Restaurant Brands International Inc. (NYSE:QSR) Q3 2018 Earnings Conference Call - Final Transcript

Oct 24, 2018 • 08:30 am ET

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Restaurant Brands International Inc. (NYSE:QSR) Q3 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, and welcome to the Restaurant Brands International Third Quarter 2018 Earnings Conference Call. All participants will be in a listen-only mode. (Operator Instructions). After today's presentation, their will be an opportunity to ask questions. (Operator Instructions) Please note, this event is being recorded.

I would now like to turn the conference over to Markus Sturm, Head of IR. Please go ahead.

Executive
Markus Sturm

Thank you, operator. Good morning, everyone, and welcome to Restaurant Brands International's earnings call for the third quarter ended September 30, 2018. A live broadcast of this call may be accessed through the Investor Relations web page at investor.rbi.com, and a recording will be available for replay.

Joining me on the call today are Restaurant Brands International's CEO, Daniel Schwartz; and CFO Matt Dunnigan. The team will be available to answer questions during the Q&A portion of today's call.

(Forward-Looking Cautionary Statements)

In addition, this earnings call includes non-GAAP financial measures. Reconciliations of non-GAAP financial measures are included in the press release available on our website.

Let's quickly review the agenda for today's call. First, Daniel will start by discussing highlights for the third quarter and will then review our performance at Tim Hortons, BURGER KING and Popeyes Louisiana Kitchen. Matt will then review consolidated financial results for the quarter, following which we will open up the call for Q&A.

I'd now like to turn the call over to Daniel.

Executive
Daniel Schwartz

Thanks, Marcus. Good morning, everyone, thanks for joining us today. I'm pleased to provide an update on our third quarter results. On a consolidated basis, this quarter we grew our adjusted EBITDA to $571 million or $576 million under prior revenue recognition standards, which represents an organic year-on-year increase of roughly 6%.

As a reminder, for comparability purposes, we're presenting the 2018 organic growth figures both on a constant currency basis as well as under previous accounting standards in both periods.

Our adjusted diluted EPS was $0.63 per share for the quarter, up from $0.58 per share in the prior year period. This increase was driven by adjusted EBITDA growth combined with the accretive redemption of our preferred shares in December of 2017, partially offset by a higher tax rate as compared to last year.

At Tim Hortons, systemwide sales grew by 3%, driven by net restaurant growth of 3% and slightly positive comparable sales.

This quarter's results reflect a continuation of sequential improvement in Canada comparable sales to nearly 1%, partially offset by softer sales in US.

At BURGER KING, we achieved systemwide sales growth of nearly 8%, reflecting net restaurant growth of 6% and comparable sales of 1%. Our global comparable sales this quarter reflect softer results in the US of negative 0.7%.

At Popeyes, we grew our systemwide sales by roughly 8%, driven by net restaurant growth of nearly 8% and slightly positive comparable sales. Our comparable sales reflect softer results in the US and a continuation of strong sales momentum in our international markets.

We remained confident in our long-term strategies to drive sustainable