Restaurant Brands International

Last modified by Wilton Risenhoover on 2022/07/01 19:27

Contents

Summary
Company Overview
- Brands
Financial Highlights
Recent developments
References

Summary

Restaurant Brands International Inc. is one of the world's largest quick service restaurant companies with more than $35 billion in annual system-wide sales and over 28,000 restaurants in more than 100 countries
RBI owns four of the world's most prominent and iconic quick service restaurant brands – TIM HORTONS, BURGER KING, POPEYES and FIREHOUSE SUBS.
Tim Hortons has more than 5,000 system wide restaurants located in Canada, the United States and around the world.
POPEYES to become one of the world’s largest chicken quick service restaurants with over 3,500 restaurants in the U.S. and around the world.

Company Overview

Restaurant Brands International Inc. (NYSE:QSR, TSX:QSR) is one of the world's largest quick service restaurant companies with more than $35 billion in annual system-wide sales and over 28,000 restaurants in more than 100 countries. RBI owns four of the world's most prominent and iconic quick service restaurant brands – TIM HORTONS, BURGER KING, POPEYES and FIREHOUSE SUBS. These independently operated brands have been serving their respective guests, franchisees and communities for decades. Through its Restaurant Brands for Good framework, RBI is improving sustainable outcomes related to its food, the planet, and people and communities.¹

Restaurant Brands International Inc. is committed to growing the TIM HORTONS, BURGER KING, POPEYES and FIREHOUSE SUBS brands by leveraging their respective core values, employee and franchisee relationships, and long track records of community support. The brands benefit from the global scale and shared best practices that come through common ownership under Restaurant Brands International Inc.

Brands

BI owns four of the world's most prominent and iconic quick service restaurant brands – TIM HORTONS, BURGER KING, POPEYES and FIREHOUSE SUBS.²

BURGER KING

Founded in 1954, the BURGER KING brand is the second largest fast food hamburger chain in the world. The original HOME OF THE WHOPPER, the BURGER KING system operates more than 18,700 locations in more than 100 countries and U.S. territories. Almost 100 percent of BURGER KING restaurants are owned and operated by independent franchisees, many of them family-owned operations that have been in business for decades.

TIM HORTONS

Tim Hortons is one of North America's largest restaurant chains operating in the quick service segment. Founded as a single location in Canada in 1964, Tim Hortons appeals to a broad range of guest tastes, with a menu that includes premium coffee, hot and cold specialty drinks (including lattes, cappuccinos and espresso shots), specialty teas and fruit smoothies, fresh baked goods, grilled Panini and classic sandwiches, wraps, soups, prepared foods and other food products. Tim Hortons has more than 5,000 system wide restaurants located in Canada, the United States and around the world.

POPEYES

Founded in New Orleans in 1972, POPEYES has more than 45 years of history and culinary tradition. POPEYES distinguishes itself with a unique New Orleans style menu featuring fried chicken, chicken tenders, fried shrimp, and other regional items. The chain’s passion for its Louisiana heritage and flavorful authentic food has allowed POPEYES to become one of the world’s largest chicken quick service restaurants with over 3,500 restaurants in the U.S. and around the world.

FIREHOUSE SUBS

Firehouse Subs is a restaurant chain with a passion for hearty and flavorful food, heartfelt service and public safety. Founded in Jacksonville, Florida in 1994 by firefighter brothers Chris Sorensen and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot and hearty subs piled high with high quality meats and cheeses and its commitment to saving lives through the non-profit Firehouse Subs Public Safety Foundation. The founders are the real deal, the food is their creation and the brand is a family of franchise operators who share their same passion for generously serving food and community.

On December 15, 2021, the company completed the acquisition of Firehouse Subs for total consideration of approximately $1,033 million.

Financial Highlights

José Cil, Chief Executive Officer of RBI commented, “I’m proud of the strong performance its brands delivered as the company closed out 2021. During the quarter, the company saw sequential improvements in each brand and around the world, including notable growth at Tim Hortons Canada and Burger King U.S.”³

Cil continued, “Two areas of particular strength across its business have been in digital sales and restaurant growth. The company's digital investments have been embraced by its guests, with global digital sales reaching $10 billion in 2021, up from $6 billion in 2020 and now representing about 30% of its global system-wide sales. In addition, its strong global network of franchisees and its development team opened over 1,200 net new restaurants, representing the highest levels of restaurant growth at Tim Hortons and Popeyes in recent history.”

“The company's growth throughout 2021 resulted in strong free cash flow, allowing it to make important investments in its business while returning over $1.5 billion of capital to shareholders and acquiring a new restaurant brand in Firehouse Subs. I am excited for what lies ahead for its family of four iconic brands and am confident in the strength of its team, its franchisees and its strategies to drive long-term growth and value creation,” concluded Cil.

