Burger King 2013 Annual Report Download - page 45

Table of Contents
Comparable Sales Growth
During 2013, system comparable sales growth of 2.4% in EMEA was driven by comparable sales growth in Germany, Spain, Turkey, the United
Kingdom and Russia. EMEA’s successful balance of value promotions and strong premium product promotions continued to drive sales.
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.
Company restaurants
During 2013, Company restaurant revenues decreased primarily due to the net refranchising of Company restaurants during the past two years,
partially offset by comparable sales growth and favorable FX impact. As of October 25, 2013, we ceased to have any Company restaurants in EMEA.
During 2013, CRM% increased primarily as a result of the leveraging effect of comparable sales growth on our fixed occupancy and other operating
costs, the net refranchising of Company restaurants with lower than average CRM% during 2013 and lower depreciation expense.
During 2012, Company restaurant revenues decreased primarily due to the net refranchising of Company restaurants during 2012 and unfavorable FX
impact. These factors were partially offset by comparable sales growth.
During 2012, CRM% increased primarily as a result of the leveraging effect of comparable sales growth on our fixed occupancy and other operating
costs and the net refranchising of 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.
Franchise and Property
During 2013, franchise and property revenues increased primarily due to an increase in royalties driven by comparable sales growth, net restaurant
growth and the net refranchising of Company restaurants. Additionally, franchise and property revenues increased as a result of a $4.3 million increase in
franchise fees and other revenue driven by the increase in the number of restaurant openings and favorable FX impact. During 2013, franchise and property
expenses were relatively unchanged from the prior year.
During 2012, franchise and property revenues increased due to an increase in royalties driven by comparable sales growth, net restaurant growth and
the net refranchising of Company restaurants. Additionally, franchise and property revenues increased as a result of an increase in property revenues
associated with new leases and subleases to franchisees as a result of the net refranchising of Company restaurants and a $4.9 million increase in franchise
fees and other revenue driven by the increase in the number of restaurant openings and the early renewal of franchise agreements. These factors were partially
offset by unfavorable FX impact.
During 2012, franchise and property expenses increased due to property expense associated with additional properties leased or subleased to franchisees
as a result of refranchisings and an increase in bad debt expense of approximately $0.6 million, partially offset by favorable FX impact.
Segment income
During 2013 and 2012, segment income increased due to an increase in franchise and property revenues net of expenses and a decrease in Segment
SG&A, partially offset by a decrease in CRM.
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Source: Burger King Worldwide, Inc., 10-K, February 21, 2014 Powered by Morningstar® Document Research℠
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