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 | |||
.
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 | ||||
.
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 | ||
.
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 | ||
.
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.
