Arcos Dorados Holdings Inc. · NYSE:ARCO
Arcos Dorados — Q4 2021 Earnings Presentation
30 slides from Arcos Dorados's earnings presentation, Mar 16, 2022
Slide 1: 4Q & Full Year 2021 Earnings
ARCO 4Q & Full Year 2021 Earnings March 16, 2022
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: Discussion Topics
Discussion Topics Key Highlights Results & Growth Digital Transformation Journey Measuring Success Environmental, Social and Governance (ESG) Wrap Up Questions & Answers 03
Slide 4: Key Highlights
Key Highlights 4Q21 and Full Year 2021 Results
Slide 5: Fourth Quarter and Full Year 2021 Key Highlights
Fourth Quarter and Full Year 2021 Key Highlights Systemwide comparable sales rose 33.6% vs. 4Q19 FY 2021 4Q 2021 Total Revenue Total Revenue • Positive 2-year comparable sales in all divisions • Strong sales trends carried into first two months of 2022 $2.7b $777.1m The Three D Strategy widened the
Slide 6: Results & Growth
Results & Growth Profitability, Capital Structure & Investments
Slide 7: Stronger Margins, Cash Generation & Balance Sheet
Stronger Margins, Cash Generation & Balance Sheet Payroll & Occupancy & Other Franchised Restaurants – Key Debt Metrics* Employee Operating Occupancy Other Benefits Expenses Royalty Expenses Operating Leverage Ratio Fees Income (Expense) 1.0x 1.6x 1.7x 7.6x 1.4x Food & G&A Paper 1.5% (0.4)% 0.2% 14.
Slide 8: Capturing McDonald's Brand's Growth Potential
Capturing McDonald’s Brand’s Growth Potential 4Q 2021 QUARTER-END FOOTPRINT DIVISION STORE TYPE TOTAL MCCAFES DESSERT 2021 – Mission Accomplished FS & IS MS & FC RESTAURANTS CENTERS • 46 new restaurants in full year 2021, BRAZIL 590 461 1,051 95 2,013 including 40 free-standing locations. • Capital
Slide 9: Digital Transformation Journey
Digital Transformation Journey Strategy
Slide 10: Our Digital Transformation Journey: Always 3 Steps Ahead
Our Digital Transformation Journey: Always 3 Steps Ahead CRM We initiated our CRM and Experience of the Future personalization efforts in First EOTF restaurant 2018 with Marketing e-commerce opened in 2016 with automation for email and In 2020 we Digital elements (tablets, McDelivery push notificati
Slide 11: Adding Agility to ADvance the Digital Transformation Journey
Adding Agility to ADvance the Digital Transformation Journey •Empowered teams with Common “Moon Shot” Objectives •Over 300 team members collaborating, taking risks and moving forward SQUADS Traditional Structure Agile Structure • Digital Experience • Digital Marketing • Digital Channel Operations &
Slide 12: Digital: Delivery / Self-Order Kiosk / App
Digital: Delivery / Self-Order Kiosk / App % of Systemwide Sales 36% 33% 2021 vs. 2019 Sales Growth: 19% • 50% Total Digital 11% • 345% Delivery • 50% Self-Order Kiosks • 20% Mobile App (all channels) 2018 2019 2020 2021 • Mass Marketing to Mass Personalization • New ecommerce platform (MOP) 4Q21 Di
Slide 13: Digital: Latin American QSR industry's favorite App
Digital: Latin American QSR industry’s favorite App •New convenience solutions and a more personalized experience •Driving higher guest lifetime value Accumulated Downloads Average Monthly Active Users (million) 62.4 (million) 34.9 45.7 +53 10.1 million unique 21.5 4.0 registered users 2018 2019 202
Slide 14: Digital: Where, When and How Experience
Digital: Where, When and How Experience Drive-Thru Front Counter Table Curbisde Own Pick-up Service Pick-up Delivery To deliver the best guest experience, generating delicious moments through technology that makes people’s lives easier 14
Slide 15: Digital: Personalization through Identifiable Sales
Digital: Personalization through Identifiable Sales will Drive Future Results •App users who make an app-initiated purchase (any functionality) who have opted-in to sharing their contact and other information •Personalized campaigns are 25%-35% more efficient •Leads to more targeted and effective ma
Slide 16: Digital: Building Frequency & Engagement
