Burger King 2012 Annual Report Download - page 50

Table of Contents
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During 2012, system comparable sales growth of 3.2% in EMEA was driven by comparable sales growth in Germany, the United Kingdom, Russia
and Turkey, partially offset by negative system comparable sales growth in Spain. EMEA’s successful balance of value promotions and strong premium
product promotions contributed to incremental sales primarily in Germany and the United Kingdom.
During 2011, system comparable sales growth of 4.3% in EMEA was driven by comparable sales growth in Germany, Turkey and Italy.
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During 2012, Company restaurant revenues decreased primarily due to the net refranchising of 59 Company restaurants during 2012 and unfavorable
FX impact. These factors were partially offset by Company comparable sales growth.
During 2011, Company restaurant revenues decreased due to the net refranchising of 7 Company restaurants during 2011 as well as the impact of 34
Company restaurants refranchised in September 2010, partially offset by Company comparable sales growth and favorable FX impact.
During 2012, CRM % increased primarily as a result of the leveraging effect of Company comparable sales growth on our fixed occupancy and other
operating costs and the net refranchising of 59 Company restaurants with lower than average CRM% during 2012. These factors were partially offset by
increased food, paper and product costs, promotions of lower margin menu items and wage rate increases in Germany.
During 2011, CRM % increased primarily as a result of the leveraging effect of Company comparable sales growth on our fixed labor and occupancy
and other operating costs, partially offset by lower food margins driven by higher commodity prices in Germany and the United Kingdom, wage rate increases
in Germany and Spain and the impact of acquisition accounting.
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During 2012, franchise and property revenues increased due to franchise comparable sales growth, franchise NRG of 240 restaurants and the net
refranchising of 59 Company restaurants which resulted in increased royalties and rental income. Additionally, initial franchise fees increased as a result of
the increase in franchise NRG during 2012 and renewal and other related franchise fees increased primarily due to the early renewal of franchise agreements.
These factors were partially offset by unfavorable FX impact.
During 2011, franchise and property revenues increased due to franchise fees and royalties derived from franchise NRG, franchise comparable sales
growth and favorable FX impact. These factors were partially offset by decreased rental income from a reduction in the number of properties leased or
subleased to franchisees.
During 2012, franchise and property expenses increased due to rent expense associated with additional properties leased or subleased to franchisees as a
result of refranchisings and an increase in bad debt expense, partially offset by favorable FX impact.
During 2011, franchise and property expenses increased due to an increase in franchise agreement amortization of $8.3 million and unfavorable FX
impact. These factors were partially offset by a decrease in bad debt expense and decreased rent expense from a reduction in the number of properties leased or
subleased to franchisees.
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During 2012 and 2011, segment income increased due to a decrease in segment SG&A and an increase in net franchise and property income, partially
offset by a decrease in CRM.
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Source: Burger King Worldwide, Inc., 10-K, February 22, 2013 Powered by Morningstar® Document Research℠
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