Popeye's 2011 Annual Report Download - page 8

As we celebrate our 40th year, Popeyes is cookin’. We just completed our third
straight year of positive same-store sales. We are gaining market share in a
sluggish economy. And, according to independent data, our same-store sales
have outpaced our competitors in the chicken quick-service restaurant (QSR)
category for the past 15 quarters. We’re doing exactly as promised four years
ago when we established our Strategic Road Map for Results to re-energize
Popeyes and unleash its full potential.
To Our Stakeholders
Cheryl A. Bachelder
Chief Executive Officer, AFC Enterprises, Inc.
Serving up results
The Popeyes brand resonates with hungry
guests who return again and again for our
flavorful food and compelling everyday
value. Throughout 2011, many QSR
brands struggled, as restaurants faced the
headwinds of low consumer confidence,
high levels of unemployment, and rising
commodity prices. Still, Popeyes served up
another year of positive results, financially
and operationally.
» Adjusted earnings were $0.99 per
diluted share versus $0.86 in 2010.
Operating EBITDA margins remained
among the highest in the restaurant
industry at 29.5 percent of total
revenues, and we generated more than
$28 million in free cash flow.
» Global same-store sales grew 3.1 percent,
the combined result of positive growth of
3.0 percent domestically and 3.3 percent
in international markets. Restaurant
operating profits in absolute dollars have
grown for the third straight year despite
record high costs.
» We opened a net total of 65 new
restaurants, bringing the system
to a record 2,035. On a percentage
basis, the Popeyes system opened
more domestic freestanding
franchised restaurants than any
of our QSR competitors in 2011.
» Our guests tell us they are enjoying
a better experience than ever before,
as evidenced by scores on our
Guest Experience Monitor survey that
show record highs in virtually every
operational metric.
We were honored by several prestigious
organizations during 2011.
» For the second time in our history,
we won a MenuMasters Award, with
Wicked Chicken named the Best
Limited Time Offer.
» Popeyes Louisiana Kitchen is featured
as one of the 15 most relevant and
successful recent brand refreshes in
the Graphic Design: Now in Production
exhibition, organized by the Walker Art
Center in Minneapolis, in collaboration
with the Smithsonian’s Cooper-Hewitt,
National Design Museum in New York.
» We won two top honors in Brandon
Hall’s Excellence in Learning and Talent
Management awards for the Best
Use of Blended Learning and Best
Onboarding Program.
In the QSR industry, money is made
in slivers of percentages, and so we
continued our focus on restaurant
profitability. In 2011, we saved
approximately $9 million in supply-chain
food costs throughout the Popeyes
system, on top of $16 million saved in
2010. While we saw a decline in restaurant
operating profit margin on a percentage
basis, 2011 was the third year in a row we
delivered increased absolute profit dollars
to our franchisees. We continue working
diligently on in-restaurant cost controls
to reduce waste and utilities. We’ve also
stepped up our business intelligence
systems for better data collection and
analysis for key metrics.
Serving up talent
A key aspect underlying all we do is talent
– the restaurant crews and corporate
staff who bring our strategy to life every
day. Over the past year, we have made
important changes to our leadership team.
Ralph Bower was named President-U.S.
in March 2012, leading day-to-day U.S.
operations for Popeyes restaurants. In
his previous role as Chief Operating
Officer, Ralph was instrumental in
both the strategy and execution of
our Strategic Road Map for Results,
creating an impressive record of
accomplishments.
Dick Lynch assumed the newly created
role of Chief Global Brand Officer in
December. Over the past four years,
as Chief Marketing Officer, he led the
transformation of the Popeyes brand,
with new positioning, messaging,
culinary innovation, and Bonafide®
chicken promotions that are clearly
resonating with guests. We are now at a
natural inflection point for Dick to extend
the power of Popeyes Louisiana Kitchen
positioning globally.
Andrew Skehan joined Popeyes in
August in the role of Chief Operating
Officer, International. With his hands-on
experience in building winning teams
and restaurants around the globe,
Andrew is ideally suited to support our
expansion plans and help our franchise
partners succeed.
6AFC ENTERPRISES, INC.