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Restaurant Brands International Reports Third Quarter 2015 Results

The following excerpt is from the company's SEC filing.

Oakville, Ontario October 27, 2015 Restaurant Brands International Inc. (TSX/NYSE: QSR, TSX: QSP) today reported financial results for the third quarter ended September 30, 2015.

Daniel Schwartz, Chief Executive Officer of Restaurant Brands International (RBI) commented, We continued to build on momentum from the first half of the year, achieving favorable comparable sales growth and net restaurant growth at both of our iconic brands, TIM HORTONS

and BURGER KING

. We also announced the first development deal at TIM HORTONS

since the creation of RBI, and our Master Franchise Jo int Venture, Burger King France, announced the proposed acquisition of Quick Group. We are excited about the path for TIM HORTONS

and BURGER KING

global expansion going forward. We have made good progress year-to-date and are unwavering in our commitment to delivering a great guest experience while driving franchisee profitability.

Third Quarter 2015 Highlights:

Tim Hortons (TH) comparable sales increased 5.3% and Burger King (BK) comparable sales increased 6.2% in constant currency

TH delivered net restaurant growth (NRG) of 69 and BK delivered NRG of 141

System-wide sales grew 8.2% at TH and 11.2% at BK in constant currency

RBI Adjusted EBITDA was up 22.8% on an organic basis to $441 million versus the prior year pro forma amount

RBI Adjusted Diluted EPS was $0.34 per share

RBI declared a dividend of $0.13 per common share and partnership exchangeable unit of RBI LP for the fourth quarter of 2015

Consolidated Operational Highlights

Three Months Ended September 30,

(unaudited)

Comparable Sales Growth

System Net Restaurant Growth (NRG)

System-wide Sales Growth

(in US$ millions)

1,600.0

1,741.3

4,520.6

4,448.3

Comparable sales growth and system-wide sales growth are calculated on a constant currency basis and include sales at franchise restaurants and company-owned restaurants.

TH 2014 third quarter figures are shown for informational purposes only.

System-wide sales are driven by sales at franchised restaurants, as approximately 100% of current restaurants are franchised. We do not record franchise sales as revenue; however, our franchise revenues include royalties based on a percentage of franchise sales.

Consolidated Financial Highlights

(in US$ millions, except per share data)

2014 PF

RBI Total Revenues

1,019.7

1,113.0

RBI Net Income (Loss) Attributable to Common Shareholders

RBI Diluted Earnings (Loss) per Share Attributable to Common Shareholders

TH Adjusted EBITDA

BK Adjusted EBITDA

RBI Adjusted Net Income (Loss) Attributable to Common Shareholders

RBI Adjusted Diluted Earnings (Loss) per Share Attributable to Common Shareholders

TH Adjusted EBITDA and BK Adjusted EBITDA are our measures of segment profitability.

RBI Adjusted EBITDA, RBI Adjusted Net Income (Loss), and RBI Adjusted Diluted Earnings (Loss) per Share are non-GAAP financial measures. Please refer to Non-GAAP Financial Measures for further detail.

Please refer to RBIs Form 8-K filed on April 27, 2015 with pro forma financial information for RBI, TH and BK.

Adjusted EBITDA growth of 22.8%, excluding the impact of FX movements, was driven by our commitment to profitable and consistent growth for both brands in the third quarter. At TH, trailing twelve month NRG of 255 in conjunction with comparable sales growth of 5.3% resulted in constant currency TH system-wide sales growth of 8.2%. The launch of premium breakfast and lunch wraps and continued strength in beverages contributed to TH outperformance. BK achieved trailing twelve month NRG of 709 and third quarter comparable sales growth of 6.2%, resulting in BK system-wide sales growth of 11.2% in constant currency. BK comparable sales growth was in part driven by successful product introductions, including Fiery Chicken Fries and the Extra Long Jalapeño Cheeseburger.

TH Segment Results

Three Months Ended September 30,

Comparable Sales Growth

System-wide Sales Growth

System Restaurant Count at Period End

Franchise and Property Revenues

TH Total Revenues

Cost of Sales

Franchise & Property Expenses

Segment SG&A

Segment depreciation and amortization

(4)(9)

Segment selling, general and administrative expenses consists of segment selling expenses and segment management general and administrative expenses.

