Restaurant Brands Half Year Financial Results 2023

Restaurant Brands New Zealand Limited releases FY23 half year results

• Total Group sales for the six months to 30 June 2023 (1H 2023) hit a new high of $640.2 million.

• Net Profit After Tax (NPAT) for 1H 2023 was $2.2 million (1.75 cents per share).

• Combined store Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) before G&A was $78.3 million.

• Store development has continued, with 10 net new stores added to the network in the past 12 months.

• Overall performance in the first half of the year was impacted significantly due to global inflationary pressures, particularly in regard to rising ingredient and wage costs.

Total store sales hit a new high of $640.2 million, up $55.3 million or 9.4% on 1H 2022, supported by 10 net additional stores and a stronger US dollar.

Restaurant Brands New Zealand Limited (RBD) has earned a Group NPAT of $2.2 million for the six months ended 30 June 2023 (1H 2023), compared with $15.3 million in 1H 2022, reflecting the significant inflationary pressures facing the Group in all markets.

Combined store EBITDA before G&A was $78.3 million, down $7.1 million on 1H 2022, with cost inflation pressures partially offset by strong sales and improved performance of the Australian division.

Restaurant Brands New Zealand Limited Chairman, José Parés, said that while sales have grown across all divisions, RBD continues to face global inflationary pressures, particularly in regard to rising ingredient and wage costs.

“Performance in the first half of the year was impacted significantly due to continued input cost increases in the New Zealand business which exceeded earlier expectations of scope and quantum, lower than expected sales growth in California and Hawaii; and higher interest rates leading to increased funding costs.”

“Additionally, labour market pressures have caused adverse staff shortages, requiring many stores across our network to reduce operating hours and/or operate with reduced capacity.”

“The business has implemented a strategic programme of price increases and cost control measures to relieve margin pressures. However, we were not able to raise prices to fully offset the cost increases during the period without significantly impacting transaction volumes.”

“It is critical that price increases are made at a pace and level that is cognisant of sales volumes, customer loyalty and our relativity to competitors. We remain firmly focused on these factors as we seek improved profitability in the second half of 2023.”

Parés says that despite the near-term inflationary impacts on performance, Restaurant Brands remains well positioned to deliver on its strategy to provide continued long-term shareholder value.
“The Board and Management Team are confident there are robust measures in place to achieve against guidance for the full year and rebuild performance to support the roadmap to sustainable growth.”

Restaurant Brands New Zealand Limited Acting Group Chief Executive Officer, Arif Khan, said: “In the second half of 2023, price increases will be closely monitored against macroeconomic factors and transaction volumes.”

“This will be supported by a diligent revenue and margin improvement programme.”

“We continue to fine-tune operations across the business to ensure our systems and processes are fit for purpose to meet the challenges of the volatile economic environment and our growing store network.”
“This includes improvements to several of our internal systems, which will streamline and enhance end-to-end processes over contracting, procurement, pricing, hiring and inventory management, improving margin controls. Additionally, the alignment of environmental, social, and corporate strategies continues to see increased efforts on general waste diversion, energy efficiency initiatives, and food waste reduction programs with a positive result.”

“Continued investment into our digital platforms is also planned to provide improved customer access and attract new customers, alongside menu re-engineering and an enhanced marketing and promotions programmes.”

RBD continues to monitor the trading and economic environment closely as volatility continues across its key markets. Management plans to provide an update on outlook for the Group, in terms of expected time to recovery, at the time of the full-year results.

Against the current economic backdrop, NPAT for the 2023 financial year is expected to be in the range of $12 million to $16 million.

Authorised by:

Arif Khan
Acting Group CEO
Phone: 525 8700

Julio Valdes
Group CFO
Phone: 525 8700

Supplementary table – summary data from the Interim Report

($NZm) 1H 2023 1H 2022 Change ($) Change (%)
Total Group sales 640.2 584.9 +55.3 +9.4
Group NPAT 2.2 15.3 -13.1 -85.6
Group Store EBITDA 78.3 85.4 -7.1 -8.4

ENDS

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Announcement PDF