Weight Watchers International, Inc.

Transcription

1 Weight Watchers International, Inc. Nicholas Hotchkin Chief Financial Officer November

2 Forward-Looking Statements The following information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about the Company s plans, strategies and prospects as well as future volume and earnings trends and expectations. These forward-looking statements are based on management s current expectations and beliefs, as well as a number of assumptions concerning future events. These forward-looking statements are subject to risks, uncertainties, assumptions and other important factors. You are cautioned not to put undue reliance on such forward-looking statements because actual results may vary materially from those expressed or implied. The reports filed by the Company pursuant to United States securities laws contain discussions of these risks and uncertainties, which include, but are not limited to, competition from other weight management industry participants or the development of more effective or more favorably perceived weight management methods; the Company s ability to continue to develop innovative new services and products and enhance its existing services and products or the failure of its services and products to continue to appeal to the market, or the Company s ability to successfully expand into new channels of distribution; the ability to successfully implement new strategic initiatives; the effectiveness of the Company s marketing and advertising programs; the impact on the Weight Watchers brand of actions taken by the Company s franchisees, licensees and suppliers; the impact of the Company s debt service obligations and restrictive debt covenants; uncertainties regarding the satisfactory operation of the Company s information technology or systems; the recognition of asset impairment charges; risks and uncertainties associated with the Company s international operations, including economic, political and social risks and foreign currency risks; the Company s ability to successfully make acquisitions or enter into joint ventures, including its ability to successfully integrate, operate or realize the projected benefits of such businesses; uncertainties related to a downturn in general economic conditions or consumer confidence; the seasonal nature of the Company s business; the impact of events that discourage or impede people from gathering with others or accessing resources; the Company s ability to enforce its intellectual property rights both domestically and internationally, as well as the impact of its involvement in any claims related to intellectual property rights; the impact of security breaches or privacy concerns; the impact of disputes with the Company s franchise operators; the impact of existing and future laws and regulations; the possibility that the interests of the Company s majority owner will conflict with other holders of its common stock; and other risks and uncertainties, including those detailed from time to time in the Company s periodic reports filed with the Securities and Exchange Commission. The Company assumes no obligation to, and expressly disclaims any obligation to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. 2

3 Overview of Weight Watchers Global leader in commercial weight management with ~3M active members 50+ years of history Behavior modification focus; multi-modal in person, online, mobile Global presence: revenue ~65% US / ~35% international Service revenues primarily from monthly subscriptions Competitive strengths provide solid foundation Scale and scope network of thousands of dedicated Service Providers who have all lost weight on Weight Watchers Proven program scientifically supported Powerful brand high awareness, trust, efficacy Large multi-tiered community active members, lapsed 3

4 Multi-Year Transformation Agenda Four Strategic Pillars: 1. Drive immediate performance improvement 2. Re-imagine the core offering 3. Grow the healthcare business 4. Strengthen the organization 4

5 Early Turnaround Progress Implementing culture of cost discipline $150M gross annualized savings target Reduced workforce by 15%; included restructuring of field operations Consolidating small meetings and reducing drop-in hours Enhanced procurement procedures and renegotiated vendor contracts Increasing effectiveness of marketing activities Sharing learnings across geographies Experimenting more with different offers and media Enhancing value of digital offerings Integrated popular activity monitors, Fitbit and Jawbone Launched co-marketing partnership in Germany Acquired technology start-up Wello 5

6 Re-imagining Weight Watchers Winter Season 2015 Initiatives Strengthening offering Expanding personalization, support and community Leveraging talented service providers to provide 1x1, personal advice to members Bringing human support to our online members for the first time Providing greater personalization and connection in between meetings for meetings members Evolving brand positioning Launching new voice and message to make brand more inclusive and aspirational Acknowledging weight loss is hard Inspiring hope Changing relationship with food for good Reaching a wider set of consumers through more diverse types of media Turning recruitment trajectory around is top priority for

7 Clear Opportunity in Healthcare Obesity is the largest preventable condition driving healthcare systems costs (US) Excess weight drives 10% of healthcare costs (Harvard) 70% of hypertension cases are attributable to obesity Obesity raises annual medical costs by $2,741/adult (Jnl Health Economics) 80% of diabetes cases attributable to obesity $443 per inpatient stay $398 per outpatient stay $284 in prescription benefits Increased cost to private insurers $140B cost to individuals $160B cost to payers $130B cost to employers $20B other 79M Americans suffer from pre-diabetes for which the CDC recommended treatment is intensive behavioral therapy for obesity Diabetes accounts for 45% of kidney disease cases Finkelstein EA, Trogdon JG, Cohen JW, Dietz W. Annual medical spending attributable to obesity: Medical Care Costs of Obesity Cawley, Jnl Health Economics 2012 payer- and service-specific estimates. Health Aff (Millwood). 2009;28(5):w822 w Heart disease is the cause of death in 68% of adults with diabetes; stroke,16% 7

8 Growing Weight Watchers Health Solutions Today Tomorrow Well-positioned to serve healthcare market Strong science and clinical proof, face-to-face, brand, market presence Existing foothold in 200+ blue chip clients ~$75M business in 2013, split between small and large employers 2015: Enter first partnership in health plan space 2016: First year of meaningful health plan revenue contribution Financial scale: significant, incremental and profitable (margins similar to traditional B2C) In-process of putting tech capabilities in place Privacy and security, data capture, and tracking, dedicated team with healthcare experience 8

9 Strengthening Organization Evolving company culture Restructured organization and simplified workflows Increased accountability and collaboration Developing talent base Enhancing innovation capabilities Bolstering competencies with hires in critical areas of technology application, marketing and insights Advancing and investing in technology transformation Modernizing architecture and changing productivity of delivery environment Building agile model; leveraging cloud technology Making progress on consumer-facing development on new offerings Delivering operations support systems such as field automation and health care market readiness 9

10 Framework for Success in Turning recruitment trajectory positive 2. Demonstrating demand for our offerings in the healthcare space 3. Advancing technology transformation 10

11 Investment Highlights Seasoned management team driving a multi-year transformation Realistic about the environment Acting with urgency Aggressive cost structure management Strong liquidity with no near-term maturities Clear pathway to rejuvenated B2C business Mobilizing resources to accelerate B2B growth including healthcare 11