Digital: Building Frequency & Engagement Exclusive Licenses & Partnerships Owning the Holiday Season •FIFA® 22 Legacy Cup: e- •League of Legends®, one Highlights: tournament in partnership of Latin America’s most •Black Friday 360-campaign focused on with Coca-Cola® with popular PC games, acquisitio
Slide 17: Digital: Hyper-personalized, Loyal, Aspirational and even more Convenient
Digital: Hyper-personalized, Loyal, Aspirational and even more Convenient! Order Ahead Delivery Roll-out our revamped App My meal is ready My way to get e-commerce experience to all when I am My favorites, markets, the ultimate wherever I am omnichannel convenience Making delicious feel-good moments
Slide 18: McDelivery: A New Consumption Occasion
McDelivery: A New Consumption Occasion First 3PO Implemented Partnerships McDelivery Playbook Available in 15 Markets and over 1,700 restaurants New Solutions and 16% of Sales Partnerships to: 2018 2019 2020 Covid19 2021 • Enhance Guest Experience 2% of Sales Sustained Sales • Grow Market Share McDe
Slide 19: McDelivery: QSR's Best Guest Experience
McDelivery: QSR’s Best Guest Experience Significant Operational Improvements Strong Marketing Support • 5 minutes Faster • 50% Reduced Delivery Inaccuracy Total Time Inaccurate Orders 2019 2020 2021 2019 2020 2021 Special 3PO Exclusive Dates Actions Menu Technology Development and Deployment • Integ
Slide 20: Drive-thru: Structural Competitive Advantage
Drive-thru: Structural Competitive Advantage Drive-thru represents a structural competitive advantage for the McDonald’s Brand in Latin America and the Caribbean Arcos Dorados operates the region’s largest free-standing restaurant portfolio with more than 1,100 locations: • >2.5x the main competitor
Slide 21: Drive-thru: Nobody Does It Better
Drive-thru: Nobody Does It Better Improved Operational Execution Higher Customer Satisfaction -32% -43% +34% 2020 2021 2020 2021 2020 2021 Service Time Inaccurate Orders Customer Satisfaction Investments in Technology and Training Strong Marketing Support 21
Slide 22: Drive-thru: Capturing New Guests Daily
Drive-thru: Capturing New Guests Daily Sales contribution of 35% in 2020 and 2021 versus just 22% in pre-pandemic 2019 • Volume: >15% more cars per restaurant per month in Dec. 2021 versus Dec. 2019 • Sales contribution should remain around 30% of total Sales Growth New Guests Club VIP Automac 3.5 m
Slide 23: Measuring Success
Measuring Success Market Share
Slide 24: Total McDonald's Brand market share gaps grew across the region
Total McDonald’s Brand market share gaps grew across the region Tota Arcos Dorados – 2021 Visit Share Brazil – 2021 Visit Share Gap: Gap: Gap: +21.0% Gap: +14.2% +19.2% +9.3% Q1 Q4 Q1 Q4 McDonald's Competitor 1 McDonald's Competitor 1 Source: Company Research – QSR visit share Source: CREST – QSR vi
Slide 25: ESG
ESG Recipe for the Future
Slide 26: ESG: Powered by Cooltura de Servicio
ESG: Powered by Cooltura de Servicio Ecuador Nº1, Brazil Nº2 and Uruguay Nº3 Great Colombia: “Sello Equipares” Place to Work Ranking • For working to ensure gender equality. Argentina: BA CONVIVE • For creating a space committed to diversity. Mexico: Súper Empresas • Nº4 Super Company for Woman Arge
Slide 27: Wrap Up
Wrap Up Closing Remarks
Slide 28: Closing Remarks
Closing Remarks Consistent sales and profitability improvements in US dollars, despite currency and input cost pressures Three D’s driving results, with significant market share gains Hyper-personalization and new functionalities are around the corner Privileged operating cash generation and balance
Slide 29: Questions & Answers
Questions & Answers
Slide 30: Thank you!
IR Contacts www.arcosdorados.com/ir Thank you! Dan Schleiniger Vice President Investor Relations daniel.schleiniger@ar.mcd.com Leticia Santiago Senior Manager Investor Relations leticia.santiago@br.mcd.com Follow us on:
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