Restaurant Brands Full Year Results Annoucement

25 February 2021
NZX/ASX






RESTAURANT BRANDS ANNOUNCES ANNUAL PROFIT RESULT

$NZm
Dec 2020
(52 weeks)
Dec 2019
(44 weeks)
Change ($) Change (%)
Total Sales 892.4 705.5 +186.8 +26.5
Net Profit After Tax 30.9 30.1 +0.8 +2.8

Note: With the change in balance date last year, the comparative reported results are for the 44 weeks ended 31 December 2019 (Dec
2019) whereas the current year comparisons are for the 52 weeks ended 31 December 2020 (Dec 2020.) A comparable unaudited
“gross up” summary is annexed to this report.

Key Points

 These trading results for the December 2020 period are for 52 weeks (full year) vs 44 weeks
(10 months) for the December 2019 period previously reported.

 Total sales for the year were $892.4 million, up against the previous 44 week period, with full year
positive same store sales growth across all three operating divisions. On an equivalent 12 month
basis total sales were up by 7.0% or $58.6 million.

 Reported net profit after tax of $30.9 million for the year was up $0.8 million on the 44 week reporting
period last year, despite being adversely impacted by COVID-19.

 Combined store EBITDA
1
(pre NZ IFRS 16) for the period was $147.3 million, up 27.0% on the
previous 44 week period. On an equivalent 12 month basis, EBITDA was up over 7.5% or
$10.3 million.

 The company acquired 69 KFC and Taco Bell stores in California on 2 September 2020, generating
an additional $51.9 million in sales and $8.5 million in EBITDA in the last four months of the financial
year.

 The Taco Bell brand launched in New Zealand and Australia (New South Wales) in late 2019 and
has continued to grow with eight stores now successfully operating in New Zealand and Australia.


Overview

During the year ended 31 December 2019 Restaurant Brands changed its balance date from February to
December. Hence the comparative financial results for the reporting period to December 2019 (FY19) are for
44 weeks compared to 52 weeks for the current reporting period (FY20). Two other significant factors have
impacted the FY20 results compared with prior year: the adverse effect of COVID-19 and the positive impact
of the California acquisition.

COVID-19, whilst creating considerable disruption across all four operating divisions, was particularly testing
for the New Zealand operations with the entire business being closed for nearly five weeks in March-April
2020. The Australian, Hawaiian and Californian operations, whilst adversely affected, have generally
continued to trade through the crisis (with some limitations) and consequently have sustained much less of
an adverse profit impact.


1

1
EBITDA is earnings before interest, tax, depreciation and amortisation. The amounts referred to throughout this report
is EBITDA before G&A, NZ IFRS 16 and Other Items. It is a non-GAAP financial measure and is not prepared in
accordance with NZ IFRS.
RESTAURANT BRANDS NEW ZEALAND LIMITED

The acquisition of 69 stores in California (58 KFC and 11 joint KFC/Taco Bell) was successfully completed
on 2 September 2020. The financial results for the California division have been significantly above
expectations despite the challenges of COVID-19. The division added $51.9 million in total sales and
$8.5 million in store EBITDA over the four months of ownership.

The resulting reported FY20 NPAT of $30.9 million is up 2.8% or $0.8 million on the prior 44 week period.

Group Operating Results

Directors are pleased to report that Restaurant Brands has produced a net profit after tax (NPAT) for the
year ended 31 December 2020 (FY20) of $30.9 million, up 2.8% on the reported NPAT of $30.1 million for
the prior period. As previously noted, the prior period reported NPAT is for 44 weeks compared to 52 weeks
in this year.

$NZm after tax
Dec 2020 Dec 2019 Change ($) Change (%)
Reported NPAT 30.9 30.1 0.8 +2.8%
Impact of NZ IFRS 16 7.0 4.5 2.5 +55.6%
Other Income & Expenses 8.8 4.0 4.8 +120.0%
Change of Balance Date* 7.1 (7.1) -
Comparable Trading NPAT 46.7 45.7 1.0 +2.2%
*Estimated (unaudited) NPAT over the eight weeks to February 2020, prorata’d from the 44 weeks to December 2019

In addition to the change of balance date, two other factors distort the prior year comparison: the continuing
negative impact of NZ IFRS 16, and Other Income and Expenses.

