2011 Shareholders' Meeting v4 FINAL[1]
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Transcript of 2011 Shareholders' Meeting v4 FINAL[1]
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September 22, 2011
2011 Shareholders Meeting
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Forward-Looking StatementForward-looking statements in this presentation regarding our expected earnings per share growth,sales growth and all other statements that are not historical facts, including without limitation
statements concerning our future economic performance, plans or objectives, are made under the SafeHarbor provisions of the Private Securities Litigation Reform Act of 1995. Any forward-looking
statements speak only as of the date on which such statements are made, and we undertake no
obligation to update such statements to reflect events or circumstances arising after such date. Wewish to caution investors not to place undue reliance on any such forward-looking statements. By
their nature, forward-looking statements involve risks and uncertainties that could cause actual results
to materially differ from those anticipated in the statements. The most significant of these uncertainties
are described in Darden's Form 10-K, Form 10-Q and Form 8-K reports (including all amendments tothose reports). These risks and uncertainties include food safety and food-borne illness concerns,
litigation, unfavorable publicity, federal, state and local regulation of our business including health care
reform, labor and insurance costs, technology failures, failure to execute a business continuity plan
following a disaster, health concerns including virus outbreaks, the intensely competitive nature of therestaurant industry, factors impacting our ability to drive sales growth, the impact of the indebtednesswe incurred in the RARE acquisition, our plans to expand our newer brands like Bahama Breeze and
Seasons 52, a lack of suitable new restaurant locations, higher-than-anticipated costs to open, close or
remodel restaurants, increased advertising and marketing costs, a failure to develop and recruiteffective leaders, the price and availability of key food products and utilities, shortages or interruptions
in the delivery of food and other products, volatility in the market value of derivatives, generalmacroeconomic factors including unemployment and interest rates, severe weather conditions,
disruptions in the financial markets, risks of doing business with franchisees and vendors in foreignmarkets, failure to protect our service marks or other intellectual property, a possible impairment in
the carrying value of our goodwill or other intangible assets, a failure of our internal controls over
financial reporting, or changes in accounting standards, and other factors and uncertainties discussed
from time to time in reports filed by Darden with the Securities and Exchange Commission.
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Reconciliation of Non-GAAP Financial Measures
In addition to disclosing financial results calculated in accordance with
U.S. generally accepted accounting principles ("GAAP"), this presentationcontains non-GAAP financial measures. The non-GAAP financialmeasures should not be considered a substitute for, or superior to,financial measures calculated in accordance with GAAP, however, theyare provided as management believes they are helpful in evaluating theCompany. The non-GAAP financial measures may be calculated
differently from, and therefore may not be comparable to, similarly titledmeasures used by other companies. Please refer to www.darden.com forreconciliation of the non-GAAP measures provided herein to thecomparable GAAP measures.
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Our Compelling Opportunity
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Our Objective
A Winning Organization Financially
Competitively superior sales and earnings growth
A top quartile total shareholder return
A Special Place to Be Where people can fulfill their professional & personal dreams
A Company That Matters
That has Fortune 100 Impact
BUILDING A GREAT COMPANY
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Fiscal 2011 Highlights
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Strong Performance
Total Sales $7.5B +$387M(+5.4%)
Operating Profit $741M +$104M(+16.3%)
Earnings Per Share $3.41 +$0.55(+19.2%)
Competitively Superior Results in Our Industry: 0.7 percentage points better same-restaurant sales results
4 percentage points higher new restaurant sales growth
Growth
FISCAL 2011 RESULTS
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Capping a Strong Decade
0%
50%
100%
2006 2007 2008 2009 2010 2011
Ten Year Percentile Ranking at Each Fiscal Year-End
75%
TOTAL SHAREHOLDER RETURN vs. S&P 500
Median
Top Quartile
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A Strong Culture
3.00
3.25
3.50
3.75
4.00
4.25
4.50
4.75
5.00
Operations TeamMembers
OperationsManagement
Support Center
FY07 FY09 FY10 FY11
FY10
IndustryBenchmark
HIGH EMPLOYEE ENGAGEMENT
HighlyEngaged
Engaged
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A Strong Culture
In service industries, employees actions with consumers transform
a companys brand aspirationsinto a customer-experienced brand.
