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Agenda ARCOS DORADOS 4Q & FY 2017 Conference Call Presentation March 21, 2018
Agenda ARCOS DORADOS
4Q & FY 2017 Conference Call Presentation
March 21, 2018
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.
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4Q17 CEO’s Opening Remarks
2
✓ High single digit comparable sales in Q4 and volume increases in every quarter of the year
✓ Highest Adjusted EBITDA margins for a Q4 and full year since 2011.
✓ More than tripled net income in Q4, reaching $62.7 million on an as-reported basis.
✓ More than 120 EOTF restaurants, opened 50 new restaurants, which was at the top end of
our guidance for the year
✓ 2018 Guidance
✓ Openings: between 65 and 70 new restaurants
✓ Total Capex: between $200 and $230 million
✓ 2017-2019 plan
✓ Openings: at least 200 new restaurants
✓ Reivestment: at least $390 million
✓ Total Capex: at least $660
✓ Dividend of $0.10 per share to be paid in two equal installments of $0.05 per share on April
5, 2018 and October 5, 2018.
We have successfully achieved our turnaround strategy driving topline
growth while improving our margins
Note: Unless otherwise indicated, all results referenced exclude Venezuela.
4Q17 Results and Highlights
Restaurant volume growth in each quarter of the year
3
✓ Strong sales performance even on top of a particularly solid final quarter in 2016.
✓ As reported revenues grew 7.6%
✓ Constant currency revenues grew 9.0%
✓ 9.1% expansion in comparable sales
o Favorable shift in mix and positive traffic in every division, except the
Caribbean
✓ Compelling value offered at every tier of our menu board
✓ Continue to work on Service Culture to enhance our second-to-none restaurant
experience
Note: Unless otherwise indicated, all results referenced exclude Venezuela.
4Q17 Performance: Brazil
Solid revenue growth driven by enhanced customer experience, strong
marketing activities and better consumer environment
4
✓ As reported revenues grew 6.6%
o Supported by a 1.4% year-over-year appreciation of the
Brazilian real
✓ Constant currency revenues grew 5.1%
o Result impacted by refranchising of certain
Company-operated restaurants
✓ Comparable sales grew 6.7%
o Faster than the average for the Brazilian
Food Service Institute
o Favorable shift in mix
o Traffic increase
✓ Key marketing drivers
o Qu4ttro Formaggi premium burger
o Co-branded products with Nutella
o McFlurry “Kit Kat White & Milk”
o “Super Mario” and “Pokémon” in the Happy Meal
4Q17 Performance: NOLAD
Improved performance driven by new affordability platform, innovative marketing
and digital initiatives and a better guest experience
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✓ As reported revenues increased 8.7%
✓ Constant currency revenue growth of 7.6%
✓ 7.2% comparable sales growth
o Favorable shift in mix
o Traffic increase in all of the division’s markets
✓ Volume growth in each quarter of the year and comparable sales grew above
inflation.
✓ Key marketing drivers
o “Para los Polleros”, “Quesolocura”
o McTrío 3x3
o McFlurry Hershey’s Mini Kisses
o “Pokemon” in Happy Meal
4Q17 Performance: SLAD
Solid traffic growth and favorable shift in mix; constant currency growth
offsets peso depreciation
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✓ As reported revenues grew 11.3%
✓ Constant currency revenue growth of 20.2%
✓ Comparable sales growth of 20.5%
o Favorable shift in mix
o Solid traffic increase
✓ Key marketing drivers
o McCombo del Dia
o Guacamole burger
o “Papas para el camino”
o McFlurry KitKat
o “Furby” and “Super Mario” in Happy
Meal
4Q17 Performance: Caribbean
Traffic still impacted by the effects of hurricanes Irma and Maria on our
businesses in Puerto and the USVI
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✓ As reported revenues rose 2.1%
✓ Constant currency revenue slightly negative
✓ Comparable sales decreased by 3.5%
✓ Improvement in mix was offset by traffic decline,
primarily in Puerto Rico and the USVI
✓ Key marketing drivers
o Pico de Gallo Guacamole premium burger
o “Lunes Pompiao”
o McFlurry Galak and McFlurry Mama-ía
o “Pokémon” in Happy Meal
Note: Unless otherwise indicated, all results referenced exclude Venezuela.
Mexico
Colombia
Brazil
Argentina
NOLADCosta Rica, Mexico,
Panama
BRAZIL
SLADArgentina, Chile,
Ecuador, Peru,
Uruguay
CARIBBEANAruba, Colombia, Curaçao, French Guyana,
Guadeloupe, Martinique, Puerto Rico, St.
