Restaurant Brands International Inc. · NYSE:QSR
Restaurant Brands International — Q4 2014 Earnings Presentation
32 slides from Restaurant Brands International's earnings presentation, Feb 17, 2015
Slide 1: Earnings Conference Call Fourth Quarter 2014
Restaurant Brands International Restaurant Brands International Inc. Earnings Conference Call Fourth Quarter 2014 February 17, 2015
Slide 2: Forward-looking statements
Restaurant Brands International This presentation contains certain forward-looking statements, which reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements are not guarantees of future performance and
Slide 3: Agenda
AGENDA HIGHLIGHTS BRAND BUSINESS STRATEGY PERFORMANCE UPDATE FINANCIAL RESULTS SUMMARY Q&A
Slide 4: Company at a Glance
Company at a Glance Restaurant Brands International * 100+ years of combined brand heritage * More than 19,000 restaurants in approximately 100 countries and U.S. territories *« —~450,000 team members worldwide * 100% owned and operated by strong franchise partners * More than $28 billion annual sys
Slide 5: RBI 2014 Highlights
Restaurant RBI 2014 Highlights aloe Global same-store-sales increased at TH and BK by 3.1% and 2.1%, respectively Net Restaurant Growth of 891, driven by 186 at TH and 705 at Bk, representing an aggregate growth of 4.9% System-wide sales increased at TH and BK by 6.6% and 6.8%, respectively TH FY Ad
Slide 6: TH 2014 Highlights
Restaurant TH 2014 Highlights aloe * Global comparable sales) of 3.1% « NRG of 186 units, representing restaurant base growth of 4.1% * System-wide sales" increased 6.6% to $6.6n Comparable Sales Net Restaurant System-wide Sales Growth!) Growth Growth!) 6.6% 3.1% 4.7% : = in 2013 2014 2013 2014 2013
Slide 7: Business Strategy - TH
Business Strategy - TH Canada - Lead, Defend, Grow International - Expansion and Growth
Slide 8: Canada: Lead, Defend, Grow
Restaurant Brands Canada International DARK ROAST COFFEE - * Launch premium products Rt Innovation ¢ Continue to grow lunch day part * Increase combo penetration ¢ Expand in core urban areas * Grow non-traditional formats Lead, Defend, Grow 8
Slide 9: U.S.
Slide 10: International
International Accelerate Expansion into New Markets Create Jobs Throughout the Entire System Bring One of Canada’s Most Iconic Brands to the World Restaurant Brands International
Slide 11: TH 2014 Performance: SSS & NRG
TH 2014 Performance: SSS & NRG Canada * Comparable sales growth of 2.9% in 2014 driven by day part expansion, combo penetration and the Dark Roast launch * Canadian NRG driven by expansion into the non-traditional restaurant format US. * Comparable sales growth of 4.9% in 2014 driven by day part exp
Slide 12: BK 2014 Highlights
Restaurant BK 2014 Highlights aloe * Global comparable sales of 2.1% primarily driven by strength in US&C and APAC ¢ NRG of 705 units, representing restaurant base growth of 5.2% * System-wide sales" increased 6.8% Comparable Net Restaurant System-wide Sales Sales Growth'") Growth Growth!) 705 6.8%
Slide 13: Business Strategy - BK
Business Strategy - BK Fete U.S. & Canada: International: Increase average unit sales with Four Accelerate NRG and Pillars continued SSS growth 13
Slide 14: Menu and Marketing
tau 1 Peron enu an arketing i ALUTIMATR a. EXTRA LONG Me Sao ekg kann " Premium LTOs + Value Promotions = A balanced approach to driving positive profitable sales 14
Slide 15: Modern Image
Restaurant ral Bran mage International ee ttightights Percent on Modern Image * Achieved 40% US&C modern image “77 target one year before plan “7 « Reimaged stores continue to achieve an average sales uplift of 10%-14% 2011 2012 2013 Before
Slide 16: International Development
Restaurant Brands International Development International Key 2014 Development Achievements * Crossed 50% of system restaurants outside of the U.S., emphasizing the increasingly global reach and presence of BK * Opened nearly 1,000 restaurants and achieved Net Restaurant Growth of 5.2%, making BK a
Slide 17: 2014 Progress on New JVs
2014 Progress on New JVs France South Africa STUNNER J easmr we 37m 4 ve cou curese = KING a 6 6 i ©. % ten @ ‘69 _—— _ om = aj J e f Qasr cucxor 5 coceon cm ces fy = Fimes ie “oe . ie 652 n 17
Slide 18: BK 2014 Performance: SSS
