®
US Investor Presentation
June 2011
Russel Creedy - CEO
Grant Ellis - CFO
A corporate franchisee in the South Pacific…
®
89
Stores
®
®
82
Stores
37
Stores
Restaurant Brands operates three brands
of which KFC dominates.
®
Sales
(NZ$m)
236
®
59
29
Ebitda
52
6
4
Assets
72
27
7
People
2,727
1,167
387
(NZ$m)
(NZ$m)
FY2011
®
New Zealand – a good place to do business.
• Modern, developed economy
• Established infrastructure
• Stable political and economic
landscape
• Limited impact of GFC with only
modest government stimulus
• Ranked 3rd in the world for ease
of doing business*
• Forecast positive GDP growth
®
*Source: World Bank www.doingbusiness.org/rankings
Restaurant Brands is a big business
in New Zealand
• 450,000 customers a week
from 208 locations
• 4,500 staff
• Estimated 15% market share
and 90% of chicken fast food
in New Zealand
• Only NZX listed fast food
retailer (NZX50)
®
®
®
The business is managed and supported by a
50 person support centre based in Auckland...
C O R P O R AT E &
MANAGEMENT
INTERNAL
AUDIT
S U P P LY C H A I N &
LOGISTICS
FINANCE &
P AY R O L L
MARKETING
HR &
RECRUITMENT
FA C I L I T Y
DEVELOPMENT
TRAINING &
DEVELOPMENT
®
IT &
C O M M U N I C AT I O N S
Financial performance over the past 5 years
has been driven by KFC...
SALES BY BRAND
EBITDA BY BRAND
NZ $m
NZ $m
350
PIZZA HUT VICTORIA
25
300
31
STARBUCKS
250
80
PIZZA HUT VICTORIA
6
33
STARBUCKS
71
PIZZA HUT
PIZZA HUT
200
150
182
100
199
70
PIZZA HUT VICTORIA
0.3
33
STARBUCKS
65
212
PIZZA HUT
31
STARBUCKS
64
223
PIZZA HUT
KFC
29
STARBUCKS
59
236
PIZZA HUT
TOTAL
60
55
50
TOTAL
40
KFC
30
20
KFC
50
37
STARBUCKS
KFC
KFC
62
TOTAL
PIZZA HUT
31
TOTAL
TOTAL
44
44
STARBUCKS
4
5
PIZZA HUT
36
4
4
STARBUCKS
PIZZA HUT
38
STARBUCKS
PIZZA HUT
3
3
46
STARBUCKS
3
5
PIZZA HUT
52
KFC
KFC
KFC
KFC
KFC
10
0
0
2007
2008
2009
2010
2011
2007
PIZZA HUT VICTORIA
2008
2009
3
KFC CAGR 7.3%
®
KFC CAGR 16.7%
2010
2011
4
6
...producing a solid flow through to
the bottom line....
NPAT (EXCL NON TRADING COSTS)
NZ $m
27
25
25
22
20
20
17
15
12
10
7
5
2
7
10
12
0
2007
2008
2009
CAGR 37.4%
®
2010
2011
...and strong operating cash flows.
OPERATING CASH FLOWS
NZ $m
45
40
39
35
30
31
25
20
15
41
23
21
10
5
0
2007
2008
2009
CAGR 18.2%
®
2010
2011
This has lead to substantial debt reduction...
BANK DEBT AT BALANCE DATE
NZ $m
50
45
40
49
43
35
34
30
25
20
18
15
10
5
12
0
2007
®
2008
2009
2010
2011
...and shareholders receiving a commensurate
improvement in returns...
EARNINGS PER SHARE*
NZ CENTS
PER SHARE
27.5
25.5
25
22.5
20.5
20
17.5
15.5
12.5
10.5
7.5
5.5
9
9
2008
2009
2.5
0.5
(2)
(5)
(7)
2007
(4)
* Full year reported
®
2010
2011
...through higher dividend and increased
share price.
