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Burger King Worldwide, Inc. Reports Fourth Quarter And Full Year 2012 Results

Stocks in this article: BKW

System-wide sales growth of 6.7%, excluding the impact of FX, in the fourth quarter was primarily attributable to comparable sales growth in the U.S. and Canada and net restaurant growth internationally.

In the fourth quarter, organic revenues grew 5.6%, excluding the impact of refranchising and FX headwinds. On a reported basis, total revenues decreased 30.3% to $404.5 million, compared to $580.6 million in the prior year period due to global refranchising transactions as well as unfavorable FX impact, partially offset by comparable sales growth and net restaurant growth.

Organic Adjusted EBITDA grew 22.5%, excluding the impact of refranchising and FX headwinds. On a reported basis, Adjusted EBITDA increased 13.5% to $174.9 million, compared to $154.1 million in the prior year period. Organic growth was driven by comparable sales and net restaurant growth, as well as G&A cost control. On a reported basis, growth was lower due to significant progress on our global refranchising initiative and FX headwinds. For the full year 2012, organic Adjusted EBITDA grew 16.6%.

Adjusted Net Income and Adjusted Diluted EPS increased 61% and 58%, respectively, compared to the prior year, primarily due to an increase in Adjusted EBITDA, lower Depreciation and Amortization and lower interest expense. For the full year 2012, Adjusted Net Income increased 36% and Adjusted Diluted EPS grew 34%.

Operational and Segment Highlights

U.S. and Canada comparable sales gains in the fourth quarter were driven by continued execution of our Four Pillars strategy. Successful new menu additions such as the Chicken Parmesan sandwich, Cinnabon® Minibon® Rolls, and our holiday sweets menu, including sweet potato curly fries and gingerbread desserts, helped drive comparable sales growth. Additionally, compelling limited-time offer promotions, such as our 55 th anniversary WHOPPER® sandwich promotion, helped drive traffic.

Europe, the Middle East and Africa (“EMEA”) delivered comparable sales growth of 1.6% in the fourth quarter, driven by the success of Chili Cheese promotions in the United Kingdom, strong performance in the company’s expanding Russian market, and the continued success of “King of the Month” deals in Germany. Performance in southern Europe was softer, with the company’s key Spain market decelerating as economic conditions deteriorated during the quarter. Net restaurant growth accelerated 170% to 127 units in the quarter, driven by strong development in Turkey, Russia, and the Middle East.

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