Restaurant Brands Half Year Financial Results 2020

Directors’ Report to Shareholders
For the six months ended 30 June 2020
(1H Dec 2020)


Key Points

1H Dec 2020* 1H Dec 2019* Change ($) Change (%)
Total Group sales ($NZm) 383.4 442.6 -59.2 -13.4
Group NPAT (reported) ($NZm) 11.4 20.0 -8.6 -42.9

* 6 months ended 30 June (26 weeks) vs 28 weeks ended 9 September 2019

 Total Group sales for the 1H December 2020 year were $383.4 million, down $59.2 million on
the previous half year. This is the result of the impact of COVID-19 as well as the current
reporting period being two weeks less than last year’s reported 28 week result.

 Net Profit after Tax for the six months (26 weeks) ended 30 June 2020 was $11.4 million
(9.2 cents per share), down $8.6 million on the 1H Dec 2019 (28 weeks ended 9 September
2019). Net profit after Tax was adversely effected by COVID-19 as reflected in the Group
sales.

 Combined brand EBITDA before G&A was down $10.6 million to $62.1 million, primarily due
to the effect of the COVID-19 store closures in New Zealand. The USA business however
delivered an earnings increase of $2.2 million, with a strong Pizza Hut performance despite
the challenges of COVID-19.

Overview

During the year ended 31 December 2019 Restaurant Brands NZ Limited (“RBD”) changed its
balance date from February to December. This half year report therefore is for a six month (26 week)
period compared to 28 weeks as a comparison for the previous half financial year. This, together with
the adverse effect of COVID-19 on the financial results makes direct comparisons between the
reported results difficult.

Scaling back the previous year’s results to enable a 26 week comparison produces a comparative
sales number of approximately $411.0 million, which is $27.6 million higher than the current year.
Similarly proportionately adjusting 1H Dec 2019 NPAT to approximately $18.6 million, results in the
1H Dec 2020 result being $7.2 million lower.

COVID-19 has had a significant impact on the company’s results. Whilst difficult to quantify exactly,
the New Zealand business five week full store closure saw lost sales in excess of $40 million. In
addition there was a period of time where stores were only able to partially open with drive-through
and delivery, further adversely impacting sales. All New Zealand stores are now fully operational.
Most stores in Australia and the USA remained open although they have been operating, and in most
cases continue to operate, without dine in facilities being available. This creates further difficulties in
quantifying the underlying effect of COVID-19.

Group Operating Results

Despite the challenges faced by Restaurant Brands during the period, Directors are pleased to report
that for the six months ended 30 June 2020, the company produced a Net Profit after Tax (NPAT) of
$11.4 million. Although down $8.6 million on last year’s reported profit the results have recovered
strongly towards the end of the second quarter as the NZ market in particular has largely returned to
pre-COVID sales levels.
RESTAURANT BRANDS NEW ZEALAND LIMITED

The underlying NPAT (excluding other items and the effect of NZ IFRS 16) is $16.1 million, a
decrease of $8.9 million on the 1H Dec 2019 result ($7.1 million on a like-for-like 26 week period).
The profit reduction is a direct result of the impact of COVID-19.

Total store sales were $383.4 million, down $59.2 million or -13.4% on 1H Dec 2019. After adjusting
for the 26/28 week comparison, store sales are down approximately $27.5 million (-6.7%). This is
purely attributable to COVID-19. Sales have however recovered towards the end of the half.

Combined brand EBITDA at $62.1 million was $10.6 million down (-14.5%) on 1H Dec 2019, partially
due to the reduction to 26 weeks in the current reporting period but primarily because of the effect of
COVID-19. The effect of COVID-19 in New Zealand and Australia was partly off-set by an increased
performance in the USA (Hawaii) business which delivered an additional $2.2 million in EBITDA.

Restaurant Brands’ store numbers now total 290, up three on 1H Dec 2019 primarily because of the
opening of the new Taco Bell stores in Australia and New Zealand. Store numbers comprise 150 in
New Zealand, 75 in Hawaii and 65 stores in Australia.

New Zealand Operations

New Zealand store sales were $174.6 million, down $56.2 million or -24.3% on 1H Dec 2019. This is
a direct reflection of five weeks full store lockdown due to COVID-19 with the balance a result of the
additional two weeks trading in 1H Dec 2019. The five week lockdown alone is estimated to have cost
over $40 million in lost sales.

Store EBITDA was $34.0 million, a $9.1 million or -21.0% drop on 1H Dec 2019. This again reflects
the shorter reporting period and the five week store closure.

New Zealand operations produced an EBIT (before other items and lease adjustments) of $17.7
million, down 31.9% on the prior year.

