Restaurant Brands Full Year Results Announcement

28 February 2020
NZX/ASX


RESTAURANT BRANDS ANNOUNCES ANNUAL PROFIT RESULT

$NZm
Dec 2019
(44 weeks)
Feb 2019
(52 weeks)
Change ($) Change (%)
Total Sales 705.5 794.0 -88.5 -11.1
Net Profit After Tax 30.1 35.7 -5.6 -15.8

Note: With the change in balance date announced last year, these reported results are for the 44 weeks ended 31 December 2019 (Dec
2019) whereas the prior year comparisons are for the 52 weeks ended 25 February 2019. A comparable unaudited “gross up” summary
is annexed to this report.


Key Points

• Following the announcement of a change in balance date for the company in October 2019, the
trading results for the December 2019 period are for only 44 weeks (10 months) vs 52 weeks (12
months) for the February 2019 period previously reported.

• Total sales for the 10 month period were $705.5 million, down against the previous 12 month period,
but positive on a same store basis across all three operating divisions. On an equivalent 12 month
basis sales were up over 5%.

• Reported net profit after tax of $30.1 million for the 10 month period was adversely impacted by the
shorter reporting period and the adoption of NZ IFRS 16.

• Combined store EBITDA
1
(pre NZ IFRS 16) for the 10 months was $116.0 million, down 10.3% on
the previous 12 month period; however on an equivalent 12 month basis, EBITDA is up over 6% at
$137.1 million.

• The Taco Bell brand was successfully launched in New Zealand and Australia (New South Wales)
with the first three stores opening in the last quarter of the December 2019 year.

• The company has entered into a conditional agreement to acquire 70 KFC and Taco Bell stores in
California to be settled in the first half of the December 2020 financial year.


Overview

Restaurant Brands (RBD) changed its balance date from February to 31 December during the year. Hence
the financial results for the reporting period to December 2019 (FY Dec 19) are for 44 weeks compared with
52 weeks in the prior year (FY Feb 19). The company also saw the first full period impact of the adoption of
leasing standard NZ IFRS 16 on the financial results, resulting in a reported Net Profit After Tax of $30.1
million, down $5.6 million on the 52 week result of $35.7 million last year.

When excluding the negative impact of NZ IFRS 16 leases, the shorter accounting period and (for the
previous year) the impact of some significant one-off costs, the normalised NPAT is $45.7 million, up 8.3%
on the prior year equivalent. This was primarily driven through the aggressive capital investment programme
and continued positive trading momentum across the key brands.

Taco Bell was successfully launched in New Zealand and New South Wales Australia with three stores
opened during the last quarter of the year. The introduction of Taco Bell in New Zealand and New South
Wales had a minimal impact on this year’s results. However, more than ten stores are forecast to open
during the next financial year with significant growth expected in sales as the brand builds towards an initial
target of sixty stores by 2024.
Group Operating Results
1

1
EBITDA is earnings before interest, tax, depreciation and amortisation. It is a non-GAAP financial measure and is not
prepared in accordance with NZ IFRS.

RESTAURANT BRANDS NEW ZEALAND LIMITED

Directors are pleased to report that Restaurant Brands has produced a net profit after tax (NPAT) for the
period ended 31 December 2019 (FY Dec 19) of $30.1 million, down 15.8% on the reported NPAT of $35.7
million for the prior year. As previously noted this year’s reported NPAT is for 44 weeks compared to 52
weeks in the prior year and includes the impact of the introduction of NZ IFRS 16 (the new lease accounting
standard).

$NZm after tax
Dec 2019 Feb 2019 Change ($) Change (%)
Reported NPAT 30.1 35.7 -5.6 -15.8%
Impact of NZIFRS 16 4.5 - 4.5 -
Other Income & Expenses 4.0 6.5 -2.5 -38.5%
Change of Balance Date* 7.1 - 7.1 -
Comparable Trading NPAT 45.7 42.2 3.5 8.3%
*Estimated (unaudited) NPAT over the eight weeks to February 2020, prorata’d from the 44 weeks to December 2019

The above table sets out a like-for-like comparison of the current year’s 10 month result versus the prior year
12 months’ normalised trading (detail of which is attached to this report). After adjusting for the negative
impact of the new lease standard ($4.5 million) and the shorter trading period (estimated at $7.1 million),
together with the positive impact of lower net income and expenses unrelated to normal trading ($2.5
million), the underlying trading profit is estimated at $45.7 million (up 8.3% on the prior equivalent year).

Total brand sales for the Group were $705.5 million, down $88.5 million when compared with the 52 week
comparison; however on a like-for-like annualised footing they are up approximately 5% and are positive on
a same store basis in all three divisions.

Combined store EBITDA (pre-NZ IFRS 16) of $116.0 million was down $13.3 million or -10.3% on prior year,
although on an annualised basis the results were up over 6% due to strong performances primarily from KFC
in NZ and Australia and Taco Bell in Hawaii. EBITDA margins (as a % of sales) improved from 16.3% to
16.4%.

Due to the difficulty for direct comparisons between reporting periods resulting from the change in balance
date the divisional analysis will focus more on same store sales and EBITDA margin as a % of sales as
these operational performance measures are not affected by the change in reporting period or the lease
standard.

Restaurant Brands’ store numbers total 287, comprising 148 in New Zealand, 74 in Hawaii and 65 stores in
Australia.

