Summary

  • The Company franchises and operates McDonald’s restaurants in more than 100 countries.
  • Out of the 40,275 McDonald's restaurants approximately 95% were franchised.
  • The Company’s revenues consist of sales by Company-operated restaurants and fees from restaurants operated by franchisees.

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McDonald's Corporation (NYSE: MCD, LSE: 0R16) franchises and operates McDonald’s restaurants, which serve a locally relevant menu of food and beverages across more than 100 countries. Out of the 40,275 McDonald's restaurants at year-end 2022, approximately 95% were franchised.

Recent Developments

McDonald’s USA Expands Test of Krispy Kreme® Doughnuts to Approximately 160 Louisville-Lexington Restaurants1

Feb. 27, 2023; McDonald’s is bringing Krispy Kreme® doughnuts to even more local restaurants with an expanded market test. Starting March 21, we’ll be serving three Krispy Kreme fan faves – the Original Glazed® Doughnut, the Chocolate Iced with Sprinkles Doughnut and the Chocolate Iced Kreme™ Filled Doughnut – at approximately 160 locations across Louisville, Lexington and the surrounding area. 

The expanded test will help it learn more about operational impact on a larger scale as well as explore customer demand. And this time around, there are even more ways for fans to satisfy their Krispy Kreme craving, with doughnuts available all day in-restaurant, at the Drive Thru, via McDelivery and on the McDonald’s App.

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Financial Highlights

In 2022, net income decreased 18% (13% in constant currencies) to $6.2 billion and diluted earnings per common share decreased 17% (12% in constant currencies) to $8.33. Foreign currency translation had a negative impact of $0.52 on diluted earnings per share. Franchised restaurants represented 95% of McDonald's restaurants worldwide at December 31, 2022.2

Consolidated operating income decreased 10% (3% in constant currencies). 2022 results included $1.3 billion of charges related to the sale of the Company's business in Russia and a gain of $271 million related to the Company's sale of its Dynamic Yield business. Excluding these items along with net gains in 2021, consolidated operating income increased 3% (10% in constant currencies).

Diluted earnings per share was $8.33, a decrease of 17% (12% in constant currencies). Excluding the current year charges and gains described above of $1.04 per share and additional nonoperating expense of $0.73 per share related to the settlement of a tax audit in France, diluted earnings per share was $10.10, an increase of 9% (15% in constant currencies), when also excluding prior year net gains and income tax benefits.

  • Consolidated revenues were flat (increased 6% in constant currencies) at $23.2 billion.
  • Systemwide sales increased 5% (11% in constant currencies) to $118.2 billion.
  • Consolidated operating income decreased 10% (3% in constant currencies) to $9.4 billion.
  • Operating margin, defined as operating income as a percent of total revenues, decreased from 44.6% in 2021 to 40.4% in 2022.
  • Diluted earnings per share of $8.33 decreased 17% (12% in constant currencies).
  • Cash provided by operations was $7.4 billion, a 19% decrease from the prior year.
  • Capital expenditures of $1.9 billion were allocated approximately 50% to each of reinvestment in existing restaurants and new restaurant openings.
  • Free cash flow was $5.5 billion, a 23% decrease from the prior year.
  • Across the System, over 1,500 new restaurants (including those in its developmental licensee and affiliated markets) were opened.
  • The Company increased its quarterly cash dividend per share by 10% to $1.52 for the fourth quarter, equivalent to an annual dividend of $6.08 per share. The Company returned a total of $8.1 billion to shareholders through dividends and share repurchases in 2022.

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Company Overview

McDonald's Corporation franchises and operates McDonald’s restaurants, which serve a locally relevant menu of food and beverages across more than 100 countries. Of the 40,275 McDonald's restaurants at year-end 2022, approximately 95% were franchised. The Company’s revenues consist of sales by Company-operated restaurants and fees from restaurants operated by franchisees.

The Company is primarily a franchisor and believes franchising is paramount to delivering great-tasting food, locally relevant customer experiences and driving profitability. Franchising enables an individual to be their own employer and maintain control over all employment related matters, marketing and pricing decisions, while also benefiting from the strength of McDonald’s global brand, operating system and financial resources.

Global Operation3

European MarketsAsian & Oceanic MarketsSouth AmericaNorth AmericaAfrican Markets
AustriaAustraliaArgentinaCanadaEgypt
AzerbaijanBahrainBoliviaCosta RicaMorocco
BelgiumBruneiBrazilDominican RepublicSouth Africa
BulgariaMainland ChinaChileEl SalvadorTunisia
CroatiaFiji IslandsColombiaHonduras 
CyprusHong KongCuracao / ArubaMexico 
Czech RepublicIndiaEcuadorNicaragua 
DenmarkIndonesiaGuadeloupePanama 
EstoniaIsraelGuatemalaPuerto Rico 
FinlandJapanGuyanaSint Maarten 
FranceJordanMartiniqueUnited States 
GeorgiaKSA - JeddahParaguay  
GermanyKSA - RiyadhPeru  
GreeceKuwaitSuriname  
HungaryLebanonTrinidad & Tobago  
IrelandMalaysiaUruguay  
ItalyMauritiusVenezuela  
LatviaNew Zealand   
LithuaniaOman   
LuxembourgPakistan   
MaltaPhilippines   
MoldovaQatar   
NetherlandsSaudi Arabia   
NorwaySingapore   
PolandSouth Korea   
PortugalSri Lanka   
RomaniaTaiwan   
SerbiaThailand   
SlovakiaTurkey   
SloveniaUnited Arab Emirates   
SpainVietnam   
Sweden    
Switzerland    
Ukraine    
United Kingdom    

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Company History

McDonald's Corporation started as a small drive-in restaurant in San Bernardino, California4

YearMilestone
1940The first McDonald's restaurant opened in San Bernardino, California, by Richard and Maurice McDonald. It was a barbecue restaurant at the time.
1948The first McDonald's franchise was opened in Des Plaines, Illinois, by Ray Kroc, who had convinced the McDonald brothers to let him franchise their concept.
1955The first McDonald's restaurant featuring the now-famous golden arches opened in Phoenix, Arizona.
1958The 100th McDonald's restaurant opened in the United States.
1961The Hamburger University training program was established in Elk Grove Village, Illinois.
1965The first McDonald's restaurant outside of the United States opened in Canada.
1971The first McDonald's restaurant opened in Japan.
1974The first Ronald McDonald House opened in Philadelphia, Pennsylvania.
1984The 10,000th McDonald's restaurant opened in Dale City, Virginia.
1990The first McDonald's restaurant opened in Moscow, Russia.
1994Ray Kroc, the founder of McDonald's Corporation, died at the age of 81.
2003McDonald's introduced its first salads to the menu.
2008McDonald's introduced its McCafé line of coffee drinks and pastries.
2015McDonald's introduced its all-day breakfast menu in the United States.
2020McDonald's announced plans to close approximately 200 restaurants in the United States due to the COVID-19 pandemic.
2021McDonald's announced plans to test a plant-based burger called the McPlant in select markets around the world.

References

  1. ^ https://corporate.mcdonalds.com/corpmcd/our-stories/article/krispy-kreme.html
  2. ^ https://fintel.io/doc/sec-mcdonalds-corp-63908-10k-2023-february-24-19413-9010
  3. ^ https://corporate.mcdonalds.com/corpmcd/our-company/where-we-operate.html
  4. ^ https://corporate.mcdonalds.com/corpmcd/our-company/who-we-are/our-history.html
Created by Asif Farooqui on 2023/03/24 11:51
     
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