New Zealand
Actual
26 weeks
30 June
2020
Actual
28 weeks
9 September
2019
Proportioned
26 weeks
9 September
2019
Change ($) Change (%)
Store sales ($m) 174.6 230.8 214.3 -56.2 -24.3
EBITDA ($m) 34.0 43.0 40.0 -9.1 -21.0
EBITDA as a % of Sales 19.5 18.6 18.6

Store Numbers 150 145

The proportioned 26 weeks in the table above is an arithmetical calculation factoring down the 28
weeks 1H Dec 2019 (26 February 2019 to 9 September 2019) to a 26 week equivalent. This is for
illustrative purposes only.

The New Zealand business continues to trade on expectation, having bounced back post the COVID-
19 lockdown, with same store sales for the half of +2.7%. This has been led by another good
performance by KFC combined with Carl’s Jr. whose sales continue to grow through both delivery and
store channels. Product offerings such as the Double Down promotion have also helped to drive this
result, with a continued strong new product development pipeline expected to maintain positive same
stores sales in H2. Taco Bell remains only a small portion of the New Zealand business sales with the
two stores opened to date but both continue to track above expectations.

EBITDA was down $9.1 million reflecting the lower sales; however the underlying EBITDA as a
percentage of sales has increased to 19.5% up from 18.6% in the 1H Dec 2019.

The New Zealand business received a Government wage subsidy of $22.1 million which was
recognised as an off-set to labour cost over the closedown period. Restaurant Brands is proud to
have made the decision to retain all staff at 100% of their wages and salaries throughout the

lockdown period. Although the wage subsidy help off-set the cost to the business of doing so, there
was a shortfall of approximately $0.5 million per week.

The Pizza Hut sub-franchising process continues. Although no existing stores were sold to
franchisees during the period, five stores have been sold to franchisees since 30 June 2020. One
turnkey store was developed and sold to a franchisee during 1H Dec 2020.

Overall store numbers increased by two during the period with one new KFC store being opened in
the Christchurch CBD and a second Taco Bell store in Shortland Street, Auckland. Both are trading
well. An additional two Taco Bell stores and two further KFC stores are expected to open before the
end of the year.


Australia Operations

In $NZ terms the Australian business contributed total sales of $NZ99.1 million (-5.4%), a store
EBITDA of $NZ11.8 million (-23.9%) and EBIT (excluding the effect of other items and NZ IFRS 16) of
$NZ3.2 million (-52.6%).

In $A terms total sales in Australia were $A94.4million, down $A5.1 million (or -5.1%) on last year,
although on a proportional 26 week basis sales are up $A2.0m, primarily due to the effect of
additional store openings with same store sales up +0.3% for the half.

Australia
Actual
26 weeks
30 June
2020
Actual
28 weeks
9 September
2019
Proportioned
26 weeks
9 September
2019
Change ($) Change (%)
Sales ($Am) 94.4 99.5 92.4 -5.1 -5.1
Store EBITDA ($Am) 11.3 14.8 13.7 -3.5 -23.6
EBITDA as a % of Sales 11.9 14.9 14.9

Store Numbers 65 61

The proportioned 26 weeks in the table above is an arithmetical calculation factoring down the 28
weeks 1H Dec 2019 (26 February 2019 to 9 September 2019) to a 26 week equivalent. This is for
illustrative purposes only.

There was significant disruption to stores due to COVID-19 with the temporary closure of all mall
stores and the closure of all dine-in channels. The business has focused on continuing to provide a
safe work environment for all members of staff and quality of hygiene standards for customers. We
continued to invest in a number of KFC upgrades in addition to growing the portfolio with work
commencing on two new drive-through Taco Bell sites and three additional KFC stores, all of which
are expected to open before the end of the year.

During the COVID-19 crisis the Australian business successfully expanded the home delivery
services into regional markets and generated further growth in KFC mobile ordering.

Store EBITDA margins of $A11.3 million (11.9% of sales) were down $A3.5 million or -23.6% on last
year. This reflects the on-going challenges from dine-in restaurants not opening, as well as initial set
up costs of operating Taco Bell as we look to scale the business.

USA Operations

Total sales in Hawaii for the period were $US68.7 million with store level EBITDA of $US10.2 million
(14.8% as a percentage of sales).

In $NZ terms the Hawaiian operations contributed $NZ109.8 million in revenues, $NZ16.3 million in
store EBITDA and an EBIT (adjusted for NZ IFRS-16 and other costs) of $NZ8.4 million for the period.
These results (particularly Pizza Hut) were all positive to 1H Dec 2019, despite the operational
challenges provided by COVID-19.

Hawaii
Actual
26 weeks
30 June
2020
Actual
28 weeks
9 September
2019
Proportioned
26 weeks
9 September
2019
Change ($) Change (%)
Sales ($USm) 68.7 70.9 65.8 -2.2 -3.1
Store EBITDA ($USm) 10.2 9.4 8.7 +0.8 +8.5
EBITDA as a % of Sales 14.8 13.2 13.2

Store Numbers 75 79

The proportioned 26 weeks in the table above is an arithmetical calculation factoring down the 28
weeks 1H Dec 2019 (26 February 2019 to 9 September 2019) to a 26 week equivalent. This is for
illustrative purposes only.

