You are on page 1of 28

CHIPOTLE MEXICAN GRILL, INC.

Company Representatives
Jens Montin
Alicia Lei
Brandon Schneider
Dean Pollema
Gordon Deng

Fast Food Industry


Quality of food

Largely recession proof


More and more restaurants
More choices, not necessarily healthier

1993: First location in Denver


2006: Initial Public Offering

Ranked 60 in the 100 fastest


growing companies in the world
Reduced use of chemical pesticide
by 150,000 pounds since 2005

Management
STEVE ELLS

MONTGOMERY F. MORAN
Co-CEO

JOHN R. HARTUNG
CFO

Founder
CEO
Chairman

Employees
The 401k Plan.

Stock compensation
Employee Stock Purchase Plan (ESPP)

Food With Integrity

Burritos

Burrito bowls

Tacos

Salads

RATIO ANALYSIS

Liquidity
7
6
5
4
3
2
1
0

McDonalds
Chipotle
McDonalds
Current Ratio Current Ratio Quick Ratio
Dec. 31, 2008

Dec. 31, 2009

Chipotle
Quick Ratio

Dec. 31, 2010

McDonalds Chipotle Cash


Cash Flow
Flow
Liquidity
Liquidity

Dec. 31, 2011

Dec. 31, 2012

Efficiency
Chipotle
2008

2009

2010

2011

2012

Average Collection Period

1.99

1.63

1.67

1.82

2.71

Days in Inventory

3.85

4.07

4.13

3.96

4.10

Days Payable Outstanding

18.49

19.24

19.17

19.79

21.52

(12.65)

(13.53)

(13.36)

(14.01)

(14.71)

Cash Conversion Cycle

McDonalds
Days Payable Outstanding

2008

2009

2010

2011

2012

40.66

44.28

54.40

56.38

60.75

Leverage/Risk
1.4
1.2

1
0.8
0.6
0.4
0.2

0
CMG Debt-to- MCD Debt-to- CMG Debt-to- MCD Debt-to- CMG Long- MCD LongAsset
Asset
Equity
Equity
term
term
Capitalization Capitalization

2008

2009

2010

2011

2012

Profitability: Gross Profit Margin


Chipotle
2008

2009

2010

2011

2012

67.57% 69.31% 69.44% 67.45% 67.38%

McDonalds
2008

2009

2010

2011

2012

76.25% 77.20% 78.00% 77.20% 77.10%

Profitability: Operating Profit Margin


Chipotle
2008
9.31%

2009

2010

2011

2012

13.42% 15.68% 15.45% 16.69%

McDonalds
2008

2009

2010

2011

2012

27.39% 30.10% 31.00% 31.60% 31.20%

Profitability: Net Profit Margin


Chipotle
2008

2009

2010

2011

2012

5.63%

8.32%

9.68%

9.47%

10.18%

McDonalds
2008

2009

2010

2011

2012

18.34% 20.00% 20.50% 20.40% 19.80%

Market: EPS
EPS

EPS as % of 2008

$10

400%

$9

350%

$8

300%

$7
$6

250%

$5

200%

$4

150%

$3

Chipotle
McD

100%

$2

50%

$1

$-

0%
2008 2009 2010 2011 2012

2008 2009 2010 2011 2012

42% average increase in EPS

Geometric Average Increases, 5 years


Chipotle

McDonalds

Net Income

37%

6%

Cash flow from operations

21%

4%

Earnings per share

39%

9%

Currently
FMV vs. BV

Chipotle
12.96

McDonalds
6.43

Market CAP

16.67B

97.49B

Market: Price-Earnings Ratio


60
50
40
30
20
10
0

Chipotle
McD

2008

2009

Dividends
No preferred stock

No dividends ever declared

2010

2011

2012

STATEMENT OF CASH FLOWS

Statement of Cash Flows


Cash provided by operating activities has increased

substantially since 2008.


Net Cash Provided by Operating Activities
450000
400000
350000
300000
250000
200000
150000
100000
50000
0

Net Cash Provided by


Operating Activities

2008

2009

2010

2011

2012

Cash Flow from Investing Activities


Purchases of Leasehold Improvements, Property
and Equipment (in thousands of dollars)
250000

Net Cash Used in Investing Activities (in


thousands of dollars)
400000
350000

200000
300000
250000

150000

200000
100000

150000
100000

50000

50000
0
Dec. 31, 2007 Dec. 31, 2008 Dec. 31, 2009 Dec. 31, 2010 Dec. 31, 2011 Dec. 31, 2012

0
Dec. 31, 2007 Dec. 31, 2008 Dec. 31, 2009 Dec. 31, 2010 Dec. 31, 2011 Dec. 31, 2012

Cash Flow from Financing Activities


Cash Flow from Financing Activities (in thousands of dollars)
40000

20000

-20000

-40000

-60000

-80000

-100000

-120000

-140000

-160000
Series1

Dec. 31, 2007


16824

Dec. 31, 2008


-29548

Dec. 31, 2009


-61943

Dec. 31, 2010


-94522

Dec. 31, 2011


-24268

Dec. 31, 2012


-143534

CFO vs. Net Income


450000
400000
350000
300000
250000
200000
150000
100000
50000
0

Net Income
CFO

2008

2009

2010

2011

2012

Effective Tax Rates


Chipotle
2008

2009

2010

2011

2012

EBIT

$127,206

$204,225

$289,061

$349,705

$457,685

Income Tax

$49,004

$77,380

$110,080

$134,760

$179,685

Tax Rate

38.52%

37.89%

38.08%

38.54%

39.62%

McDonalds
Tax Rate

2008

2009

2010

2011

2012

30.0%

29.8%

29.3%

31.3%

32.4%

Taxes continued: Stock -Based Compensation


Excess Tax benefit on StockBased (in thousands of dollars)

2008

2009

2010

2011

2012

284

10,435

14,526

38,786

73,210

Chipotle finds ways to reward employees while avoiding taxes in the process!

CONCLUSION

Why Chipotle?
Growth company

Quality of food
Current and future consumer demands