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INVESTOR DAY
ARCOS DORADOS
3Q 2018 CONFERENCE CALL PRESENTATIONNovember 14, 2018
DISCLAIMER
This presentation contains forward-looking statements that represent our beliefs, projections and predictions about future events or our future performance. Forward-looking
statements can be identified by terminology such as “may,” “will,” “would,” “could,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,”
“continue” or the negative of these terms or other similar expressions or phrases. These forward-looking statements are necessarily subjective and involve known and unknown
risks, uncertainties and other important factors that could cause our actual results, performance or achievements or industry results to differ materially from any future results,
performance or achievement described in or implied by such statements.
The forward-looking statements contained herein include statements about the Company’s business prospects, its ability to attract customers, its affordable platform, its
expectation for revenue generation and its outlook. These statements are subject to the general risks inherent in Arcos Dorados' business. These expectations may or may not be
realized. Some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition, Arcos Dorados' business and operations involve
numerous risks and uncertainties, many of which are beyond the control of Arcos Dorados, which could result in Arcos Dorados' expectations not being realized or otherwise
materially affect the financial condition, results of operations and cash flows of Arcos Dorados. Additional information relating to the uncertainties affecting Arcos Dorados' business
is contained in its filings with the Securities and Exchange Commission. The forward-looking statements are made only as of the date hereof, and Arcos Dorados does not
undertake any obligation to (and expressly disclaims any obligation to) update any forward-looking statements to reflect events or circumstances after the date such statements
were made, or to reflect the occurrence of unanticipated events.
2
3Q18 OPENING REMARKS AND HIGHLIGHTS
Comparable Sales
+7.4%YoY
Adjusted EBITDA
$88m+19.7%YoY
+50.1% YoY (in CC)
New openings
54Sep 30,2018 (LTM)
Revenues
$720m-12.9% YoY
+8.3% YoY (in CC)
Adjusted EBITDA
margin
12.3 %
EOTF restaurants
196Sep 30, 2018
✓ Comparable sales growth of 7.4% despite volatile
environments in our two largest markets
✓ Adjusted EBITDA margin expansion of 340 basis points,
driven by our ability to manage our cost structure
efficiently
✓ Market leadership in QSR segment, with strong potential
to continue growing our brand in the region
✓ Continue to execute strategies that drive top line growth,
through award-winning marketing initiatives, while
strengthening our margins
✓ On track with our capex plan
✓ 200 new restaurants, majority free-standing
✓ Reinvest $390M, primarily to accelerate EOTF
Note: Financial results exclude Venezuela 3
3Q18 KEY INITIATIVES
• McDelivery now available in 10 markets across the region, up from 3 just a year ago
• Mobile app with over 17 million downloads in 20 countries
• Continued improvement in customer satisfaction scores, with Brazil reaching the
highest level since monitoring began
• Innovation is driving brand preference, guest traffic, market share, average check
growth and efficiency
• Recognized for our innovative marketing initiatives, with numerous awards granted by
the Mobile Marketing Association
• Modernizing our restaurants under Experience of the Future (196 as of Sep 2018,
650 EOTF restaurants by end of 2019)
4
1.552 1.548 1.540 1.546 1.545 1.543 1.538
604 612 620 642 645 648 657
1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18
Company Operated Franchised
3Q18 RESTAURANT DEVELOPMENT
BRAZIL
NOLAD
SLAD
CARIBBEAN
CURRENT FOOTPRINT
RESTAURANTS
+7
(*) Restaurant Addition LTM (net)
-5
+29
+4
DIVISIONSTORE TYPE
TOTAL
RESTAURANTSMCCAFES
DESSERT
CENTERSFS & IS MS & FC
BRAZIL 502 437 939 93 1,663
NOLAD 326 195 521 25 620
SLAD 231 159 390 130 356
CARIBBEAN 268 77 345 37 312
TOTAL 1,327 868 2,195 285 2,951
577 Company Operated
362 Franchised
341 Company Operated
49 Franchised
259 Company Operated
86 Franchised
361 Company Operated
160 Franchised
2,195
196
5