Although reported sales are down $US2.2 million this is predominately due to this year’s 26 week vs
last year’s reporting period of 28 weeks. On a proportioned comparison sales are up $US2.9 million
for the period which is also reflected in same store sales which are up +8.0% for the year to date.

Pizza Hut in Hawaii has seen a significant increase in both sales and profitability. This has been the
result of both the benefits of a strategic review which saw the closure of seven stores at the end of
last year with a move towards smaller and more efficient delivery and carry-out delcos and the
excellent response by the Pizza Hut brand to the challenges created by COVID-19. Pizza Hut USA
were very responsive with their COVID-19 response, emphasizing food safety, no touch contactless
delivery as well as the roll out of curb side pick-up. They also had a strong value multi pizza offering
that resonated well in the Hawaii community. Online ordering grew significantly and now accounts for
60% of sales.

Although Taco Bell was harder hit by the closure of dine in options, promotions of family size meals
and affordable pricing were successful, with drive through average ticket increasing significantly. Uber
Eats and Postmates came on board as food aggregators (in addition to GrubHub) which has also
helped to drive sales.

Store numbers are down by six from 1H Dec 2019 following the closure of several Pizza Hut stores
late last year as part of our strategy to close some very old dine-in restaurants. During this period one
new Taco Bell store has opened in Kahili.

Corporate & Other

General and administration (G&A) costs were $22.7 million, an increase of $1.8 million on 1H Dec
2019, largely as a result of long term incentive remuneration payments and additional costs
associated with the launch of Taco Bell in New Zealand and Australia. G&A as a % of total revenue
was 5.7%, up from 4.6% in the prior year due to the drop in revenue as a result of store closures for
COVID-19.

Depreciation charges of $15.4 million for the half year were $0.2 million lower than the prior year.
Although when adjusted to reflect the reduced weeks depreciation is up by $1.8 million, reflecting the
continued high level of new store builds and store refurbishments as well as new leases increasing
the right of use asset depreciation.

Financing costs of $14.1 million were up $0.8 million on prior year primarily due to an increase in
lease interest of $0.8 million resulting from new leases and some existing leases being extended.
Bank interest costs were $3.3 million, consistent with the prior year with increased debt levels off-set
by lower interest rates.

Tax expense was $4.1 million is down $3.6 million due to the lower earnings. The effective tax rate is
26.3% down from 27.7% last year due to the strong performance of the Hawaii division which has a
corporate tax rate of 21%.

Other items

Other items for the half year were $2.6 million, an increase of $0.2 million on prior year. This year’s
costs included continued amortisation of franchise rights acquired on acquisition of QSR Pty Limited
and Pacific Island Restaurants Inc. ($0.7 million), impairment of assets ($0.6 million), acquisition costs
($0.8 million) and relocation and major refurbishment costs ($0.5 million) off-set by the utilisation of
depreciation provisions of $0.4 million created in prior years.

Government Grants

The company received $22.1 million as a wage subsidy for its New Zealand division over the COVID-
19 crisis. This money was received in April 2020 and was applied against wages and salaries in the
half year. Because of its material nature the amount is disclosed as a separate line item in the
consolidated statement of comprehensive income and is also included in the consolidated statement
of cash flows as part of the receipts from Government grants.

During the COVID-19 crisis the company also received a $US8.1 million as a Government loan in the
USA. This support is part of the Paycheck Protection Program (PPP) offered to businesses affected
by the crisis. The receipt has been classified as deferred income at reporting date, pending an
application for this PPP loan to be forgiven. The amount is also included in the receipts from
Government grants in the statement of consolidated cash flows.

NZ IFRS 16

The impact of NZ IFRS 16 on the Group accounts is a reduction of $2.8 million on after tax operating
earnings (2019: $2.9 million).

The consolidated statement of financial position has right of use assets of $360.5 million up $5.4 million due
to increased store numbers and lease renewals. Lease liabilities of $438.6 million are also up $11.3 million
reflecting the increase in future lease commitments.

Cash Flow & Balance Sheet

In February the Group announced the negotiation of new bank facilities of $370 million which were
activated on 1 May 2020. The new facilities were both part of the rationalisation of the Group’s lending
arrangements as it became more geographically diversified and also to fund the US acquisition. The
new arrangements have meant some reduction in interest costs.

Bank debt at the end of the half year was up to $165.9 million compared to $154.3 million at the
previous year end. Cash and cash equivalents increased to $58.2 million during the period resulting in
net debt reducing by $11.7 million to $107.7 million over the half year.

