Tim Hortons — Q3 2014 Earnings Presentation
21 slides from Tim Hortons's earnings presentation, Nov 5, 2014
Slide 1: 2014 Third Quarter Conference Call
2014 Third Quarter Conference Call
Slide 2: Speakers
Speakers Scott Bonikowsky Senior Vice-President, Corporate Affairs & Investor Relations Marc Caira President & Chief Executive Officer Cynthia Devine Chief Financial Officer 2
Slide 3: Safe Harbor Statement
Safe Harbor Statement This presentation includes forward-looking statements which constitute forward-looking information within the meaning of Canadian securities laws and forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking sta
Slide 4: Marc Caira, President & Chief Executive Officer
Marc Caira President & Chief Executive Officer
Slide 5: Q3 Overview
Q3 Overview 5 Good momentum in business Effective execution against strategic priorities Building strong foundation to support future growth
Slide 6: Canada: Lead, Defend & Grow
Canada: Lead, Defend & Grow 6 Extend brand reachNarrow average cheque gap Premium products Increased combo penetration Expand in urban core areas Sell into new channels
Slide 7: U.S.: Must-Win Battle
U.S.: Must-Win Battle 7 Increase average unit volumes Reduce capital intensity Menu innovation driving same-store sales growth 7 development agreements 145 locations
Slide 8: Differentiated innovation
Differentiated innovation 8 Spicy Crispy Chicken Sandwich Steak & Cheese Panini Dark Roast Coffee Blend
Slide 9: Leveraging new technologies
Leveraging new technologies 9 Tims TV Double Double cardTimmyMe app
Slide 10: Reaching people in new ways
Reaching people in new ways 10 Dark Roast Launch “Tims Next Door”
Slide 11: Creating the foundation for long-term, sustainable growth
11 Creating the foundation for long-term, sustainable growth
Slide 12: Cynthia Devine, Chief Financial Officer
Cynthia Devine Chief Financial Officer
Slide 13: Top-Line Sales Growth
Top-Line Sales Growth 2014 Q3 2013 Q3 Systemwide Sales Growth (1)* 6.9% 4.7% 12.8% 10.8% Same-Store Sales Growth (2) 3.5% 1.7% 6.8% 3.0% Percentages represent year-over-year comparisons, unless otherwise noted. *Constant currency basis. (1) Systemwide sales growth includes restaurant sales at both F
Slide 14: Q3 2014 – Revenues ($CDN M)
Q3 2014 – Revenues ($CDN M) 2014 Q3 2013 Q3 % Change Sales Distribution sales $534.5 $473.6 12.8% Company-operated restaurant sales 6.2 6.1 1.8% Sales from VIEs 94.1 96.0 (2.0)% 634.8 575.8 10.2% Franchise revenues Rents & royalties 230.4 212.1 8.6% Franchise fees 44.0 37.5 17.4% 274.4 249.6 9.9% To
Slide 15: Q3 2014 – Costs and Expenses ($CDN M)
Q3 2014 – Costs and Expenses ($CDN M) 2014 Q3 2013 Q3 % Change Cost of sales $545.1 $501.9 8.6% Operating expenses 86.3 78.3 10.2% Franchise fee costs 43.6 37.9 15.1% General & administrative expenses 41.7 38.8 7.5% Equity (income) (4.0) (4.1) (0.9)% Transaction costs 27.3 - N/M Corporate reorganiza
Slide 16: Q3 2014 – Earnings Highlights ($CDN M)
Q3 2014 – Earnings Highlights ($CDN M) 2014 Q3 2013 Q3 % Change Operating income $168.8 $168.8 - % Adjusted operating income(1) $196.1 $169.8 15.5% Interest expense, net (17.6) (8.5) N/M Income taxes 51.4 45.4 13.3% Net income attributable to noncontrolling interests 1.6 1.1 N/M Net income attributa
Slide 17: Q3 2014 – Segment Results ($CDN M)
Q3 2014 – Segment Results ($CDN M) 2014 Q3 2013 Q3 % Change Canada $196.2 $179.6 9.2% U.S. $7.4 $2.7 N/M Corporate Services $(9.7) $(14.3) N/M All numbers rounded. N/M – Not Meaningful. 17
Slide 18: Progress towards strategic objectives
Progress towards strategic objectives 18 Well positioned to continue to deliver solid returns to investors
Slide 19: Appendices
Appendices
Slide 20: Systemwide Sales Growth & Same-store Sales Growth
Systemwide Sales Growth & Same-store Sales Growth Total systemwide sales growth includes restaurant level sales at both Company-operated and franchised restaurants. Substantially all of our systemwide restaurants were franchised as at September 28, 2014. Systemwide sales growth is determined using a
Slide 21: Information on Non-GAAP Measures: Adjusted Operating Income and Adjusted EPS
Information on Non-GAAP Measures: Adjusted Operating Income and Adjusted Earnings Per Share (EPS) Reconciliation of Adjusted Operating Income Q3 2014 Q3 2013 Operating income $168.8 $168.8 Add: Transaction costs(1) 27.3 - Add: Corporate reorganization expenses - 1.0 Adjusted operating income $196.1