RBI: Reports Third Quarter 2015 Results

Oakville / CA. (rbi) Restaurant Brands International Inc. (RBI) 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 Joint 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 percent and Burger King (BK) comparable sales increased 6.2 percent in constant currency
• TH delivered net restaurant growth (NRG) of 69 and BK delivered NRG of 141
• System-wide sales grew 8.2 percent at TH and 11.2 percent at BK in constant currency
• RBI Adjusted Ebitda was up 22.8 percent on an organic basis to 441 million USD versus the prior year pro forma amount
• RBI Adjusted Diluted EPS was 0.34 USD per share
• RBI declared a dividend of 0.13 USD per common share and partnership exchangeable unit of RBI LP for the fourth quarter of 2015

Consolidated Operational Highlights

Adjusted Ebitda growth of 22.8 percent, 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 percent resulted in constant currency TH system-wide sales growth of 8.2 percent. 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 percent, resulting in BK system-wide sales growth of 11.2 percent 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

Third quarter TH system-wide sales growth of 8.2 percent was driven by comparable sales growth and NRG for the trailing twelve month period. We achieved consolidated TH comparable sales growth of 5.3 percent, with TH Canada and TH US comparable sales growth of 5.4 percent and 4.3 percent, 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 percent, for the trailing twelve month period to end the quarter with 4’845 restaurants. TH Total Revenues of 737.7 million USD declined 11.6 percent 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 percent while TH Adjusted Ebitda grew 33.5 percent to 244.0 million USD.

BK Segment Results

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 percent in constant currency. BK achieved comparable sales growth of 6.2 percent 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 percent 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 percent FX headwind on revenues for the third quarter. Excluding the impact of FX movements, BK Total Revenues grew by 8.6 percent to 282.0 million USD versus prior year third quarter results. BK Adjusted Ebitda of 196.7 million USD increased 10.7 percent 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 USD, net debt was 8.0 billion USD and total cash balance was 1.0 billion USD. On October 27, 2015, our Board of Directors declared a dividend of 0.13 USD 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 RBI’s right as general partner of the Partnership, in its sole discretion, to deliver a cash payment in lieu of RBI common shares (Image: pexels.com).