Operating cash flows were $51.6 million, down $12.1 million being a direct reflection of the effect of
COVID-19. Operating cash flows, however include $35.4 million of Government grants, $22.1 million
from the New Zealand wage subsidy with the remainder in relation to the PPP loan in Hawaii.

Net investing cash outflows at $24.3 million versus $27.7 million in 1H Dec 2019 reflect the continued
high level of spend as the Group continues to build new stores as well as focus on refurbishing stores
throughout the network. The decline of $3.4 million on last year relates to having minimal spend in
April due to the New Zealand lock down, together with the shorter reporting period.

Dividend

Restaurant Brands continues to ramp up its capital expenditure programme. Despite the interruption
of the COVID-19 crisis, the company is targeting more than 60 Taco Bell stores in New Zealand and
Australia over the next five years, with the first four stores already open and successfully operating.
This, combined with potential further acquisitions and refurbishment programmes, is increasing
demands on capital. Directors have therefore resolved there will be no interim dividend for the 31
December 2020 financial year.

Directors have also considered the future of the existing Dividend Reinvestment Plan and, given the
constraints upon the majority shareholder in participation and the limited likelihood of dividends in the
immediate future, they have elected to terminate the Dividend Reinvestment Plan with immediate
effect.

Acquisitions

In December 2019 the Group entered into a conditional agreement to acquire 70 stores in Southern
California, USA for $US73 million (plus some capital expenditure reimbursements). The purchase
comprised 59 KFC stores and 11 combined KFC Taco Bell stores, together with a head office facility.
The purchase was conditional on Yum! approval and the assignment of property leases.

After satisfying a number of conditions, including the approval from the franchisor, Yum! Restaurants
International, the transaction for 69 stores was settled on 2 September 2020 in New Zealand
(1 September in the USA). The $US80.7 million purchase price was fully funded through debt
drawdown on existing facilities. Total net debt is approximately $NZ240 million following the
transaction.

The business is expected to generate $US95 million in sales every year with a store EBITDA of
$US12 million. It has 1,500 employees and is centred around the greater Los Angeles area.

Directors are very pleased with the acquisition and expect that it will serve as a base for considerable
future expansion in the US market.

COVID-19 response

Directors would like to acknowledge all staff for their efforts in overcoming the many and varied
challenges faced over the period of the COVID-19 crisis. Each division has had to deal with different
issues including a full shut down and restart in New Zealand and extended periods of reduced trading
in Australia and Hawaii. During these trying and stressful times the teams in our stores managed to
successfully keep the business running.

Outlook

Although the Group was adversely affected by COVID-19, particularly with the full close down in New
Zealand, trading has recovered well and is now producing results on or above prior years.

New store roll outs for the KFC brand will continue in Australia with three stores opening before the
end of the year. The Taco Bell brand will also see two stores opening in New Zealand and four stores
scheduled to open in Australia by early 2021. The Hawaiian market will see at least one further Taco
Bell transformation completed by the end of the calendar year.

The company continues to evaluate further acquisition opportunities in all three existing markets,
together with the US mainland.

Despite a solid recovery in sales and margin in the beginning of 2H, continuing COVID-19 trading
restrictions and with the possibility of further outbreaks, RBD is not providing firm guidance for the
balance of this financial year.


Authorised by:

Russel Creedy Grant Ellis
CEO CFO
Phone: 525 8710 Phone: 525 8710

ENDS

Consolidated Income Statement
For the six months ended 30 June 2020
30 June 2020vs Prior9 September 2019
$NZ000's26 weeks%28 weeks
unaudite dunaudite d
Sales
Total New Zealand sales
174,603 (24.3)230,797
Total Australia sales
99,137 (5.4)104,846
Total USA s ale s
109,697 2.6106,919
Total sales383,437
(13.4)
442,563
Other revenue12,054 (25.6)16,196
Total operating revenue395,491
(13.8)
458,759
Cost of goods sold(338,839)7.7(367,136)
Gross margin56,652
(38.2)
91,623
Distribution expenses (2,887)(24.5)(2,319)
Marketing expenses(20,969)16.2(25,010)
General and administration expenses(22,689)(8.4)(20,933)
Government grants22,071 n/a-
Other items(2,552)(10.3)(2,312)
Operating profit (EBIT)29,626
(27.8)
41,049
Financing expenses(14,127)(5.7)(13,365)
Net profit before taxation15,499
(44.0)
27,684
Taxation expense (4,081)46.9(7,679)
Total profit after taxation (NPAT)11,418
(42.9)
20,005
% sales% sales
Conce pt EB ITD A be fore G&A including Gove rnme nt grants
Total New Zealand
33,970 19.5(21.0)43,026 18.6
Total Aus tralia
11,832 11.9(23.9)15,539 14.9
Total USA
16,272 14.815.614,071 13.2
Total concept EBITDA before G&A62,074
16.2(14.5)
72,636
16.4
Ratios
N e t tangible as s e ts pe r s e curity (ne t tangible as s e ts divide d by
numbe r of s hare s ) in ce nts
19.5 (1.5)
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.
Sales and concept EBITDA for each of the concepts may not aggregate to the total due to rounding.

