RBI: reports first quarter 2016 results

Oakville / CA. (rbi) Restaurant Brands International Inc. (RBI) reported financial results for first quarter ended March 31, 2016. Chief Executive Officer Daniel Schwartz: «Building on last year’s performance, we generated strong results at both of our iconic brands, Tim Hortons (TH) and Burger King (BK), during the first quarter of 2016. Innovative product launches and continued expansion of our global footprint drove favorable comparable sales and system-wide sales growth for the quarter. We believe our focused approach on delivering a great guest experience and growing franchisee profitability will support long-term, sustainable value for our guests, franchisees, employees and shareholders».

First Quarter 2016 Highlights:

  • Tim Hortons (TH) comparable sales increased 5.6 percent and Burger King (BK) comparable sales increased 4.6 percent in constant currency
  • Delivered 25 net restaurant growth (NRG) at TH and 5 NRG at BK
  • System-wide sales grew 7.9 percent at TH and 10.0 percent at BK in constant currency
  • RBI Adjusted Ebitda was up 22.9 percent on an organic basis to 407.8 million USD
  • RBI Adjusted Diluted EPS was up 95.6 percent to 0.30 USD per share versus prior year results
  • RBI declared a dividend of 0.15 USD per common share and partnership exchangeable unit of Restaurant Brands International Limited Partnership for the second quarter of 2016

Consolidated Operational Highlights

(unaudited) Q1/2016 Q1/2015
Comparable Sales Growth
TH 5.6% 5.3%
BK 4.6% 4.6%
System Net Restaurant Growth (NRG)
TH 25 41
BK 5 15
System-wide Sales Growth
TH 7.9% 8.1%
BK 10.0% 9.6%
System-wide Sales in million USD
TH USD 1’424.7 USD 1’459.5
BK USD 4’236.8 USD 4’023.9

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Consolidated Financial Highlights

(in million USD, except per share data) Q1/2016 Q1/2015
(unaudited)
RBI Total Revenues USD 918.5 USD 933.3
RBI Net Income (Loss) Attributable to
Common Shareholders USD 50.0 USD (8.3)
RBI Diluted Earnings (Loss) per Share
Attributable to Common Shareholders USD 0.21 USD (0.04)
TH Adjusted Ebitda USD 227.8 USD 184.4
BK Adjusted Ebitda USD 180.0 USD 170.7
RBI Adjusted Ebitda USD 407.8 USD 355.1
RBI Adjusted Net Income (Loss) Attributable
to Common Shareholders USD 142.1 USD 73.9
RBI Adjusted Diluted Earnings (Loss) per Share
Attributable to Common Shareholders USD 0.30 USD 0.16

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RBI Adjusted Ebitda of 407.8 million USD was up 22.9 percent year-over-year, excluding the impact of FX movements, driven by strong comparable sales and successful execution of brand-specific strategic initiatives. At TH, year-over-year restaurant count growth of 3.2 percent, combined with comparable sales growth of 5.6 percent, led to system-wide sales growth of 7.9 percent in constant currency versus prior year results. TH performance was driven by continued strength in beverages and grilled wraps as well as successful product launches, such as the Pulled Pork Sandwich and the Croissant Breakfast Sandwich. BK comparable sales growth of 4.6 percent and restaurant count growth of 4.3 percent year-over-year led to system-wide sales growth of 10.0 percent in constant currency. BK comparable sales growth was a result of successful product launches and promotions, including Grilled Dogs.

TH Segment Results

(in million USD) Q1/2016 Q1/2015
(unaudited)
Comparable Sales Growth 5.6% 5.3%
System-wide Sales Growth 7.9% 8.1%
System-wide Sales USD 1’424.7 USD 1’459.5
System Net Restaurant Growth (NRG) 25 41
System Restaurant Count at Period End 4’438 4’299
Sales USD 467.3 USD 480.1
Franchise and Property Revenues USD 190.5 USD 203.6
TH Total Revenues USD 657.8 USD 683.7
Cost of Sales USD 369.6 USD 416.3
Franchise + Property Expenses USD 72.1 USD 92.9
Segment SG+A USD 16.2 USD 27.1
Segment Depreciation and Amortization USD 25.1 USD 32.6
TH Adjusted Ebitda USD 227.8 USD 184.4

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For the first quarter of 2016, system-wide sales at TH grew 7.9 percent, in constant currency, as a result of favorable comparable sales growth and net restaurant growth. TH opened 25 net new restaurants for the quarter and reported restaurant count growth of 3.2 percent year-over-year, ending the quarter with 4’438 restaurants. Comparable sales grew 5.6 percent for TH, with TH Canada and TH US comparable sales growth of 5.6 percent and 5.8 percent, respectively.

TH experienced an 8.6 percent FX headwind to revenues for the first quarter. Compared to prior year’s results and excluding the impact of FX movements, TH Total Revenues of 657.8 million USD grew 5.2 percent while TH Adjusted Ebitda of 227.8 million USD grew 35.2 percent.

BK Segment Results

(in million USD) Q1/2016 Q1/2015
(unaudited)
Comparable Sales Growth 4.6% 4.6%
System-wide Sales Growth 10.0% 9.6%
System-wide Sales USD 4’236.8 USD 4’023.9
System Net Restaurant Growth (NRG) 5 15
System Restaurant Count at Period End 15’008 14’387
Sales USD 23.2 USD 19.4
Franchise and Property Revenues USD 237.5 USD 230.2
BK Total Revenues USD 260.7 USD 249.6
Cost of Sales USD 18.6 USD 16.9
Franchise + Property Expenses USD 32.1 USD 36.2
Segment SG+A USD 42.0 USD 37.6
Segment Depreciation and Amortization USD 12.0 USD 11.8
BK Adjusted Ebitda USD 180.0 USD 170.7

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At BK, strong comparable sales growth and the addition of new restaurants year-over-year helped drive system-wide sales growth of 10.0 percent in constant currency versus prior year results. Comparable sales increased 4.6 percent in the first quarter, with all BK regions – the U.S. and Canada (US+C), Europe, the Middle East, and Africa (EMEA), Latin America and the Caribbean (LAC), and Asia Pacific (APAC) – achieving positive comparable sales year-over-year. BK restaurant count increased to 15’008, with 5 net new restaurants added in the quarter, representing restaurant count growth of 4.3 percent year-over-year.

Compared to prior year results and excluding the impact of FX movements, BK revenues of 260.7 million USD grew 8.0 percent and BK Adjusted Ebitda of 180.0 million USD grew 9.7 percent.

Cash and Liquidity

As of March 31, 2016, total debt was 9.0 billion USD, and net debt, excluding total cash and cash equivalents of 0.8 billion USD, was 8.1 billion USD. On April 27, 2016, our Board of Directors declared a dividend of 0.15 USD per common share and Class B exchangeable partnership unit of Restaurant Brands International Limited Partnership for the second quarter of 2016. The dividend will be payable on July 06, 2016 to shareholders and unit-holders of record at the close of business on May 16, 2016.