH) 52.8% 19.5% Mid-point IRR 23.0% (a) FY14 results for 758 company-owned Panera bakery-cafes opened before fiscal year end 2012 (excluding closed cafes) (b) Avg investment cost for 599 company-owned Panera cafes opened before fiscal year end 2012 (excluding closed cafes and acquisitions) 9 (c) Cash-on-cash ROI for New Store Approval Framework is net of any cannibalization impact

2014 Total Number of Bakery Cafes AUV of $2.5M 1,880 2008 1,777 AUV of 1,652 $2M 1,541 1,453 1,380 925 1,325 867 809 Franchise 740 662 585 562 Company 955 910 843 801 795 791 763 2008 2009 2010 2011 2012 2013 2014 Note: System % unit growth is net of café closings and franchise acquisitions. 10

Track Record of EPS Growth 30% 28% 27% 25% 24% 16% -2% 2008 2009 2010 2011 2012 2013 2014 Note: Fiscal 2013 included 53 weeks, while 2014 contained just 52 weeks 11

PNRA BWLD CMG SBUX DRI EAT S&P 12

Panera has delivered over the last fifteen years a total return of more than 4,000% to shareholders, compared to about 40% for the S&P 500. Over the past five years, the company has delivered a total return to shareholders of more than 100%, as compared to about 75% for the S&P 500. 13

 38 franchise groups partner in our growth – Over the past decade, they have built over 1,000 cafes with their capital  Positive cash balances – $110 million of free cash flow net of CAPEX in 2014  Since 2010, we’ve deployed nearly $1B for share buyback – ~10% of shares outstanding 14

Setting Panera Up for an Even Stronger Future 15

Improve guest Develop, prototype and iterate Panera 2.0 (for eat in 1 experience in and to go) • café (less Digital access • friction) Operational Integrity • Deliver to table Build capabilities that allow Panera to utilize its soup, salad, Expand growth into 2 sandwich credibility and integrated digital access to expand adjacent $1B+ into very large adjacent markets markets • Unit growth: Traditional & infill growth (Delco) • Catering ( through dedicated Hubs) • Delivery • CPG Increase desirability Revised “Concept Essence” to activate innovation in 3 of café food, operations, marketing and store design 16

END MEANS (INITIATIVES) 2.0 (Digital access + Ops Integrity + Deliver  Café that is a better competitive alternative to Table) (Less friction / Greater desire) Concept Essence 2015 – “ Craveable  wellness” Activating Innovation in:  • Food and bakery (brand reputation, category credibility, excitement) • Operations • Marketing (new campaign + voice) • Store design Capabilities for expanded growth: Unit growth (traditional and in-fill with Delco)  “ Hoovering ” Delivery  (Take share in adjacent $1B+ markets) CPG  Catering (Hubs, benefiting catering and  retail) Byproduct: Sustained double-digit earnings growth 17

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Source: Goldman Sachs Global Investment Research 20

THE NEW EAT-IN THE NEW TO-GO EXPERIENCE EXPERIENCE Pic to Come Pic to Come 21

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Wellness Ally Craveable Food Everyday Oasis Relationships and Warmth (Through Soups, Salads, Sandwiches, Snacks, Beverages ) We are a wellness We offer craveable We are an everyday We build relationships foods …the familiar ally that empowers oasis for our guests with our guests and enables our made fabulous and through warmth guests to choose a engaging, path of (food) adventuresome foods wellness ----------------- ----------------- ----------------- ----------------- “I trust that I am being “Food worth going out “Panera is a place I “Panera is of me” good to myself” of your way for” want to be” “Wellness That’s Craveable ” “Experience That’s Uplifting” GOOD BREAD Bread is core to our heritage and must be an important symbol of our commitment to the intersection of Craveable Food and Wellness Ally. We will lead the Good Bread movement. “Good eating brings out the best in all of us” 25

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 Half portions  Flatbreads  Broth Bowls  Clean foods – No artificial additives  Super Celebration 2: Clean salad dressings, Power Kale Caesar, Mediterranean Chicken & Quinoa, Strawberry Poppyseed  Super Celebration 3: Upgrade any sandwich to clean, carved, slow-roasted turkey  Whole grains 27

Operations Delivering Extraordinary Customer Satisfaction 28

 Kitchen display systems  Speed of service/throughput  Capacity  Staffing  Cafe Health  iBOH 29

 New agency – Anomaly  New campaign  Voice – consistent across all channels  My Panera – ~ 19 million members 30

We are also innovating in store design Remodels & Relocations 31

OUR MISSION DESIGN as a differentiator and point of competitive advantage, solving for customer use, operator use, appropriate economics and consistency with Concept Essence 2015 32

Store Design 33

Store Design 34

Store Design 35

Store Design 36

Let’s take a deeper look at our initiatives to expand growth… 37

Expanded Growth: New Bakery-Cafe Development 38

Bakery-Café Development: Utilizing smaller, in-fill locations (Delco) 39

Expanded Growth: Delivery 40

Delivery is an estimated $44B market…and one that represents a huge opportunity for Panera. 41

Expanded Growth: Consumer Products