Consolidated Income Statement - Proportionally reduced for comparatives
For the six months ended 30 June 2020
Proportional reduction
1
30 June 2020vs Prior9 September 2019
$NZ000's26 weeks%26 weeks
unaudite dunaudite d
Sales
Total New Zealand sales
174,603 (18.5)214,312
Total Australia sale s
99,137 1.897,357
Total USA s ale s
109,697 10.599,282
Total sales383,437
(6.7)
410,951
Other revenue12,054 (19.8)15,039
Total operating revenue395,491
(7.2)
425,990
Cost of goods sold(338,839)0.6(340,912)
Gross margin56,652
(33.4)
85,078
Distribution expenses (2,887)(34.1)(2,153)
Marketing expenses(20,969)9.7(23,223)
General and administration expenses(22,689)(16.7)(19,438)
Government grants22,071 na-
Other items(2,552)(18.8)(2,147)
Operating profit (EBIT)29,626
(22.3)
38,117
Financing expenses(14,127)(13.8)(12,411)
Net profit before taxation15,499
(39.7)
25,706
Taxation expense (4,081)42.8(7,131)
Total profit after taxation (NPAT)11,418
(38.5)
18,575
% sales% sales
Conce pt EBITD A be fore G&A including Gove rnme nt grants
Total New Zealand
33,970 19.5(15.0)39,953 18.6
Total Australia
11,832 11.9(18.0)14,429 14.9
Total USA
16,272 14.824.513,066 13.2
Total concept EBITDA before G&A62,074
16.2(8.0)
67,448
16.4
1. Th e res u lts o f th e 28 week perio d en d ed 9 Sep temb er 2019 h av e been pro po rtio n ally red uced in an arith met ical calcu lation to a comparable 26 week period. This has been done for illustrative
purposes only.

N on-GAAP Financial M e as ure s
For the s ix months e nde d 30 June 2020
The Group results are prepared in accordance with New Zealand Generally Accepted Accounting Practice (“NZ GAAP”) and comply with
New Zealand International Financial Reporting Standards (“NZ IFRS”). These financial statements include non-NZ GAAP financial
measures that are not prepared in accordance with NZ IFRS. The non-NZ GAAP financial measures used in this presentation are as fo llo
w
1.
EBITDA including Government grants, G&A and other items
. The Group calculates Earnings Before Interest, Tax, Depreciatio
and Amortisation (“EBITDA”) before G&A (general and administration expenses) and other items by taking net profit before taxation
and adding back (or deducting) financing expenses, other items, depreciation, amortisation and G&A. The Group also refers to this
measure as
Conce pt EB ITD A be fore G&A and othe r ite ms
. 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
Conce pt
refers to the Group’s eight 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 USA divisions (Taco Bell and Pizza Hut).
The term
G&A
represents non-store related overheads.
2.
Total N PAT e xcluding the impact of N Z IFR S 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 whils t
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.
The Group believes that these non-NZ GAAP measures provide useful information to readers to assist in the understanding of the fina nc ia l
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-NZ GAAP measures as reported by the Group may not be comparable to similarly titled amounts reported
b
other companies.
The fo llo wing is a re c o nc ilia tio n b e twe e n the se no n- N Z GAAP me a s ure s a nd ne t p ro fit a fte r ta xa tio n:
$NZ000's
Note*
EB ITD A including Gove rnme nt grants , be fore G&A and othe r ite ms
1
62,074 72,636
Depreciation(15,361)(15,149)
Net loss on sale of property, plant and equipment (included in depreciation)(74)(487)
Lease depreciation(13,832)(13,996)
Lease costs20,716 20,199
Amortisation (included in cost of sales)(1,328)(1,385)
General and administration costs - area managers, general managers and support centre(20,017)(18,457)
Other income- 603
O ther expenses(2,552)(2,915)
EBIT 29,626 41,049
Financing expenses(14,127)(13,365)
Net profit before taxation 15,499 27,684
Taxation expense (4,081)(7,679)
Net profit after taxation11,418 20,005
Add back NZ IFRS 16 impact3,952 3,871
income tax on NZ IFRS 16 impact(1,161)(956)
Total N PAT e xcluding the impact of N Z IFR S 16
2
14,209 22,920
* Refers to the list of non-NZ GAAP measures as listed above.
Six months e nde d
30 June 2020
unaudite d
28 we e ks e nde d
9 Se pte mbe r 2019
unaudite d