New Zealand Operations

New Zealand operating revenue for the 44 weeks ended 31 December was $395.5 million, down $56.3
million on the 52 week FY Feb 2019 year, including a $16.0 million reduction in sales due to the disposal of
the Starbucks Coffee business during the prior year.

Total store sales were $367.5 million, a decrease of $52.2 million on last year. However, when normalised
for 12 months New Zealand sales were up 3.5% and same store sales were strongly up 5.0%.

The New Zealand business delivered EBITDA of $67.9 million, an $8.5 million reduction on FY Feb 2019.
Overall the New Zealand operations achieved a concept EBITDA before G&A of 18.5%, up from 18.2% last
year, however on an annualised basis the result is up 5% up on the prior year. Once again this was largely
driven by the continued strong performance of the KFC brand.

KFC New Zealand

$NZm
Dec 2019 Feb 2019 Change ($) Change (%)
Network sales 325.8 356.9 -31.1 -8.7
Network store numbers 106 100

RBD sales 308.4 336.5 -28.1 -8.4
RBD store numbers 100 94

RBD EBITDA 66.1 70.4 -4.3 -6.1
EBITDA as a % of sales 21.4 20.9

KFC New Zealand continues to underpin the overall performance of the New Zealand operations with
another excellent year. Although reported sales were down 8.4% to $308.4 million due to the 44 week
reporting year, same store sales were up 5.2% and total full year equivalent sales up 8.3%.

The KFC sales growth was driven by sound marketing programmes, a further roll out of KFC delivery to a
more than forty stores, six new store openings, some very strong new product releases and continued
positive impact from the sponsorship of Super Rugby.

Whilst there remain input cost pressures, the EBITDA margin strengthened to 21.4% of sales. In dollar
terms, EBITDA for the 44 weeks totalled $66.1 million, down 6.1% on last year’s (52 week) result, but on a
52 year equivalent basis was up 10.9% to $78.1 million.

The brand continued delivering investment in store assets with 10 major renovations completed during the
year, along with the opening of up to six new stores.

Pizza Hut New Zealand

$NZm
Dec 2019 Feb 2019 Change ($) Change (%)
Network sales 85.2 101.0 -15.8 -15.6
Network store numbers 101 98

RBD sales 28.5 35.4 -6.9 -19.3
RBD store numbers 29 30

RBD EBITDA 0.9 2.0 -1.1 -56.1
EBITDA as a % of Sales 3.1 5.7


Transformation of the Pizza Hut network in New Zealand to a master franchise model continues on plan with
the sale of two stores to franchisees during FY Dec 19. The company remains on target to reduce the
number of company stores to 15 by the end of the next financial year.

Company owned store numbers decreased by one to 29, whilst the number of independent franchisee stores
has increased to 73, bringing the total Pizza Hut network to 102 stores. During the period two stores were
closed and six new stores were opened with two further stores expected to be opened in the first quarter of
this year.

In company owned stores, total sales were down to $28.5 million, which is due to the reduced reporting
period, less stores and lower same store sales. On an annual equivalent basis they were $33.7 million, down
4.7%. Same store sales declined by 4.1% over the period

Restaurant Brands’ Pizza Hut store EBITDA was $0.9 million (3.1% of sales), reflecting continued margin
pressures with labour rates and ingredient costs increases.

Carl’s Jr. New Zealand

$NZm
Dec 2019 Feb 2019 Change ($) Change (%)
Sales 29.9 31.9 -2.0 -6.1
Store numbers 18 18

EBITDA ($m) 1.3 0.9 +0.4 +41.0
EBITDA as a % of sales 4.4 2.9

Note: All Carl’s Jr. stores are RBD owned

Reported sales were down 6.1% due to the reduced reporting period although on an annualised basis sales
were up 11.0%. The introduction of a delivery service in February 2019 continues to have a positive impact
with strong same store sales growth of 11.3% helping drive profitability into the brand. Store numbers
remained stable at 18.

EBITDA was $1.3 million (4.4% of sales vs 2.9% last year), an increase of $0.4m on the prior year despite
the reduced reporting period.

Taco Bell New Zealand

In November the first Taco Bell was opened in New Lynn Mall, Auckland. The store opened with a first
week’s sales of over $150,000 and delivered over $0.7 million in sales in its first two months trading,
significantly up on expectations. With establishment costs, the business incurred a small loss of $0.3 million
for the year. The next store in Shortland Street, Auckland is expected to open in the first quarter of 2020 with
five further stores forecast to be opened during the 2020 year.

Australian operations

In $NZ terms, the Australian business (operating the KFC and Taco Bell brands) contributed total sales of
$NZ169.1 million, store EBITDA of $NZ25.2 million and EBIT of $NZ8.6 million. On an annualised basis both
sales and store EBITDA are well up on the prior year.

Store EBITDA was impacted by costs of $NZ0.7 million relating to the initial launch of the first two Taco Bell
stores in December 2019.

KFC Australia

$Am
Dec 2019 Feb 2019 Change ($) Change (%)
Sales 159.6 178.3 -18.7 -10.5
Store numbers 63 61

Store EBITDA 24.5 27.0 -2.5 -9.3
EBITDA as a % of sales 15.4 15.2


In $A terms, total sales for the KFC business in Australia were $A159.6 million, down $A18.7 million (or
10.5%) on last year due to the reduced reporting period. Same store sales continue to remain strong, up
5.1% on last year. On a full year equivalent basis sales were up 5.8% or $A10.3 million.

