Arcos Dorados Holdings Inc. · NYSE:ARCO
Arcos Dorados — Q2 2024 Earnings Presentation
30 slides from Arcos Dorados's earnings presentation, Aug 14, 2024
Slide 1: 2nd Quarter 2024 Results
Arcos Dorados 2 Quarter 2024 nd Results August 14, 2024
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements that represent our beliefs, projections and predictions about future events or our future performance. Forward-looking statements can be identified by terminology such as “may,” “will,” “would,” “could,” “should,” “expect,” “intend,” “
Slide 3: Agenda
Agenda 1 Key 4 Balance Sheet Highlights & Growth 2 Sales & 5 MFA Renewal Profitability Update 3 Digital, Delivery 6 Wrap Up & Drive-thru 3
Slide 4: Key Highlights
1 Key Highlights 2nd Quarter 2024
Slide 5: Second Quarter 2024 Key Highlights
Second Quarter 2024 Key Highlights 2Q 2024 Systemwide Systemwide Comparable Sales grew 2.4x blended inflation, excluding Argentina Total Revenue Comparable Sales • Up 2.6x inflation in Brazil, with significant market share gains versus the prior year. • Up 2.5x blended inflation in NOLAD and 2.0x bl
Slide 6: Sales & Profitability
2 Sales & Profitability Divisional Sales Performance
Slide 7: Brazil Division Sales Performance
Second Quarter 2024 Brazil Division BRAZIL 10.2% Sales Performance ($million) Systemwide comparable sales growth 15.2% 9.1% 405.2 442.0 466.6 2Q23 2Q24 2Q24 (as reported) (in constant currency) • Comps were up 2.6x inflation in the 2Q24, with balanced volume and average check growth. • Digital chann
Slide 8: North Latin American Division Sales Performance
Second Quarter 2024 North Latin American Division Sales Performance NOLAD 7.9% ($million) Systemwide comparable 10.0% sales growth 11.7% 277.6 310.2 305.4 2Q23 2Q24 2Q24 (as reported) (in constant currency) • Comparable sales up 2.5x blended inflation in the 2Q24. • Digital channel sales grew more t
Slide 9: South Latin American Division Sales Performance
Second Quarter 2024 South Latin American Division Sales Performance SLAD 113.4% ($million) Systemwide comparable sales growth 117.5% 0.3% 357.7 358.7 778.0 2Q23 2Q24 2Q24 (as reported) (in constant currency) • Systemwide comparable sales grew at 2.0x blended inflation, excluding Argentina. • Above i
Slide 10: Market Share Gains Across the Board
Market Share Gains Across the Board Total Brand Spend Share Delivery Spend Share Latin America Latin America +2.9pp +0.8pp YoY YoY +1.2pp +0.5pp YoY YoY +0.3pp +1.0pp YoY YoY 1H23 1H24 1H23 1H24 McDonald's Competitor 1 Competitor 2 McDonald's Competitor 1 Competitor 2 10 Source: Proprietary research
Slide 11: Consolidated Adjusted EBITDA Growth & Margin Bridge
Second Quarter 2024 Consolidated Adjusted EBITDA Growth & Margin Bridge 2Q24 – Adj. EBITDA Margin Performance 2Q24 – Consolidated 10.7% (% of total revenue) Adj. EBITDA margin ($million) 2Q23 Occupancy Franchised Other 2Q24 18.1% Adjusted Payroll & & Other Restaurants Operating Adjusted EBITDA Food
Slide 12: Divisional Profitability – Benefitting from Diversification
Second Quarter 2024 Divisional Profitability – Benefitting from Diversification BRAZIL 19.5% NOLAD 8.4% SLAD 8.5% ($million) ($million) ($million) Adj. EBITDA Adj. EBITDA Adj. EBITDA margin margin margin 30.9% 65.7% 24.6% (17.1)% (8.5)% (7.3)% 69.1 86.2 90.5 28.2 26.2 25.9 36.9 30.6 61.1 2Q23 2Q24 2
Slide 13: Digital, Delivery & Drive-thru
3 Digital, Delivery & Drive-thru 3D’s Strategy
Slide 14: Total Digital Sales up 24% in US dollars
Total Digital Sales1 up 24% in US dollars2 Driving Frequency with Data and Guest Experience Total Digital Sales Penetration 49% 57% >130 m Mobile APP 2Q 2023 2Q 2024 Downloads Identified Sales Penetration ~90 m ~21 m Unique Registered Average Monthly 19% 24% Users Active Users 2Q 2023 2Q 2024 ¹Mobil
Slide 15: Delivery & Drive-thru: Leveraging the Free-standing Portfolio
