Restaurant Brands International Inc. · NYSE:QSR
Restaurant Brands International — Q4 2015 Earnings Presentation
38 slides from Restaurant Brands International's earnings presentation, Feb 16, 2016
Slide 1: Earnings Conference Call Fourth Quarter 2015
Restaurant Brands International Earnings Conference Call Fourth Quarter 2015 February 16, 2016 Restaurant Brands International zs Tim Notlous (3
Slide 2: Safe Harbor Statement
Restaurant Brands Safe Harbor Statement heir This presentation contains certain forward-looking statements and information, which reflect management's current beliefs and expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statem
Slide 3: Agenda
AGENDA HIGHLIGHTS TIM HORTONS® BURGER KING® DEVELOPMENT FINANCIAL RESULTS SUMMARY Q&A APPENDIX
Slide 4: Two iconic brands
Restaurant Two iconic brands Restaurant ¢ $23+ billion annual system-wide sales Brands. International « 19,000+ restaurants worldwide * ~100 countries and US territories * ~100% franchised Note: System-wide sales are driven by our franchise restaurants as ~100% of our current system-wide restaurants
Slide 5: Highlights
Restaurant 201 5 Highlights iemational * Global comparable sales growth of 5.6% and 5.4% at TH and BK, respectively « NRG of 786 represented YoY restaurant base growth of 4.2% * System-wide sales growth of 9.8% and 10.3% at TH and Bk, respectively « Adjusted EBITDA increased 21.4% YoY on an organic
Slide 6: Tim Hortons
NN im Hortons® ee ALWAYS FRESH ~ COFFEE
Slide 7: TH 2015 Highlights
Restaurant TH 2015 Highlights oe * Global comparable sales growth of 5.6% driven by continued strength in coffee and daypart expansion through successful new product launches « NRG of 155 units, representing YoY restaurant base growth of 3.6% * System-wide sales growth of 9.38% « Adjusted EBITDA inc
Slide 8: Highlights
* Comparable sales growth of 5.5% for 2015 driven by strength in lunch and beverages ¢ Impactful product launches including grilled wraps and Nutella pockets, as well as successful promotions * NRG across standard and non- standard formats Note: See Appendix page for more information on the TH resta
Slide 9: Highlights
Restaurant Brands International Comparable Sales Growth 6.4% 5.8% 5.1% 4.9% Q4 2014 =Q4 2015 2014 2015 Net Restaurant Growth * Comparable sales growth of 6.4% in 2015 driven by strength in beverages and breakfast * Acceleration in openings offset by 7 closures of underperforming [| 1 restaurants — B
Slide 10: Highlights
Restaurant Brands I nternational International Comparable Sales Growth 5.9% 4.6% 2.9% 1.7% Q4 2014 Q4 2015 2014 2015 Net Restaurant Growth * Comparable sales growth of 4.6% in 55 2015 driven by sales in beverages and 40 Nutella pockets ¢ NRG of 55 in 2015 more than double the prior year net new rest
Slide 11: Burger King
Slide 12: BK 2015 Highlights
Restaurant BK 2015 Highlights oe * Global comparable sales increase of 5.4% driven by strength across all regions « NRG of 631 units, representing YoY restaurant base growth of 4.4% * System-wide sales growth of 10.8% * Adjusted EBITDA increase of 13.1% YoY on an organic basis to $760 million Compar
Slide 13: Highlights
Restaurant Brands International Comparable Sales Growth 5.7% 4.2% 2.8% 2.1% Q42014 Q4 2015 2014 2015 Net Restaurant Growth * Comparable sales growth of 5.7% in 2015 driven by growth in the breakfast 38 37 daypart and impacttul limited time offers such as Buffalo Chicken Fries and the A.1. Halloween
Slide 14: Highlights
Comparable sales growth of 4.5% in 2015 driven by Russia, Turkey, Spain and UK NRG of 275 slightly lower than prior year; robust restaurant pipeline in place for 2016 MFUJV partner, Burger King France, acquired Quick Group, becoming the #2 QSR company in France Restaurant Brands. International Compa
Slide 15: Highlights
Restaurant Brands International Highlights Comparable Sales Growth 4.4% 3.6% 3.4% 2.9% Q4 2014 G4 2015 2014 2015 Net Restaurant Growth * Comparable sales growth of 3.4% 260 driven by outperformance in China 235 * NRG of 260 in 2015 driven by 132 momentum in China and India ww « Ended the year with m
Slide 16: Highlights
LAC Comparable sales growth of 8.4% in 2015 driven by strength in Brazil with improvement in Puerto Rico NRG of 95 with accelerated openings in Brazil, offset by closures in Mexico and Costa Rica Reached more than 500 restaurants in Brazil Restaurant Brands International Comparable Sales Growth 8.7%
Slide 17: Development
Development 16
Slide 18: Development 2015 Highlights
Restaurant Brands Development International 2015 Highlights * Opened 786 net restaurants across TH and BK and achieved restaurant base growth of 4.2% « Accelerated development in TH International with NRG of 55 and more than 100 restaurants in the Middle East * Signed TH development agreements in Ci
Slide 19: TH US Development Update
Restaurant Brands Deve I Ce) p m e nt International TH US Development Update * Accelerated expansion through development agreements that grant exclusive regional development rights to best-in-class franchise [%) Existing Restaurants partners » Signed ADAs @ Restaurant Closures * Signed new developme
Slide 20: BK EMEA Development Update