Store EBITDA of $A24.5 million was down $A2.5 million or -9.3% on last year due to the reduced reporting
period. Full year equivalent EBITDA however was $A29.0 million, up over 7.4%. Store EBITDA as a
percentage of sales is 15.4%, up from 15.2%, with good operating controls.

The company-owned KFC store network totalled 63 stores as at balance date. One store was opened in the
last quarter of the year along with one store acquired in December 2019. The business has continued to
invest in the store upgrade programme with 14 stores completed in the financial year.

Taco Bell Australia

In December the first two Taco Bell stores were opened in Jesmond and Blacktown in New South Wales with
initial sales exceeding expectations to a total of $A0.6 million. As with the New Zealand Taco Bell business
initial set up costs have resulted in a small EBITDA loss of $A0.7 million A further seven stores are forecast
to open in 2020.

Hawaii operations

In $NZ terms, the Hawaiian operations contributed $NZ168.9 million in revenues, $NZ22.9 million in brand
EBITDA (pre-NZ IFRS 16) and an EBIT of $NZ8.1 million for the FY Dec 19.

Total sales in Hawaii were $US110.6 million, with store level EBITDA of $US15.0 million. Once again Taco
Bell had a very strong result with sales and margins well ahead of expectations. Whilst Pizza Hut continues
to be challenged, facing increased margin pressures, the results this period were much improved. Same
store sales in Hawaii were up 9.1% overall.

Taco Bell Hawaii

$USm
Dec 2019 Feb 2019 Change ($) Change (%)
Sales 66.5 72.3 -5.8 -8.0
Store numbers 37 36

Store EBITDA 13.5 14.3 -0.8 -5.6
EBITDA as a % of sales 20.2 19.8

Taco Bell continues to perform very well with total sales of $US66.5 million and store-level EBITDA of
$US13.5 million (20.2% of sales). Full year equivalent sales and EBITDA are $US78.6 million (+8.7%) and
$US15.9 million (+11.2%) respectively. A full promotional programme including both new product releases
and the re-introduction of previously successful products, together with initial returns from refurbished stores
all helped to drive the strong sales growth which resulted in same store sales of +13.7%.

Pizza Hut Hawaii

$USm
Dec 2019 Feb 2019 Change ($) Change (%)
Sales 44.1 52.4 -8.3 -15.8
Store numbers 37 44

Store EBITDA 1.6 1.9 -0.3 -15.8
EBITDA as a % of sales 3.4 3.6


Total sales were $US44.1 million, up 3.0% on a same store basis. Store-level EBITDA was $US1.6 million,
down only $0.3 million despite the shorter reporting period. Margin pressure from participating in US-wide
value-led marketing promotions together with higher commodity and direct labour expenses continue
meaning EBITDA as a percentage of sales remained similar to prior period at 3.4%.

There has been a review and realignment of the store network resulting in 7 stores closing during the period.
This is in line with our refurbishment strategy that will see a move away from the larger restaurants into
smaller, more cost-effective delivery and carry out (delco) units.

A new franchise agreement has been agreed in principle with Yum!, providing certainty for the brand going
forward.

Corporate & Other

General and administration (G&A) costs were $33.3 million, down $2.5 million from last year due to the
reduced reporting period, but were up $3.6 million on a normalised annual basis. G&A as a % of total
revenue was 4.5% which is consistent with FY Feb 2019.

Depreciation charges of $47.6 million for FY Dec 19 was $17.3 million higher than the prior year primarily
due to the impact of depreciation of $22.4 million on the right of use assets created under NZ IFRS 16.
Excluding the effect of NZ IFRS 16 depreciation was $25.4 million down $5.2 million due to the change in
reporting period.

Financing costs of $21.5 million were up $14.7 million on prior year once again reflecting the impact of NZ
IFRS 16 with lease interest of $16.4 million. Interest on debt for the period ended 31 December 2019 was
$5.4 million, down $1.4 million on last year reflecting the shorter reporting period.

Tax expense was $12.8 million, down $0.9 million on the prior year with an effective tax rate of 29.9%
(27.7% for FY Feb 19) without the one off benefit of non-assessable income in the prior year.

Other items

Other net income and expense of $4.6 million is down from $9.0 million for the prior year. This primarily
relates to continued costs for refurbishment and relocation of stores of $3.2 million.

The FY Feb 19 figure included $3.5 million leave remediation costs and an impairment charge of $3.5 million
relating to Carl’s Jr. asset-carrying value in New Zealand, partially offset by a gain on the sale of the
Starbucks Coffee business. These were not repeated in the current FY Dec 2019 year.

Cash Flow & Balance Sheet

The composition of the Group’s balance sheet is significantly affected by the introduction of NZ IFRS 16. Its
introduction has increased the total assets of the Group by $374.6 million primarily due to the inclusion of
$356.1 million in right of use assets associated with the Group leased property and the deferred tax asset
created from the adoption of the standard. Equally there has been an increase of $426.5 million in liabilities
reflecting the future discounted lease liability on these leased stores.

