Presentación de PowerPoint€¦ · F&P Payroll and employee benefits Occupancy and other operating exp Royalty Fees 3Q18 OPERATING COSTS AND EXPENSES COMPANY OPERATED RESTAURANT

INVESTOR DAY

ARCOS DORADOS

3Q 2018 CONFERENCE CALL PRESENTATIONNovember 14, 2018

DISCLAIMER

This presentation contains forward-looking statements that represent our beliefs, projections and predictions about future events or our future performance. Forward-looking

statements can be identified by terminology such as “may,” “will,” “would,” “could,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,”

“continue” or the negative of these terms or other similar expressions or phrases. These forward-looking statements are necessarily subjective and involve known and unknown

risks, uncertainties and other important factors that could cause our actual results, performance or achievements or industry results to differ materially from any future results,

performance or achievement described in or implied by such statements.

The forward-looking statements contained herein include statements about the Company’s business prospects, its ability to attract customers, its affordable platform, its

expectation for revenue generation and its outlook. These statements are subject to the general risks inherent in Arcos Dorados' business. These expectations may or may not be

realized. Some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition, Arcos Dorados' business and operations involve

numerous risks and uncertainties, many of which are beyond the control of Arcos Dorados, which could result in Arcos Dorados' expectations not being realized or otherwise

materially affect the financial condition, results of operations and cash flows of Arcos Dorados. Additional information relating to the uncertainties affecting Arcos Dorados' business

is contained in its filings with the Securities and Exchange Commission. The forward-looking statements are made only as of the date hereof, and Arcos Dorados does not

undertake any obligation to (and expressly disclaims any obligation to) update any forward-looking statements to reflect events or circumstances after the date such statements

were made, or to reflect the occurrence of unanticipated events.

2

3Q18 OPENING REMARKS AND HIGHLIGHTS

Comparable Sales

+7.4%YoY

Adjusted EBITDA

$88m+19.7%YoY

+50.1% YoY (in CC)

New openings

54Sep 30,2018 (LTM)

Revenues

$720m-12.9% YoY

+8.3% YoY (in CC)

Adjusted EBITDA

margin

12.3 %

EOTF restaurants

196Sep 30, 2018

✓ Comparable sales growth of 7.4% despite volatile

environments in our two largest markets

✓ Adjusted EBITDA margin expansion of 340 basis points,

driven by our ability to manage our cost structure

efficiently

✓ Market leadership in QSR segment, with strong potential

to continue growing our brand in the region

✓ Continue to execute strategies that drive top line growth,

through award-winning marketing initiatives, while

strengthening our margins

✓ On track with our capex plan

✓ 200 new restaurants, majority free-standing

✓ Reinvest $390M, primarily to accelerate EOTF

Note: Financial results exclude Venezuela 3

3Q18 KEY INITIATIVES

• McDelivery now available in 10 markets across the region, up from 3 just a year ago

• Mobile app with over 17 million downloads in 20 countries

• Continued improvement in customer satisfaction scores, with Brazil reaching the

highest level since monitoring began

• Innovation is driving brand preference, guest traffic, market share, average check

growth and efficiency

• Recognized for our innovative marketing initiatives, with numerous awards granted by

the Mobile Marketing Association

• Modernizing our restaurants under Experience of the Future (196 as of Sep 2018,

650 EOTF restaurants by end of 2019)

4

1.552 1.548 1.540 1.546 1.545 1.543 1.538

604 612 620 642 645 648 657

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18

Company Operated Franchised

3Q18 RESTAURANT DEVELOPMENT

BRAZIL

NOLAD

SLAD

CARIBBEAN

CURRENT FOOTPRINT

RESTAURANTS

+7

(*) Restaurant Addition LTM (net)

-5

+29

+4

DIVISIONSTORE TYPE

TOTAL

RESTAURANTSMCCAFES

DESSERT

CENTERSFS & IS MS & FC

BRAZIL 502 437 939 93 1,663

NOLAD 326 195 521 25 620

SLAD 231 159 390 130 356

CARIBBEAN 268 77 345 37 312

TOTAL 1,327 868 2,195 285 2,951

577 Company Operated

362 Franchised


49 Franchised


86 Franchised


160 Franchised

2,195

196

5

3Q18 TOPLINE RESULTS

6,1%

9,6%10,6% 10,4%

7,4%

FY2015 FY2016 FY2017 3Q2017 3Q2018

COMPARABLE SALES GROWTH (%)

790688

855

38

33

41

3Q17 3Q18 (as reported) 3Q18 (in constantcurrency)

Sales by company operated restaurants Revenues from franchised restaurants

896827

720

TOTAL REVENUE ($ M)

