Good day. And welcome to the Restaurant Brands International First Quarter 2019 Earnings Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please also note, this event is being recorded. I would now like to turn the conference over to Chris Brigleb, RBI, Head of Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Restaurant Brands International's earnings call for the first quarter ended March 31, 2019. As a reminder, a live broadcast of this call maybe accessed through the Investor Relations webpage at investor.rbi.com and a recording will be available for replay. Joining me on the call today are Restaurant Brands International’s CEO, José Cil, and CFO, Matt Dunnigan. José and Matt will also be joined by our COO, Josh Kobza for the Q&A portion of today’s call. Today’s earnings call contains forward-looking statements, which are subject to various risks set forth in the press release issued this morning and in our SEC filings. 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. José will start with some opening remarks and highlights for the first quarter, and then discuss our performance at TIM HORTONS, BURGER KING and POPEYES. Matt will then review financial results before opening the call up for Q&A. I'd now like to turn the call over to José. José Cil: Thanks, Chris. And good morning, everyone. I’ll start with a few summary of Q1 results, but then I’ll spend the majority of my time sharing my views on the key drivers of our performance, and the confidence we have in our teams and plans across each of our brands to continue driving strong system wide sales growth around the world. Overall, we had another good quarter with 6.4% consolidated system-wide sales growth, reaching nearly 26,000 restaurants worldwide. Our system-wide sales growth was led by BURGER KING at more than 8%, TIM HORTONS at about 0.5% and POPEYES at nearly 7%. Our results in the quarter were highlighted by…

Thanks José. And good morning, everyone. This quarter system-wide sales across each of our brands led to adjusted EBITDA of $500 million, up over 5% organically year-over-year. It’s also important to highlight that as we discussed previously, there can be temporary mismatches between ad fund revenues and expenses. This quarter ad fund expenses exceeded revenues by $4 million more than they did in the first quarter of last year and impacted our consolidated organic adjusted EBITDA growth rate by approximately 1%, excluding this impact, our growth rate would have been over 6%. At the segment level, TIM HORTONS first quarter adjusted EBITDA was $237 million, which represents a 1.1% organic increase year-over-year. This increase was driven by continued system-wide sales growth, primarily as a result of 1.9% unit growth, offset by lower comparable sales of negative 0.6%. Substantially all of the negative $4 million year-over-year impact to consolidated adjusted EBITDA related to the mismatch in timing of ad fund revenues and expenses was attributable to TIM HORTONS. Excluding this impact, our organic adjusted EBITDA growth at TIM HORTONS would have been approximately 3%. At BURGER KING, we grew system-wide sales by more than 8%, driven by continued momentum in net restaurant growth of nearly 6% and comparable sales of over 2%. Growth in our topline resulted in Q1 BURGER KING adjusted EBITDA of $222 million representing a year-over-year organic increase of nearly 10%. Finally at POPEYES, system-wide sales growth for the first quarter was just under 7% driven by net restaurant growth of approximately 6.5% and comparable sales of 0.6%. Growth in our topline resulted in adjusted EBITDA of $41 million, which was up over 6% organically year-over-year. Our first quarter adjusted net income was $255 million. This compares to the first quarter of 2018 adjusted net income of $314…

Thank you. We will now begin the question and answer session. [Operator Instructions] Today’s first question comes from Nicole Miller of Piper Jaffray. Please go ahead.

Thank you. Good morning. And we appreciate the update. I actually just have one question on delivery this morning with a couple of parts if that's okay, please. And first, could you just talk big picture about technology and the first part is how do you leverage at the RBI level the platform, thinking kind of when you’re talking about the POS upgrades at POPEYES? The second part is what data are you getting, you were explicit in saying you know it's a higher average check, but what else can you tell us about the delivery customer? And then the third part is in terms of delivery, what delivery sales at each brand is possible are going through the third party marketplace apps and which ones are going through your brand apps or what is your intention to drive business that way? Thank you. José Cil: Hi, Nicole. I’m going to have -- thanks for the question. I’m going to have Josh answer that.

