Arcos Dorados Holdings Inc. · NYSE:ARCO
Arcos Dorados — Q3 2024 Earnings Presentation
28 slides from Arcos Dorados's earnings presentation, Nov 13, 2024
Slide 1: 3rd Quarter 2024 Results
Arcos Dorados 3 Quarter 2024 rd Results November 13, 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 Final Profitability Thoughts 3 Digital, Delivery 6 Supplemental & Drive-thru Information 3
Slide 4: Key Highlights
1 Key Highlights 3rd Quarter 2024
Slide 5: Third Quarter 2024 Key Highlights
Third Quarter 2024 Key Highlights 3Q 2024 Systemwide Systemwide Comparable Sales grew 1.6x blended inflation, excluding Argentina Total Revenue Comparable Sales • Up 1.6x inflation in Brazil, with positive guest traffic and average check growth. $1.1b 32.1% • Up 2.3x blended inflation in NOLAD and 1
Slide 6: Sales & Profitability
2 Sales & Profitability Divisional Sales Performance
Slide 7: Third Quarter 2024 Brazil Division Sales Performance
Third Quarter 2024 Brazil Division BRAZIL 6.8% Sales Performance ($million) Systemwide comparable sales growth 11.6% (1.8)% 439.2 431.5 490.2 3Q23 3Q24 3Q24 (as reported) (in constant currency) • Comparable sales grew 1.6x inflation and rose more than 18% in the last 24 months through the 3Q24. • Co
Slide 8: Third Quarter 2024 North Latin American Division Sales Performance
Third Quarter 2024 North Latin American Division Sales Performance NOLAD 6.2% ($million) Systemwide comparable 8.2% sales growth 4.8% 295.6 309.7 319.9 3Q23 3Q24 3Q24 (as reported) (in constant currency) • Comparable sales up 2.3x blended inflation in the 3Q 2024. • Comparable guest volume growth wa
Slide 9: Third Quarter 2024 South Latin American Division Sales Performance
Third Quarter 2024 South Latin American Division Sales Performance SLAD 90.4% ($million) Systemwide comparable sales growth 93.3% 0.6% 390.3 392.5 754.3 3Q23 3Q24 3Q24 (as reported) (in constant currency) • Comparable sales grew 1.3x blended inflation, ex-Argentina. • Guest volume and average check
Slide 10: Market Share Gains Across the Board
Market Share Gains Across the Board 80 Arcos Dorados Brazil Division Spend Share, year-to-date Spend Share, year-to-date 70 60 50 +3.6pp +1.8pp YoY YoY 40 30 20 +1.3pp +0.4pp YoY YoY 10 +0.3pp (0.6)pp 0 YoY YoY 9M23 9M24 9M23 9M24 McDonald's Competitor 1 Competitor 2 McDonald's Competitor 1 Competit
Slide 11: Consolidated Adjusted EBITDA Growth & Margin Bridge
Third Quarter 2024 Consolidated Adjusted EBITDA Growth & Margin Bridge 3Q24 – Adj. EBITDA Margin Performance 3Q24 – Consolidated 11.0% (% of total revenue) Adj. EBITDA margin ($million) 3Q23 Occupancy Franchised Other 3Q24 Adjusted Payroll & & Other Restaurants Operating Adjusted 22.9% EBITDA Food &
Slide 12: Divisional Profitability – Benefitting from Diversification
Third Quarter 2024 Divisional Profitability – Benefitting from Diversification BRAZIL 18.3% NOLAD 9.9% SLAD 9.1% ($million) ($million) ($million) Adj. EBITDA Adj. EBITDA Adj. EBITDA margin margin margin 15.1% 84.9% 1.5% (2.4)% (14.5)% (5.0)% 77.8 79.0 89.6 32.3 30.7 31.6 41.8 35.7 77.2 3Q23 3Q24 3Q2
Slide 13: Digital, Delivery & Drive-thru
3 Digital, Delivery & Drive-thru Organic Sales Drivers
Slide 14: Total Digital Sales up about 16% in US dollars
Total Digital Sales1 up about 16% in US dollars2 Driving Frequency with Data and Guest Experience Total Digital Sales Penetration 50% 58% ~140 m Mobile APP 3Q 2023 3Q 2024 Downloads Identified Sales Penetration >94 m ~20 m Unique Registered Average Monthly 20% 24% Users Active Users 3Q 2023 3Q 2024
Slide 15: Delivery & Drive-thru: Long-Term Growth Drivers
Delivery & Drive-thru: Long-Term Growth Drivers Systemwide Off-Premise Sales1 ~19% of systemwide sales 9M21 9M22 9M23 9M24 >24% of systemwide sales ¹Delivery and Drive-thru 15 2In US dollars
Slide 16: Loyalty Program
Loyalty Program 13.9 million members so far, with full roll-out planned for 2025 Registered Members (million) • Currently implemented in Brazil, Costa Rica and Uruguay. • Higher usage and frequency. • Boosting identified sales penetration. • Loyalty Program roll-out to remaining 3.2 13.9 Arcos Dorad
Slide 17: Balance Sheet & Development
4 Balance Sheet & Development Capital Structure & Investments
Slide 18: Strong Balance Sheet and Long-Term Debt Ratings
Strong Balance Sheet and Long-Term Debt Ratings Key Debt Metrics Cash Flow from Operating Activities ($million) ($million) Leverage Ratio 1.4x 1.0x 1.0x 1.2x BB+ 598 Stable 481 379 370 658 279 674 304 728 247 719 121 Ba1 232.3 159.8 Stable 2021 2022 2023 9M24 9M23 9M24 Total Debt Cash & Equivalents
Slide 19: The Fourth D – Development
The Fourth “D” – Development Modernizing and Expanding to Drive Future Growth 3Q 2024 Quarter-end Restaurant Footprint Store Type Total Dessert Division McCafé Freestanding In Store MS & FC Restaurants Centers BRAZIL 610 91 459 1,160 124 2,003 NOLAD 408 47 194 649 19 524 SLAD 257 124 220 601 205 734
Slide 20: Wrap Up
5 Wrap Up Final Thoughts
Slide 21: Closing Remarks
Closing Remarks Brand and Market Share Four D’s Strategy • World’s favorite QSR Brand. • Best in Class Digital, Delivery and Drive-thru, • Market share leadership in all main markets. provide a structural competitive advantage. • Omnichannel approach leverages region’s • Sophisticated Development pr
Slide 22: Questions & Answers
Questions & Answers
Slide 23: Supplemental Information
6 Supplemental Information
Slide 24: Consolidated Net Income Growth & Margin Bridge
Third Quarter 2024 Consolidated Net Income Growth & Margin Bridge 3Q24 – Net Income Margin Performance 3Q24 – Net Income 3.1% (% of total revenue) margin Net Interest Other Net Income ($million) 3Q23 Operating Expense & Gain / (Loss) Foreign Non- attributable to 3Q24 Net Depreciation Charges Other f
Slide 25: Net Debt to Net Income
Net Debt to Net Income Key Debt Metrics ($million) Leverage Ratio 8.3x 2.6x 2.7x 4.1x 598 481 379 370 658 279 674 304 728 247 719 121 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 26: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation For Three-Months September 30, 2024 2023 Adjusted EBITDA Reconciliation Net income attributable to Arcos Dorados Holdings Inc. 35.2 59.7 Net income attributable to non-controlling interests 0.1 0.4 Income tax expense, net 39.6 28.1 Other non-operating income (expenses)
Slide 27: 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 28: 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
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