---

PricewaterhouseCoopers, 15 Customs Street West, Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz
Independent review report
To the shareholders of Restaurant Brands New Zealand Limited
Report on the interim financial statements
We have reviewed the accompanying interim financial statements of Restaurant Brands New Zealand
Limited (the Company) and its subsidiaries (the Group) on pages 1 to 13, which comprise the
consolidated statement of financial position as at 30 June 2020, and the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the period ended on that date, and selected explanatory notes.
responsibility for the interim financial statements
The Directors are responsible on behalf of the Company for the preparation and fair presentation of
these interim financial statements in accordance with International Accounting Standard 34 Interim
Financial Reporting (IAS 34) and New Zealand Equivalent to International Accounting Standard 34
Interim Financial Reporting (NZ IAS 34) and for such internal control as the Directors determine is
necessary to enable the preparation of interim financial statements that are free from material
misstatement, whether due to fraud or error.
Our responsibility
Our responsibility is to express a conclusion on the accompanying interim financial statements based
on our review. We conducted our review in accordance with the New Zealand Standard on Review
Engagements 2410 Review of Financial Statements Performed by the Independent Auditor of the
Entity (NZ SRE 2410). NZ SRE 2410 requires us to conclude whether anything has come to our
attention that causes us to believe that the interim financial statements, taken as a whole, are not
prepared in all material respects, in accordance with IAS 34 and NZ IAS 34. As the auditors of the
Company, NZ SRE 2410 requires that we comply with the ethical requirements relevant to the audit of
the annual financial statements.
A review of interim financial statements in accordance with NZ SRE 2410 is a limited assurance
engagement. The auditor performs procedures, primarily consisting of making enquiries, primarily of
persons responsible for financial and accounting matters, and applying analytical and other review
procedures.
The procedures performed in a review are substantially less than those performed in an audit
conducted in accordance with International Standards on Auditing (New Zealand) and International
Standards on Auditing. Accordingly, we do not express an audit opinion on these interim financial
statements.
We are independent of the Group. Other than in our capacity as auditors and providers of specified
procedures on landlord certificates and review of Yum! Advertising Co-operative report, we have no
relationships in, or interests in, the Group. The provision of these other services has not impaired our
independence.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that these interim
financial statements of the Group do not present fairly, in all material respects, the financial position
of the Group as at 30 June 2020, and its financial performance and cash flows for the period then
ended, in accordance with IAS 34 and NZ IAS 34.

PwC
Who we report to
This report is made solely to the Companyshareholders, as a body. Our review work has been
undertaken so that we might state to the Companyshareholders those matters which we are required
to state to them in our review report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the shareholders, as a body, for our
review procedures, for this report, or for the conclusion we have formed.
For and on behalf of:
Chartered Accountants Auckland
8 September 2020

---

Restaurant Brands New Zealand Limited
Results for announcement to the market

Reporting Period Six month period ended 30 June 2020
Previous Reporting Period 28 week period ended 9 September 2019

Amount (000s) Percentage change
Revenue from ordinary
activities
NZ$395,491 -13.8%
Profit from ordinary
activities after tax
attributable to security
holder.
NZ$11,418 -42.9%
Net profit attributable to
security holders.
NZ$11,418 -42.9%

Interim/Final Dividend Amount per share Imputed amount per share
Interim n/a n/a

Record Date n/a
Dividend Payment Date n/a

Comments: A brief Refer to attached report

This report is based on accounts which have not been audited. The report is provided
with the accounts which accompany this announcement.

---

Russel Creedy - Group CEOGrant Ellis - Group CFO8 September 2020
Restaurant Brands
New Zealand Limited
Results Presentation
6 Months to 30 June 2020 (1H 20)

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

Key Points
3
Note: •
1H 19 = 28 weeks to 9 September 2019
•
1H 19R = 28 weeks to 9 Septem
ber 2019 prorated down to 26 weeks
•
1H 20 = 26 weeks to 30 June 2020
Commentary
 
(1H
 
19R
 
vs.
 
1H
 
20)
1H
 
19
1H
 
19R
1H
 
20
•
   
Group
 
Sales
 ‐
6.7%
$442.6m
$411.0m
$383.4m
•
   
Reported
 
NPAT
 ‐
38.7%
$20.0m
$18.6m
$11.4m
•
   
Brand
 
EBITDA
 ‐
7.9%
$72.6m
$67.4m
$62.1m
•
   
COVID
‐
19
 
had
 
a
 
significant
 
adverse
 
impact
 
on
 
the
 
business
•
   
69
 
store
 
acquisition
 
in
 
California
 
settled
 
on
 
2
 
September
 
(after
 
balance
 
date)