SHARE PRICE RELATIVE TO NZX50 INDEX*
DIVIDEND PER SHARE*
DIVIDEND PER SHARE*
1.99
3.00
DIVIDEND PER SHARE IN NZ CENTS
DIVIDEND PER SHARE IN US CENTS
NZD/USD FX RATE AT BALANCE DATE
DIVIDEND PER SHARE IN NZ CENTS
NZX50 RETURN SINCE27/2/2007 (BASE 4009)
NZX50 RETURN SINCE27/2/2007 (BASE 4009)
* Declared (fully imputed)
®
RBD RETURN 27/2/2007 (BASE $1.15)
* Relative nzx50 & RBD Index return to base 27/2/2007
27
27NOV
FEB 1110
27 AUG 10
27 NOV 10
27 MAY 10
27 AUG 10
27 FEB 10
RESTAURANT BRANDS ORD SHARE PRICE
RESTAURANT BRANDS ORD SHARE PRICE
RBD RETURN 27/2/2007 (BASE $1.15)
NZD/USD FX RATE AT BALANCE DATE
27 MAY 10
2011
27 FEB 10
2010
27
27NOV
NOV0909
2009
27AUG
AUG0909
27
2008
2011
27 MAY 09
2010
0.00
27 MAY 09
0.00
27 FEB 09
DIVIDEND PER SHARE
IN US CENTS
2007
-50%
27 FEB 09
2009
-50%
0.50
27 NOV 08
2008
0%0
1.00
27 NOV 08
0
0%0
0.50
4
50%
50%
1.50
27
27MAY
AUG0808
2007
13
100%
2.00
27 AUG 08
4
0
6 4 5
7
7
9
1.00
100%
27
MAY0808
27 FEB
4
5
7
9
2.50
27 FEB 08
6
5
7
1.50
150%
27 NOV 07
5
13
13
3.00
-100%
27 FEB 11
13
10
2.00
1.35 17
27 MAY 07
1.26
1.26
10
1.35 17
1.44
27 NOV 07
1.45
2.50
1.44
27 AUG 07
1.45
150%
27 FEB 07
15
15
RBD SHARE
PRICE NZ$
27 AUG 07
20
20
SHARE PRICE RELATIVE TO NZX50 INDEX*
1.99
27 MAY 07
NZ
CENTS
CENTS
PER SHARE
27 FEB 07
NZ
CENTS
CENTS
PER SHARE
RBD SHARE
PRICE NZ$
-100%
Restaurant Brands has a strong relationship
with its franchisors and is considered
a ‘best practice’ operator
particularly within its KFC business.
ent
Store developm
sold per 100 people
USA (5 week promo)
3.2
Canada (4 week promo)
2.9
New Zealand (First two weeks)
9.9
®
Sales Growth
$million
®
2006 2007200820092010
US Sales per Store
1.0
1.0
1.0
1.0
0.9
NZ Sales per Store
(RBD Stores)
2.1
2.3
2.5
2.6
2.7
NZ $m
The KFC transformation process has been a
52
46
textbook case study in rebuilding a business.
60
50
40
30
KFC SALES
NZ $m
31
30
28
26
20
38
36
KFC EBITDA
250
10
KFC SALES
200
171
173
182
172
212
199
150
0
171
173
2004
172
182
2005
212
199
2006
223
0
NZ $m
236
223
60
2004
2005
2006
2007
2008
2009
NUMBER OF
STORES
TRANSFORMED
ROI (EBIT /TA)
2009 2010 2011
5%
69% 66%
236
2010 50
50
KFC TRANSFORMED STORES
2011
46
40
30
28
26
20
30
2007
2008
2009
2010
2011
40
30
0
2004
2005
2006
2007
2008
2009
2010
0
2011
50
0
TOTAL CAPEX $NZ68M
49
40
30
20
10
34
1
9
0
®
2004
2005
2006
2007
2008
2009
NB: CUMULATIVE NUMBER
55% OF TOTAL TRANSFORMED TO DATE
34
2010
2004
1
2010
2011
2005
9
2006
2007
2008
2009
55% OF TOTAL TRANSFORMED TO DATE
21
0
2009
NB: CUMULATIVE NUMBER
40
30
30
2008
21
10
NUMBER OF
STORES
TRANSFORMED
2007
ROI (EBIT /TA)
2009 2010 2011
5%
69% 66%
KFC TRANSFORMED STORES
2006
49
10
20
2005
38
36
40
TOTAL CAPEX $NZ68M
2004
31
52
2011
2010
2011
KFC strategies are about maintaining the
momentum of transformation.
®
Continued store transformation
®
®
®
5-8 a year
New store builds
1-2 a year as sites become available.
Market potential 140 stores
Active new product development
Utilise YUM! worldwide connections
Pursue in-store efficiencies
Enhance system-based planning and
control (labour scheduling, CCTV, XBR)
Reduce supply chain costs
Increase resource, leverage dual
chicken supply
Pizza Hut’s strategies involve facility
rationalisation and business improvement.
Mega
Meal
2 Big New Yorker
®
Pepsi,
pizzas, 1.5L
1 Fries
34.90
$
pick up
Limited time
only
Continue store sales to
Independent Franchisees,
including new sites
Current
Proposed
RB IF
RB IF
82 5
40 45
Restaurant Brands retains main
centres/larger stores
Brand rationalisation and
improved operating model
Upgrade facilities, centralised
ingredient processing, some
rationalisation
Continue market stimulation
with new product development
Leverage YUM! New product
development and marketing
The re-invigorated Starbucks Coffee business
is increasingly profitable, generating further
investment opportunities.
®
Maintain sales momentum
through continuing strength
of ‘3rd place experience’ and
competitive pricing
Supply chain efficiencies
improve margins.
Focus on staff training.
Completion of facility upgrades
3 - 4 a year Enhanced food offering
New range has seen recent
improvement in food mix.
New Zealand a big food market
(15-20% of mix).