Hey, Nicole. Good morning and thanks for the question. I think like you we are very excited about the future of technology and the relevance of it for all of our brands around the world on many fronts, but particularly for delivery. I think we’ve seen our business - starting in the international markets, but increasingly in the US, the growth of this new sales channel. And I think we’ve kind of just gotten started with it 12 to 18 months ago and we’ve seen it grow in penetration, as particularly across our US business with BURGER KING and POPEYES. I think as José has mentioned ,we’ve grown pretty rapidly the coverage of our restaurants with BURGER KING now to almost half of the system in the US and with POPEYES to about 1300 restaurants now across the US. And I think our outlook for that is to continue to grow coverage over the coming quarters and years, and probably also to expand the sources from which we take orders over time. We see these channels to be highly incremental and to be profitable to our restaurants. So I think we’ll look to expand those. At the same time, we’ve also spend a lot of time especially with some of the centralized resources that you mentioned trying to improve how we operationalize some of these new channels, particularly through technology and through integrations with US and how we integrate with some of the third party channels. So especially over the last couple of quarters, we’ve worked on making sure that we have direct integrations and that helps us to make sure that we can have more seamless ordering and we’ve also seen a bit - a pretty big improvement in some of our ops metrics and how we can deliver to our guest and these channels, as we roll them out and specially as we take orders from more order taking channels with delivery as well. So we’re pretty excited about it. The last one I’d say is just broadly on data and understanding our guest better. This is something that we have been able to leverage particularly essentially across all of our digital channels and we’ll talk about a bit more I think in a couple of weeks at Investor Day. As we move to a more digital environment, we’re really being able to understand our guest in a way that we’ve never have before. And I think it's really exciting for us to be able to look at the business in a new way, understand how people interact with our brands better. I think it's going to make us much smarter about the business and enable us to provide a better experience to our guests. So I think it's all very exciting and we look forward to sharing much more about it with the rest of our investors and analysts in a couple of weeks here.

And our next question today comes from John Glass of Morgan Stanley. Please go ahead.

Thanks. Good morning. José, can you talk a little bit more about unit growth and how you would like to frame this year? I guess, specific question is, what did the closures in the US - how did that – how much did that impact the total BURGER KING units? And how you think about that in the years? Just a year when you think you can open in total about the same number of units on a system wide basis globally as you did last year, is it going to be lower for various reasons, maybe help us just frame 2019 please? José Cil: Hey, John. Thanks for the question. As we mentioned, the unit growth - the net unit growth in quarter one slowed slightly, but that was the result of the plant closures in the US. This is actually quite healthy for the business. It helps continue to build franchise profitability in the US system as we close these lower volume restaurants and we’re replacing them with new BK of Tomorrow restaurants. So all-in-all, the plant closure for the first quarter were positive. We don't give guidance or direction in terms of the performance or what we expect to deliver from a net restaurant growth at a company level for the full year. But we're super excited about the pipeline, we remain very optimistic about our long-term prospects for growth. We have a solid pipeline for each of the brands. In our home markets, we have very solid pipelines globally. We tend to see fluctuations in performance quarter-over-quarter. But we look at the pipelines and our development plans over the long haul and we're excited about the prospects for the year and beyond. Thanks for the question.

And our next question today comes from Dennis Geiger of UBS. Please go ahead.

Good morning. Thanks for the question. Wondering if you could talk a bit more about the benefit from the Tim's loyalty program, and may be sort of the strong adoption rates, so beyond the strong adoption rates that you’ve seen, anything else that you can highlight at this early stage, as it relates to driving visits, to driving sales? I guess related to that Josh, you kind of just touched on some of the data, but just how quickly can you start to collect this data from the loyalty program at Tim’s and then ultimately utilize it to impact customer behavior and drive traffic, is that something we could see in 2019, just some commentary there? Thanks.

