Agenda
ARCOS DORADOS
“MORGAN STANLEY
CONSUMER CONFERENCE”November 15, 2011
Woods Staton
Chief Executive Officer
Disclaimer
This presentation contains forward-looking statements that represent our beliefs, projections and
predictions about future events or our future performance. Forward-looking statements can be
identified by terminology such as “may,” “will,” “would,” “could,” “should,” “expect,” “intend,” “plan,”
“anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” or the negative of these terms or
other similar expressions or phrases. These forward-looking statements are necessarily subjective and
involve known and unknown risks, uncertainties and other important factors that could cause our actual
results, performance or achievements or industry results to differ materially from any future results,
performance or achievement described in or implied by such statements.
The forward-looking statements contained herein include statements about the Company’s business
prospects, its ability to attract customers, its affordable platform, its expectation for revenue generation
and its outlook. These statements are subject to the general risks inherent in Arcos Dorados' business.
These expectations may or may not be realized. Some of these expectations may be based upon
assumptions or judgments that prove to be incorrect. In addition, Arcos Dorados' business and
operations involve numerous risks and uncertainties, many of which are beyond the control of Arcos
Dorados, which could result in Arcos Dorados' expectations not being realized or otherwise materially
affect the financial condition, results of operations and cash flows of Arcos Dorados. Additional
information relating to the uncertainties affecting Arcos Dorados' business is contained in its filings with
the Securities and Exchange Commission. The forward-looking statements are made only as of the
date hereof, and Arcos Dorados does not undertake any obligation to (and expressly disclaims any
obligation to) update any forward-looking statements to reflect events or circumstances after the date
such statements were made, or to reflect the occurrence of unanticipated events.
THE LATIN AMERICAN ASPIRATIONAL McDONALD’S EXPERIENCE
Acquired McDonald’s Latam operations in August 2007
• Exclusive right to own, operate and sub-franchise McDonald’s restaurants in 20 countries and
territories
World’s largest McDonald’s franchisee based on systemwide sales and number of restaurants
• 5.1% of McDonald’s 2010 global sales
• 6.7% of McDonald’s 2010 total franchised restaurants
• Over 85,000 employees
Undisputed leader in the QSR industry in Latin America
• 1,777 restaurants, 1,306 dessert centers and 267 McCafés
Solid management team with successful track record
• 17 years average experience in the McDonald’s system
Growth from core McDonald’s and new format developments
• Double-digit growth in key financial metrics since 2007
• Brand extensions: dessert centers, McCafés
Arcos Dorados:
the leading QSR player in Latin America
IPO April 14, 2011
Note: Class A shares are entitled to one vote per share and class B shares are entitled to five votes per share
SHARES
Class A: 129.5 million (NYSE: ARCO)
Class B: 80.0 million
Votes B/A= 5:1
Exclusive right to own, operate and grant McDonald’s
restaurants until 2027
Use of McDonald’s intellectual property with flexibility
to adapt
AD pays royalties and fees to McDonald’s
• Responsible for sub-franchisees
MFA requirements:
• Controlling shareholder must own over 51% voting
and 30% economic interest
• AD exclusivity with McDonald’s
• Operating and openings targets
ControllingShareholder,
39.7%
Float, 60.3%
Relationship with McD’s and ownership structure
Key MFA Highlights ARCO Ownership Structure
More than 85,000 employees throughout the region
Restaurants are owned, fully
managed and operated by AD
Restaurants are managed and
operated by the franchisee
• AD retains operating profits generated
by operated restaurants
• Franchisees pay a monthly rent to
Arcos Dorados, which leases the
property to franchisees
AD controls all real estate through ownership or lease depending on optimal capital
allocation and leases the restaurants to the franchisee.
Arcos Dorados’ model is unique vis-à-vis McDonald’s as a majority of restaurants are company-
operated
We operate and sub-franchise restaurants
Restaurants
Company-operated (74%) Franchised (26%)
SLAD
Brazil
Caribbean
NOLAD
Number of systemwide
restaurants(1)
533
627
144
473
(1) As of September 30, 2011; does not include McCafé units & Dessert Centers
30%
35%
8%
27%
1,777 100%
Unique platform with geographic diversification
Unmatched footprint in the region
Favorable macro fundamentals with attractive growth prospects
Large and growing QSR market
Dominant position in Latin America
Substantial growth and value–creation opportunities
Right “Zip Code”
Right Industry
Right Brand
Right Strategy
Experienced
Management TeamProven track record of delivering growth and profitability
Investment highlights
Dominant QSR brand in the region
2.3%
1.0%
1.2%
1.9%
3.3%
10.4%Mac
Burgerking
Subw ay
Habbs
oxxo
Bobs
Source: Company F-1
3.2x
Combined market
share: 9.7%
Superior brand recognition and leadership position
MAJOR FAST FOOD RESTAURANTS IN LATIN AMERICA: 2010 MARKET SHARE
% of Population between 15-34 years old
Latin America: attractive consumer market complements brand attributes
Sources: US Census Bureau, EIU (as of November 2010), FGV, IBGE and LCA prepared by the Brazilian Ministry of Finance
2003 2009
Class D/E Class C Class A/B
96
(55%)
13
(8%) 66
(37%)
73
(39%)
20
(11%)95
(50%)
~30mm
(mm individuals and % population)
7.1%
5.2%4.6%
3.5%
1.8%
Argentina Brazil ChileColombia Mexico
33.6%
31.8%
34.5%33.7%
27.4%
ArgentinaBrazil ColombiaMexico US
Our Region:
Favorable economic & demographic dynamics
Superior GDP per capita growth
2006-2010 CAGR (%)
Young and growing population
Changing socio-economic profile in Brazil
Improving economic conditions
Source: Company F-1
Note: (1) Selected Latin American countries include Argentina, Brazil, Chile, Colombia, Mexico, Puerto Rico and Venezuela
Other QSR 5%
Chicken 6%
Latin American
F. Food 6% Bakery 25%
Burger
19%
Others
46%
Arcos Dorados
54%
Burger segment sales: $8 bn
Latam fast food sales: $43 bn 2.7%
9.8%
US Latin America¹
Fast food industry 2006-2010 growth (% p.a.)
