Restaurant Brands International Inc. · NYSE:QSR
Restaurant Brands International — Q2 2016 Earnings Presentation
33 slides from Restaurant Brands International's earnings presentation, Aug 4, 2016
Slide 1: Earnings Conference Call Second Quarter 2016
Restaurant Brands International Earnings Conference Call Second Quarter 2016 August 4, 2016 Restaurant Brands International zs Tim Notlous (3
Slide 2: Safe Harbor Statement
Restaurant Safe Harbor Statement hero 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 statements ar
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 3 - System-wide sales are primarily driven by our franchise restaurants as ~ 100% of our current system-wi
Slide 5: Q2 2016 Highlights
Restaurant Q2 2016 Highlights hero * Global comparable sales growth of 2.7% and 0.6% at TH and BK, respectively * Restaurant count growth of 3.8% YoY * System-wide sales growth of 4.8% and 5.9% at TH and Bk, respectively « Adjusted EBITDA increased 16.2% YoY on an organic basis to $479 million * Adj
Slide 6: Tim Hortons
Yo im Hortons® —_ ALWAYS FRESH ©
Slide 7: TH Q2 2016 Highlights
Restaurant TH Q2 2016 Highlights Hrd Comparable Sales Growth 5.9% 2.7% 2Q15 2Q16 Note: Global comparable sales growth of 2.7% driven by impactful new product launches Restaurant count growth of 3.38% YoY with Q2 NRG of 26 units System-wide sales growth of 4.8% Adjusted EBITDA increase of 24.1% YoY o
Slide 8: Canada Highlights
Canada Comparable sales growth of 2.3% driven by successful product launches including the Chicken Bacon Ranch Wrap, Potato Wedges, and the Farmers Breakfast Wrap NRG of 25 units across standard and non-standard formats Note: - Comparable sales growth presented in constant currency. Restaurant Brand
Slide 9: U.S. Highlights
Comparable sales growth of 5.9% with notable strength in coffee, cold beverages, and breakfast sandwiches, such as the Croissant Breakfast Sandwich Impactful new product introductions such as Oreo and Mocha ICED CAPP® Signed Development Agreement in Minneapolis Note: - Comparable sales growth presen
Slide 10: International Highlights
Restaurant International Hein Comparable Sales Growth (3.2%) (3.3%) 2015 2016 Net Restaurant Growth « Launched successful new products such as the Steak Panini, Steak Wrap, and Steak Breakfast Sandwich « Announced the first TH Master Franchise Joint Venture with the closing of the Philippines agreem
Slide 11: Burger King
Slide 12: BK Q2 2016 Highlights
Restaurant BK Q2 2016 Highlights Hrd * Global comparable sales increase of 0.6% with continued strength in Asia Pacific (“APAC’) and Latin America and the Caribbean (“LAC’), partially offset by softness in the U.S. and Canada (“US&C’) ¢ Restaurant count growth of 3.9% YoY with Q2 NRG of 92 units * S
Slide 13: US & Canada Highlights
Restaurant Brands U S & Cc International Highlights Comparable Sales Growth 1.9% (0.8%) 2Q15 2Q16 Net Restaurant Growth * Continued strength in Grilled Dogs and successful product launches including Chicken Rings and Mac n’ Cheetos « NRG of (15) with a robust pipeline to support stronger second half
Slide 14: EMEA Highlights
Comparable sales growth of 0.8% with notable strength in Russia and Germany, offset by softness in UK and Italy NRG of 51 driven by growth in Russia, Spain, and France Note: - Comparable sales growth presented in constant currency. Restaurant Brands International Comparable Sales Growth 5.1% 0.8% 2Q
Slide 15: APAC Highlights
Comparable sales growth of 5.8% driven by strength in China, Korea, and Japan NRG of 46 driven by growth in China and India Note: - Comparable sales growth presented in constant currency. Restaurant Brands International Comparable Sales 2Q15 Growth 2Q16 Net Restaurant 45 2Q15 Growth 46 2Q16 14
Slide 16: LAC Highlights
Comparable sales growth of 4.9% driven by momentum in Brazil and Argentina, with softness in Mexico and Puerto Rico NRG of 10 driven by Brazil and relaunch in Costa Rica, partially offset by softness in Mexico Note: - Comparable sales growth presented in constant currency. Restaurant Brands. Interna
Slide 17: Development