The table above sets out a like-for-like comparison of the current year’s 12 month result versus the prior year
10 months’ normalised trading (detail of which is attached to this report). After adjusting for the negative
impact of the NZ IFRS 16 accounting lease standard and the shorter trading period (estimated at
$7.1 million), together with the impact of higher net expenses unrelated to normal trading, the underlying
trading profit is estimated at $46.7 million (up 2.2% on the prior equivalent year).

Total brand sales for the Company were $892.4 million, up $186.8 million when compared with the 44 week
prior period. On a like-for-like annualised footing they are up approximately 7.0%, primarily because of the
inclusion of $51.9 million of sales for the four months following the California acquisition. All three existing
divisions produced positive same store sales.

Combined store EBITDA (pre-NZ IFRS 16 and Other Items) of $147.3 million was up $31.4 million or +27.0%
on the prior period. On an annualised basis the results were up 7.5%, due to strong performance in Hawaii
and the acquisition of the California operations. EBITDA margins (as a % of sales) improved from 16.4% to
16.5% due to the strength of the Pizza Hut Hawaii performance.

Restaurant Brands’ store numbers at the end of the financial year totalled 348, comprising 137 in
New Zealand, 72 in Hawaii, 70 stores in Australia and 69 stores in California.

New Zealand Operations

Total store sales in New Zealand were $410.4 million, up $42.9 million or +11.7% on the 44 week period
ending December 2019. This is a result of the additional eight weeks trading in the December 2020 year,
partially offset by the five weeks full store lockdown due to COVID-19 with lost sales of approximately
$40 million.

Actual
52 weeks
31 December
2020
Actual
44 weeks
31 December
2019
Proportioned
52 weeks
31 December
2019
Change ($) Change (%)
Store sales ($m) 410.4 367.5 434.3 +42.9 +11.7%
EBITDA ($m) 75.9 67.9 80.3 +8.0 +11.8%
EBITDA as a % of Sales 18.5
18.5 18.5
Store Numbers 137 148
The proportioned 52 weeks in the table above is an arithmetical calculation factoring up the 44 weeks ending Dec 2019 (26 February
2019 to 31 December 2019) to a 52 week equivalent. This is for illustrative purposes only.

The New Zealand business was completely closed for nearly five weeks in March-April 2020 as part of the
COVID-19 lockdown, losing an estimated $40 million in sales over the period. However upon re-opening the
business recovered well, with same store sales for the full year up +5.3%. The underlying sales growth has

been driven by another good performance by KFC combined with Carl’s Jr., both brands sales have
remained strong throughout the year with growth through both the delivery and in-store channels. The
accelerated expansion of delivery channels as part of the COVID-19 response has also helped. Taco Bell
remains only a small portion of the New Zealand business sales with three stores opened during the year
and sales from the four existing stores continuing to track above expectations.

EBITDA was up $8.0 million reflecting the higher sales; however the underlying EBITDA as a percentage of
sales has remained constant on 18.5%.

As part of the COVID-19 response the New Zealand business received a government wage subsidy of
$22.0 million, which was fully passed on to all staff. This number has been included in the statement of
comprehensive income. Restaurant Brands elected to retain all staff at 100% of their wages and salaries
throughout the lockdown period. Although the wage subsidy helped to offset the cost to the business, there
was a shortfall of approximately $0.5 million per week. There were also other fixed costs incurred during the
mandated lockdown which contributed to an estimated $4.4 million drop in EBITDA before G&A costs over
the closure period.

The Pizza Hut sub-franchising process continues, with 16 stores sold to franchisees during the year. This
included three turnkey stores. The company now operates 13 stores with independent franchisees operating
90 stores.

Overall store numbers decreased by 11 during the year with the 16 Pizza Hut stores sold offset with one new
KFC store being opened in Central Christchurch and the continued roll out of Taco Bell with three new stores
opened in the greater Auckland region. KFC Kapiti was also acquired from an independent franchisee during
the period. All five of the new stores are trading well.

Australian Operations

The Australian business contributed total sales of $NZ214.9 million (up 27.1%), and a store EBITDA
(excluding the effect of NZ IFRS 16) of $NZ29.4 million (up 16.7%).


