Restaurant Brands Asia (RBA) Q2 24/25 earnings summary

Executive summary

• India business remains robust, with continued growth in profitability despite a challenging environment and negative same-store sales growth (SSSG) for the first time in 8-9 quarters.

• Dine-in traffic in India continues to increase, supported by value-driven promotions and digital transformation initiatives.

• Indonesia faces significant macroeconomic and geopolitical headwinds, leading to negative traffic and sales, but operational efficiencies and cost controls are being prioritized.

• Consolidated revenue for the quarter ended September 30, 2024, was ₹6,324.28 million, up from ₹6,249.04 million year-over-year, but down sequentially from ₹6,466.86 million.

• Net loss widened to ₹654.54 million for the quarter, compared to a loss of ₹506.52 million in the same quarter last year.

Financial highlights

• India revenue reached INR 492 crores, up 0.3% quarter-over-quarter and 8.5% year-over-year.

• Gross margin in India was 67.5%, up 0.7% year-over-year and flat sequentially.

• Restaurant-level EBITDA in India (pre-Ind AS 116) was 19.8%, up 7.6% year-over-year.

• Company-level EBITDA was INR 24.4 crores, 39.4% higher sequentially and 0.6% higher year-over-year.

• Standalone revenue for the quarter was ₹4,921.22 million, up from ₹4,534.69 million year-over-year.

Outlook and guidance

• India plans to open 55 new restaurants in FY25, targeting a total of 510 by year-end; most new locations are already under construction.

• Medium-term gross margin target for India is 69% by FY27, driven by pricing, supply chain, and distribution initiatives.

• Indonesia aims to reach cash breakeven at the country level through new product launches, marketing, and cost containment.

• Management continues to focus on operational improvements and resource allocation based on segment performance in India and Indonesia.