Other than the impact of NZ IFRS 16 the balance sheet is largely unchanged with the exception of net debt
(loans less cash holdings) which has reduced by $11.5 million to $119.4 million reflecting the build-up in
cash from not paying an interim dividend in preparation for the acquisition in California. The company’s New
Zealand and Australian banking facilities expire in October 2020 therefore $101.6 million was included in
current liabilities. Subsequent to year end new facility agreements were signed with Westpac Banking
Corporation, Bank of China, Rabobank and JP Morgan for a new facility for approximately $370 million for
refinancing existing debt together with funding of the new California acquisition.

Operating cash flows were up $16.4 million to $87.6 million due once again to the impact of NZ IFRS 16 with
$16.0 million of lease payments classified as financing activities (as payments of lease principal) . After
adjusting for NZ IFRS 16, the operating cash flows are up $0.3 million to $71.6 million (despite the change in
the reporting period) reflecting continuing strong profitability (and some working capital movements).

Net investing cash outflows were $59.7 million (versus $26.7 million last year) with payments for fixed assets
and intangibles of $59.7 million up from $36.9 million including the scrape and rebuild of three Taco Bells in
Hawaii, building three new Taco Bell stores in New Zealand and Australia and significant KFC refurbishment
expenditure in both those markets. Last year’s net investing cash flows also included $10.2 million received
from the sale of nine Pizza Hut stores and the Starbucks Coffee business.

US Expansion

On 23 December the company announced that it had entered into a conditional agreement to acquire 59
KFC and 11 joint KFC/Taco Bell stores in California, USA for $US73 million. The business generates an
annual turnover of $US95 million and has a 12 month trailing store EBITDA of in excess of $US12 million.

This initiative, which has been well signalled to the market is a sound strategic move, providing immediate
critical mass in two very strong brands. It also provides significant growth potential for further expansion into
mainland USA.

The transaction is contingent upon Yum! approval and satisfactory assignment of leases and other critical
contracts for the business. It is expected to be completed by March-April this year.

Outlook

Following the introduction of the Taco Bell brand to New Zealand and Australia (New South Wales) at the
end of FY Dec 19, the focus remains on investing to build brand presence with more than ten stores
expected to open in FY Dec 20. While we do not forecast the brand to be margin positive, it is not expected
to have a material effect on the result in FY Dec 20.

The conditional acquisition of 59 KFC and 11 joint KFC/Taco Bell stores in California will have a
considerable impact on the balance sheet and earnings profile once completed. Once the acquisition is
finalised (provisionally March-April 2020) further details as to the financial impact on the company’s results
will be provided.

The company is not anticipating any significant change in the economic and competitive environment or
unusual costs in the 2020 financial year.

Further updates will be provided at the annual meeting.

Annual Shareholders’ Meeting

The Annual Shareholders’ Meeting of the company will be held in Auckland, New Zealand on Thursday 28
May 2020. For further information please contact:


Russel Creedy Grant Ellis
Group CEO Group CFO/Company Secretary
Phone: 525 8710 Phone: 525 8710


ENDS

About Restaurant Brands:

Restaurant Brands New Zealand Limited operates the KFC, Pizza Hut, Taco Bell and Carl’s Jr. brands in
New Zealand, the KFC and Taco Bell brands in Australia and the Taco Bell and Pizza Hut brands in Hawaii
and Guam. These brands - four of the world’s most famous - are distinguished for their product, look, style
and ambience, service and for the total experience they deliver to their customers around the world.

Consolidated Income Statement
For the 44 week period ended 31 December 2019
31 Dec 2019vs Prior25 Feb 2019
44 weeks%52 weeks
$NZ000's
Sales
KFC308,357 (8.4)336,534
Pizza Hut28,515 (19.3)35,350
Starbucks Coffee- (100.0)16,022
Carl's Jr.29,920 (6.1)31,864
Taco Bell729 n/a-
Total New Zealand sales367,521 (12.4)419,770
KFC 168,532 (12.0)191,547
Taco Bell573 n/a-
Total Australia sales169,105 (11.7)191,547
Taco Bell101,586 (4.2)106,004
Pizza Hut67,329 (12.2)76,725
Total Hawaii sales168,915 (7.6)182,729
Total sales705,541 (11.1)794,046
Other revenue28,125 (13.1)32,357
Total operating revenue733,666 (11.2)826,403
Cost of goods sold(587,874)13.2(677,185)
Gross margin145,792 (2.3)149,218
Distribution expenses (3,976)(9.6)(3,629)
Marketing expenses(39,524)11.3(44,542)
General and administration expenses(33,306)7.0(35,818)
Other items(4,616)48.7(8,997)
Operating profit (EBIT)64,370 14.556,232
Financing expenses(21,464)(215.8)(6,797)
Net profit before taxation42,906 (13.2)49,435
Taxation expense (12,815)6.4(13,694)
Net profit after taxation (NPAT)30,091 (15.8)35,741
% sales% sales
Concept EBITDA before G&A
KFC66,065 21.4(6.1)70,384 20.9
Pizza Hut885 3.1(56.1)2,017 5.7
Starbucks Coffee-
n/a(100.0)3,110 19.4
Carl's Jr.1,302 4.441.0923 2.9
Taco Bell(345)(47.3)n/a- n/a
Total New Zealand67,907 18.5(11.2)76,434 18.2
KFC 25,902 15.4(10.9)29,064 15.2
Taco Bell(700)(122.1)n/a- n/a
Total Australia25,202 14.9(13.3)29,064 15.2
Taco Bell20,546 20.2(2.0)20,968 19.8
Pizza Hut2,319 3.4(16.6)2,781 3.6
Total Hawaii22,865 13.5(3.7)23,749 13.0
Total concept EBITDA before G&A115,974 16.4(10.3)129,247 16.3
Ratios
Net tangible assets per security (net
tangible assets divided by number of
shares) in cents
9.9 (19.6)
Cost of goods sold are direct costs of operating stores: food, paper, freight, labour and store overheads.
Distribution expenses are costs of distributing product from store.
Marketing expenses are order centre, advertising and local store marketing expenses.
General and administration expenses (G&A) are non-store related overheads.