Actual
52 weeks
31 December
2020
Actual
44 weeks
31 December
2019
Proportioned
52 weeks
31 December
2019
Change ($) Change (%)
Sales ($Am) 202.4 160.2 189.3 +42.2 +26.3%
Store EBITDA ($Am) 27.7 23.4 27.7 +4.3 +18.4%
EBITDA as a % of Sales 13.7
15.4 15.4
Store Numbers 70 65

The proportioned 52 weeks in the table above is an arithmetical calculation factoring up the 44 weeks ending Dec 2019 (26 February
2019 to 31 December 2019) to a 52 week equivalent. This is for illustrative purposes only.

Total sales in Australia were $A202.4 million, up $A42.2 million (or +26.3%) on last year, and on a
proportioned 52 week basis sales were up $A12.1 million primarily due to the effect of additional store
openings. Same stores sales were also up 2.0%.

There was significant disruption to stores due to COVID-19 with the temporary closure of all mall stores and
the extended closure of all dine-in restaurants. The business has focused on ensuring a continued safe work
environment for all members of staff and the highest hygiene standards for customers, whilst providing
continued emphasis on providing efficient delivery services.

Investment in KFC store upgrades continued, together with new store openings. Two new drive-thru
Taco Bell sites and four additional KFC stores opened during the year, bringing total store numbers to 70.

With the extended closure of the dine in facilities due to COVID-19 the home delivery service was expanded
into New South Wales regional locations, which generated further growth in the KFC delivery channel. This
has helped maintain same store sales growth over the past 12 months, but has added to the cost pressures
of the business which, together with initial Taco Bell set up costs, is reflected in a drop in EBITDA as a
percentage of sales to 13.7%.

Store EBITDA margins of $A27.7 million (13.7% of sales) were up $A4.3 million or +18.4% on last year. This
reflects the additional eight weeks trading. On an equivalent 52 week basis store EBITDA has remained flat
with additional sales offset by higher cost pressures.


Hawaiian Operations

Total sales in Hawaii for the period were $US139.3 million with store level EBITDA of $US21.5 million
(15.6% as a percentage of sales vs 13.5% in the prior period).

Actual
52 weeks
31 December
2020
Actual
44 weeks
31 December
2019
Proportioned
52 weeks
31 December
2019
Change ($) Change (%)
Sales ($USm) 139.3 110.7 130.8 +28.6 +25.8%
Store EBITDA ($USm) 21.5 15.0 17.7 +6.5 +43.3%
EBITDA as a % of Sales 15.6
13.5 13.5
Store Numbers 72 74
The proportioned 52 weeks in the table above is an arithmetical calculation factoring up the 44 weeks ending Dec 2019 (26 February
2019 to 31 December 2019) to a 52 week equivalent. This is for illustrative purposes only.

In $NZ terms the Hawaiian operations contributed $NZ215.1 million in revenues and $NZ33.5 million in
EBITDA for the year. These results were all up (particularly Pizza Hut) on the equivalent December 2019
year despite the operational challenges created by COVID-19.

Reported sales are up $US28.6 million to $US139.3 million primarily due to the comparison with last year’s
reporting period of 44 weeks. On an equivalent year comparison sales were up $US8.6 million for the period
which is reflected in same store sales growth of 7.7% for the year.

Pizza Hut saw a significant increase in both sales and profitability. The excellent response by the Pizza Hut
brand to the challenges created by COVID-19 was a major driver of the strong sales performance. With
Pizza Hut USA emphasizing food safety, no-touch contactless delivery as well as the roll out of curbside
delivery, customers reacted favourably, particularly with the continued influence of COVID-19 in Hawaii.
Online ordering grew significantly and now accounts for 60% of sales. The closure of seven old format stores
at the end of last year, and a further three stores this year, with a move towards smaller and more efficient
delivery and carry-out (delco) style stores also helped drive profitability.

Although Taco Bell was harder hit by the closure of dine in options, the promotions around family size meals
and affordable pricing was successful with drive through average customer spend increasing significantly.
UberEats and DoorDash also came on board as additional food aggregators (in addition to Grubhub) which
has also helped to drive delivery sales.

Store numbers are down by net two from December 2019 following the closure of three Pizza Hut stores as
part of the strategy to close some very old dine-in restaurants. During this period one new Pizza Hut store
has opened and is performing strongly.

