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.