Delivery & Drive-thru: Leveraging the Free-standing Portfolio Systemwide Off-Premise Sales1 >20% of systemwide sales 2Q23 3Q23 4Q23 1Q24 2Q24 >25% of systemwide sales ¹Delivery and Drive-thru 15 2In US dollars versus 2Q 2023
Slide 16: Loyalty Program
Loyalty Program Over 11 million1 registered members and growing fast Registered Members +Frequency (million) 1.5x to 2.0x vs Non-Loyalty +90 Day Active Customers 3.2 11.2 Dec 2023 Mar 2024 Apr 2024 Jul 2024 16 ¹As of July 31, 2024
Slide 17: Balance Sheet & Growth
4 Balance Sheet & Growth Capital Structure & Investments
Slide 18: Healthy Balance Sheet & Cash Flows to Support Future Growth
Healthy Balance Sheet & Cash Flows to Support Future Growth Key Debt Metrics Cash Flow from Operating Activities ($million) ($million) Leverage Ratio 1.4x 1.0x 1.0x 1.2x BB+ 577 Stable 472 379 370 658 279 674 304 728 247 716 139 Ba2 84.3 63.7 Positive 2021 2022 2023 1H24 1H23 1H24 Total Debt Cash &
Slide 19: Restaurant Portfolio
Restaurant Portfolio Latin America’s Most Modernized Footprint 2Q 2024 Quarter-end Restaurant Footprint Store Type Total Dessert Division McCafé Freestanding In Store MS & FC Restaurants Centers BRAZIL 599 91 460 1,150 114 2,002 NOLAD 408 48 193 649 19 519 SLAD 250 125 221 596 201 733 TOTAL 1,257 26
Slide 20: Master Franchise Agreement
5 Master Franchise Agreement Renewal Procedures
Slide 21: Master Franchise Agreement (MFA) Renewal
Master Franchise Agreement (MFA) Renewal Renewal Procedures Renewal Notice • McDonald’s had until August 3, 2024, • The Renewal Notice contains the terms offered to provide Arcos Dorados with a by McDonald’s for the renewal of the MFA. Renewal Notice to extend the MFA. • McDonald’s has offered to re
Slide 22: Wrap Up
6 Wrap Up Closing Remarks
Slide 23: Closing Remarks – Set Up for Continued Growth
Closing Remarks – Set Up for Continued Growth Consistency Resilience • Best guest experience in the industry. • Reduced volatility due to macro and FX. • Building trust with our guests. • 2nd highest Adj. EBITDA in US dollars for a 2Q, despite macro and FX headwinds. Sustainability Longevity • Struc
Slide 24: Supplemental Information
7 Supplemental . Information
Slide 25: Consolidated Net Income Growth & Margin Bridge
Second Quarter 2024 Consolidated Net Income Growth & Margin Bridge 2Q24 – Net Income Margin Performance 2Q24 – Net Income 2.4% (% of total revenue) margin Net Interest Other Net Income ($million) 2Q23 Operating Expense & Gain / (Loss) Foreign Non- attributable to 2Q24 Net Depreciation Charges Other
Slide 26: Net Debt to Net Income
Net Debt to Net Income Key Debt Metrics ($million) Leverage Ratio 8.3x 2.6x 2.7x 3.4x 577 481 379 370 658 279 674 304 728 247 716 139 2021 2022 2023 9M24 Total Debt Cash & Equivalents Net Debt • Total financial debt includes short-term debt, long-term debt, accrued interest payable and derivatives i
Slide 27: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation For Three-Months June 30, 2024 2023 Adjusted EBITDA Reconciliation Net income attributable to Arcos Dorados Holdings Inc. 26.6 28.4 Net income attributable to non-controlling interests 0.1 0.2 Income tax expense, net 18.1 38.8 Other non-operating income (expenses), net
Slide 28: Definitions
Definitions In analyzing business trends, management considers a variety of performance and financial measures which are considered to be non-GAAP including: Adjusted EBITDA, Constant Currency basis, Systemwide sales, and Systemwide comparable sales growth. Adjusted EBITDA: In addition to financial
Slide 29: Questions & Answers
Questions & Answers
Slide 30: Thank you!
IR Contacts www.arcosdorados.com/ir Thank Dan Schleiniger you! Vice President Investor Relations daniel.schleiniger@mcd.com.uy Leticia Santiago Senior Manager Investor Relations leticia.santiago@br.mcd.com Follow us on
Arcos Dorados Holdings — Q2 2024 Earnings Presentation on 6ix