QSR: The Sixth Inning of a Five Year Journey; Reiterate Buy Rating

Research evidence excerpt

QSR: The Sixth Inning of a Five Year Journey; Reiterate Buy Rating

ees disbanding their separate

2027 0.90E 1.11E 1.18E 1.10E 4.30E advocacy group as well as 97% of BK franchisees voting to extend heightened marketing

Prior 0.88E 1.09E 1.16E 1.09E 4.22E spending this year.

P/E 17.5x

2028 0.99E 1.20E 1.28E 1.20E 4.68E Timing of Doyle’s incentives align with RBI’s 2028 goal of business simplification:

Prior 0.96E 1.18E 1.25E 1.17E 4.55E

Chairman Patrick Doyle is highly incentivized, through his Nov. 2022 comp package, to get P/E 16.1x

RBI’s stock price up over the next 18-24 months. To get to the high end of the PSU payout

EBITDA ($M) threshold ($122 per share in May 2028, including ~$12 of cumulative dividends), RBI would (FY DEC) 1Q 2Q 3Q 4Q FY

need to deliver ~24% annual TSR from here, which seems unlikely. At that price Doyle 2026 707.0 823.0E 844.0E 817.0E 3,190.0E

would have turned his initial $30mn stock investment in RBI into ~$375mn of compensation

Prior 680.6 818.9E 836.8E 817.1E 3,153.4E (by our math) across shares, options, RSUs and PSUs. But even if RBI delivers a more

EV/EBITDA 14.8x

muted +10% TSR over the next 24 months, Doyle would still reach ~$190mn (by our math).

2027 738.0E 858.0E 883.0E 855.0E 3,333.0E And if the stock is flat from here that drops to ~$130mn. The timing of the vesting lines-up,

Prior 713.3E 851.9E 871.6E 848.7E 3,285.5E unsurprisingly, with the 2026-2028 simplification of the RBI story laid out at the investor day

EV/EBITDA 14.2x earlier this year. But we note this may also be the result of reaching an inflection following

2028 774.0E 896.0E 923.0E 897.0E 3,490.0E 3.5 years of investments, nearly two-thirds of the way through Doyle’s 5.5 year commitment

Prior 747.6E 890.8E 913.2E 888.2E 3,439.9E to reinvigorating the brand.