Yeah. Hi, Dennis. It's Josh. Good morning. Thanks for the question. Indeed we are really pleased with the results so far on loyalty. As I think José mentioned a little bit ago, you know, the engagement from our guest so far has been really impressive. We have something like half of our transactions already everyday going through this new loyalty program in a very short period of time and I think that’s really exciting. To your point, I think the most exciting piece about that, may be or probably two things. One, it's allowing us to give something back to our most loyal guests and kind of reward their loyalty to our brand. I think that's something that’s really special. And two, going back to the point that I made to Nicole's question earlier, it's helping us already in just such a very short period of time to be able to understand our business much better. I would tell you it’s already changing the way that we look at the business, that we are able to understand the business, to be able to look at things on a guest by guest perspective. And so I think that we’re already figuring out how it’s going to change, how we look at products and promotions, and I think it's going to change the way that we manage the business here already this year in 2019.

And our next question today comes from Jeffrey Bernstein of Barclays. Please go ahead.

Great. Thank you very much. Two unrelated questions. The first one, just on the TIM HORTONS Canadian business, you mentioned some enhanced competitive activity above and beyond kind of the weather and other unusuals. I'm just wondering if you can provide any color on that and how management thinks about responding to something like that in terms of better battling back from a influx of competition? And the other question was just on the BURGER KING, Impossible launch, I mean it seems like it was just some test, but now it seems fairly certain that it's going to be rolled out nationally later this year. So, I'm just wondering if you could provide some color in terms of your expectations. I mean it would seem like that's not necessarily in line with your core customer. But just wondering if you can provide some color in terms of what your outlook is for that platform? Thank you. José Cil: Thanks, Jeff. Appreciate the questions. On the competitive activity, we obviously are in a very highly competitive market in Canada. That’s not anything new. The intensity and nature of the competition and the competitor tends to vary from time to time and we usually don't call at any particular competitor activity as it's hard to pinpoint exactly - hard to quantify exactly what the impact is. That’s why we were able to share with you more information around the impact that we were able to quantify with Roll Up The Rim and whether we felt those were - we had much more concrete data to be able to share with you on that. I think what's encouraging as we look at the long-term plans and prospects for the business in Canada for Tim’s is that with the key fundamentals of the Winning…

And our next question today comes from John Zamparo of CIBC. Please go ahead.

Thank you. Good morning. Appreciate the color on the Tim’s business. José what's the longer-term vision for Roll Up The Rim if the enhanced giveaways didn't generate the incremental traffic you've been hoping for, how do you evolve to match that heightened level of competition that you've seen? José Cil: Yeah, s e made some changes - thanks for the question John. We made some changes to the program. We increased the length of it. We increased the coffee awards and we didn't see a corresponding uplift in traffic. We look at check in traffic pre-and post-promotion and we moderated the changes after the launch and we didn't see the impact that we expected from those changes. That said, Roll Up The Rim is a 33 year old brand, it has tremendous awareness in Canada. Our guests in Canada love the program. It connects well with them. And so we think there's an opportunity to integrate this with digital and continue to evolve the program to meet the expectations of our guest and of our franchise and restaurant owners in the business. So we're excited about continuing to evolve the platform. We weren't pleased with the results in Q1, but long-term we view this as a brand that's important for the TIM HORTONS business in Canada.

And our next question today comes from Gregory Francfort of Bank of America. Please go ahead.

Hey, guys. Thank you. I mean, cost pressure in the US the last few quarters, it sounds like QSR players have been a little bit more willing to take their average checks up and have you guys noticed or seen this dynamic and has that changed how you're approaching pricing and check recently in your BK US business? José Cil: Thanks for the question Greg. We continued to see franchise profitability in the business in the US and it fluctuates from month to month and quarter to quarter. But over the long haul, we've seen good progress on that front on that side of the business. Our franchise partners remain very excited about the business – they are continuing to invest and re-imaging, as well as new stores. Our focus has always been and will continue to be on driving guest counts and traffic more traffic into our restaurants. And so we're going to approach the business as we have in the past with a long-term view of having a balanced approach with good core offerings, premium offerings that really drive excitement around - amongst those that want to indulge and then we have value offerings that are going to be for the everyday use. We also believe there is a long-term opportunity for our breakfast business, which we started to invest in an overhaul towards the end of Q1 with the launch of the BK café. So long term our focus continues to be on driving more guests into the restaurants and having a balanced everyday good offer for the guest to come in and enjoy the BURGER KING brand, as well as the same approach that we apply for the other brands. Thanks for the question.

