McDonald’s: Announces 3-Year Total Cash Return Target

Oak Brook / IL. (mdc) During an investor conference presentation this week, McDonald´s Corporation President and Chief Executive Officer Don Thompson announced an intensified commitment to the Company´s customer-focused strategic framework – the Plan to Win – and other actions to enhance long-term shareholder value.

«The Plan to Win along with our competitive advantages, System alignment and financial discipline has served as our strategic roadmap, guiding the execution of our global growth priorities», said Don Thompson. «Today, the Plan to Win has evolved as we re-energize the McDonald´s System by placing the customer at the center of everything we do. We are pursuing targeted growth opportunities to provide our customers with their favourite food and drink, create memorable experiences, offer unparalleled convenience and become an even more trusted brand to deliver the most meaningful impact for our customers and our business».

In addition, the Company announced plans to optimize its capital and ownership structures and scrutinize G+A spending. Specifically, the Company expects to:

  • Return 18 to 20 billion USD to shareholders between 2014 and 2016 through a combination of dividends and share repurchases, representing a ten to 20 percent increase over the amount of cash returned between 2011 and 2013;
  • Re-franchise at least 1’500 restaurants by the end of 2016, primarily in Asia/Pacific, Middle East and Africa (APMEA) and Europe, reflecting a more than 50 percent increase in re-franchising activity compared with the prior three-year period; and
  • Analyze G+A spending with the primary intent of reallocating resources to higher return initiatives and growth areas, including development of the Company´s global digital capabilities.

«The actions we are taking to enhance long-term shareholder value fit squarely within our proven business model», said Senior Executive Vice President and Chief Financial Officer Pete Bensen. «Our three-year cash return target is based on several activities including the significant free cash flow generated from our operations, as well as the use of cash proceeds from our debt additions and re-franchising activity. Financial discipline has always been a cornerstone of McDonald´s strategic plan, and we will pursue these activities while maintaining appropriate levels of financial flexibility, liquidity and access to capital for the Company and the System. Our commitment to this discipline continues to fortify our long-standing financial strength and our ability to deliver sustained profitable growth».

Thompson concluded, «We are committed to continuous improvement in everything we do – from the food we serve, to our engagement with our customers, to the management of our financial resources. Guided by our evolved customer-focused priorities, the McDonald´s System is determined to create experiences that our customers notice and appreciate so they reward us with their business and loyalty».

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