Tim Hortons — Burger King Worldwide and Tim Hortons — Merger or Acquisition (August 2014)
30 slides from Tim Hortons's merger presentation, Aug 26, 2014
Slide 1: Creating a Global QSR Leader
Creating a Global QSR Leader August 26th, 2014 0
Slide 2: Forward-looking statements
This presentation includes forward-looking statements, which are often identified by the words “may”, “might”, “believes”, “thinks”, “anticipates”, “expects”, “intends” or similar expressions and includes statements regarding (1) expectations whether a transaction will be consummated, including whet
Slide 3: Participants
Participants Marc Caira President & Chief Executive Officer, Tim Hortons Inc. Alexandre Behring Executive Chairman of the Board, Burger King Worldwide Inc. Daniel Schwartz Chief Executive Officer, Burger King Worldwide Inc. Cynthia J. Devine Chief Financial Officer, Tim Hortons Inc. 2
Slide 4: Companies at a Glance
Companies at a Glance Canada’s Leading QSR Chain #2 Fast Food Hamburger Chain Globally • Undisputed QSR leader in Canada with growing • Iconic 60 year old brand universally known for U.S. presence that has been serving great- great-tasting, flame-grilled hamburgers tasting coffee and baked goods for
Slide 5: Agenda
Agenda Transaction Highlights Tim Hortons Overview Burger King Overview Transformational Opportunity Financing Highlights and Timetable 4
Slide 6: Transaction Overview
Transaction Overview • Offer price of C$89.32 per share, C$65.50 in cash and 0.8025 shares of the new company per Tim Hortons share, equating to C$23.82 based on the Burger King closing price as of August 22 nd, 2014 • Premium of 39% to 30-day volume-weighted average share price and 30% premium to A
Slide 7: Creating a Global QSR Leader
Creating a Global QSR Leader Creating 3rd Largest Global QSR New public company will generate $23bn in system sales with attractive business mix Catalyzing Tim Hortons Untapped International Potential Opportunity to apply Burger King’s scale, capabilities and infrastructure to accelerate Tim Hortons
Slide 8: Agenda
Agenda Transaction Highlights Tim Hortons Overview Burger King Overview Transformational Opportunity Financing Highlights and Timetable 7
Slide 9: Tim Hortons Overview
Tim Hortons Overview Canada’s Leading QSR 42% traffic share with $6.5bn+ in system sales Strong Customer Loyalty 3,630 Canadian units generate ~C$2.2 million standard AUV Fully-Franchised Business Model 99.5% franchised with average franchisee operating 3-4 units Vertically Integrated Strategy 5 dis
Slide 10: An Unparalleled Canadian Success Story
An Unparalleled Canadian Success Story Beloved and Highly Recognizable Canada’s Favourite Total Caffeinated Beverages Canada # 1 Most Trusted Coffee Retailer Brand Ipsos Reid % Share of QSR Servings All Other QSR 11% 5% 6 10% # Most Influential Brand 75% Canada Ipsos Reid Canadian Caffeinated Bevera
Slide 11: Tim Hortons Strategic Vision will Continue
Tim Hortons Strategic Vision will Continue Lead, Defend & Grow Must-Win Battle Grow, Learn & Expand Continue leadership in Canada Build scalable, profitable business Continue to build on success in through day part expansion, in core and priority markets while GCC while pursuing new menu innovation,
Slide 12: Track Record of Consistent Growth
Track Record of Consistent Growth Store Count 4,417 4,240 4,009 3,750 2010A 2011A 2012A 2013A Canada Same Store Sales % 8% 8% 6% 6% 5% 5% 4% 4% 3% 3% 3% 2% 1% 11
Slide 13: Strong Canadian Footprint with Global Ambitions
Strong Canadian Footprint with Global Ambitions Canada • 3,588 stores in 11 provinces and territories • 5 distribution centers and 2 manufacturing facilities • Fleet of branded trucks U.S. 3,588 Canada Units • 859 stores in 11 states (80%) • 1 manufacturing facility • Operating in the U.S. since 198
Slide 14: Agenda
Agenda Transaction Highlights Tim Hortons Overview Burger King Overview Transformational Opportunity Financing Highlights and Timetable 13
Slide 15: Burger King Overview
Burger King Overview #2 Fast Food Hamburger Chain Globally $16bn+ in sales, serving 2.3bn guests annually Global Brand Presence ~14,000 restaurants in nearly 100 countries Fully-Franchised Business Model QSR industry-leading EBITDA margins Accelerating International Growth Among fastest-growing QSRs
Slide 16: Burger King's Proven Strategy