And our next question today comes from Sara Senatore of Bernstein. Please go ahead.

Thanks. One question and then a follow-up please. First, on the question, I just wanted to get your thoughts on what we're seeing in terms of delivery traffic, as potentially just shifting some of the business between daypart, such as to say breakfast seems broadly weak in the industry and yet dinner is getting better I think because it benefits from delivery. So are you seeing any evidence that perhaps you're just seeing some of your traffic shift among dayparts, either breakfast and lunch and into dinner something along those lines? And then my follow-up, was just on Tim’s in China, I know it's really small and its early days but it's such a big piece of the unit growth story for that brand going forward. If you could just give us any color on may be what you're seeing there with respect to economics or demand or brand perception? Thanks. José Cil: Thanks, Sara. I'm going to have Josh answer the question on delivery and then I'll take the one for Tim’s China.

Hi, Sara/. Good morning. Thanks for the question on delivery. Well, I would say that, we have seen that the delivery kind of our delivery orders will over index a little bit towards later in the day or kind of a dinner daypart. We haven't I wouldn't say that we've seen our kind of our baseline or x delivery business shifting in a discernible way. So I'll give it back to José for the Tim's China question. José Cil: Thanks, Sara. So on Tim's China I think its early days. We had two restaurants open as of the end of Q1 and we're very pleased with the initial performance. I was there in March, as I mentioned in my comments earlier. And I saw the first restaurant that we opened I actually met some long time TIM HORTONS fans there were two gentlemen from British Columbia there that were just sitting and watching and observing the restaurant the menu, the guest interaction and it was a really neat experience. The good news is they approved, they approved of the image, they approved of the product, they approved of the overall experience and we're seeing that the Chinese consumer and guest is also approving. Our early reads on the business are very positive. We've had very positive social media reactions from local guests. The guests are interacting with the brand. The way we expected on beverage and also on the food side. I think this is our ace new country entry and we applied a lot of the learning's from the earlier launches. So I think we were much smarter about looking at and took our time to look at the menu ensure, we have the right beverage, offering including an expansion of the tea offering. We also took a close look at what food offerings we should be delivering to our guest there in order to make it relevant for the Chinese consumer, while at the same time, maintaining kind of the principles and the fundamentals of the TIM HORTONS brand. We've seen a very good start it's been a smooth beginning in China. And but its early days and we have a long-term view on the business in China and continue to be excited about the prospects there. We also have a great team on the ground, which is super motivated and excited so we're very bullish on China for the long haul.

And our next question today comes from Alton Stump of Longbow Research. Please go ahead.

Great. Thank you. Good morning. Just wanted to ask it was mentioned the competitive environment in Canada getting a bit more intense. I mean, is there any color as far as is it kind of the QSR players or kind of the overall QSR space or just if you can give us that where the competition's coming from? José Cil: Yeah, thanks for the question. I think as I mentioned earlier in response to the earlier question, it's a highly competitive market. You see some shifts in the level of competition and the nature of the - and the competitor shift from time to time. We don't - it's hard to call out any particular competitor activity and we don't do it given the difficulty of pinpointing and quantifying it. But as I mentioned earlier, I think we remain very encouraged about the business. We have a very strong brand obviously in Canada serving seven out of 10 cups of coffee in the country. We continue to have very strong and healthy traffic counts and we continue to have a very strong and healthy restaurant level P&. So we continue to focus on the fundamentals of the Winning Together plan and we think over the long haul, those fundamentals will allow us to continue to grow the business in any environment.

And our next question today comes from Will Slabaugh of Stephens. Please go ahead.

