Agenda ARCOS DORADOS · 4Q12 Non-Operating Results Stable overall funding costs despite higher debt...
Transcript of Agenda ARCOS DORADOS · 4Q12 Non-Operating Results Stable overall funding costs despite higher debt...
Agenda
ARCOS DORADOS
4Q & FY2012 Conference Call Presentation
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.
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• Maintained leading market share by defending traffic
• Advanced profitability initiatives
• Organic revenue growth of 13.8% o Comparable sales growth of 8.6% outperformed listed peers
• Adjusted EBITDA and Net Income increased despite ongoing sluggish
consumption environment in Brazil o Organic Adjusted EBITDA grew 4.7%
• Gross addition of 130 new restaurants (LTM) to drive future earnings
• Brazil 4Q GDP growth of 0.6%
4Q2012 Results & Highlights
LEADING REGIONAL MARKET SHARE DESPITE
INREASED COMPETITION
Solid underlying growth despite weak economic expansion in Brazil,
underscoring brand dominance and execution strength
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Key Marketing Initiatives
• Increased comparable sales and traffic through promotions on unique
value platform:
o Core products at affordable prices
• Average check growth:
o Premium products (Angus)
o Product innovation (CBB)
• Fourth quarter continued with brand enhancement activities
Focused on maintaining traffic and driving long-term profitability
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4Q12 Performance: Brazil
• Impacted by continued sluggish consumer spending and 14.4% currency
depreciation
• +12.6% organic revenue growth
o Comparable sales growth of 6.3% due to successful campaigns in
the affordability and premium platform
• Growth drivers for the quarter
o Big Mac
o Gran Verano
o Angus Barbecue
• Biggest QSR coverage
Double-digit organic revenue growth despite modest economic
expansion and weak consumer activity
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4Q12 Performance: NOLAD
• Overall sound economic environment in Mexico
o Mexico turnaround ongoing, with focus on traffic
- Conservative pricing strategy to face competition
o MFY containing cost pressure
• +9.2% organic revenue growth
o Comparable sales growth of 0.5%
o Strong contribution from new restaurants (Costa Rica & Panama)
• Premium products and a-la-carte options favorably received
Turnaround plan advancing in a competitive environment
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4Q12 Performance: SLAD
• Continued strong y-o-y performance
o Gained market share in Venezuela and exceeded consumption
growth in Argentina
• +19.2% organic revenue growth
o Comparable sales growth of 16.4%
• Growth drivers
o Value platform: Triple Bacon
• Focus on high potential countries such as Colombia
Argentina and Venezuela operations advanced despite headwinds
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4Q12 Performance: Caribbean
• +4.4% organic revenue growth
o Comparable sales growth of 3.1%
• Combined Beverage Business successful in creating new consumption
opportunities
• Growth drivers
o CBO
o McRib
Maintained stable revenue growth
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69 Restaurant Additions (net)
19 Reimagings
28 Restaurant Additions (net)
13 Reimagings
19 Restaurant Additions (net)
20 Reimagings
8 Restaurant Closings(net)
5 Reimagings
4Q12 New Unit Development & Reimaging
SLAD
Brazil
Caribbean
NOLAD
Number of systemwide
restaurants(1)
575
731
139
503
30%
37%
7%
26%
1,948 100%
8 (1) As of December, 2012; does not include McCafé units & Dessert Centers
4Q12 Adjusted EBITDA Bridge
Adjusted EBITDA variations ($ Million)
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104.6
14.6 9.7
9.0 11.1
111.6
0
20
40
60
80
100
120
EBITDA 2011 Revenues Variation @2011 EBITDA Margin
EBITDA Margin Variationexcl. Special Items in CC
Fluctuation of the localcurrencies
Special Items EBITDA 2012
In constant currencies
4Q12 Non-Operating Results
Stable overall funding costs despite higher debt levels
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• Debt restructuring in April 2012
o Improved alignment of currency cash flows
o Reduced derivative variations
o Reduced FX exposure on intercompany loans
• Income tax rate of 26.2%, below the 30.5% in the year-ago period
o Reduced valuation allowances over deferred tax assets in 4Q12
• Brazil 2012 GDP growth of 0.9%
• Organic revenue growth of 14.2% o Comparable sales growth of 9.2%
• Adjusted EBITDA of $340.6 million o Organic Adjusted EBITDA grew 1.2%
• Net income stable at $114.3 million (-1.0%)
• Gross openings reached 130 restaurants o Year end restaurant count to 1,948
• CAPEX totaled $294.5 million, broadly in line with guidance
• 28.8% full year effective tax rate
FY2012 Results & Highlights
High single-digit comparable sales growth despite modest economic
expansion in largest market
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(In millions of U.S. dollars, except ratios) As of As of
December 31, 2012 December 31,
(Unaudited) 2011
Cash & cash equivalents 184.9 176.3
Total Financial Debt (i) 659.8 532.3
Net Financial Debt (ii) 474.9 536.0
Total Financial Debt / LTM Adjusted EBITDA ratio 1.9 1.6
Net Financial Debt / LTM Adjusted EBITDA ratio 1.4 1.0
(i) Total financial debt includes short-term debt, long-term debt and derivative instruments (including the asset
portion of derivatives amounting to $3,952 as a reduction of financial debt)
(ii) Total financial debt less cash and cash equivalents
4Q12: Financial Indicators
Healthy financial ratios
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Looking Ahead - 2013
• Venezuela update
• Guidance 2013: Organic Growth vs. 2012
2013 *
Consolidated Revenue Growth 15 - 18%
Consolidated Adj. EBITDA Growth 8 - 10%
Effective Tax Rate 33 -35%
Capital Expenditures $280 million
Total Openings (gross) App. 140
* Organic growth refers to constant currency and excludes special
items for both years
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Key Vectors: A Focus on Driving Value
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- >100 products & flavors
- 16 new cities
- MFY & extended supplier base
- G&A Leverage
- R$ denominated debt
For additional information:
Sofia Chellew
Investor Relations
(+5411) 4711-2515
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