3Q18 TOPLINE RESULTS
6,1%
9,6%10,6% 10,4%
7,4%
FY2015 FY2016 FY2017 3Q2017 3Q2018
COMPARABLE SALES GROWTH (%)
790688
855
38
33
41
3Q17 3Q18 (as reported) 3Q18 (in constantcurrency)
Sales by company operated restaurants Revenues from franchised restaurants
896827
720
TOTAL REVENUE ($ M)
• Comp sales of +7.4%
• Constant currency revenue growth of +8.4%. As reported revenue affected by currency depreciation in Argentina and Brazil
Note: Financial results exclude Venezuela 6
35,0% 35,5%
21,9% 20,5%
26,4% 27,5%
5,0% 5,5%
3Q17 3Q18
F&P Payroll and employee benefits Occupancy and other operating exp Royalty Fees
3Q18 OPERATING COSTS AND EXPENSES
G&A EXPENSESCOMPANY OPERATED RESTAURANT EXPENSES
88.4% 89.1%
($ M and as a % of Total Revenues)(As a % of sales by Company operated restaurants)
7.1% 6.8%
• Improved productivity led to efficiencies in payroll in all our divisions
• G&A expenses decreased by $9.5M and 30 bps as a % of revenues, achieving the lowest level since IPO
Note: Financial results exclude Venezuela 7
59
49
3Q17 3Q18
3Q18 ADJUSTED EBITDA AND NET INCOME
Net Income
($ million) + One-time tax credit (23.2 M)
+ Lower interest expense (2.8M)
- Higher income tax expense (5.9M)
+ Higher Foreign exchange gain (4.5M)
Note: Financial results exclude Venezuela
Breakdown of main variations contributing to 3Q18 Adjusted EBITDA margin
(%)
8
25,3
42,7
3Q17 3Q18
8,90,6
1,3 0,6 0,4 0,10,3
3,5 12,3
0
2
4
6
8
10
12
14
Adj.EBITDAMg 3Q17
Food & Paper Payroll Occupancy &Other OpExpenses
Royalty Fees Franchisedrestaurants -occupancyexpenses
G&A Other OpIncome
(expense)
Adj. EBITDAMg 3Q18
378 310386
3Q17 3Q18 (as reported) 3Q18 (in constantcurrency)
3Q18 DIVISIONAL TOPLINE
Comparable sales and CC revenue growth across all divisions, volatile macroeconomic environment impacting Argentina
and Brazil. NOLAD and the Caribbean comparable sales growth well above blended inflation
BRAZIL NOLAD
SLAD CARIBBEAN (Ex-Vzla)
+2.1% (CC)
1.0%
102106 109
3Q17 3Q18 (as reported) 3Q18 (in constantcurrency)
252 201298
3Q17 3Q18 (as reported) 3Q18 (in constantcurrency)
94 103 103
3Q17 3Q18 (as reported) 3Q18 (in constantcurrency)Comparable sales growth %
18.1% 12.7%
($ million)
($ million) ($ million)
($ million)
6.7%
9
6.8%
5 7 7
3Q17 3Q18 (as reported) 3Q18 (in constantcurrency)
2617
28
3Q17 3Q18 (as reported) 3Q18 (in constantcurrency)
109 9
3Q17 3Q18 (as reported) 3Q18 (in constantcurrency)
4968
85
2Q17 2Q18 (as reported) 2Q18 (in constantcurrency)
3Q18 DIVISIONAL ADJUSTED EBITDA
Adjusted EBITDA Margin expansion in Brazil and Caribbean, contraction in NOLAD and SLAD
BRAZIL NOLAD
SLAD CARIBBEAN (Exc-Vzla)
13.0% 21.8% 9.7% 8.3%
10.4% 5.4%
Adjusted EBITDA margin %
8.6%
($ million) ($ million)
($ million) ($ million)
10
3Q18 LEVERAGE AND CASH FLOW HIGHLIGHTS*
Notes:
1) Total financial debt includes short-term debt, long-term debt and derivative instruments
2) Net Debt = Total financial debt less cash and cash equivalents
3) Leverage ratio = Net financial debt / LTM adjusted EBITDA
3Q18 3Q17
Net cash from operations 52.8 67.2
Capex (55.9) (43.4)
Asset monetization proceeds 4.8 11.3
Net cash used in investment activities (40.8) (33.3)
Share repurchases (8.3) -
Dividend payments - -
Net cash used in financing activities (9.3) (1.7)
$ million
801
654 620
621567
105 87163
328
208
696
567
457
293
359
0
100
200
300
400
500
600
700
800
900
2014 2015 2016 2017 3Q2018
Total Debt Cash & Equivalents Net Debt
1.3x1.0x1.7x2.3x2.6x
$ million
11
LEVERAGE
RATIO
(*) Balance sheet and cash flow as reported, including Venezuela
• Strong and healthy balance sheet
• $8.3M in share buybacks
CLOSING REMARKS
✓ Expecting short-term macro challenges, but remain committed to our long-term plan
✓ Modernizing our restaurants, providing the best guest experience, and offering the best
value for money in the QSR segment
✓ Leveraging our scale to make a positive impact in the communities we serve
✓ Remain aligned with McDonald’s global commitments related to Packaging & Recycling,
Kids Nutrition and Climate Change
✓ Supporting youth employment in the LATAM and Caribbean regions
✓ Undisputed leadership position to capture the significant growth opportunity that Latin
America presents
12
INVESTOR DAYIR CONTACT Patricio Iñaki Esnaola
Director of Investor Relations
+54.11.4711.2561