Good afternoon, guys. I had a question on BURGER KING. You seem to have pulled back decently in the level of discounting in the business in the US in particular. Curious if we should expect this level and type of promotion to continue and maybe return to being somewhat more intent. And at the same time, given the strong results internationally, rather how would you characterize your promotional activity in some of those stronger markets that you mentioned and how that compared to prior quarters? Thank you. José Cil: Thanks for the question. As we've said many times in the past, I think our business grows here in the US and internationally when we have a balanced offering. Good core offerings with featuring the Whopper and our amazing chicken sandwiches and other core offerings with a focus also on premium and value to address everyday guest as well. We’re building our breakfast business in the US and we think that's an opportunity for growth over the long haul. And I think what's also positive here is that these plans that we're building for the US and internationally our plans that we build together with our US franchise partners as well as international partners. We’ll see some shifts and movements in terms of where the focus is by quarter. We don't share that in advance for obvious reasons, given the competitive nature of the business, but we do believe firmly and the importance of a balanced offering and continue to deliver on a calendar that meets that demand. Thank for the question.

And our next question today comes from Jeremy Scott of Mizuho. Please go ahead.

Hey, thanks. You mentioned BK US comps didn't come in as expected. Breakfast was soft. Promotions didn't go as planned. I know you had a difficult lap. I've been wondering if you could speak to the underlying traffic trends. I think there was a sense earlier this year that the promotional activity was reaching this apex and it seems like that we've seen the deceleration to Greg's and Will's question. But what has that done to your price motivated traffic? Are you comfortable with your marketing balance right now? And I think you talked about TIM HORTONS comps year-to-date, but can you provide any color on BURGER KING US as well? José Cil: Hey, Jeremy. Thanks for the question. I'm never comfortable, but I'm super excited long term about the business in the US and as we mentioned in Q1, we had good performance in BURGER KING in the US across the menu, but we were lapping some strong promotions and product launches, including the Double Quarter Pound King and the launch of the Spicy Crispy Chicken. What we saw that worked well in the quarter were the $6 King box which has been in place for a bit of time now and the launch of the Big King XL which is a premium offering and we transitioned from $1 price point on nuggets to $1.49 price point and also introduced or reintroduced the spicy nuggets and that did well. Where we didn't do so well, as I mentioned earlier we didn't have a great launch to the grilled chicken sandwich, it's a great product. But it didn't have the connection to the guest as we were expecting and we had a soft start to the quarter in breakfast, but we addressed that throughout the quarter towards the end of March with the kick off of BK Café which is a long-term investment for us to build our breakfast business. As I said earlier in response to the previous questions, our focus will always be on having a balanced approach and we think that having good value is a must in our business. But at the same time, if we deliver great quality products through our core offerings and premium offerings, as well as the expansion of our breakfast business, we think there's a long-term opportunity for us to grow traffic and top line sales in our U.S. business for the long haul. Thank you for the question.

And our next question today comes from David Tarantino of Baird. Please go ahead.

Hi. Good morning. My question on the BURGER KING unit growth and I know you mentioned that there were some closings in the US this quarter. I wanted to clarify, is that a issue that you think was isolated to the first quarter or something you think will continue and if it's going to continue, could you give us give us a sense for how many units are out there that you think are at that marginal profitability level that need to be closed? Thanks. José Cil: Thanks for the question, David. We don't give direction or guidance in terms of openings or closures, but we did call out the plant closures for Q1, because it was a higher number than normal. We expect - as I've mentioned already, we expect the long-term pipeline for the U.S. and international for BURGER KING to continue to be strong. We feel good about our openings plan. Last year we opened more restaurants in BURGER KING in the U S than we have in decades and we continue to see strong uptake by our franchise partners in terms of investing in new stores. The new stores that we're building are freestanding dry fruits featuring the BK of tomorrow image, many of them will double drive-throughs with outdoor digital menu boards, with the full suite of digital offerings including kiosks in many cases, with open kitchens and really attractive looking restaurants. So the mix of openings and closures that we saw in Q1 in the US, I think overall is positive for the business because it helps address franchise profitability which is one of the things we're obsessed with. We are obsessed with having happy guests and happy franchise partners and that those are the two key fundamentals that will help us drive the business from a growth standpoint for the long haul. Thanks for the question.