Californian Operations

Following Yum! and landlord approval, the acquisition of 69 stores in California was settled on
2 September 2020. With most of the existing management team in place, the completion was executed
smoothly. Even with the impact of COVID-19 on the business effectively closing the dine-in channel,
management continuity and the benefit of recently upgraded stores ensured that Restaurant Brands’ most
recent acquisition delivered initial financial results well ahead of expectations.

Total sales in California for the period were $US35.6 million with store level EBITDA of $US5.8 million
(16.4% as a percentage of sales).

In $NZ terms the California operations contributed $NZ51.9 million in revenues and $NZ8.5 million in
EBITDA for the four month period from 2 September 2020.

Actual
52 weeks
31 December
2020
Actual
44 weeks
31 December
2019
Change ($) Change (%)
Sales ($USm) 35.6 n/a n/a n/a
Store EBITDA ($USm) 5.8 n/a n/a n/a
EBITDA as a % of Sales 16.4
n/a
Store Numbers 69 n/a

The California division made a solid contribution to the Group results over the four months since acquisition.
Despite the dine in channels being closed due to COVID-19 for the majority of the four months, drive through
sales have remained strong and, like the other divisions, delivery sales are well above expectations. The
strong sales have driven a higher than expected EBITDA margin percentage to sales of 16.4%, producing
the store earnings well above expectations.

The business saw an extensive reinvestment programme prior to settlement. However in line with the
strategy to further reinvest in the stores, more capital expenditure is planned for this market, including new
store builds of which two are already underway.

Corporate & Other

General and administration (G&A) costs were $45.6 million, up $12.3 million from last year due to the longer
current reporting period, but also up $6.2 million on a normalised annual basis. Most of the increase came
from long term incentive remuneration and additional G&A charges in California as that acquisition came on
stream. G&A as a % of total revenue was 4.9% which is up from 4.5% for the period ended
31 December 2019. This was largely due to the effect of the full closure of the New Zealand stores and the
lost sales during that period.

Depreciation charges of $65.0 million for the year ended 31 December 2020 were $17.2 million higher than
the prior year primarily due to the impact of the additional reporting weeks. It also included $5.7 million from
the newly acquired California division. Of the $65.0 million, $30.9 million related to right of use asset
depreciation incurred under NZ IFRS 16.

Financing costs of $30.2 million were up $8.8 million on prior year, once again reflecting the impact of the
additional reporting weeks. Interest on bank debt for the period ended 31 December 2020 was $6.5 million,
up $1.4 million on last year due to the longer reporting period and the additional debt taken on to acquire the
California business. This was partially off-set by a lower effective interest rates following the restructure of
the Group’s debt facilities which was activated in May 2020.

Tax expense was $14.0 million, up $1.2 million on the prior year. The effective tax rate was 31.2% (29.9%
for FY19) with a higher level of non-deductible expenses in the current year.

Other items

Other Net Income and Expense of $8.8 million is up from $4.6 million for the prior period. This primarily
relates to acquisition costs associated with the California acquisition of $4.3 million.

Cash Flow & Balance Sheet

The total assets of the Group are $1,173.0 million, up $293.1 million primarily due to the inclusion of
$263.2 million of new assets in California. Equally there has been an increase of $270.6 million in liabilities,
primarily reflecting the future discounted lease liability on leases acquired and an increase in debt
drawdowns arising from that transaction.

Included in the Group’s debt is a $11.3 million Paycheck Protection Program loan (PPP loan) in Hawaii from
the US federal government. Application has been made for the loan to be forgiven with a decision expected
by mid-2021.

Operating cash flows were up $24.2 million to $111.9 million, reflecting the additional weeks being reported,
along with the strong trading performance. The inclusion of the California business has also had a positive
impact on operating cash flows.

Net investing cash outflows were $178.0 million (versus $59.7 million last year) including the acquisition of
the California business for $119.2 million ($US80.7 million). Payments for fixed assets and intangibles of
$60.5 million was up from $59.7 million with five new KFC, and five new Taco Bell stores in New Zealand
and Australia and significant KFC refurbishment expenditure in both those markets. In addition there were
several major Taco Bell refurbishments in Hawaii. This year’s net investing cash flows also included inflows
of $4.5 million received, primarily from the sale of Pizza Hut stores in New Zealand.