Other Fast Food
39%
Latam QSR sales: $26 bn
Large & growing QSR industry which remains
underpenetrated
QSR/Fast Food Industry
Proven organic growth potential
Latam Fast Food
Burger Segment
Top line growth drivers and earnings enhancements
Substantial growth and value-creation opportunities
Reimagings since Aug. 2007
380
9 month 2011 Comp sales growth (%)
14%
McCafé and Dessert Center openings since Aug. 2007
Dessert Centers
McCafés
Restaurant openings (gross) since Aug 2007
195 68Company-operated
Franchised
263
530
MFY: Restaurants updated
Increase in Comparable Sales
Reimaging of Existing Restaurants
New Restaurant Openings
Brand Extension
Additional Earnings
Enhancements
148 606
>
GLOBAL INITIATIVES
Product
CORE MENU
Price Strategy
GRANDES PLACERES,
PEQUEÑOS PRECIOS
Promotion
LOCAL PROMOTIONSPREMIUM PRODUCTS MCTRIO / MCCOMBO DEL DÍA
Delivering relevant and value-oriented menus, while leveraging the local and global reach of the brand
Growth in comparable sales driven
by a three “P” strategy
Reimaging adds an average of 5% to restaurant sales revenue
Restaurants reimaged since acquisition 380
% of restaurants with updated image ~ 40%
Reimaging & iconic locations reinforce aspirational
status & brand strength
Highlights
New standard Image
2008 2009 2010 2011
Caribbean
NOLAD
SLAD
Brazil
Accelerating new openings in the region
Restaurants (end of period)1,640 1,7551,680
Net openings by division:Gross openings
85
5864
Source: Morgan Stanley Research (May, 2011)
>100
Substantial opportunity for new restaurant openings
Increased Openings Pace Fast Food Spending / Foodservice Spending
(2009)
• Market Potential
• Unit economics of nearby restaurants
• Balanced risk/return analysis by country
• Shopping center development trends
• Level of competition
• Logistics
1. Determine unit potential
2. Prioritize (based on risk/return)
• Capital allocation
• Territory mapping
3. Site selection & negotiation
• Business case per restaurant
• Signing
4. Permit & construction bidding
5. Construction
6. Opening
Openings plan: key metrics
CRITERIA FOR OPENINGS PLAN
OPENINGS PROCESS & STEPS
Highlights
Expanding Arcos Dorados’ proven business concept
56
13
148
69
8
403
205
762
Total number of locations 286 1,378
Average return on investment ~
46% 207%
% of total transactions (1)
~ 9% 33%
% of total sales (1)
5% 10%
Note: (1) Based on restaurants that contain a McCafé and/or a Dessert Center
Brand extension initiatives
Geographic footprint as of Dec 2010 McCafe
Dessert Centers
Improving cost structure and leveraging business scope
Additional earnings enhancement opportunities
MADE FOR YOU SCALE
LOCAL SOURCING PAN-REGIONAL INFRASTRUCTURE
19 years in the Company
18 years in the Company
3 years in the Company
17 years in the Company
20 years in the Company
23 years in the Company
VP COO
S. Alonso
VP CFO
G. Lemonnier
VP HR
P. Rodriguez de la Torre
VP Development
S. Magnasco
VP Marketing
R. Mandia
VP Supply Chain
H. Sbrolla
President & CEO
W. Staton 25 years in the Company
17 year average experience in the McDonald’s system
Experienced management team
with an unmatched track record in the industry
Management Team
Note: (1) 2007 figures are the annualized results of the last 5 months of operation in that year
(US$mm)
Strong and improving operations
NET REVENUES
ADJ. EBITDA
2,259
2,6072,665
3,018
2,151
2,699
2007 Ann. 2008 2009 2010 9 mo. '10 9 mo. '11
Ex Vzla Vzla
(US$mm)
(1)
218
288266
299
201235
2007 Ann. 2008 2009 2010 9 mo. '10 9 mo. '11(1)
0.91.0
1.41.2
4Q10 1Q11 2Q11 3Q11
Net Financial Debt /LTM Adj EBITDA Covenant < = 2.5x
Note: Figures as of September 30, 2011
Solid Capital Structure to support expansion
LEVERAGE RATIO EVOLUTION
CONSOLIDATED FINANCIAL DEBT DEBT MATURITY PROFILE
Total :$ 548 million
Net Financial Debt : $ 297 million
306214
27
2019 Senior Notes(US $)
2016 BRL Notes(R $)
Other
306214
12
2012 ~ 2016 ~ 2019
Senior Notes Short Term Debt Other LT Debt
Right “Zip Code”
Right Industry
Right Brand
Arcos Dorados is strategically positioned to capture an
increasing share of a growing marketplace
Right Strategy
Experienced
Management Team
Investment summary
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