Professor Leonard L. Berry
REWARDING CONFIRMATION
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Our Long-Term Opportunity
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Our Opportunity
THROUGH FISCAL 2016
+$3B to +$4B of Revenues
+1 Point to +2 Points of EBIT Margin
+$2.00 to +$3.50 of EPS
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Seizing the Opportunity
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Taking an Expansive Growth Perspective
Acquisition
Incubation
NewBrands
New Formats(Synergy)
New Markets(Intl)
New Channels(Airports, Campus)
Existing Brands
Non-Traditional
Growth Opportunities
Same-Restaurant Guest Count Growth Strengthen Our Core
Expand Our Core
New Unit Growth
Existing Brands TraditionalGrowth Opportunities
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Acquisition
Incubation
NewBrands
New Formats(Synergy)
New Markets(Intl)
New Channels(Airports, Campus)
Existing Brands
Non-Traditional
Growth Opportunities
Same-Restaurant Guest Count Growth Strengthen Our Core
Expand Our Core
New Unit Growth
Existing Brands TraditionalGrowth Opportunities
Taking an Expansive Growth Perspective
Long-Term Opportunity through Fiscal 2016: +$3B to +$4B of revenues (7% to 9% sales CAGR)
+$2.00 to $3.50 of EPS (10% to 15% CAGR)
Capture Non-Traditional Opportunities Focus of the Business Development Group
Synergy restaurant launch
International expansion
Maximize Traditional Opportunities Have a strong foundation
Added new Enterprise Marketing and Operationsorganizations to elevate focus on longer lead timeopportunities
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Growth Drivers
FISCAL 2011 TO FISCAL 2016
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Strong Brands
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Potential Revenue Growth
FY 2011 FY 2016
$3.5B
$4.9B(7% CAGR)
+$700M Same-Restaurant Growth
+$700M New Restaurant Growth
FISCAL 2011 TO FISCAL 2016
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FISCAL 2011 TO FISCAL 2016
Potential Revenue Growth
FY 2011 FY 2016
$2.5B
$3.1B(4.5% CAGR)
+$500M Same-Restaurant Growth
+$100M New Restaurant Growth
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FISCAL 2011 TO FISCAL 2016
FY 2011 FY 2016
$984M
$1.9B(14.5% CAGR)
+$200M Same-Restaurant Growth
+$700M New Restaurant Growth
Potential Revenue Growth
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FISCAL 2011 TO FISCAL 2016
FY 2011 FY 2016
$502M
$1.2B(18.5% CAGR)
+$100M Same-Restaurant Growth
+$600M New Restaurant Growth
Potential Revenue Growth
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FISCAL 2011 TO FISCAL 2016
FY 2011 FY 2016
1,894
2,415(5% CAGR)
Average Annual Unit Growth of +80 to +115
Potential Total Unit Growth
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Cost-Effective Support
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Cost-Effective Platform
Supply Chain $21M
Sustainability $18M
Facilities Management $4M
Restaurant Labor $8M
$51M of Savings Realized(Cumulative)
FISCAL 2008 TO FISCAL 2011
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Cost-Effective Platform
Supply Chain $20M to $25M
Sustainability $10M to $12M
Facilities Management $10M to $15MRestaurant Labor $35M to $40M
$75M to $92M of AdditionalSavings Estimated
(Cumulative)
FISCAL 2012 TO FISCAL 2016
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Winning Culture
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Winning Culture
PROFESSIONAL GROWTH CREATED: FISCAL 2011 TO FISCAL 2016
Promotions to RestaurantGeneral Manager / Managing Partner
Promotions to Restaurants Manager
Net New Employees
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Winning Culture
A COMPANY THAT MATTERS
Lower Calories in 10 Years
Less Sodium in 10 Years
Less Water Usage in 5 Years
Less Energy Usage in 5 Years
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Winning Culture
Signature initiative that builds on our industry and companys
long time roles as opportunity engines
Partners: College SummitBoys & Girls Clubs of America
UNCFHispanic College Fund
Helping young people understand and access the wide rangeof education and training opportunities available beyond high
school
A COMPANY THAT MATTERS
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Winning Culture
Donating to hungry neighbors wholesome surplus food thatwould otherwise be discarded
Partners: Feeding AmericaFood Donation Connectionmore
than 1,200 local charities across the nation
Over 48 million pounds of food worth over $480 million in valuecontributed the last 8 years
A COMPANY THAT MATTERS
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A Company Thats MoreValuableand Valued
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FISCAL 2011 TO FISCAL 2016
FY 2011 FY 2016
$7.5B
$11.5B(9% CAGR)
Dardens Potential Revenue Growth
$10.5B(7% CAGR)
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Dardens Potential Operating Margin (EBIT)
FISCAL 2011 TO FISCAL 2016
FY 2011 FY 2016
9.9%
12.0%(+40 bps/year)
$10.9%(+20 bps/year)
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Dardens Potential EPS Growth
FISCAL 2011 TO FISCAL 2016
FY 2011 FY 2016
$3.41
$6.86(15% CAGR)
$5.49(10% CAGR)
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Dardens Potential Operating Cash Flow
FISCAL 2011 TO FISCAL 2016
FY 2011 FY 2016
$895M
$1.5B(11% CAGR)
$1.2B(6% CAGR)
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Our Opportunity
THROUGH FISCAL 2016
+$3B to +$4B of Revenues
+1 Point to +2 Points of EBIT Margin
+$2.00 to +$3.50 of EPS
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Our Opportunity
THROUGH FISCAL 2016
Make an Even Bigger Difference for
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Fiscal 2012 Outlook
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Expecting Continued Solid Performance
Total Sales +$485M to +$560M +6.5% to +7.5%Growth
Diluted Net +$0.41 to +$0.51 +12% to +15%EPS Growth
with higher confidence at this point in the yearin the low end of the diluted net EPS growth range
FISCAL 2012 OUTLOOK
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