The Panera Bread Company

(PNRA)

Ankur Mathur
Daniel McGirr

Disclaimer!
Certain comments expressed in this
presentation do not represent the views of
Stern IAG, or of Dan McGirr, but rather
are the sole responsibility of Ankur.

And the serious nature is from Dan, and

doesn’t represent Ankur’s personal
craziness.

1
 Agenda
History of Panera Bread Company
What does Panera do??
Multiple types of revenue
Why are they different?
Competition

Agenda, part 2
Growth
Risk?
Recommendations
Valuation
Q&A

2
 History
Founded: 1981
Originally named Au Bon Pain
IPO in 1991
Sold Au Bon Pain in 1999
Presented at IAG in 2004

What does Panera Do?

“A loaf of bread in every arm”
Specialty bread demand
Provide breakfast, lunch and dinner items
Soups, salads, and sandwiches
Via Panera

3
 Menu Items
Bakery
Sourdough Breads
Specialty Breads
Asiago Cheese, Three-Seed Sourdough, Fiesta, Sun-Dried
Tomatoes, Pesto, Olive, Cinnamon Raisin
Soups
Salads
Chicken Oriental Salad
Caesar Salad
Sandwiches
Smoked Turkey, Asiago Roast Beef, Vegetable Spring
Rolls

Revenue
Company owned Bakery Sales
75% of total sales
Franchise royalties and fees
Close to 4.5% of franchisee sales
Free Money!
Fresh dough sales to franchisees
Low margins
Low risk, they HAVE to buy from Panera

4
 Why is Panera Different?
Niche in food industry
No major direct competitors
Ranked #1 in food quality among 118
food chains
Won “Best of…” awards in nearly every
state
Highest level of customer loyalty

Competition
No direct major competitor
Alternates are possible
Starbucks
Applebee's
New World Restaurants
Private firms
Local, “Mom and Pop” stores

5
 Competition, Part 2
Supplier power
Suppliers don’t have too much power
Selling/buying commodities
Franchisees must buy from Panera
Buyer Power
Low buyer Power
High customer loyalty
Unique offerings, i.e. not Burger King to McDonalds to
Wendy's
New entrants

Growth!
New Bakery-Cafes
Currently only 600 stores
Far from saturation
Unlike Starbucks and McDonalds, etc
Many untapped regions/cities
Extensive franchisee development
agreements
Move to 40/40/40 from 50/50/50

6
 Risk?

Risk
No risk
Not really
Commodities price changes
Low Carb Craze!?

7
 Recommendation
BUY at market price

Valuation

8
 Q&A
Steve????

The End

Thanks for coming!