And our next question today comes from Jon Tower of Wells Fargo. Please go ahead.

Great. Thanks. Just on the BK U.S. app, I know it's still relatively early in the relaunch. But can you just discuss what you're seeing from the monthly active users with respect to frequency or uptake of deals relative to say your average customer? And then kind of going back to the earlier topic around discounting kind of slowing sequentially versus the fourth quarter, it appears that you have quite a bit of discounting or deals through the app is this -should we think about this as being the better channel for you guys to offer some of the deep value offers versus say traditional media in the future. Thank you.

Hey, John, It’s Josh. Thanks for the question. I think to your point that I do believe we're early in our experience with the mobile application, but we're really excited with the success that we've had so far. We've had a lot of traction in getting downloads and we're really pleased with the engagement that we've have on the app. I think that the BURGER KING U.S. team has done some really exciting things whether it's things like the, The Whopper Detour or 3¢ STACKER promotion and I think to your point on frequency, what we've seen so far at least is that it seems like a lot of our bigger fans tend to want to engage with us on the mobile app. So we do see a bit higher frequency from some of those guests. But I think there’s a lot more for us to learn. I think this is a really powerful tool for us to engage with all of our guests, and we'll continue to evolve in how we use that tool and how we were able to provide a greater experience to our guests through this – this and many other new digital interfaces over the coming quarters and years.

And our next question comes from Andrew Charles of Cowen & Company. Please go ahead.

Great. Two separate questions, if I may. José I appreciate the color on Q1 TIM’s Canada comp the reacceleration in April, have two year trends to start secure still a little below the lovely experience in 4Q 2018 despite an impressive 20% of the Canadian population some have the loyalty program and in a very short period time. What do you think the biggest roadblock is returning to two years trends you saw in TIM’s Canada in 4Q? And then Matt, separate question for you in the quarter there was tan inducement recorded with an operating cash flow which was suggest no remodel activity at Tim’s Canada. What was just the following through remodels complete in 4Q? Thanks. José Cil: Great. Thanks for the question. I think as I mentioned earlier all of the underlying fundamentals that drove our Q3 and Q4 performance are still driving our performance today including roughly 1.5% comps so far in April. And what's encouraging is that these building blocks from our Winning Together plan have been – have been resonating well with our guest and continue to drive the underlying business. We are not satisfied with being positive approximately 1.5 and so far in April but it does gives us confidence that we are back on track with Q4 with good momentum and from here we can build even more attraction with our solid plan for balance of the year.

Hey, Andrew, it’s Matt . Just a question around TI. I think a couple off important things to call out. One is seasonal timing, so the first quarter tends to be a lighter quarter for us. We do continue to complete the welcome image remodels and continue to roll that program out. We re-modeled about 50 or so restaurants in the quarter. The other thing that's taking a chunk here is that we also have a joint venture without Tim's and partnership which is a little bit of unique mechanic where we essentially pre-fund the renovation cost for the restaurants and in that JV, and then subsequently rebuild our franchisees for their portion of the investment. And so we funded a few million dollars of that in Q4 of last year and then in Q1 of this year we saw TI credit coming back that offset the TI that we invested into the welcome remodels in the quarter. We are still on track, and if you'll recall last year, I think we remodel approximately 380 restaurants. We have a really strong pipeline and we continue to move forward with that program this year and are excited for the outlook of re-imaging the system across Canada.

Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to José Cil, CEO of Restaurant Brands International. Please go ahead sir. José Cil: Thanks, everyone for participating on this morning's call. As I mentioned earlier, the fundamentals of our business remain strong. The diversity of our global business combined with continued strength of our restaurant expansion model enable us to continue driving solid topline growth in Q1 of nearly 6.5% system wide sales. We're not in this for the short term. We are all here for the long-term. We have great brands, great team, great partners and restaurant owners and a great business model and we are super excited about the long-term growth prospects at RBI. Thanks again. We look forward to updating you soon and we'll see you all on May 15th at our Investor Day.

Thank you, sir. The conference has now concluded and we thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.