Non-GAAP Financial Measures
For the 44 week period ended 31 December 2019
The Group results are prepared in accordance with New Zealand Generally Accepted Accounting Practice (“GAAP”) and comply
with International Financial Reporting Standards (“IFRS”). These financial statements include non-GAAP financial measures that
are not prepared in accordance with IFRS. The non-GAAP financial measures used in this presentation are as follows:
1. EBITDA before G&A and other items. The Group calculates Earnings Before Interest, Tax, Depreciation and Amortisation
(“EBITDA”) before G&A (general and administration expenses) by taking net profit before taxation and adding back (or deducting)
financing expenses, non-trading items, depreciation, amortisation and G&A. The Group also refers to this measure as
Concept EBITDA before G&A and other items. This measure provides the results of the Group’s core operating
business and excludes those costs not directly attributable to stores. This is believed to be a useful measure to assist in the
understanding of the financial performance of the Group.
The term Concept refers to the Group’s seven operating divisions comprising the New Zealand divisions (KFC, Pizza Hut,
Taco Bell and Carl’s Jr.), two Australia divisions (KFC and Taco Bell) and the two Hawaii divisions (Taco Bell and Pizza Hut).
The term G&A represents non-store related overheads.
2. Total NPAT excluding the impact of NZ IFRS 16. Total Net Profit After Taxation (“NPAT”) excluding the impact of
NZ IFRS 16 is calculated by taking profit after taxation attributable to shareholders and adding back (or deducting) lease items whilst
also allowing for any tax impact of those items. This measure reflects the performance of the business, excluding costs associated with
the adoption of NZ IFRS 16 and is considered a useful measure to assist with understanding the financial performance of the Group.
3. Capital expenditure including intangibles. Capital expenditure including intangibles represents additions to property, plant
and equipment and intangible assets. This measure represents the amount of reinvestment in the business and is therefore a useful
measure to assist the financial position of the Group.
The Group believes that these non-GAAP measures provide useful information to readers to assist in the understanding of the
financial performance and position of the Group but that they should not be viewed in isolation, nor considered as a substitute for
measures reported in accordance with IFRS. Non-GAAP measures as reported by the Group may not be comparable to similarly
titled amounts reported by other companies.
The following is a reconciliation between these non-GAAP measures and net profit after taxation:
$NZ000'sNote*31 Dec 201925 Feb 2019
EBITDA before G&A, NZ IFRS 16 and other items1115,974 129,247
Depreciation(25,250)(30,163)
Loss on sale of property, plant and equipment (included in depreciation)(106)(146)
Lease deprecation(22,395)-
Add back lease costs32,369 -
Amortisation (included in cost of sales)(2,178)(3,112)
General and administration costs - area managers, general managers and support centre(29,428)(30,597)
Other income722 3,034
Other expenses(5,338)(12,031)
EBIT 64,370 56,232
Financing expenses(21,464)(6,797)
Net profit before taxation 42,906 49,435
Taxation expense (12,815)(13,694)
Net profit after taxation30,091 35,741
Add back IFRS 16 impact6,076 -
Taxation expense on IFRS 16 impact(1,547)-
Net profit after taxation excluding NZ IFRS 16234,620 35,741
* Refers to the list of non-GAAP measures as listed above.