Burger King’s Proven Strategy Strategy Initiatives Results Accelerate growth of Master Franchise JVs (“MFJV”) and International Increased NRG by 4x since 2010 Accelerate NRG Development Agreements Expanded brand into ~100 countries and continued SSS growth Capitalize on emerging middle class consume
Slide 17: Growing Global Brand
Growing Global Brand Burger King has quadrupled the pace of its international growth over the past four years with its proven MFJV(1) strategy. Almost 50% of its restaurants are outside of the U.S. today Burger King Global Footprint Brazil JV 317 102 2010 2013 China JV 190 38 2010 2013 Russia JV 174
Slide 18: Agenda
Agenda Transaction Highlights Tim Hortons Overview Burger King Overview Transformational Opportunity Financing Highlights and Timetable 17
Slide 19: Creating a Global QSR Leader
Creating a Global QSR Leader Creating 3rd Largest Global QSR New public company will generate $23bn in system sales with attractive business mix Catalyzing Tim Hortons Untapped International Potential Opportunity to apply Burger King’s scale, capabilities and infrastructure to accelerate Tim Hortons
Slide 20: Creating 3rd Largest Global QSR
Creating 3rd Largest Global QSR The transaction will create the world’s 3rd largest global QSR from two iconic brands • ~$23bn in system sales and over 18,000 restaurants in ~100 countries • Company will be one of the fastest-growing global QSRs with leading growth metrics • Companies have similar f
Slide 21: Catalyzing Tim Hortons Untapped International Potential
Catalyzing Tim Hortons Untapped International Potential By leveraging Burger King’s MFJV(1) model, Tim Hortons can accelerate the pace of its international growth • Burger King has successfully pioneered Net Unit Growth % the MFJV model, allowing it to become a QSR leader in restaurant growth 5.6% 5
Slide 22: Creating A Global, Multi-Brand Platform
Creating A Global, Multi-Brand Platform New Company to be headquartered in Canada, the new company’s largest market and natural location for its HQ. We plan to manage the brands separately while benefiting from shared best practices and a common culture New Company Global Headquarters in Canada Burg
Slide 23: Continuing Commitment to our Communities and Causes
Continuing Commitment to our Communities and Causes Both companies are deeply involved in their communities and will continue these commitments on a broader platform TWO PILLARS Scholarships in North America Grants to employees of the Libraries in EMEA & APAC EDUCATION TWO PILLARS BURGER KING system
Slide 24: Commitment to Canada
Commitment to Canada The New Company creates significant benefits for Canada Governance Headquarters and Employment • 3 of new company’s 11 directors will be designated • New company will be headquartered in Canada and by Tim Hortons listed on the TSX and NYSE • Tim Hortons franchisee Advisory Board
Slide 25: Generating Substantial Value for Shareholders
Generating Substantial Value for Shareholders The New Company will create substantial value for all shareholders • 39% premium to the 30-day volume-weighted average share price on August 22nd Value for Tim Hortons • Substantial premium to all-time share price high Shareholders • Significant cash tod
Slide 26: Strategic Partner with Long-Term Vision
Strategic Partner with Long-Term Vision 3G Capital and its affiliates invest in leading consumer brands with significant growth potential • Family investors who have been partners for over 30 years • Long-term approach to investing • Focus on business operations through deep partner involvement • De
Slide 27: Agenda
Agenda Transaction Highlights Tim Hortons Overview Burger King Overview Transformational Opportunity Financing Highlights and Timetable 26
Slide 28: Sources & Uses
Sources & Uses • 3G Capital, Burger King’s majority Sources of Funds shareholder, will own 51% of the new USD billions unless otherwise indicated company Amount Cash $ 0.6 • Other Burger King shareholders Debt 9.0 will own 27% of new company Preferred Investment 3.0 New Common Equity 2.9 • Tim Horto
Slide 29: Timetable
Timetable • Subject to customary closing conditions, regulatory and shareholder approvals including: o Tim Hortons stockholder approval o Investment Canada Act approval Tim Hortons and Burger King are committed to bringing significant benefits to Canada through this strategic transaction that will
Slide 30: Creating a Global QSR Leader
Creating a Global QSR Leader 29
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