Outlook

The focus for Taco Bell in New Zealand and Australia remains on investing to build brand presence with
more than ten stores expected to open by December 2021. The significance of the brand’s sales will
continue to grow as additional stores are opened. However overall the financial impact of the brand on the
Group will remain slight for the coming year.

The inclusion of 58 KFC and 11 joint KFC/Taco Bell stores in California will have a positive impact on
earnings profile in the 2021 year.

Current trading for the new year remains strong across all divisions; however with the current uncertainties
that remain with COVID-19 it is difficult to provide firm guidance. Further updates will be provided at the
annual meeting.

Annual Shareholders’ Meeting

The Annual Shareholders’ Meeting of the company will be held on Thursday 27 May 2021. Given the
COVID-19 uncertainty, it will be a virtual meeting.


Authorised By:

Russel Creedy Grant Ellis
Group CEO Group CFO
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 NSW, Australia, the KFC and Taco Bell Brands in California,
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 year ended 31 December 2020
31 Dec 2020vs Prior31 Dec 2019
52 weeks%44 weeks
$NZ000's
Sales
Total New Zealand sales410,399 11.7367,521
Total Australia sales214,923 27.1169,105
Total Hawaii sales215,113 27.4168,915
Total California sales51,924 n/a-
Total sales892,359
26.5
705,541
Other revenue32,369 15.128,125
Total operating revenue924,728 26.0733,666
Cost of goods sold(761,695)(29.6)(587,874)
Gross margin163,033 11.8145,792
Distribution expenses (7,138)(79.5)(3,976)
Marketing expenses(48,344)(22.3)(39,524)
General and administration expenses(45,595)(36.9)(33,306)
Government grants22,013
n/a-
Other items(8,777)(90.2)(4,616)
Operating profit 75,192 16.864,370
Financing expenses(30,220)(40.8)(21,464)
Net profit before taxation44,972 4.842,906
Taxation expense (14,034)(9.5)(12,815)
Net profit after taxation (NPAT)30,938 2.830,091
% sales% sales
Concept EBITDA before G&A
Total New Zealand75,856 18.511.767,907 18.5
Total Australia29,408 13.716.725,202 15.4
Total Hawaii33,547 15.646.722,865 13.5
Total California8,516 16.4n/a- n/a
Total concept EBITDA before G&A147,327 16.527.0115,974 16.4
Ratios
Net tangible assets per security (net
tangible assets divided by number of
shares) in cents
(26.2)9.9
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.
EBITDA excludes the impact of NZ IFRS 16.

Consolidated Income Statement
For the year ended 31 December 2020
Annualised unaudited results for 52 weeks - based on audited 44 week period results
ReportedAnnualised
1
Reported
31 Dec 202031 Dec 201931 Dec 2019
AuditedUnauditedAnnualisedAudited
52 weeks52 weeks% change44 weeks
$NZ000's
Sales
Total New Zealand sales410,399 434,343
(5.5)
367,521
Total Australia sales214,923 199,852
7.5
169,105
Total Hawaii sales215,113 199,626
7.8
168,915
Total California sales51,924 -
n/a
-
Total sales892,359 833,821
7.0
705,541
Other revenue32,369 33,239 (2.6)28,125
Total operating revenue924,728 867,060
6.7
733,666
Cost of goods sold(761,695)(694,760)(9.6)(587,874)
Gross margin163,033 172,300
(5.4)
145,792
Distribution expenses (7,138)(4,699)(51.9)(3,976)
Marketing expenses(48,344)(46,710)(3.5)(39,524)
General and administration expenses(45,595)(39,365)(15.8)(33,309)
Government grants22,013
-
n/a
-
Other items(8,777)(5,455)(60.9)(4,616)
Operating profit 75,192 76,072
(1.2)
64,370
Financing expenses(30,220)(25,367)(19.1)(21,464)
Net profit before taxation44,972 50,706
(11.3)
42,906
Taxation expense (14,034)(15,145)7.3(12,815)
Net profit after taxation (NPAT)30,938 35,562
(13.0)
30,091
Concept EBITDA before G&A
2
Total New Zealand75,856 80,253
(5.5)
67,907
Total Australia29,408 29,784
(1.3)
25,202
Total Hawaii33,547 27,023
24.1
22,865
Total California8,516 -
n/a
-
Total concept EBITDA before G&A147,327 137,060
7.5
115,974
1 The annualised December 2019 figures are an arithmetic calculation grossing up the 44 week audited results to reflect an equivalent 52 week period. This has been done for illustrative
purposes only.
2 EBITDA excludes the impact of NZ IFRS 16.