Segment depreciation and amortization consists of depreciation and amortization included in cost of sales and franchise and property expenses.

TH Adjusted EBITDA for the three months ended September 30, 2015 excludes $(0.3) million of acquisition accounting impact on cost of sales and includes $3.7 million of cash distributions received from equity method investments. TH pro forma Adjusted EBITDA for the three months ended September 30, 2014 includes $3.1 million of cash distributions received from equity method investments.

Third quarter TH system-wide sales growth of 8.2% was driven by comparable sales growth and NRG for the trailing twelve month period. We achieved consolidated TH comparable sales growth of 5.3%, with TH Canada and TH US comparable sales growth of 5.4% and 4.3%, respectively.

Led by development in Canada, we recorded TH net restaurant growth of 69 during the third quarter. TH increased its restaurant base by 255 restaurants, or 5.6%, for the trailing twelve month period to end the quarter with 4,845 restaurants. TH Total Revenues of $737.7 million declined 11.6% versus the prior year pro forma amount primarily as a result of FX headwinds. Excluding the impact of FX movements and compared to prior year pro forma results, TH Total Revenues increased 6.3% while TH Adjusted EBITDA grew 33.5% to $244.0 million.

BK Segment Results

14,669

13,960

BK Total Revenues

We continued to achieve positive comparable sales growth and net restaurant growth at BK with year-over-year system-wide sales growth of 11.2% in constant currency. BK achieved comparable sales growth of 6.2% with continued positive comparable sales growth in the U.S. and Canada (US&C), Europe, the Middle East, and Africa (EMEA), Latin America and the Caribbean (LAC), and Asia Pacific (APAC). Most notably, US&C reported comparable sales growth of 5.2% despite lapping the successful 2014 Chicken Fries launch. BK top-line growth was also driven by the addition of 709 net new restaurants for the trailing twelve month period. With 141 net new restaurants added in the third quarter, BK ended the period with 14,669 restaurants.

BK experienced a 6.9% FX headwind on revenues for the third quarter. Excluding the impact of FX movements, BK Total Revenues grew by 8.6% to $282.0 million versus prior year third quarter results. BK Adjusted EBITDA of $196.7 million increased 10.7% on an organic basis, compared to the third quarter in the prior year.

Cash and Liquidity

As of September 30, 2015, total debt was $9.0 billion, net debt was $8.0 billion and total cash balance was $1.0 billion. On October 27, 2015, our Board of Directors declared a dividend of $0.13 per common share and Class B exchangeable partnership unit of Restaurant Brands International Limited Partnership for the fourth quarter of 2015. The dividend will be payable on January 5, 2016 to shareholders and unitholders of record at the close of business on November 25, 2015.

Commencing on December 12, 2015, the anniversary date of the Tim Hortons transaction, unitholders may require the Partnership to exchange all or any portion of their Class B exchangeable partnership units for RBI common shares on a one for one basis, subject to RBIs right as general partner of the Partnership, in its sole discretion, to deliver a cash payment in lieu of RBI common shares. For more information on how to exercise this exchange right, please visit RBIs investor relations page at

http://investor.rbi.com

Investor Conference Call

We will host an investor conference call and webcast at 8:30 a.m. Eastern Time on Tuesday, October 27, 2015, to review financial results for the third quarter ended September 30, 2015. The earnings call will be broadcast live via our investor relations website at

and a replay will be available for 30 days following the release. The dial-in number is (877) 317-6711 for US callers, (866) 450-4696 for Canadian callers and (412) 317-5475 for callers from other countries.

Contacts

Investors

Andrea John, Investor Relations

(905) 339-4940;

investor@rbi.com

Media

Patrick McGrade, Communications and Corporate Affairs

(905) 339-5815;

media@rbi.com

About Restaurant Brands International

Restaurant Brands International Inc. is one of the worlds largest quick service restaurant companies with over $23 billion in system-wide sales and over 19,000 restaurants in approximately 100 countries and US territories. RBI owns two of the worlds...


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