Restaurant Brands Half Year Financial Results 2024

RESTAURANT BRANDS RELEASES 30 JUNE 2024 HALF YEAR FINANCIAL RESULTS • Record Group store sales of $687.2 million • Net Profit After Tax (NPAT) of $12.6 million • Group store EBITDA was $94.6 million, an increase of 20.8% on 1H 2023 • Store numbers (owned and franchised) now total 506 Auckland, 29 August 2024. Restaurant Brands New Zealand Limited (RBD or the Group), has reported today its financial results for the six months ended 30 June 2024 (1H 2024). RBD delivered record Group store sales of $687.2 million for 1H 2024, a 7.3% increase on the same period last year (1H 2023). Group NPAT of $12.6* million represents a significant improvement on 1H 2023. Group store EBITDA reached $94.6 million, a significant increase of $16.3 million or 20.8% on 1H 2023. *Included in Group NPAT is a non-cash net impairment charge of $3.3 million relating to property, plant and equipment and intangible assets ($2.5 million after-tax). Restaurant Brands’ store numbers totalled 506, of which 378 are owned and 128 franchised. Four new stores were opened in 1H 2024, for a total of 13 net new stores from 1H 2023. “We are proud to observe that our strategy is delivering good results”, said RBD Chairman, José Parés. “Initiatives including cost control measures, operational efficiencies, and price programmes continue to deliver value for money for customers and to protect brand health, maintain customer loyalty, and staying competitive. They have also helped offset rising labour costs and consumer pressures. In terms of the regions where RBD operates, performance in New Zealand and Hawaii are particularly noteworthy as both regions showed significant improvements, with solid growth in 1H 2024”. Parés continued, “our brand reach is growing, with the opening of new stores across all brands, including small-format delivery, carry-out and drive-through concepts to meet the changing needs of our customers. We also continue to recruit motivated business owners to open franchised stores for our award-winning Pizza Hut network”. RBD Chief Executive Officer, Arif Khan, says “the Group is expanding its store portfolio, investing in technology and disrupting its brand offerings to deliver winning, digital-first brands to customers and strengthen revenue streams”. In New Zealand store sales recorded solid growth to $309.6 million, up 13.7% on 1H 2023. The development of new KFC, Taco Bell and Carl’s Jr. stores contributed to the increase in total sales. Same store sales increased 10.0%, primarily driven by a solid transaction growth resulting from our strategic initiatives and resuming operations to full trading hours, as labour shortages eased. KFC delivered double digit growth in same store sales and, most importantly, steady solid transactions. Taco Bell did well with double digit growth in both same store sales and transactions, with customers adopting the Mexican-inspired food offered by the brand. Carl’s Jr. also delivered positive same store sales in 1H 2024 and offered innovative store formats. Store EBITDA was $49.2 million, a 52.8% increase on 1H 2023. Store EBITDA margin was at 15.9%, which also represented a significant increase compared with the same period last year. In Australia, store sales were $A139.6 million, down 0.5% on 1H 2023. The region is facing an adverse economic environment that continues to impact consumer demand. However, digital sales through owned and third-party aggregator channels are contributing to the sales volume. Same store sales were down 3.8% on 1H 2023, from current market conditions and a high comparison base. Store EBITDA was $A15.4 million, a 0.6% decrease on 1H 2023. The Group continues to implement cost control initiatives to support recovery and preserve margins to deliver growth when market conditions improve. In Hawaii, store sales were $US84.3 million, a 6.3% increase on 1H 2023, primarily driven by the thriving Taco Bell brand and steady Pizza Hut sales. Same store sales increased 4.7% on 1H 2023, as a result of a strong marketing and promotions programme and the successful implementation of pricing strategies. Additionally, some areas saw an increase in staffing which allowed certain key stores to extend their trading hours and serve late-night customers. Store EBITDA was $US14.9 million, an increase of 18.3% on the prior year. This was driven by the effect of margin recovery initiatives, although inflation and high energy prices are still limiting disposable income. In California, store sales were $US53.6 million, down 3.4% on the same period last year, affected by elevated cost-of-living pressures. Same store sales decreased by 5.8%, primarily due to a shift in consumer preferences to value-oriented options. However, this was partially offset by new menu propositions and strategic pricing programmes. Store EBITDA decreased by $US3.0 million, or 53.6%, largely due to the 29% increase in the minimum wage which came into effect on 1 April 2024. RBD continues to focus on initiatives to offer new products, reinforce transactions and improving operational efficiencies to maintain brand health and support growth once market conditions begin to recover. Group General and Administration (G&A) expenses were $33.1 million, an increase of $0.3 million on 1H 2023. G&A as a percentage of total revenue was 4.6%, down on 1H 2023 at 4.9%, supported by initiatives aimed at reducing non-essential G&A expenses across the Group. Total assets were $1,442.0 million, up $16.2 million on 31 December 2023 and bank debt at the end of 1H 2024 was $274.4 million compared to $289.4 million as of 31 December 2023, due to a combination of net repayments of $23 million offset by $8 million of exchange rate effects. Total liabilities were $1,132.0 million, down $3.3 million on 31 December 2023. The Group had bank debt facilities totalling $385.9 million, with $111.5 million undrawn. Cash and cash equivalents decreased by $9.6 million since 31 December 2023 with the higher earnings offset by investment in the store development programme and the repayment of bank loans. RBD remains comfortably within all banking covenants with a Net Debt to EBITDA ratio of 1.9:1 (2.4:1 in 1H 2023). Khan added, “in addition to focusing on margin and profit recovery, we are launching innovative new products, transforming our menus, investing in technology, and delivering enhanced marketing programmes in order to continue to grow our distinctive brands”. “We continue to push the boundaries of creativity to deliver insight-driven marketing and social media programmes, which are creating virality and solidifying our brands at the forefront of culture”. “The margin recovery initiatives implemented in 2H 2023 will continue to deliver steady improvements over the next 18 months.” Parés said in closing that, “while the operating environment continues to present challenges, the last 12 months have been transformative for Restaurant Brands, and we are seeing the results. Looking forward, we are gearing up for the next phase of growth alongside our investors, our customers and our team”. Authorised by: Arif Khan CEO Phone: 525 8700 Julio Valdés CFO Phone: 525 8700 ENDS.