Restaurant Brands Deve I Ce) p m e nt International BK EMEA Development Update * Established MFJV in Germany with | MFJVs | long-time franchise partner @ New * Established MFJV in Spain with © Biisting largest franchisee in the market * Burger King France, our MFJV in France, acquired Quick Group in
Slide 21: Financial Results
Financial Results 20
Slide 22: 2015 Financial Results
Restaurant Brands 2015 Financial Results ato Adjusted EBITDA increased 21.4% organically on a year-over-year basis to $1,666 million versus prior year pro forma Adjusted EBITDA Reported Adjusted Net Income of $561 million Adjusted Diluted EPS of $1.18 Adjusted Adjusted Net Adjusted EBITDA Income Dil
Slide 23: Cash Generation and Allocation
Restaurant Brands Cash Generation and Allocation rato 2015 Ending Cash Bridge (US$ in millions) $1,064 _ ess!) [a $931 ($362) || $758 a ‘$294 — ($294) ($122) (879) Beginning FOF Debt Dividends Unit Debt FX & Other Ending Cash Balance Refinancing Repurchase Amortization Cash Balance Note: Beginning C
Slide 24: Capital Structure
Restaurant Brands Capital Structure ee (US$ in millions) ae 1 pat/201 5 Maturity Base Rate 2014 Term Loan Facility Ba3/B+ $5,098 2021 Libor = 1.00% 3.75% 2015 Senior Notes Ba3/B+ 1,250 2022 4.63% 4.63% 2014 Senior Notes B3/B- 2,250 2022 6.00% 6.00% Capital Leases & Other 348 Various Total Debt $8,94
Slide 25: Dividends
Restaurant Dividends iemational * On February 16, 2016, RBI Board of Directors declared a dividend of $0.14 per common share and partnership exchangeable unit of RBI LP for the first quarter of 2016 « The dividend will be payable on April 4, 2016 to shareholders and unitholders of record at the clos
Slide 26: Summary
Summary ALWAYS FRESH (Om F 25
Slide 27: 2015 Summary
Restaurant Brands 2015 Summary Fa ¢ Same-store sales momentum across both brands drove favorable results in RBI's first year * Achieved strong year-over-year organic Adjusted EBITDA growth ¢ Meaningful growth in franchisee profitability across both brands * Consistent commitment to our communities a
Slide 28: Always Fresh
ALWAYS FRESH (Om F 27
Slide 29: Appendix
Appendix 28
Slide 30: TH Restaurant Redefinition
Restaurant Brands International TH Restaurant Redefinition We have redefined our TH restaurant classification to exclude limited service e kiosks 2 y 2 2014 2015 TH 144 155 Canada 8,440 3,551 8,650 Canada 117 99 US 636 649 650 US 13 1 International 38 58 113 International 20 55 18,667 14,372 = 15,00
Slide 31: Use of Non-GAAP Financial Measures
Restaurant Use of Non-GAAP Financial Measures |.) Below, we define the non-GAAP financial measures, provide a reconciliation of each non-GAAP financial measure to the most directly comparable financial measure calculated in accordance with GAAP, and discuss the reasons that we believe this informati
Slide 32: RBI EBITDA and Adj. EBITDA to Net Income (Quarter)
RBI EBITDA and Adj. (in US$ millions) Segment Income: TH BK Adjusted EBITDA Share-based compensation and non-cash incentive compensation expense”! TH transaction and restructuring costs"? Impact of equity method investments”? Other operating expenses (income), net EBITDA Depreciation and amortizatio
Slide 33: RBI EBITDA and Adj. EBITDA to Net Income (Year)
(in US$ millions) Segment Income: TH 3K Adjusted EBITDA Share-based compensation and non-cash incentive compensation expense’?! Acquisition accounting impact on cost of sales TH transaction and restructuring costs” Impact of equity method investments" Other operating expenses (income), net EBITDA De
Slide 34: RBI Net Income to Adj. Net Income and Adjusted Diluted EPS (Quarter)
RBI Net Income to Adj. Net Income and Adjusted Diluted EPS (in US$ millions, except per share data) Net income Income tax expense Income before income taxes Adjustments: Franchise agreement amortization Amortization of deferred financing costs and original issue discount Interest expense and loss on
Slide 35: RBI Net Income to Adj. Net Income and Adjusted Diluted EPS (Year)
RBI Net Income to Adj. Net Income and Renan Adjusted Diluted EPS International (in US$ millions, except per share data) Twelve Months Ended December 31, 2015 2014 PF Net income $ 511.7 $ 437.1 Income tax expense 162.2 835.8 Income before income taxes 673.9 172.9 Adjustments: Franchise agreement amor
Slide 36: TH & BK Organic Growth (Q4)
Restaurant TH & BK Organic Growth ipo Impact ot FX Actual Q4'15 vs. Q4 14 Movements Organic Growth (in US$ millions) Q4'15 Q4'14 $ % $ $ % Calculation: A B C B-C=D D/A Revenue TH $ 7715 § 8185 fa} $ (47.0 6.7% $ (1349) $ 87.8 10.7% BK $ 285.5 $ 274.2 $ 11.3 41% $$ (15.4) $ 26.7 9.7 % RBI $ 1,057.0 $
Slide 37: TH & BK Organic Growth (Year)
TH & BK Organic Growth (in USS millions) Calculation Revenue TH BK RBI Adiusted EBITDA TH BK RBI {a} 2014 TH Pro Forma Restaurant Brands International Impact of FX Actual 2015 vs. 2014 Movements Organic Growth 2015 2014 $ % $ $ % A B C B-C=D D/A $ 2956.9 $ 3,145.1 fa} S (188.2) (6.0% $ (465.1) $ 276
Slide 38: Footnotes to Reconciliation Tables
Restaurant Brands Footnotes to Reconciliation Tables |.» Note Definitions in the current report on Form &-K filed with the Securities and Exchange Commission on February 16, 2016. 37 Represents (gain) loss on early extinguishment of debt, $3.2 million and $11.3 million of non-cash interest expense f
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