Non-GAAP Financial Measures
For the year ended 31 December 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
follows:
1.
EBITDA before G&A, NZ IFRS 16 and other items.
The Group calculates Earnings Before Interest, Tax, Depreciation 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
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-NZ 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 NZ IFRS. Non-NZ 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-NZ GAAP measures and net profit after taxation:
$NZ000's
Note* 31 Dec 2020 31 Dec 2019
EBITDA before G&A, NZ IFRS 16 and other items1147,327 115,974
Depreciation(33,812)(25,250)
Net gain / (loss) on sale of property, plant and equipment (included in depreciation)(276)(106)
Lease deprecation(30,908)(22,395)
Lease costs44,919 32,369
Amortisation (included in cost of sales)(2,740)(2,178)
General and administration costs - area managers, general managers and support centre(40,541)(29,428)
Other income615 722
Other expenses(9,392)(5,338)
EBIT 75,192 64,370
Financing expenses(30,220)(21,464)
Net profit before taxation 44,972 42,906
Taxation expense (14,034)(12,815)
Net profit after taxation30,938 30,091
Add back IFRS 16 impact9,741 6,076
Taxation expense on IFRS 16 impact(2,737)(1,547)
Total NPAT excluding the impact of NZ IFRS 16237,942 34,620
* Refers to the list of non-NZ GAAP measures as listed above.

---

Restaurant Brands New Zealand Limited
Results announcement to the Market



Results for announcement to the market
Name of issuer Restaurant Brands New Zealand Limited
Reporting Period 52 Weeks ended 31 December 2020
Previous Reporting Period 44 Weeks ended 31 December 2019
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$924,728 26.0%
Total Revenue $924,728 26.0%
Net profit/(loss) from
continuing operations
$30,938 2.8%
Total net profit/(loss) $30,938 2.8%
Interim/Final Dividend
Amount per Quoted Equity
Security
n/a
Imputed amount per Quoted
Equity Security
n/a
Record Date n/a
Dividend Payment Date n/a
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
($0.26) $0.10
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Refer announcement for Restaurant Brands released to the
market on 25 February 2021
Authority for this announcement
Name of person

authorised
to make this announcement
Grant Ellis
Contact person for this
announcement
Grant Ellis
Contact phone number +64 9 525 8710
Contact email address Grant.ellis@rbd.co.nz
Date of release through MAP

25/02/2021

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 CEO
Grant Ellis - Group CFO
25 February 2021
Restaurant Brands
New Zealand Limited
Annual Results to 31 December 2020
(FY20)

• Key Points
• Results Overview
• New Zealand Operations
• Australian Operations
• Hawaiian Operations
• Californian Operations
• Strategy
• Outlook
• Questions
Presentation Outline
2

Key Points
3
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
•FY 20 = 12 months to 31 December 2020
vs. FY 19Dvs. FY 19D (R)FY 19FY 19DFY 19D (R)FY 20
• Group Sales+26.5%+7.0%$794.0m$705.5m$833.8m$892.4m
• Reported NPAT+2.8%(13.2%)$35.7m$30.1m$35.6m$30.9m
• Brand EBITDA+27.0%+7.5%$129.2m$116.0m$137.1m$147.3m
• A strong performance despite the COVID-19 headwinds.
• California purchase (69 stores) completed on 2 September and trading above expectations following acquisition.