System-wide Sales Growth of 13.8%
Net Restaurant Growth of 4.5%
Diluted EPS of $2.69 versus $1.60 in prior year
Adjusted Diluted EPS of $2.82 versus $2.03 in prior year
Net Income Attributable to Common Shareholders and Noncontrolling Interests of $1,249 million versus $748 million in prior year
Adjusted EBITDA of $2,248 million increased 17.1% organically versus the prior year
Net Cash Provided by Operating Activities of $1,726 million and Free Cash Flow of $1,620 million
Returned $1,525 million of capital to shareholders through Dividends and open market Share Repurchases
Acquired Firehouse Subs on December 15, 2021

During 2021, the increase in sales was driven by an increase of $265 million in its TH segment, a favorable FX Impact of $108 million, and $1 million fromthe FHS acquisition, partially offset by a decrease of $9 million in its PLK segment. The increase in its TH segment was driven by an increase in supply chainsales due to an increase in system-wide sales and an increase in sales to retailers.

During 2021, the increase in cost of sales was primarily driven by an increase of $195 million in its TH segment, an unfavorable FX Impact of $86 million,and $1 million from the FHS acquisition, partially offset by a decrease of $3 million in its PLK segment. The increase in its TH segment was driven by anincrease in supply chain sales and an increase in sales to retailers, partially offset by a decrease in bad debt expense.

During 2021, the increase in franchise and property revenues was driven by an increase of $177 million in its BK segment, an increase of $75 million in ourTH segment, an increase of $20 million in its PLK segment, $4 million from the FHS acquisition, and a favorable FX Impact of $55 million. The increases wereprimarily driven by increases in royalties in its BK, TH and PLK segments, and increases in rent in its TH segment, as a result of increases in system-wide salesand decreases in rent relief provided to eligible franchisees

During 2021, the decrease in franchise and property expenses was driven by a decrease of $36 million in its BK segment, a decrease of $11 million in ourTH segment, and a decrease of $2 million in its PLK segment, partially offset by an unfavorable FX Impact of $22 million and $1 million from the FHSacquisition. The decrease in its BK segment was primarily related to bad debt recoveries in the current year compared to bad debt expense in the prior year.

During 2021, the increase in advertising revenues was driven by an increase of $29 million in its TH segment, an increase of $21 million in its BKsegment, an increase of $12 million in its PLK segment and a favorable FX Impact of $13 million. The increases in all of its segments were primarily driven byincreases in system-wide sales.

During 2021, the increase in advertising expenses was driven by an increase of $61 million in its TH segment, an increase of $11 million in its PLKsegment, an increase of $6 million in its BK segment, and an unfavorable FX Impact of $14 million. The increase in all of its segments was primarily driven byan increase in advertising revenues, and for its TH segment, also driven by its support behind the marketing program in Canada.

Cash and Liquidity

As of December 31, 2021, total debt was $13.5 billion, and net debt (total debt less cash and cash equivalents of $1.1 billion) was $12.4 billion, and net leverage was 5.5x. During the fourth quarter the company increased its senior secured term loan A facility to $1,250 million to finance the acquisition of Firehouse Subs and extended the maturity date of its senior secured term loan A facility and its senior secured revolving credit facility from October 7, 2024 to December 13, 2026. During the fourth quarter the company also repurchased 6.4 million RBI common shares for $369 million under its $1 billion share repurchase program and as of December 31, 2021 had $449 million remaining under the authorization.

The RBI board of directors has declared a dividend of $0.54 per common share and partnership exchangeable unit of RBI LP for the first quarter of 2022. The dividend will be payable on April 6, 2022 to shareholders and unitholders of record at the close of business on March 23, 2022. In connection with the declared dividend, RBI also announced that it is targeting a total of $2.16 in dividends per common share and partnership exchangeable unit of RBI LP for 2022.

Recent developments

Tim Hortons Accelerating Global Growth with Plans to Launch in India in 2022

3/15/2022 Tim Hortons is proud to be introducing another global market to Canada's favourite coffee.⁴

Tim Hortons will launch in India later this year as part of an exclusive agreement with a joint venture entity owned by Apparel Group and Gateway Partners. The first restaurant is set to open in New Delhi and there are plans to launch over 300 locations across the country over the next 10 years.

With this launch, India will become the fourth country in the Asia Pacific region where Tim Hortons is serving its iconic coffee and treats, including a growing presence in China where there are over 400 Tims restaurants. Tim Hortons can also be found in the United States, Mexico, Spain, the United Kingdom, across the Middle East, Thailand and the Philippines.

No matter where they are in the world, Tim Hortons restaurants proudly reflect their Canadian roots with design elements like the Maple Leaf, red plaid and hockey sticks. Tims restaurants globally also serve original Canadian classics like Double Double™ coffees and Timbits™ donuts, along with local flavours that are unique to each market.

"India is one of the world's fastest growing markets for coffee and tea retail chains and Tims is thrilled to be opening there soon," said David Shear, President of RBI International, the parent company of Tim Hortons.

"We're committed to serving India the premium quality coffee and delicious foods that Tims fans in Canada and around the world love," said Shear. "This launch in India is another critical step in its continuing international expansion plans."