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Agenda
ARCOS DORADOS
Morgan Stanley Conference
November 13, 2012
Woods Staton
Chief Executive Officer
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.
1
WORLD’S LARGEST
McDONALD’S FRANCHISEE
BASED ON SYSTEMWIDE
SALES AND NUMBER OF
RESTAURANTS
5.5%
of McDonald’s 2011
global sales
6.8%
of McDonald’s 2011
total franchised
restaurants
Over
90,000 employees
UNDISPUTED LEADER IN
THE QSR INDUSTRY IN
LATIN AMERICA
SUBSTANTIAL GROWTH
OPPORTUNITIES IN
UNDERPENETRATED
MARKETS
• Large and growing
QSR industry
• Surging middle class
with preference for
convenience and
away-from-home
eating
• New restaurant
openings, reimagings
and brand extensions
to add value
SOLID MANAGEMENT
TEAM WITH
SUCCESSFUL TRACK
RECORD
• 20+ years average
experience in the
McDonald’s system
• Solid performance in
key financial metrics
under current
management
1,880
Restaurants
1,852
Dessert Centers
319
McCafés
Arcos Dorados:
The Leading QSR Player in Latin America
THE ASPIRATIONAL McDONALD’S EXPERIENCE IN LATIN AMERICA
Arcos Dorados is an Operator
We Operate and Sub-franchise Restaurants Operator business model
COMPANY OPERATED RESTAURANTS
Revenues from Restaurant Sales
Royalty Fee
Costs related to running the business
Operating Results
SUB FRANCHISED RESTAURANTS
Revenues from Rental Income
Rental Fee (related to real estate)
Profitability of Sub-franchised Restaurants
*Royalty Payments = collected and paid to McDonald’s Corporation
27%
73% -
-
-
Sub-
Franchised
Operated
SLAD
Brazil
Caribbean
NOLAD
556
691
137
496
(1) Restaurants in Arcos Dorados’ territories as of September 2012; does not include McCafé units & Dessert Centers
30%
37%
7%
26%
1,880 100%
Unmatched Footprint in the Region Unique platform with geographic diversification
NUMBER OF
RESTAURANTS(1)
EXPERIENCED
MANAGEMENT
TEAM
Proven track record
of delivering growth
and profitability
• 20+ years
average
experience
in the region
RIGHT
STRATEGY
Market savvy
• Product platform,
pricing,
promotions
• Strong
development
pipeline
RIGHT
INDUSTRY
Large and growing
QSR market
• Underpenetration
allows for ample
opportunity
• Emerging market
growth remains
healthy
RIGHT
“ZIP CODE”
Surging middle
class favoring
convenience and
away-from-home
eating
RIGHT
BRAND
Dominant position
in Latin America
• Brand
• Aggressive
product intros
Investment Highlights
Dominant QSR brand in the region
9.9%
3.1%
2,5%
1.6%
1.3%
1,2%
Mac
Burgerking
Subway
Habbs
oxxo
Bobs
3.2x
Combined market
share: 9.7%
Superior Brand Recognition and Leadership Position
MAJOR FAST FOOD RESTAURANTS IN LATIN AMERICA: 2011 MARKET SHARE
6
# Units
1,840
804
295
9,546
1,003
1,762
Restaurants in Arcos Dorados’ territories as of December 2011; OXXO’s count as of June 2011
MACROECONOMIC
DRIVERS
7
% of Population between 15-34 years old
Latin America: Attractive consumer market complements brand attributes
Sources: IMF, CEPAL, UNECE, DANE, FGV, IBGE and the Brazilian Ministry of Finance
2003 2011
Class D/E Class C Class A/B
96
(55%)
13
(8%) 66
(37%)
64
(33%)
22
(12%) 105.5
(55%)
~39.5mm
(mm individuals and % population)
7.3%5.1% 5.2% 4.8%
2.8%
Argentina Brazil Chile Colombia Mexico
34,5%
32,6%
34,6% 33,7%
27,5%
Argentina Brazil Colombia Mexico US
Our Region: Rapidly Growing Middle Class Prefers Convenience of Eating Out
GDP per capita (PPP) growth
2006-2011 CAGR (%)
Young and Growing Population
Changing socio-economic profile in Brazil
Improving Economic Conditions
8
Middle Eastern 2%
Chicken 8%
Latin American
F. Food 5% Bakery 24%
Burger
18%
Others
46%
Arcos Dorados
54%
Burger segment sales: $8.5 bn
Latam fast food sales: $47 bn
Fast Food growth outpaced other
categories in the region Other Fast Food
42%
Latam Key Categories sales: $27 bn
Large & Growing Fast Food Industry
Fast Food Industry Potential Growth
Latam Fast Food
Burger Segment
9 Source: © Euromonitor International – October 2012
Strategic Initiatives Key vectors: A focus on driving value
Comparable Sales Growth
New Unit Development
Margin Management
G&A Leverage
EBITDA-to-Net Income Yield
GLOBAL INITIATIVES
Product
CORE MENU
Price Strategy
GRANDES PLACERES,
PEQUEÑOS PRECIOS
Promotion
LOCAL PROMOTIONS PREMIUM PRODUCTS MCTRIO / MCCOMBO DEL DÍA
Delivering relevant and value-oriented menus, while leveraging the local and global reach of the brand
Growth Driver: Three “P” Strategy
11
2008 2009 2010 2011 2012 E
Restaurants (End of period) 1,640 1,755 1,680
Gross openings
85
58 64
101
Substantial Opportunity for New Restaurant
Openings
Accelerating new openings in the region
1,840
12
130
North
Northeast
Midwest
Southeast
South
Actual Portfolio
Market
Potential
Brazil NOLAD SLAD Caribbean
3Q11 3Q12
Brazil NOLAD SLAD Caribbean
3Q11 3Q12
13
Solid Regional Organic Growth
Organic Revenue Growth by Region
Organic Adjusted EBITDA Growth
-9.2%
8.7%
17.9%
4.3%
23.1%
5.2%
-17.5%
166.1%
Total Consolidated 3Q12 Revenues: $962 million
Total Consolidated 3Q12 Adjusted EBITDA: $84 million
Excluding currency translations and special items
3Q12 Balance Sheet & Leverage Metrics
14
($ in millions, except per share data) 3Q12 FY11
Cash & cash equivalents 244.1 176.3
Total Financial Debt (i) 653.1 532.3
Net Financial Debt (ii) 409.0 536.0
Total Financial Debt / LTM Adjusted EBITDA
ratio 2.0 1.6
Net Financial Debt / LTM Adjusted EBITDA
ratio 1.2 1.0
(i) Total financial debt includes short-term debt, long-term debt and derivative instruments (including the asset portion of derivatives amounting to $5,263 as a reduction of
financial debt)
(ii) Total financial debt less cash and cash equivalents
20 years in the Company
20 years in the Company
18 years in the Company
21 years in the Company
24 years in the Company
VP COO
S. Alonso
VP CFO
G. Lemonnier
VP Development
S. Magnasco
VP Marketing
R. Mandia
VP Supply Chain
H. Sbrolla
President & CEO
W. Staton 26 years in the Company
20+ average years experience in the McDonald’s system
Experienced Management Team
Unmatched Track Record in the Industry
Management Team
15
Right “Zip Code”
Right Industry
Right Brand
Right Strategy
Experienced
Management
Team
Investment Summary Arcos Dorados is strategically positioned to capture an
increasing share of a growing marketplace
For additional information:
Sofia Chellew
Investor Relations
(+5411) 4711-2515
sofia.chellew@ar.mcd.com
17
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