Tim Hortons 2014 Investor Conference

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  • Investor Conference 2014
  • Introduction Scott Bonikowsky Vice-President Corporate Affairs & Investor Relations
  • Welcome
  • Agenda Morning Session Topic Presenter Introduction/Housekeeping Scott Bonikowsky, Vice-President Corporate Affairs & Investor Relations Winning in the New Era Marc Caira, President & Chief Executive Officer Trends & Insights Bill Moir, Chief Brand & Marketing Officer Questions & Answers Lunch
  • Agenda Afternoon Session Topic Presenter Strategic Pillars & The Ultimate Guest Experience David Clanachan, Chief Operating Officer Canada: Lead, Defend & Grow Roland Walton, President, Tim Hortons Canada U.S.: Must-Win Battle Mike Meilleur, Executive Vice-President, Tim Hortons U.S.A. International: Grow, Learn, Expand Jill Sutton, Executive Vice-President, General Counsel, & Corporate Secretary Questions & Answers Break Supply Chain & Productivity Cynthia Devine, Chief Financial Officer Financial Strategy & Outlook Cynthia Devine, Chief Financial Officer Enabling Execution Steve Wuthmann, Executive Vice-President, Human Resources Strategic Plan Summary Marc Caira, Chief Executive Officer Executive Group Q&A
  • Safe harbor statement Certain information in todays presentations, particularly information regarding future economic performance, finances, and targets, aspirational goals, plans, expectations and objectives of management, and other information, constitutes forward-looking information within the meaning of Canadian securities laws and forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We refer to all of these as forward-looking statements. Various factors including competition in the quick service segment of the food service industry, general economic conditions and others described as risk factors in our 2012 Annual Report on Form 10-K filed February 21, 2013, our Quarterly Report on Form 10-Q filed on November 7, 2013, and our 2013 Annual Report on Form 10-K expected to be filed on February 25, 2014 with the U.S. Securities and Exchange Commission and Canadian Securities Administrators, could affect our actual results and cause such results to differ materially from those expressed in, or implied by, forward-looking statements. As such, readers are cautioned not to place undue reliance on forward-looking statements contained in these presentations, which speak only as to managements expectations as of the date hereof. Forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about: (i) prospects and execution risks concerning our growth strategy; (ii) the absence of an adverse event or condition that damages our strong brand position and reputation; (iii) the absence of a material increase in competition or in volume or type of competitive activity within the quick service restaurant segment of the food service industry; (iv) the cost and availability of commodities; (v) the absence of an adverse event or condition that disrupts our distribution operations or impacts our supply chain; (vi) continuing positive working relationships with the majority of our restaurant owners; (vii) the absence of any material adverse effects arising as a result of litigation; (viii) no significant changes in our ability to comply with current or future regulatory requirements; (ix) our ability to retain our senior management team and attract and retain qualified personnel; (x) our ability to maintain investment grade credit ratings; (xi) our ability to obtain financing on favorable terms; and (xii) general worldwide economic conditions. We are presenting this information for the purpose of informing you of managements current expectations regarding these matters, and this information may not be appropriate for any other purpose. We assume no obligation to update or alter 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. Please review our full Safe Harbor Statement at www.timhortons.com/en/about/safeharbor.html.
  • Winning in the New Era Marc Caira President & CEO
  • 2014-2018 Rejuvenated Canadian growth engine Scalable, profitable U.S. business Established, growing international presence Enhanced capabilities and talent Above market-average total shareholder return (TSR)
  • What you can expect from Tim Hortons in the next 5 years Unwavering focus on improving and delivering the ultimate guest experience Becoming one of the industry's most consumer-centric, innovation-driven companies Leveraging technology for competitive advantage Tim Hortons "Wherever, Whenever, However" Disciplined management and execution
  • Bold Different Daring
  • Our Promise We will delight every consumer who comes in contact with our Brand by providing superior quality products/services and the ultimate in guest experience
  • Well positioned Tremendous growth trajectory SYSTEMWIDE SALES ($M) +9% CAGR 6,445 5,296 4,519 5,623 6,804 A unique partnership benefiting all stakeholders: Investors, Restaurant Owners, Communities and the Corporation 6,042 4,904 4,095 3,329 2,535 2002 3,639 2,855 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
  • Well positioned Key accomplishments CANADA U.S. Sustained leadership in Canada Over a decade of doubledigit sales growth Unparalleled consumer reach and loyalty Brand awareness, convenience in our largest markets Continuing to outgrow the market INTERNATIONAL Emerging successful base in the Gulf Cooperation Council
  • Well positioned The undisputed Canadian beverage leader TOTAL CAFFEINATED BEVERAGES % SHARE OF QSR SERVINGS All Other QSR 76.6% 9.6 74.5 Hot Tea 75.9% Brewed Coffee 64.6% 4.6 Cold Specialty Coffee 76.0% 11.4 Hot Specialty Coffee Source: NPD Crest, 12 months ended November 2013. All trademarks, copyrights and other forms of intellectual property belong to their respective owners.
  • A New Era is facing consumer and restaurant companies Heightened consumer demands Changing demographics Low growth environment Evolving market forces Sweeping technology changes Intensified competition (1.1)% Canadian QSR traffic growth Source: NPD Crest, November 2013; U.S. Bureau of Statistics, January 2014 6.6% U.S. Unemployment
  • The New Era presents many transformational opportunities From To Known for Coffee and Baked Goods Coffee, Beverages and Snacks, A Destination for Meals Canada North America, Global Opportunistic Insightful, proactive and agile In our Restaurants In our Restaurants, Plus Building Restaurants Consumer-centric: Winning Guests
  • Key Pillars of our Strategy CANADA Lead, Defend & Grow U.S. A Must-Win Battle INTERNATIONAL Grow, Learn, Expand
  • Significant opportunities across our portfolio Lead, Defend & Grow Defend the core Narrow the average cheque gap Capture new demand spaces Extend our brand reach Must-Win Battle Core and priority market AUV growth Optimize box and capital deployment model Focus on select core and priority markets Grow, Learn & Expand Grow and learn in GCC Validate strategy in 2014 beyond GCC Redeploy resources Positioned to enter new market(s) in 2015
  • Several critical enablers will underpin our success Driven by Consumer Insights In-depth understanding Data driven pursuit of "Demand Spaces" Differentiated Innovation Forward looking Rapid idea to launch Nutrition, Health and Wellness Leverage Technology for Advantage Operational Excellence Consumer Loyalty Engaged Employees Focused and accountable Dedicated to the ultimate guest experience Making a True Difference Individuals Community Planet
  • Winning requires a commitment to expected behaviours Empowerment with clear accountability Making disciplined choices Fast, nimble, flawless execution An unwavering sense of urgency
  • Strong Value Creation Abovemarket TSR Sustainable growth Operating profit improvement Responsible and efficient use of capital
  • Trends and Insights Bill Moir Chief Brand and Marketing Officer
  • Position of strength 1 # Most Trusted Coffee Retailer Brand 6 # Most Influential Brand Ipsos Read Worldwide 61 # Most Beloved Brands APCO Insight Ipsos Read Undisputed Coffee Leader in Canada
  • Stron