Oakville / CA. (rbi) Restaurant Brands International Inc. (RBI) reported financial results for the first quarter ended March 31, 2015. RBI Chief Executive Officer Daniel Schwartz: «We are off to a strong start in 2015, having achieved one of our best quarters of comparable sales growth in years for both of our iconic brands, Tim Hortons (TH) and Burger King (BK). We continue to execute on brand-specific strategies across marketing, operations and development. We have established a solid foundation in our first full quarter as RBI and will look to build on this momentum throughout the rest of the year». Q1/2015 highlights:
- Tim Hortons (TH) comparable sales increased 5.3 percent and Burger King (BK) comparable sales increased 4.6 percent
- TH delivered 53 net restaurant growth (NRG) and BK delivered NRG of 15
- System-wide sales grew 8.1 percent at TH and 9.6 percent at BK in constant currency
- RBI Adjusted Ebitda was up 18.1 percent on an organic basis to 354.6 million USD versus the prior year pro forma amount
- RBI Adjusted Diluted EPS of 0.18 USD per share
- RBI declared a dividend of 0.10 USD per common share and partnership exchangeable unit of RBI LP for the second quarter of 2015
Consolidated Financial and Operational Highlights
RBI Adjusted Ebitda was up 6.7 percent versus pro forma first quarter 2014 results, driven by growth at both brands.
System-wide sales at TH and BK grew 8.1 percent and 9.6 percent, respectively, for the first quarter. We reported comparable sales growth of 5.3 percent and 4.6 percent for TH and BK, respectively. Strength at TH in the first quarter was primarily a result of our continued daypart expansion, combo penetration, and recent product launches such as Dark Roast coffee and the Crispy Chicken Club Sandwich. Momentum at BK was mainly driven by successful new products and promotions including the two for five platform and the Spicy «BLT WHOPPER» sandwich. We closed the quarter with 68 net new restaurants, with TH and BK achieving higher NRG compared to NRG results in the first quarter of 2014.
TH Segment Results
System-wide sales at TH grew 8.1 percent in the first quarter, primarily as a result of comparable sales growth and NRG for the trailing twelve month period. We achieved 53 net new restaurants for the quarter and an NRG of 200 for the trailing twelve month period. TH comparable sales growth of 5.3 percent for the quarter was up approximately 370bps versus the prior year, with first quarter comparable sales growth of 4.9 percent and 8.9 percent for our TH Canada and TH US markets, respectively. TH Total Revenues of 682.4 million USD declined (1.2 percent) compared to the prior year pro forma revenues due to FX headwinds. On an organic basis, excluding the impact of these currency movements, TH Total Revenues increased 11.0 percent from the prior year pro forma results. Compared to the pro forma results for the first quarter of 2014, TH Adjusted Ebitda of 183.9 million USD for the first quarter of 2015 grew 19.8 percent on an organic basis.
BK Segment Results
At BK, comparable sales and unit growth continued to drive system-wide sales growth. Comparable sales accelerated 4.6 percent in the first quarter, with all four BK markets—the U.S. and Canada (US+C), Europe, the Middle East, and Africa (EMEA), Latin America and the Caribbean (LAC), and Asia Pacific (APAC)—generating comparable sales growth. Notably, US+C and LAC reported comparable sales growth of 6.9 percent and 4.9 percent, respectively, for the quarter. We grew our BK system restaurant count to 14’387, with 15 net new restaurants added in the first quarter. In the first quarter, BK Total Revenues of 249.6 million USD grew 3.6 percent from the prior year, mainly due to comparable sales growth and the opening of 710 net new restaurants for the trailing twelve month period, offset by unfavorable foreign exchange rate movements of approximately 14.5 million USD. On an organic basis, excluding the impact of foreign exchange rate movements, BK Total Revenues increased 9.6 percent from the prior year. BK Adjusted Ebitda of 170.7 million USD grew 16.2 percent from the prior year on an organic basis. Organic growth was primarily driven by favorable sales trends. Reported BK Adjusted Ebitda grew 6.9 percent compared to the first quarter of 2014.
Cash and Liquidity
As of quarter end, total debt was 9.2 billion USD and net debt was 8.2 billion USD. Our cash balance of 1.0 billion USD in the first quarter was down 0.8 billion USD versus the prior quarter, primarily due to a 1’157.6 million CAD tender payment for Tim Hortons legacy bonds and a 59.6 million USD prepayment and regular amortization of our existing term loan. On April 27, 2015, our Board of Directors declared a dividend of 0.10 USD per common share and Class B exchangeable partnership unit of Restaurant Brands International Limited Partnership for the second quarter of 2015. The dividend will be payable on July 03, 2015 to shareholders and unit-holders of record at the close of business on May 29, 2015.