BK 2014 Performance: SSS aie US&C * 4 consecutive quarter of positive comparable sales growth « Driven by a well-balanced promotional mix and a commitment to launching fewer, more impactful products EMEA * Same-store-sales growth finished the year at 1.9% * Success driven by continued strength in Sp
Slide 19: BK 2014 Performance: NRG
BK 2014 Performance: NRG aie US&C * Store base flat with slight improvement over prior year EMEA * Opened the first restaurants of our new BK France joint venture * Successfully launched a new joint venture in Southem and Eastern Europe APAC * Entered key strategic market with the opening of BK rest
Slide 20: BK Financial Results
Brands international BK Financial Results * Finished 2014 with 11% organic Adjusted 2014 2013 EBITDA growth, representing the 4" Sinton) consecutive year of double-digit organic Revenue” $1,055 $1,146 6% Adjusted EBITDA growth * Strong performance driven by sustained BemceseaesTON® = ee momentum in
Slide 21: BK Financial Results: Organic Bridges
BK Financial Results aah Organic Revenue Bridge") - 2014 vs. 2013 Organic Adj. EBITDA Bridge") - 2014 vs. 2013 ($ in millions) $76 $726 $1,146 $666 || $64 $1,055 & oT | | : ($141) ($15) 2013 Refranchising FX Organic 2014 2013 Retranchisng. FX Organic 2014 YoY Revenue Up +6% on Organic Basis YoY Adju
Slide 22: Financial Results - 2014 Combined Pro-forma
Financial Results -— 2014 Combined Pro-forma Results 2014 Pro-Forma Adjusted EBITDA 2014 Pro-Forma Adjusted EBITDA - Capex ($ in millions) $1,331 $1,542 $708 816 $ $726 $628 TH BK Combined TH BK Combined” 1) See Appendix for reconciliation to most comparable GAAP numbers. 2 2 2) Pro Forma Combined A
Slide 23: Financial Results - Balance Sheet
Restaurant Financial Results —- Balance Sheet hing (8 in millions) Maturity All-in Rate 2014 Credit Facility B1/B+ , 2021 Libor = 1,00% 4,50% 2014 Senior Notes Caa1/B- 2,250 2022 6.00% 6.00% TH Series 1-3 Notes 1,045 Various Capital Leases & Other 260 Various Total Debt $10,305 Cash Balance (1,888)
Slide 24: Capital Allocation
Restaurant Brands Capital Allocation fe ¢ RBI intends to continue to return capital to shareholders and unitholders in-line with BKW practice prior to the combination * On February 17", 2015, RBI Board of Directors declared a dividend of $0.09 per share for the first quarter of 2015 * The dividend w
Slide 25: 2014 Summary
Restaurant 2014 Summary irises Positive momentum across both brands * Accelerated international expansion through strong NRG * Built on same-store-sales momentum * Drove strong year-over-year organic Adjusted EBITDA growth * Successfully completed transformational combination to create Restaurant Br
Slide 26: Q&A
Q&A
Slide 27: Appendix
APPENDIX
Slide 28: Use of Non-GAAP Financial Measures
Restaurant Use of Non-GAAP Financial Measures = |.) Below, we define the non-GAAP financial measures, provide a reconciliation of each non-GAAP financial measure to the most directly comparable financial measure calculated in accordance with GAAP, and discuss the reasons that we believe this informa
Slide 29: RBI Net Income to EBITDA, Adj. EBITDA and BK Adj. EBITDA
RBI Net Income to EBITDA, Adj. EBITDA and BK Adj. EBITDA (in US$ millions) Three Months Ended Twelve Months Ended December 31, | December 31, December 31, December 31, 2014 2013 2014 2013 EBITDA and Adjusted EBITDA (unaudited) Net income (loss) $ (389.4) $ 66.8 §$ (277.4) $ 233.7 Interest expense, n
Slide 30: RBI Other Operating Expenses (Income), net
RBI Other Operating Expenses (Income), net Other Operating Expenses (Income), net Three Months Ended Twelve Months Ended December 31, December 31, (in USE millions) 2014 2013 2014 2013 (unaudited) Net losses (gains) on disposal of assets, restaurant closures and refranchisings $ 91 §$ 0.1 $ 25.4 § 0
Slide 31: BK Organic Revenue and Adjusted EBITDA Reconciliation
Restaurant Brands International Refran. Adjusted FX Actual Q4 '14 vs. Q4'13 Impact Q4 13 Impact Organic Growth (in US$ millions) Q4 14 Q413 $ % $ $ $ $ % Calculation: A B Cc A+C0=D E B-C-E=F F/D Revenue $ 2742 $ 265.2 $§$ 9.0 34% $ (28) $ 2624 §$ (8.7) $ 205 7.8% Adjusted EBITDA $ 1891 $$ 1821 §$ 7.
Slide 32: Footnotes to Reconciliation Tables
Footnotes to Reconciliation Tables 1) Represents share-based compensation expense associated with employee stock options for the periods indicated; also includes the portion of annual non-cash incentive compensation that eligible employees elected to receive or are expected to elect to receive as co
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