Development 16
Slide 18: Development Update
Restaurant Brands Development International Development Update « Master Franchise Joint Venture Accelerated Growth after (MFJV) model is a franchisee-led MFJV Agreement development model that enables us Brazil to accelerate international growth 500+ ¢ First MFJV for BK established in 2011 in Brazil
Slide 19: Financial Results
Financial Results 18
Slide 20: Q2 2016 Financial Results
Restaurant Q2 2016 Financial Results hereto Adjusted EBITDA increased 16.2% YoY on an organic basis to $479 million =a * Adjusted Net Income increased 36.5% YoY to $192 million Adjusted Diluted EPS increased 38.3% YoY to $0.41 Adjusted Adjusted Net Adjusted EBITDA Income Diluted EPS $479 $192 $428 $
Slide 21: Cash Generation and Allocation
Restaurant Brands Cash Generation and Allocation hrton Q2 2016 YTD Ending Cash Bridge ($ in millions) $517 | $18 $098 $758 ($260) ($35) Beginning FOF Dividends Debt Amortization FX & Other Ending Cash Balance Cash Balance Note: - Debt Amortization includes prepayment of our existing term loan and pr
Slide 22: Capital Structure
Capital Structure Restaurant Brands. International ($ in millions) can 3 eia0/20. 16 Maturity Base Rate Term Loan Facility Ba3/B+ $5,072 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 366 Various Total De
Slide 23: Dividends
Restaurant Brands Dividends International * On August 3, 2016, RBI Board of Directors declared a dividend of $0.16 per common share and partnership exchangeable unit of RBI LP for the third quarter of 2016 ¢ The dividend will be payable on October 4, 2016 to shareholders and unitholders of record at
Slide 24: Summary
Summary 23
Slide 25: Q2 2016 Summary
Restaurant Q2 2016 Summary Ar * Continued system sales growth driven by successful marketing and restaurant development * Strong development pipeline in place for long-term restaurant growth * Continued growth in profitability due to top-line momentum and cost discipline ¢ Raised dividend to $0.16 p
Slide 26: 25
25
Slide 27: Appendix
Appendix 26
Slide 28: Use of Non-GAAP Financial Measures
Restaurant Brands 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 U.S. Generally Accepted Accounting Principles (“GAAP”
Slide 29: RBI EBITDA and Adj. EBITDA to Net Income (Three Months)
RBI EBITDA and Adj. EBITDA to Net Income (in $ millions) Segment Income: TH BK Adjusted EBITDA Share-based compensation and non-cash incentive compensation expense" Acquisition accounting impact on cost of sales TH transactior and restructuring costs” Integration costs Impact of equity method invest
Slide 30: RBI EBITDA and Adj. EBITDA to Net Income (Six Months)
RBI EBITDA and Adj. EBITDA to Net Income (in $ millions) Segment Income: TH BK Adjusted EBITDA Share-based compensation and non-cash incentive compensation expense" Acquisition accounting impact on cost of sales TH transactior and restructuring costs” Integration costs Impact of equity method invest
Slide 31: RBI Net Income to Adj. Net Income and Adjusted Diluted EPS
RBI Net Income to Adj. Net Income and Restaurant Brands Adjusted Diluted EPS International (in $ millions, except per share data) Three Months Ended June 30, 2016 2015 Net income $ 247.6 $ 93.8 Income tax expense 59.2 45.2 Income before income taxes 306.8 139.0 Adjustments: Franchise agreement amort
Slide 32: TH & BK Organic Growth
Restaurant TH & BK Organic Growth ipo Impact of FX Actual Q2'16 vs. Q2'15 Movements Organic Growth (in $ millions) Q2'16 Q2 "15 $ % $ $ % Calculation A B Cc B-C=D D/A Revenue TH $ 98 § (640 § (4.2) (05% $ (4 $ 29.2 3.8% BK $ 2804 $ 278.2. $§$ 2.2 08% $ 7) $ 9 2.8% RBI $ 1,040.2 $ 1,042.2 $ (2.0) (0.
Slide 33: Footnotes to Reconciliation Tables
Restaurant Brands Footnotes to Reconciliation Tables |.» 1) Represents share-based compensation expense associated with equity awards for the periods indicated; also includes the portion of annual non-cash incentive compensation expense that eligible employees elected to receive or are expected to e
Restaurant Brands International — Q2 2016 Earnings Presentation on 6ix