Consolidated Income Statement
For the period ended 31 December 2019
Annualised unaudited results for 52 weeks - based on audited 44 week period results
ReportedAnnualisedReported
31 Dec 201931 Dec 2019Annualised 25 Feb 2019
$NZ000's44 weeks52 weeks% change52 weeks
Sales
KFC308,357 364,422 8.3%336,534
Pizza Hut28,515 33,700 (4.7%)35,350
Starbucks Coffee- - n/a16,022
Carl's Jr.29,920 35,360 11.0%31,864
Taco Bell729 861 n/a-
Total New Zealand sales367,521 434,343 3.5%419,770
KFC 168,532 199,174 4.0%191,547
Taco Bell573 677 n/a-
Total Australia sales169,105 199,852 4.3%191,547
Taco Bell101,586 120,056 13.3%106,004
Pizza Hut67,329 79,570 3.7%76,725
Total Hawaii sales168,915 199,626 9.2%182,729
Total sales705,541 833,821 5.0%794,046
Other revenue28,125 33,239 2.7%32,357
Total operating revenue733,666 867,060 4.9%826,403
Cost of goods sold(587,874)(694,760)(2.6%)(677,185)
Gross margin145,793 172,300 15.5%149,218
Distribution expenses (3,976)(4,699)(29.5%)(3,629)
Marketing expenses(39,524)(46,710)(4.9%)(44,542)
General and administration expenses(33,309)(39,365)(9.9%)(35,818)
Other items(4,616)(5,455)39.4%(8,997)
Operating profit (EBIT)64,370 76,072 35.3%56,232
Financing expenses(21,464)(25,367)(273.2%)
(6,797)
Net profit before taxation42,906 48,343 (2.2%)49,435
Taxation expense (12,815)(15,145)(10.6%)(13,694)
Net profit after taxation (NPAT)30,091 35,562 (0.5%)35,741
Concept EBITDA before G&A
KFC66,065 78,076 10.9%70,384
Pizza Hut885 1,046 (48.1%)2,017
Starbucks Coffee- - n/a3,110
Carl's Jr.1,302 1,538 66.6%923
Taco Bell(345)(408)n/a-
Total New Zealand67,907 80,253 5.0%76,434
KFC 25,902 30,611 5.3%29,064
Taco Bell(700)(827)n/a-
Total Australia25,202 29,784 2.5%29,064
Taco Bell20,546 24,282 15.8%20,968
Pizza Hut2,319 2,740 (1.5%)2,781
Total Hawaii22,865 27,023 13.8%23,749
Total concept EBITDA before G&A115,974 137,060 6.0%129,247
The annualised December 2019 figures are an arithmetic calculation grossing up the 44 week audited results to reflect
the equivalent 52 week period. This has been done for illustrative purposes only.

---

Restaurant Brands New Zealand Limited
Results for announcement to the market

Reporting Period 44 week period ended 31 December 2019
Previous Reporting Period 52 week period ended 25 February 2019

Amount (000s) Percentage change
Revenue from ordinary
activities
NZ$733,666 -11.2%
Profit after taxation
attributable to shareholders
NZ$30,091 -15.8%
Total comprehensive
income for the period
attributable to shareholders
NZ$30,542 -22.2%

Interim/Final Dividend Amount per share Imputed amount per share
Final NA NA

Record Date NA
Dividend Payment Date NA

Comments: Please note that the reporting period is for 44 weeks
compared to 52 weeks for the previous reporting period
– for more details regarding the results refer to attached
report


This report is based on accounts which have been audited. The report is provided
with the accounts which accompany this announcement.

---

Russel Creedy - Group CEO
Grant Ellis – Group CFO
28 February 2020
Restaurant Brands NZ Limited
10 Months Results to 31 December 2019
(FY 19D)

•Key Points
•Results Overview
•New Zealand Operations
•Australia Operations
•Hawaii Operations
•US Acquisition
•Outlook
•Questions
Presentation Outline
2

Key Points
Note:
•FY 19 = 12 months to 25 February 2019
•FY 19D = 10 months to 31 December 2019
•FY 19D (R) = Restated FY 19D (pro rata) for equivalent 12 month period
Commentary (FY 19D (R) vs. FY 19)FY 18FY 19FY 19DFY 19D (R)
• Group Sales +5.0%$740.8m$794.0m$705.5m$833.8m
• Reported NPAT -0.5%$35.5m$35.7m$30.1m$35.6m
• Brand EBITDA + 6.0%$122.6m$129.2m$116.0m$137.1m
• Launch of Taco Bell in Australia & NZ
• Agreement to acquire 70 stores in California
3

Results Overview
4

Impact of change of balance date, adoption of NZ IFRS 16 and classification of other items masks a
sound trading result
$m (after tax)FY 19FY 19DChange $Change %
Reported NPAT35.7 30.1 (5.6) (15.8%)
NZ IFRS 16- 4.5 4.5 -
Other Income and Expenses6.5 4.0 (2.5) (38.5%)
Change of Balance Date- 7.1 *7.1 -
Comparable Trading NPAT42.2 45.7 3.5 8.3%
* Pro rata gross up 44 to 52 weeks
5

As previously foreshadowed, NZ IFRS 16 had a significant impact on income statement and balance sheet
$mFY 19D
NPAT pre NZ IFRS 1634.8
Lease costs32.7
ROU depreciation(22.4)
Lease interest(16.4)
Taxation 1.4
NPAT impact from NZ IFRS 16(4.7)
NPAT post NZ IFRS 1630.1
$mFY 19FY 19D
Right of use assets *- 376
Other assets460 504
Total assets460 880
Lease liabilities- 430
Other liabilities236 242
Total liabilities236
672
* Incl deferred tax
Income Statement
Balance Sheet
6

EBITDA
$NZm
Sales
$NZm
* Grossed up 44 to 52 weeks
All divisions saw increased sales and profit (on a prior year equivalent basis)
421.4
419.8
367.5
434.3
151.8
191.5
169.1
199.9
167.5
182.7
168.9
199.6
740.8
794.0
705.5
833.8
FY 18FY 19FY 19 DFY 19D (R)*
N ew Z e ala nd
AustraliaHawaii
FY 18 FY 19 FY 19D FY 19D (R)*
76.5
76.4
67.9
80.3
22.0
29.1
25.2
29.8
24.1
23.7
22.9
27.0
122.6
129.2
116.0
137.1
FY 18FY 19FY 19 DFY 19D (R)*
New ZealandAustraliaHawaii
FY 18 FY 19 FY 19D FY 19D (R)*
7