Continued facility rationalisation
New store builds (2-3 year). Closure of
poor performing stores at lease end.
$50-150k/ each.
The business is very people dependent and
Restaurant Brands looks after its people
(or partners!) at all levels.
HEALTH & SAFETY IS PARAMOUNT
LTI/
MILLION
HRS
TURNOVER IS LOW FOR THE INDUSTRY
%
TURNOVER
20
18
103%
TURNOVER
US MARKET*
73%
17
69%
52%
2009
2010
2011
STAFF TRAINING TO NZ QUALIFICATIONS AUTHORITY LEVELS
NZQA
GRADUATES
2009
2010
*YUM! US HISTORICAL
1,504
998
1,026
®
2009
2010
2011
VS FAST FOOD STANDARD
2011
Restaurant Brands people
STAFF VIDEO
MONTAGE
®
Restaurant Brands leverages its franchise
relationship to the full for new product and
promotional opportunities.
BBQ
n
Praw
BBQ se
ehou
Smok
d
Minteb
Lam
Grilled
Buffalo Wings
& Sauce
$5.90 5pk.
s
Angu
Be ef
sauce choice:
en
Chickdo
Alfre
• Apricot Blas
t
• Garlickin’
Aioli
• Peri Peri Jolt
• Smokin’ BBQ
• Tangy Ranch
Chicken cuts may vary
Grilled
Pack
QuarterChicke
n & Sauce
Grilled
Chicken
& Sauce
1 pc. Grilled
1 reg. Potato & Gravy
1 reg. Chips
1 reg. Drink
1 Bread Roll
$3.90 1pc.
E NEW
6 HUGVOURS
FLA
ny of
a
*
em on
ses.
Try th es and ba
our siz
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nd
a Lege s are
ita is
ur
arghar NEW flavo ll
ato M
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*Tom d all other - prices
u.
an
zzas
pizza, nsation pi andard men
Se
per st
be as
For Two Chicken & Sauce
2 pcs. Grilled
2 reg. Potato & Gravy
2 reg. Coleslaw
2 reg. Chips
2 reg. Drinks
MB0O
CO$19.9
$9.90
to
Toma rita
ha
g
r
a
M
Grilled
k
s & reg.drin
FOR reg.chip
VAR
8 pcs IETY B
.
UCK
4 Cri Original
ET
s
R
Any py Strips ecipe,
3 larg
, reg
.P
e sid
es, 2 opcorn
C
dipp
ing s hicken,
auce
s
29.90
$
SALAD
COMBO
COMBO
k
d & reg.drin
FOR side sala
k
s & reg.drin
FOR reg.chip
SALAD
COMBO
k
d & reg.drin
FOR side sala
$
EW
N
G
I
ZZA
HE B
.90
14
Grilled
Grilled
$6.90
$7.90
Chicken
Burger
Grilled
Chicken
Salad
Chicken eBLT
ach Grilled Wrap
Burger pick upChicken
$
only
d time
Limite
5.90
Grilled
Chicken Wrap
$5.90
extra pc.
of grilled chicken
Chicken cuts may vary.
3
SUPE
R VA
with
R
10
4 Cris pcs. Ori IETY B
ginal
p
Recip UCKE
Any 3 y Strips,
T
reg
e,
large
sides . Popcorn
, 2 dip
ping Chicken,
sauc
es
32.90
$
TVC
®
Customers keep coming back to our revitalised
and welcoming stores.
®
As New Zealand’s leading food and
beverage operator, growth opportunities for
Restaurant Brands are considerable.
®
•
•
•
•
Store numbers
Store formats
Store ownership
Brand layers
•
•
•
•
Possible capacity 140 stores
‘Super stores’, mall opportunities
Smaller store sales to independent franchisees
Breakfast (potential), build on Grilled, Krushers,
Double Down
• Ownership model
•
• Market size
•
• New format
•
Blended RBD and franchisee stores produces
‘best of both worlds’
Largest operator (and part of RBD group) to leverage
cost opportunities
Proven overseas ‘re-invented’ markets (PHD, dine-in)
• Leverage NZ
•
coffee culture
•
• New site opportunities
• Continue to build on ‘3rd place’ •
Kiwis are big coffee drinkers
Previous rationalization has opened up alternative
locations
Starbucks has strong brand presence in New Zealand
• Fourth & fifth brands
• Expansion by acquisition
• Leverage core
competencies
•
currently under evaluation
•
•
Offshore – in Australia
Onshore – possible acquisition
of other brands
®
®
Questions?
Disclaimer
This presentation includes not only a review of current and historical operations, but also some forward looking statements about Restaurant Brands and its constituent businesses. Because these
statements are forward looking, Restaurant Brands can make no firm representations as to their certainty. Further information including news releases, presentations and statutory reports is
available on the company’s website (www.restaurantbrands.co.nz ) with additional information about matters which could cause Restaurant Brands’ performance to differ from any forward looking
statements in this presentation. Please view this presentation in the wider context of material previously published by Restaurant Brands.
®