4
Results Overview

5
NPAT reduced as a result of temporary store closures from COVID-19
$m (after tax)FY 19FY 19DFY 20Change $ Change B/(W)%
Reported NPAT35.7 30.1 30.9 0.8 2.8%
NZ IFRS 16 Impact- 4.5 7.0 2.5 (55.6%)
Other (Income) and Expenses6.5 4.0 8.8 4.8 (120.0%)
Change of Balance Date- 7.1 *- (7.1)n/a
Comparable Trading NPAT42.2 45.7 46.7 1.0 2.2%
* Pro rata gross up 44 weeks to 52 weeks

6
COVID-19 – An unprecedented impact on the business
NEW 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.
• Stores allowed to progressively re-open (Level 3,2,1)
from 28 April to 9 June, when full trading resumed.
• Further Level 3 & Level 2 restrictions from August to
October.
• Government grants of $22.0m for wages received
during the Level 4 “lockdown” fully paid out to staff.
• 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
intermittently during the second half of the year.
• FSDT stores performed strongly.
• Total lost sales estimated at in excess of $A5m.
• No Government support.
HAWAII
• Hawaii and Guam Taco Bell stores 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.
CALIFORNIA
• COVID-19 restrictions in place from acquisition with dine-in
channels fully closed.

8
Lost sales and margin from NZ COVID-19 closure more than made up for by US
operations
420
368
434
410
192
169
200
215
183
169
200
215
52
794
706
834
892
FY 19FY 19D FY 19D (R) FY 20
Sales
$NZm
New ZealandAustraliaHawaiiCalifornia
76
68
80
76
29
25
30
29
24
23
27
34
9
129
116
137
147
FY 19FY 19D FY 19D (R) FY 20
Brand EBITDA
$NZm
New ZealandAustraliaHawaiiCalifornia
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
•FY 20 = 12 months to 31 December 2020

9
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
•FY 20 = 12 months to 31 December 2020
% of Revenue
4.3%
4.5%
4.5%
G&A costs at 4.9% of revenues including variable long term incentive remuneration
and initial Taco Bell staffing costs in New Zealand & Australia
4.9%
16.3
15.2
18.0
18.6
6.4
7.0
8.3
9.1
8.5
8.1
9.6
10.3
2.5
4.6
3.0
3.5
5.1
FY 19FY 19DFY 19D (R)FY 20
G&A
$NZm
New ZealandAustraliaHawaiiCaliforniaCorporate
33.3
45.6
35.8
39.4

10
Other Income and Expenses (“non-trading items”) up on prior year with California
acquisition costs
$NZm (Pre tax)
FY 19DFY 20
Gain on sale Pizza Hut stores
(0.1)(0.5)
Lease termination
(0.3)(0.2)
Impairment of assets & goodwill
(0.7)(0.1)
Lease surrender gain
(0.3)-
Leave remediation
0.4 -
Sundry other income & expenses
-0.4
Relocation & refurbishment
3.2 1.8
Franchise rights amortisation
1.8 3.1
Acquisition costs
0.6 4.3
4.6 8.8

11
Operating cash flows up on prior year with strong trading and California acquisition
$NZm
FY 19FY 19DFY 20
Operating Cashflow ( NZ IFRS 16 adjusted)
71 72
*
91
*
Investing Cashflow (adjusted)
(27)(60)(59)
**
Free Cashflow
45 12 32
* Adjusted for lease principal payments of $21.2m (FY 19D $16.0m) classified as financing activities under NZ IFRS 16
** Adjusted for $119.2m ($US80.7m) 69 store California acquisition
Note:
•FY 19 = 12 months to 25 February 2019
•FY 19D = 10 months to 31 December 2019
•FY 20 = 12 months to 31 December 2020

12
Net borrowings up with completion of RBD California settlement, somewhat
mitigated by strong operating cash flows
FY 19 FY 19D FY 20Facility (2-3 years)
Ratios
Net Debt: EBITDA*1.3:11.2:11.9:1
Gearing(ND:ND+E)37%36%47%
Net Debt $NZm
*
FY 19D EBITDA grossed up 44 weeks to 52 weeks, EBITDA including lease costs (pre NZ IFRS16)
131
119
201
351

13
New Zealand Operations

14
NZ sales adversely impacted by COVID-19 closures and restrictions with EBITDA
correspondingly reduced, despite Government grant
420
368
434
410
2.7%
5.0%
5.0%
5.3%
FY 19FY 19DFY 19D (R)FY 20
NZ Sales
Total Sales $mSame Store Sales %
76
68
80
76
18.2%
18.5%
18.5%
18.5%
FY 19FY 19DFY 19D (R)FY20
NZ EBITDA
EBITDA $mEBITDA % of Sales
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
•FY 20 = 12 months to 31 December 2020