G&A
$NZm
* Grossed up 44 to 52 weeks
% of Revenue
4.2%
4.3%
4.5%
15.9
16.3
15.2
18.0
4.9
6.4
7.0
8.3
7.5
8.5
8.1
9.6
3.7
4.6
3.0
3.5
FY 18FY 19FY 19DFY 19D (R) *
New ZealandAustr aliaHa waiiCorporate
35.8
39.4
31.9
33.3
FY 18 FY 19 FY 19D FY 19D (R)*
G&A costs at 4.5% of revenues with variable remuneration and initial Taco Bell staffing
4.5%
8

Other Income and Expenses (“non-trading items”) down on prior year without Carl’s Jr. impairment and
leave remediation costs
$NZm (pre tax)
FY 19FY 19D
Impairment of assets & goodwill3.5 (0.7)
Lease surrender gain-
(0.3)
Lease termination-(0.3)
Gain on sale Pizza Hut stores(1.8)(0.1)
Gain on sale of Starbucks Coffee(1.2)-
Hawaii workers compensation1.6 -
Leave remediation3.5 0.4
Acquisition costs0.4 0.6
Franchise rights amortisation2.0 1.8
Relocation & refurbishment1.0 3.2
9.0 4.6
9

*Adjusted for $147.5m acquisition of PIR and additional Australian stores
**Adjusted for payments of lease principal of $16.0m classified as financing activities under NZ IFRS 16
Operating cash flow up in line with prior year despite 44 vs 52 week difference
Investing cash flow increased substantially on accelerated capex programme and no disposal proceeds
$NZmFY 18
FY 19FY 19D
Operating Cash Flow (adjusted)
67.8 71.3 71.6 **
Investing Cash Flow (adjusted)(25.8)*
(26.7)(59.7)
Free Cash Flow42.0 44.6
11.9
10

Net borrowings reduce with strong operating cash flow and no dividend, partly offset by
higher capex
156.7
130.9
119.4
FY 18 FY 19 FY 19D
Ratios
Net Debt: EBITDA*1.6:11.3:11.2:1
Gearing (ND:ND+E)44%37%36%
Net Debt $NZm
*FY 19D EBITDA grossed up 44 to 52 weeks, including lease costs
11

New banking facilities in place reflecting RBD’s more global outlook and will be used to repay existing
debt and to fund US acquisition
• Banks:Westpac, Rabobank, JP Morgan,Bank of China
• Tenor:3 – 4 years
• Security:Negative Pledge Structure
• Type:BilateralFacilities under a Common Terms Deed
• Currencies:NZD, AUD,USD
• Facilities:Te r mand Revolving
60 60
117
117
76
193
ExistingNew
New ZealandAustraliaUSA
370
253
$NZm
12

New Zealand Operations
13

NZ total sales up on prior year with solid KFC increase
* Grossed up 44 to 52 weeks
319.6
336.5
308.4
364.4
41.1
35.4
28.5
33.7
34.9
31.9
29.9
35.4
25.8
16.0
FY 18FY 19FY 19DFY 19D (R)*
Sales
$NZm
KFCPizza HutCarl's Jr.Taco BellStarbucks
421.4
419.8
434.3
367.5
0.9
0.7
14

NZ EBITDA continues to climb with consistently strong performance by KFC
66.5
70.4
66.1
78.1
3.2
2.0
0.9
1.0
2.0
0.9
1.3
1.5
4.8
3.1
FY 18FY 19FY 19DFY 19D (R)*
EBITDA
$NZm
KFCPizza HutCarl's Jr.Taco BellStarbucks
76.5
-0.4
-0.3
76.4
80.3
67.9
* Grossed up 44 to 52 weeks
15

* Grossed up 44 to 52 weeks
319.6
336.5
308.4
364.4
6.2%
4.3%
5.2%
5.2%
FY 18FY 19FY 19DFY 19D (R)*
KFC Sales
Total Sales $mSame Store Sales %
41.1
35.4
28.5
33.7
8.1%
-6.1%
-4.1%
-4.1%
FY 18
FY 19
FY 19D
FY 19D (R)*
RBD Pizza Hut Sales
Total Sales $mSame Store Sales %
34.9
31.9
29.9
35.4
-2.6%
-3.3%
11.3%
11.3%
FY 18FY 19FY 19DFY 19D (R)*
Carl's Jr. Sales
Total Sales $mSame Store Sales %
KFC NZ maintains strong sales growth with improved performance from Carl’s Jr. on delivery
channel
16

* Grossed up 44 to 52 weeks
66.5
70.4
66.1
78.1
20.8%
20.9%
21.4%
21.4%
FY 18FY 19FY 19 DFY 19D (R)*
KFC EBITDA
EBITDA $m
EBITDA % of Sales
3.2
2.0
0.9
1.0
7.8%
5.7%
3.1%
3.1%
FY 18FY 19FY 19DFY 19D (R)*
RBD Pizza Hut EBITDA
EBITDA $mEBITDA % of Sales
2.0
0.9
1.3
1.5
5.6%
2.9%
4.4%
4.4%
FY 18FY 19FY 19DFY 19D (R)*
Carl's Jr. EBITDA
EBITDA $mEBITDA % of Sales
NZ earnings dominated by KFC with continuing strong margins (despite labour cost pressures)
17