• Comp sales of +7.4%

• Constant currency revenue growth of +8.4%. As reported revenue affected by currency depreciation in Argentina and Brazil


35,0% 35,5%

21,9% 20,5%

26,4% 27,5%

5,0% 5,5%

3Q17 3Q18

F&P Payroll and employee benefits Occupancy and other operating exp Royalty Fees

3Q18 OPERATING COSTS AND EXPENSES

G&A EXPENSESCOMPANY OPERATED RESTAURANT EXPENSES

88.4% 89.1%

($ M and as a % of Total Revenues)(As a % of sales by Company operated restaurants)

7.1% 6.8%

• Improved productivity led to efficiencies in payroll in all our divisions

• G&A expenses decreased by $9.5M and 30 bps as a % of revenues, achieving the lowest level since IPO


59

49

3Q17 3Q18

3Q18 ADJUSTED EBITDA AND NET INCOME

Net Income

($ million) + One-time tax credit (23.2 M)

+ Lower interest expense (2.8M)

- Higher income tax expense (5.9M)

+ Higher Foreign exchange gain (4.5M)

Note: Financial results exclude Venezuela

Breakdown of main variations contributing to 3Q18 Adjusted EBITDA margin

(%)

8

25,3

42,7

3Q17 3Q18

8,90,6

1,3 0,6 0,4 0,10,3

3,5 12,3

0

2

4

6

8

10

12

14

Adj.EBITDAMg 3Q17

Food & Paper Payroll Occupancy &Other OpExpenses

Royalty Fees Franchisedrestaurants -occupancyexpenses

G&A Other OpIncome

(expense)

Adj. EBITDAMg 3Q18

378 310386


3Q18 DIVISIONAL TOPLINE

Comparable sales and CC revenue growth across all divisions, volatile macroeconomic environment impacting Argentina

and Brazil. NOLAD and the Caribbean comparable sales growth well above blended inflation

BRAZIL NOLAD

SLAD CARIBBEAN (Ex-Vzla)

+2.1% (CC)

1.0%

102106 109


252 201298


94 103 103

3Q17 3Q18 (as reported) 3Q18 (in constantcurrency)Comparable sales growth %

18.1% 12.7%

($ million)

($ million) ($ million)

($ million)

6.7%

9

6.8%

5 7 7


2617

28


109 9


4968

85


3Q18 DIVISIONAL ADJUSTED EBITDA

Adjusted EBITDA Margin expansion in Brazil and Caribbean, contraction in NOLAD and SLAD

BRAZIL NOLAD

SLAD CARIBBEAN (Exc-Vzla)

13.0% 21.8% 9.7% 8.3%

10.4% 5.4%

Adjusted EBITDA margin %

8.6%



10

3Q18 LEVERAGE AND CASH FLOW HIGHLIGHTS*

Notes:

1) Total financial debt includes short-term debt, long-term debt and derivative instruments

2) Net Debt = Total financial debt less cash and cash equivalents

3) Leverage ratio = Net financial debt / LTM adjusted EBITDA

3Q18 3Q17

Net cash from operations 52.8 67.2

Capex (55.9) (43.4)

Asset monetization proceeds 4.8 11.3

Net cash used in investment activities (40.8) (33.3)

Share repurchases (8.3) -

Dividend payments - -

Net cash used in financing activities (9.3) (1.7)

$ million

801

654 620

621567

105 87163

328

208

696

567

457

293

359

0

100

200

300

400

500

600

700

800

900

2014 2015 2016 2017 3Q2018

Total Debt Cash & Equivalents Net Debt

1.3x1.0x1.7x2.3x2.6x

$ million

11

LEVERAGE

RATIO

(*) Balance sheet and cash flow as reported, including Venezuela

• Strong and healthy balance sheet

• $8.3M in share buybacks

CLOSING REMARKS

✓ Expecting short-term macro challenges, but remain committed to our long-term plan

✓ Modernizing our restaurants, providing the best guest experience, and offering the best

value for money in the QSR segment

✓ Leveraging our scale to make a positive impact in the communities we serve

✓ Remain aligned with McDonald’s global commitments related to Packaging & Recycling,

Kids Nutrition and Climate Change

✓ Supporting youth employment in the LATAM and Caribbean regions

✓ Undisputed leadership position to capture the significant growth opportunity that Latin

America presents

12

INVESTOR DAYIR CONTACT Patricio Iñaki Esnaola

Director of Investor Relations

+54.11.4711.2561

[email protected]

mailto:[email protected]

Documents

Presentación de PowerPoint€¦ · F&P Payroll and employee benefits Occupancy and other operating exp Royalty Fees 3Q18 OPERATING COSTS AND EXPENSES COMPANY OPERATED RESTAURANT