4
Results Overview

5
NPAT reduced as a result of temporary store closures from COVID-19
$m
 
(after
 
tax)
1H
 
19
1H
 
20
Change
 
$
Reported
 
NPAT
20.0
 
11.4
 
(8.6)
NZ
 
IFRS
 
16
2.9
 
2.8
 
(0.1)
Other
 
Income
 
and
 
Expenses
2.7
 
1.9
 
(0.8)
Change
 
of
 
Balance
 
Date
(1.4)
*
‐
                 
1.4
 
Comparable
 
Trading
 
NPAT
24.2
 
16.1
 
(8.1)
*
 
Pro
 
rata
 
Reported
 
NPAT
 
28
 
weeks
 
to
 
26
 
weeks

6
COVID-19 – An unprecedented impact on the businessNEW ZEALAND•
All stores fully closed 26 March - 27 April (Level 4).
•
Lost sales in excess of $40m. All staff were paid full
wages over this time.
•
At Level 3 (28 April) stores were open for delivery
and drive through only (mall stores remained closed).
•
At Level 2 (13 May) all stores open, but in-store
dining remained closed.
•
At Level 1 (9 June) all stores able to fully trade.
•
Government grants of $22.1m for wages during the Level 4 “lockdown” significantly reduced financial impact of the closures.
•
All stores now fully open with trading back to normal.

7
COVID-19 – An unprecedented impact on the business
AUSTRALIA•
Temporary closure of 15 mall and inline stores.
•
Store dine in closed for all of the second quarter, and
still trading with dine in closed.
•
FSDT stores performed strongly.
•
Total lost sales estimated at in excess of $A5m.
•
No Government support.
USA•
Hawaii and Guam Taco Bell stores were impacted by
dine in restrictions and temporary mall store closures.
•
Pizza Hut business, with a strong delivery and online
offer, saw steady growth in sales and EBITDA.
•
Government PPP loan of $US8.1m received.
•
Stores still trading, but restrictions remain and
periodic closures due to staff infections.

8
Hawaii performed strongly with record earnings whilst New Zealand and Australia results were impacted by COVID-19 te
mporary store closures and restrictions
230.8
 
214.3
 
174.6
 
104.8
 
97.4
 
99.1
 
106.9
 
99.3
 
109.7
 
442.6
 
411.0
 
383.4
 
1H
 
19
 
(28w)
1H
 
19R
 
(26w)
1H
 
20
 
(26w)
Sales
$NZm
New
 
Zealand
Australia
Hawaii
43.0
 
40.0
 
34.0
 
15.5
 
14.4
 
11.8
 
14.1
 
13.1
 
16.3
 
72.6
 
67.4
 
62.1
 
1H
 
19
 
(28w)
1H
 
19R
 
(26w)
1H
 
20
 
(26w)
Brand
 
EBITDA
$NZm
New
 
Zealand
Australia
Hawaii

9
Other Income and Expenses (“non-trading items”) slightly up on prior year with California acquisition costs
$NZm
 
(Pre
 
tax)
1H
 
19
1H
 
20
Sundry
 
other
 
income
 
&
 
expenses
(0.3)
(0.3)
Store
 
closure
 
costs
0.3
 
0.2
 
Relocation
 
&
 
refurbishment
1.0
 
0.5
 
Impairment
 
of
 
assets
0.1
 
0.6
 
Franchise
 
rights
 
amortisation
1.1
 
0.7
 
Acquisition
 
costs
0.1
 
0.8
 
2.3
 
2.5
 

*Adjusted
 
for
 
payments
 
of
 
lease
 
interest
 
classified
 
as
 
operating
 
activities
 
under
 
NZ
 
IFRS
 
16
 
of
 
$10.1m
 
in
 
1H
 
19
 
and
 
$10.8m
 
in 1H 20,
 
and
 
payments
 
of
 
lease
 
costs
 
excluded
 
from
 
operating
 
activities
 
under
 
NZ
 
IFRS
 
16
 
of
 
$20.2m
 
in
 
1H
 
19
 
and
 
$20.7m
 
in
 
1H
 
20.
10
Operating and investing cash flow down on prior year primarily due to COVID-19 impact, despite Government subsidies
$NZm
1H
 
19
1H
 
20
Operating Cash Flow (adjusted) *
53.6
 
41.7
 
Investing Cash Flow
(27.7)
(24.3)
Free Cash Flow
25.9
 
17.4
 

11
Net borrowings and ratios stable despite reduced operating cash flows with lower capex
*
EBITDA for rolling 12 months, including lease costs
$NZm
1H
 
19
1H
 
20
Net Debt
109.8
 
107.7
 
Net Debt:EBITDA*
1.1:1
1.2:1
Gearing (ND:ND+E)
31%
32%

12
New Zealand Operations

13
NZ sales adversely impacted by COVID-19 closures and restrictions with EBITDA correspondingly reduced, despite Government grant
230.8
 