Sales of Pizza Hut stores to independent franchisees continues together with increase in
new store builds
36
30
29
61
68
73
FY 18FY 19FY 19D
RBDIndependents
98
97
102
No. of Stores
18

New store build is gaining momentum with 6 new KFC stores this year
KFC Tauranga Crossing
KFC Bombay
19

First Taco Bell store opened in Lynn Mall, Auckland to strong sales, although set up costs impact
FY19D and FY20
On target to deliver up to 6 store openings for FY20
20

Australia Operations
21

* Grossed up 44 to 52 weeks
Australia KFC business performed strongly, assisted by roll-out of delivery from 32 stores
139.5
178.3
159.6
188.6
4.9%
4.7%
5.1%
5.1%
FY 18FY 19FY 19DFY 19D (R)*
KFC Australia Sales
Total Sales $AmSame Store Sales %
20.2
27.0
24.5
29.0
14.5%
15.2%
15.4%
15.4%
FY 18FY 19FY 19DFY 19D (R)*
KFC Australia EBITDA
EBITDA $AmEBITDA % of Sales
22

First two Taco Bell stores opened in NSW (Jesmond and Blacktown) to strong sales
23

Hawaii Operations
24

Store refurbishment programme and successful promotions for Taco Bell drove very strong sales
growth, whilst Pizza Hut stabilised
68.3
72.3
66.5
78.6
51.5
52.4
44.1
52.1
119.8
124.7
110.6
130.7
FY 18FY 19FY 19DFY 19D (R)*
Sales
$USm
Taco BellPizza Hut
13.9
14.3
13.5
15.9
3.3
1.9
1.6
1.8
17.2
16.2
15.0
17.8
FY 1 8FY 1 9FY 1 9DFY 19D (R)*
Brand EBITDA
$USm
Taco BellPizza Hut
* Grossed up 44 to 52 weeks
25

Taco Bell Moanalua
Taco Bell Nanakuli
Taco Bell Pearl City
(before and after)
26

68.3
72.3
66.5
78.6
5.1%
13.7%
13.7%
FY 18FY 19FY 19DFY 19D (R)*
Taco Bell Sales
Total Sales $USmSame Store Sales %
13.9
14.3
13.5
15.9
20.3%
19.8%
20.2%
20.2%
FY 18FY 19FY 19DFY 19D (R)*
Taco Bell EBITDA
EBITDA $USmEBITDA % of Sales
51.5
52.4
44.1
52.1
-2.1%
3.0%
3.0%
FY 18FY 19FY 19DFY 19D (R)*
Pizza Hut Sales
Total Sales $USmSame Store Sales %
3.3
1.9
1.6
1.8
6.5%
3.6%
3.4%
3.4%
FY 18FY 19FY 19DFY 19D (R)*
Pizza Hut EBITDA
EBITDA $USmEBITDA % of Sales
Taco Bell goes from strength to strength whilst Pizza Hut stabilised with six older format stores closed
in November/December
* Grossed up 44 to 52 weeks
27

US Acquisition
28

On 23 December, RBD entered into an agreement to acquire 70 stores in Southern California
•Purchase price:$US73 million
•Annual sales:$US95 million
•Store EBITDA:$US12 million
•11 KT and 59 KFC stores
•Staff:1,500
•Conditional on:• Yumapproval
• Lease assignments
29

Outlook
With stable and growing operations in all three markets the Company is poised for further
expansion through acquisition, store refurbishments and new store roll outs.
New KFC store builds will drive sales and profit enhancement in New Zealand and Australia. The
Taco Bell scrape and rebuilds in Hawaii will further assist that result.
The introduction of the Taco Bell brand to New Zealand and Australia will have an immaterial
adverse effect on the FY20 result (largely establishment costs) as we build brand presence in both
markets.
Completion of the USA 70 store acquisition (expected March-April) will lift sales and earnings in
FY20.
An update will be provided at the annual meeting.
30

Questions
DISCLAIMER
The information in this presentation:
•Is provided by Restaurant Brands New Zealand Limited (“RBD”) for general information purposes and does not constitute investment advice or an offer of or invitation to purchase RBD securities.
•Includes forward-looking statements. These statements are not guarantees or predictions of future performance. They involve known and unknown risks, uncertainties and other factors, many of which
are beyond RBD’s control, and which may cause actual results to differ materially from those contained in this presentation.
•Includes statements relating to past performance which should not be regarded as reliable indicators of future performance.
•Is current at the date of this presentation, unless otherwise stated. Except as required by law or the NZX Main Board and ASXlisting rules, RBD is not under any obligation to update this presentation,
whether as a result of new information, future events or otherwise.
•Should be read in conjunction with RBD’s audited consolidated financial statements for the 44 week period ending 31 December 2019 and NZX and ASX market releases.
•
Includes non-GAAP financial measures including "EBITDA”. These measures do not have a standardised meaning prescribed by GAAP and therefore may not be comparable to similar financial
information presented by other entities. However, they should not be used in substitution for, or isolation of, RBD’s auditedco nsolidated financial statements. We monitor EBITDA as a key performance
indicator and we believe it assists investors in assessing the performance of the core operations of our business.
•Has been prepared with due care and attention. However, RBD and its directors and employees accept no liability for any errors or omissions.
•Contains information from third parties RBD believes reliable. However, no representations or warranties are made as to the accuracy or completeness of such information.
31