Arcos Dorados Holdings Inc. · NYSE:ARCO
Arcos Dorados — Q2 2022 Earnings Presentation
24 slides from Arcos Dorados's earnings presentation, Aug 10, 2022
Slide 1: 2Q 2022 Earnings
Arcos Dorados 2Q 2022 Earnings August 10, 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 Divisional Sales Divisional Profitability Capital Allocation & Growth Three D’s Strategy Recipe for the Future Wrap Up 03
Slide 4: Key Highlights: 15 Years of Arcos Dorados & 2Q22 Results
Key Highlights 15 Years of Arcos Dorados & 2Q22 Results
Slide 5: 15 Years of Arcos Dorados
15 Years of Arcos Dorados Committed to the long-term, sustainable growth strategy. Grew to almost 2,300 restaurants, with free-standing units now 50% of the total footprint. Generated consistent unit sales growth, navigated tough economies and improved results. Built the QSR industry’s leading Digit
Slide 6: Second Quarter 2022 Key Highlights
Second Quarter 2022 Key Highlights Total Systemwide Robust Revenue Growth Revenue Comparable Sales • Volume growth continues to drive topline expansion • Offering good value without pressuring local inflation $883.9m +47.9% • Market Share and Brand Preference remain strong Adjusted Three D’s Strateg
Slide 7: Sales Highlights
Sales Highlights Divisional Sales Performance
Slide 8: Comp sales grew over 3x inflation in all Divisions
Comp sales grew over 3x inflation in all Divisions Systemwide comparable sales growth (%) BRAZIL 37.4% NOLAD 20.9% SLAD (Ex- Venezuela) 98.8% ($million) ($million) ($million) 47.0% 104.0% 18.5% 58.6% 75.9% 15.2% 225.7 358.1 331.9 193.3 222.7 229.1 172.3 303.1 351.5 2Q22 2Q22 2Q22 2Q21 2Q22 2Q22 2Q21
Slide 9: Profitability Highlights
Profitability Highlights Divisional Profitability
Slide 10: Adjusted EBITDA Performance, by Division
Adjusted EBITDA Performance, by Division Adjusted EBITDA margin (%) BRAZIL NOLAD SLAD (Ex- Venezuela) 14.7% 10.4% 11.2% ($million) ($million) ($million) 43.6% 27.6% 239.2% 55.8% 22.2% 177.6% 33.8 52.7 48.6 19.0 23.3 24.3 12.2 34.0 41.5 2Q21 2Q22 2Q22 2Q21 2Q22 2Q22 2Q21 2Q22 2Q22 (as reported) (in c
Slide 11: Margins Benefitting from Revenue and Cost Management
Margins Benefitting from Revenue and Cost Management Consolidated Adjusted EBITDA Margin Bridge Total G&A Expenses vs. 2Q 2021 ($ million) 2Q21 Occupancy Franchised Other 2Q22 Adjusted Payroll & & Other Restaurants Operating Adjusted EBITDA Food & Employee Operating Royalty - Occupancy Income EBITDA
Slide 12: Capital Allocation & Growth
Capital Allocation & Growth Capital Structure & Investments
Slide 13: Cash Flow Generation & Strong Balance Sheet to Support Growth
Cash Flow Generation & Strong Balance Sheet to Support Growth Cash Flow from Operations* Key Debt Metrics* ($ million) Leverage Ratio 1.7x 7.6x 1.4x 1.1x 121.9 ($ million) 519 484 379 402 35 606 122 685 166 658 279 692 289 2021 2022 2019 2020 2021 2Q22 June 30 – Year-to-Date Total Debt Cash & Equiva
Slide 14: Growing with better Returns on Investment
Growing with better Returns on Investment 2Q 2022 QUARTER-END RESTAURANT FOOTPRINT STORE TYPE TOTAL DESSERT DIVISION MCCAFES RESTAURANTS CENTERS FS & IS MS & FC BRAZIL 610 460 1,070 109 1,971 NOLAD 434 194 628 15 532 SLAD 365 223 588 163 703 TOTAL 1,409 877 2,286 287 3,206 2Q 2022 – A Steady Pace •
Slide 15: Three D's Strategy
Three D’s Strategy Digital, Delivery & Drive-thru
Slide 16: Three D's: Sustained Growth Across Segments
Three D’s: Sustained Growth Across Segments Digital Sales % of Systemwide Sales 41% >23.0% 13.0% 36% 35% 33% 19% Delivery Sales 11% Drive-thru Sales Growth1 Growth1 2018 2019 2020 2021 1Q22 2Q22 Delivery Self-Order Kiosk Order Ahead 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 1Q20 2Q20 3Q20 4Q
Slide 17: Strong Market Share Gains and Brand Equity
Strong Market Share Gains and Brand Equity Market Share growth continues, as Informal Eating Out customers migrate to formal brand segment • McDonald’s share grew throughout LatAm, leveraging Arcos Dorados’ structural competitive advantages. • The McDonald’s Brand is also the region’s Favorite QSR B
Slide 18: Recipe for the Future
Recipe for the Future ESG Platform
Slide 19: Renewable Energy – Scope 2 GHG Reduction
Renewable Energy – Scope 2 GHG Reduction New Renewable Energy Sources ✓ We have partnered with EDP to build three new solar power plants to serve as the exclusive power source for several of our restaurants and dessert centers in Brazil ✓ We are also actively speaking with other renewable energy pro
Slide 20: Social Commitment
Social Commitment Diversity and Inclusion ✓ Argentina – “Sello de Inclusión Social” for Barrio 31 restaurant Gender Equality ✓ Ecuador and Uruguay - #1 Great Place to Work for Women ✓ Ecuador – “Buenas Prácticas de Equidad de Género” (Violeta Magazine) 20
Slide 21: Wrap Up
Wrap Up Closing Remarks
Slide 22: Closing Remarks
Closing Remarks Execution is strong across markets ✓ Highest Adjusted EBITDA in Company history ✓ Many opportunities remain to improve operations moving forward Three D’s, Restaurants and Value are driving guest volume growth and market share gains ✓ Guests are migrating to the McDonald’s Brand expe
Slide 23: Questions & Answers
Questions & Answers
Slide 24: Thank you!
IR Contacts www.arcosdorados.com/ir Thank you! Dan Schleiniger Vice President Investor Relations daniel.schleiniger@mcd.com.uy Leticia Santiago Senior Manager Investor Relations leticia.santiago@br.mcd.com Follow us on:
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