Popeye's 2010 Annual Report Download - page 7

AFC ENTERPRISES, INC.
6
To Our Stakeholders
Cheryl A. Bachelder
Chief Executive Offi cer, AFC Enterprises, Inc.
President, Popeyes® Louisiana Kitchen
We delivered another strong
year of positive results, both
fi nancially and operationally.
“
”
*Foradjustedearningsperdilutedshare,operatingEBITDA,andfreecashflow,seedefinitions,computations,andreconciliationstoGAAPmeasuresonpage8.
The distinctive Louisiana fl avor of Popeyes food continues to deliver – for our hungry guests, for our franchise
owners and operators, for our employees, and for our shareholders. Over the past three years, we’ve been
following a strategic plan we call our Road Map for Results. Our positive results tell us we’re headed in the right
direction, and our hard work is paying off.
Passion
People quickly develop a passion for
Popeyes – craving our chicken, seafood,
biscuits, and signature side dishes. We
hear it all the time from our guests. We
have a passion, too, that’s just as strong.
Ours is for serving a highly differentiated
brand of fl avorful food, for seizing the
compelling growth opportunity we see
around the world, and for developing an
attractive franchise business model that
generates steady and reliable cash fl ows.
The economy has been tough in
recent years, yet we have consistently
outpaced the competition. According
to independent data, for the second
consecutive year Popeyes domestic
same-store sales have grown faster than
both the quick-service restaurant (QSR)
and chicken QSR categories, where we’ve
led the way for 11 straight quarters.
We now also have independent research,
announced last summer, that validates
what we’ve always known: Consumers
prefer the taste of Popeyes Spicy and
Mild Bonafi de® bone-in fried chicken
over KFC® Original Recipe® bone-in fried
chicken. We came out on top, and
we’re savoring the taste of victory.
We are passionate about our food and, as
such, we continue to invest in innovation
to make sure there’s always something
new at Popeyes, from tasty new menu
items and value pricing on our core
chicken and seafood offerings to limited-
time promotions or portable packaging,
such as the Seafood Tackle Box, for
busy lives on the go. For our restaurant
operators, innovation leads to cost-saving
strategies to improve operating profi ts.
With the effective use of our spokesperson
Annie in national media advertising, our
innovative promotions helped deliver
positive growth in guest counts and
same-store sales.
In 2011, our brand-building efforts will
remain focused on our famous core
chicken and seafood offerings, while
periodically adding new menu innovations
with our distinctive Louisiana fl avor
profi le. Additionally, in 2011, we will
be implementing a unifi ed strategy for
fountain beverages that is designed to
be more exciting for our guests and more
profi table for our Popeyes restaurants.
This effort builds on the multi-year
agreements we announced in 2010
with two powerful marketing partners:
The Coca-Cola Company and Dr Pepper
Snapple Group.
Performance
In 2010, we delivered another strong
year of positive results, both fi nancially
and operationally.
Adjusted earnings were $0.86 per diluted
share versus $0.74 in 2009. We attribute
this 16 percent increase primarily to the
improved operating performance we’re
seeing from initiatives of our Strategic
Road Map for Results. In 2010, our
operating EBITDA margins remained
among the highest in the restaurant
industry at 30.9 percent of total
revenues, and we generated more than
$25 million in free cash fl ow.*
-1.7%
2008 2009 2010
0.7%
2.6%
1
Global Same-store
Sales Growth