214.3
 
174.6
 
5.2%
5.2%
2.7%
1H
 
19
 
(28w)
1H
 
19R
 
(26w)
1H
 
20
 
(26w)
NZ
 
Sales
Total
 
Sales
 
$m
Same
 
Store
 
Sales
 
%
43.0
 
40.0
 
34.0
 
18.6%
18.6%
19.5%
1H
 
19
 
(28w)
1H
 
19R
 
(26w)
1H
 
20
 
(26w)
NZ
 
EBITDA
EBITDA
 
$m
EBITDA
 
%
 
of
 
Sales

14
Australia Operations

15
Australia business impacted by mall store closures and dine in restrictions, however larger FSDT stores performed strongly
99.5
 
92.4
 
94.4
 
5.9%
5.9%
0.3%
1H
 
19
 
(28w)
1H
 
19R
 
(26w)
1H
 
20
 
(26w)
Australia
 
Sales
Total
 
Sales
 
$Am
Same
 
Store
 
Sales
 
%
14.8
 
13.7
 
11.3
 
14.9%
14.9%
11.9%
1H
 
19
 
(28w)
1H
 
19R
 
(26w)
1H
 
20
 
(26w)
Australia
 
EBITDA
EBITDA
 
$Am
EBITDA
 
%
 
of
 
Sales

16
Hawaii Operations

17
Hawaii boosted by strong Pizza Hut performance during dine in restrictions, despite reduced sales and margins in Taco Bell
70.9
 
65.8
 
68.7
 
9.1%
9.1%
8.0%
1H
 
19
 
(28w)
1H
 
19R
 
(26w)
1H
 
20
 
(26w)
Hawaii
 
Sales
Total
 
Sales
 
$USm
Same
 
Store
 
Sales
 
%
9.4
 
8.7
 
10.2
 
13.2%
13.2%
14.8%
1H
 
19
 
(28w)
1H
 
19R
 
(26w)
1H
 
20
 
(26w)
Hawaii
 
EBITDA
EBITDA
 
$USm
EBITDA
 
%
 
of
 
Sales

18
US Acquisition

19
On 2 September RBD settled a 69 store
acquisition in Southern California
• Purchase price of $US73m and $US7.7m of store
remodel/refurbishment capex
spent over last 2 years,
coupled with customary working capital adjustments.
• Consists of 58 KFC and 11 combined KFC and Taco
Bell stores.
• Over 80% of remodel/refurbishment work completed
to new brand standards.
• Existing management and staff retained with a similar
structure to the successful Hawaii and Australia acquisitions.
• Sales of $US95m with brand EBITDA (before G&A) in
excess of $US12m, with strong growth expected over at least the next 6 months.
• Fully debt funded from new $370m bank facilities
activated 1 May 2020.

20
Completion of US acquisition places fi
nal piece on RBD beach head expansion
strategy
• Future expansion in US to come from store builds and
smaller franchise acquisition.
• Confirms wisdom of geographic and brand
diversification strategy.
• Offshore operations now comprise over 50% of RBD
sales and revenue.
• With current US business RBD expects to reach its
$1billion dollar revenue target next year.
47%
20%
19%
13%
%
 
of
 
Revenue*
NZ
Australia
Hawaii
California
44%
16%
24%
16%
%
 
of
 
Brand
 
EBITDA*
NZ
Australia
Hawaii
California
*FY19 existing businesses with current FY estimates on US acquisition.

Outlook
21
Despite the challenges of operating under COVID-19 restrictions RBD intends to take a “business as usual” approach and continue with further growth through acquisition, store refurbishments and new store roll outs.New KFC and Taco Bell store builds will continue
to drive sales and profit enhancement in New
Zealand and Australia. The Taco Bell scrape and r
ebuilds in Hawaii will further assist that
result.The addition of the California 69 store acquisition w
ill have little input on this year’s result with
acquisition costs, but will lift sales and earnings
in FY21 and provide a strong base for future
mainland US expansion.Despite a solid recovery in sales and margin
in the beginning of 2H, continuing COVID-19
trading restrictions and with the possibility of fu
rther outbreaks mean that
RBD is not providing
firm guidance for the balance of this financial year.

Questions
DISCLAIMERThe information in this presentation: 
Is provided by Restaurant Brands New Zealand Limited (“
RBD
”) for general information purposes and does not constitute investm
ent advice or an offer of or invitation to purchase RBD secu
rities.

Includes forward-looking statements. These
statements are not guarantees or
predictions of future performance. They involve kno
wn 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 st
ated. Except as required by law
or the NZX Main Board and ASX li
sting 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 unaudited consolidated
financial statements for the 26 week period ending 30 June 2020
and NZX and ASX market releases.

Includes non-GAAP financial measures including "EBITDA”. These measures do not have a standardised meaning prescribed by GAAP a
nd therefore may not be com
parable to similar financial
information presented by other entities. However, they should not
be used in substitution for, or isolation of, RBD’s audited co
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. Ho
wever, no representations or wa
rranties are made as to the acc
uracy or completeness of such information.
22