Croix, St. Thomas, Trinidad & Tobago,
Venezuela
27 Restaurant Additions LTM (net)
6 Restaurant Additions LTM (net)
2 Restaurant Addition LTM (net)
-3 Restaurant Additions LTM (net)
4Q17 New Unit Development
SLAD
Brazil
Caribbean
NOLAD
Number of systemwide
restaurants(1)
390
929
350
519
18%
42%
16%
24%
2,188 100%
8(1) As of December 31, 2017; does not include McCafé units (316) & Dessert Centers (2,877)
4Q17 Adjusted EBITDA Bridge
As reported Adjusted EBITDA variations ($ Million)
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$ 83.8$ 89.1
$ 86.3 $ 2.4$ 4.6 $ 0.7
$ 22.3 $ 111.4
0
20
40
60
80
100
120
EBITDA 4Q2016 VeneuelaEBITDA
EBITDA Excl.Venezuela
Organic Growth -Excl. Venezuela
CurrencyTranslation - Excl.
Venezuela
EBITDA Excl.Venezuela
VeneuelaEBITDA
EBITDA 4Q2017
0
10
20
30
40
50
60
70
80
90
Brazil NOLAD SLAD CaribbeanEx.Vza
US
$ M
illio
n
4Q16 4Q17
22.1%
0
50
100
150
200
250
300
350
400
450
Brazil NOLAD SLAD CaribbeanEx.Vza
US
$ M
illio
n
4Q16 4Q17
7.6%
5.1%
20.2%
12.1%
1Excludes currency variations 10
Revenues
US$: As reported% growth: Constant Currency basis1
Adjusted EBITDA
US$: As reported% growth: Constant Currency basis1
Constant Currency Consolidated (Ex-Vza) 4Q17 Revenues: +9.0% Constant Currency Consolidated (Ex-Vza) 4Q17 Adj. EBITDA: +5.5%
4Q17 Divisional Results
-8.7%
EBITDA MARGIN 4Q17 vs 4Q16
Consolidated Ex. Vza Brazil NOLAD SLAD Caribbean Ex. Vza
-10bps +270bps -90bps -70bps -40bps
-0.3%
4Q17 Non-Operating Results
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✓ $4.2 million foreign currency exchange non-cash gain, versus non-cash gain of $3.5
million last year
✓ Net interest expense remained relatively stable year over year at 13.9 million in this
quarter
✓ Income tax expense of $21.4 million in the quarter, compared to an income tax
expense of $18.9 million in the prior year period
✓ Net income of $69.3 million, compared to net income of $21.2 million in same period
of 2016
o The result largely reflects higher year-over-year operating results, which
included $35.6 million from the Company’s re-development initiative compared
with $4.6 million in the prior-year quarter
As reported consolidated results including Venezuela
1Total financial debt includes short-term debt, long-term debt and derivative instruments.2Total financial debt less cash and cash equivalents.
4Q17 Financial Indicators
We continued to strengthen our balance sheet
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As of As of
December 31, December 31,
(In millions of U.S. dollars, except ratios) 2017 2016
Cash & Cash Equivalents 328.1 194.8
Total Financial Debt1 621.5 610.2
Net Financial Debt2 293.4 415.4
Total Financial Debt / LTM Adjusted EBITDA ratio 2.0x 2.6x
Net Financial Debt / LTM Adjusted EBITDA ratio 1.0x 1.7x
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4Q17 CEO’s Closing Remarks
✓ Despite a challenging environment, we substantially met our three-year goals through a
focused execution of our strategic plans
✓ We have been attracting more customers, more often, to our restaurants
✓ We will continue to offer compelling value and great food, rolling out Experience of the Future
and changing our Service Culture
✓ We are taking a leadership role in social and environmental responsibility with respect to
packaging and recycling and kids’ nutrition as well as Climate Change.
✓ Highlights from our ongoing social engagement initiatives:
o Many of our markets partnered with local NGOs to raise funds during our Gran Dia
o Further progress in our efforts to support youth employment initiatives
WE WILL CONTINUE TO LEVERAGE OUR STRONG RESTAURANT PORTFOLIO,
LOCALLY FAVORITE MENU ITEMS AND BEST PEOPLE TO DRIVE SUSTAINABLE
GROWTH AND CREATE SIGNIFICANT SHAREHOLDER VALUE
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IR Contact
For additional information:
Daniel Schleiniger Patricio Iñaki Esnaola
VP of Corporate Communications & IR IR Sr. Manager
+54.11.4711.2675 +54.11.4711.2561