15
Sales of Pizza Hut stores to independent franchisees continues, together with
increase in new store builds
No. of Stores
68
73
90
30
29
13
FY 19FY 19DFY 20
IndependentsRestaurant Brands
102
98
103
Note:
•FY 19 = as at 25 February 2019
•FY 19D = as at 31 December 2019
•FY 20 = as at 31 December 2020

16
Australian Operations

17
Australian business impacted by mall store closures and dine in restrictions
with COVID-19 crisis; however larger FSDT stores performed strongly
178
160
189
202
4.7%
5.1%
5.1%
2.0%
FY 19FY 19DFY 19D (R)FY 20
Australia Sales
Total Sales $AmSame Store Sales %
27
25
29
28
15.1%
15.4%
15.4%
13.7%
FY 19FY 19DFY 19D (R)FY 20
Australia EBITDA
EBITDA $AmEBITDA % of Sales
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
•FY 20 = 12 months to 31 December 2020

18
Hawaiian Operations

19
Hawaii boosted by strong Pizza Hut performance during COVID-19, despite reduced
sales and margins in Taco Bell
125
111
131
139
2.0%
9.1%
9.1%
7.7%
FY 19FY 19DFY 19D (R)FY 20
Hawaii Sales
Total Sales $USmSame Store Sales %
16
15
18
22
13.0%
13.5%
13.5%
15.6%
FY 19FY 19DFY 19D (R)FY 20
Hawaii EBITDA
EBITDA $USmEBITDA % of Sales
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
•FY 20 = 12 months to 31 December 2020

20
Californian Operations

21
69 Store California acquisition successfully concluded on 2 September for $US80.7m
• Smooth transfer of ownership.
• Full senior leadership team in place (CEO – Raziel
Valiente, CFO – Allan Wong Kam).
• Despite COVID-19, first four months’ trading well up
on prior year.
• Three new KFC sites in progress for FY21.
• Initial discussions with potential acquisition targets.

Completion of US acquisition places final piece on RBD beach head expansion
strategy
22
• Future expansion in US to come from store builds and
smaller franchise acquisition.
• Confirms wisdom of geographic and brand
diversification strategy.
• Offshore operations will comprise over 50% of RBD
sales in FY21.
• With additional US business RBD expects to reach its
$1billion dollar revenue target next year.
*FY20 existing businesses with California acquisition annualised.
43%
21%
21%
15%
% of Revenue*
NZAustraliaHawaiiCalifornia
43%
16%
24%
18%
% of Store EBITDA*
NZAustraliaHawaiiCalifornia

23
California acquisition exceeding expectations in first four months of ownership
30
36
FY 19D*FY 20
California Sales (4 months)
Total Sales $USm
4
6
FY 19D*FY 20
California EBITDA (4 months)
EBITDA $USm
*
FY 19D represents pro-forma 16 weeks prior year trading (pre RBD acquisition).

24
Strategy – Next Steps
RBD has now established a presence in each of its four key operating markets and has a
store growth strategy for each market.
New ZealandAustraliaHawaiiCalifornia
Continue to deliver organic same-store sales and profit growth through: operational improvements, store
refurbishments, channel enhancements, innovative marketing, new product development, and staff
attraction/retention initiatives.
KFC• New store builds.• New store builds.
• Acquire smaller franchises.
• Position for major
acquisition opportunity.
• Establish first RBD store
in Hawaii by 2022.
• New store builds.
• Acquire smaller
franchises.
Pizza Hut• Formalize structure and
grow store network as
master franchisee.
__
• Continue RR exit
strategy (delco
replacements).
• Build new delcos where
appropriate.
__
Taco Bell• Accelerate new store roll
out.
• Accelerate new store roll
out.
• Continue store
transformation strategy.
• Maintain current
business.
Carl’s Jr.• Recommence store builds
in smaller format.
• Close/rebrand loss making
stores.
______

Outlook
25
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 rebuilds in Hawaii will further assist that
result.
The addition of the California 69 store acquisition will lift sales and earnings in FY21 and
provide a strong base for future mainland US expansion.
Despite solid sales and margins in the beginning of FY21, continuing COVID-19 trading
restrictions and with the possibility of further outbreaks mean that RBD is not providing firm
guidance for the FY21 results at this stage.

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 ASX listing 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 12 months ending 31 December 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 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 audited consolidated 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.
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