CORPORATE FINANCE

COURSE CODE: FINM542

TOPIC: RESTAURANT BRANDS ASIA ltd.
Name: Prashant Chandra Pandey

Registration No: 12206139

Roll No: RQ2244B39 Section: Q2244

Submitted to: DR. Nitin Gupta

Group No. Number Section Class Roll Name of Student PEER Work done by the
for No. Rating person
Assignment

12206075 Q2244 RQ2244B36 Pramod Kumar 4 NEWS ARTICLE

Behera ANALYSIS
12206126 Q2244 RQ2244B37 Atul Kumar 4 NEWS ARTICLE
24 ANALYSIS
12206147 Q2244 RQ2244B40 Jonathan Nyarko 5 NEWS ARTICLE
Lartey ANALYSIS

12206128 Q2244 RQ2244B38 Anshul Dhiman 3 NEWS ARTICLE

ANALYSIS

12206139 Q2244 RQ2244B39 Prashant Chandra 5 Compilation Work,

Pandey News Analysis,
Leading the group.

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ABSTRACT

In business, finance function refers to the proper allocation and utilization of the fund for its
day-to-day operations, long term and short-term goals. Without proper finance function,
companies would not be able to run smoothly. Earlier finance function simply processes based
on the acquisition of the short term and long-term goals. But recently most of the companies
also use various tools, methods and practices in it.

In order to set up a business and also to run it smoothly, funds are raised from various sources.
After getting fund, it also needs to be used wisely. Out of all these processes, the finance
manager has to match the outflows and inflows of funds to make sure that the business is
running smoothly. The different types of finance functions are: -

• Investment decision: It is also known as capital budgeting decision. It includes

allocating the funds and investment decision in general for future profits.
• Financing decision: The important role of the finance manager is to know how, when
and where to raise the funds and also make use of it wisely.
• Dividend decision: The company is obliged to know how to distribute the dividend to
its shareholders. It includes how much of its net profit needs to be distributed and how
much of it needs to be retained for its future use.
• Liquidity decision: It is concerned with management of its current assets. It is also an
important factor for the smooth running of the business, because if a company does not
have good working capital, it may be illiquid and will fail to meet its obligations and
later attract bankruptcy.

ABOUT THE COMPANY

Restaurant Brands International Inc. (RBI) is a Canadian-American multinational fast

food holding company. It was formed in 2014 by the $12.5 billion merger between American
fast food restaurant chain Burger King and Canadian coffee shop and restaurant chain Tim
Hortons, and expanded by the 2017 purchase of American fast-food chain Popeyes Louisiana
Kitchen. The company is the fifth-largest operator of fast food restaurants in the world
behind Subway, McDonald's, Starbucks and Yum! Brands. RBI is based alongside Tim
Hortons in Toronto (previously Oakville, Ontario). For tax purposes, Burger King and
Popeyes retain their existing operations and headquarters, both in Miami. The 2014 merger

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focused primarily on expanding the international reach of the Tim Hortons brand and
providing financial efficiencies for both companies.
3G Restaurant Brands Holdings LP, an affiliate of the Brazilian investment company 3G
Capital, owns a 32% stake in Restaurant Brands International.[5] The company is publicly
traded on the New York Stock Exchange and the Toronto Stock Exchange.
In January 2019, Jose Cil was named the CEO of Restaurant Brands International, and Daniel
Schwartz was named the executive chairman of the company.

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Article 1. The report is derived from an article by Business Standard where it describes about
a plan by Burger King to invest USD 400M in its US restaurants over next 2yrs to upgrade its
stores boosting its overall sales.

Analysis:
Because of its declining sales and average performance in sales over past few years. Finally
this decision by Burger King may show higher growth because of the plan to upgrade stores
and work on upgrading their applications and software’s will fasten and smoothen their
operations, which shall leads to positively increase in sales and growth. They also plan to
digital ordering as per the localize customized menu. They wang to prioritize most on customer
feedback and its return value. They also introduced new menu that is wopper Burger. More
customers also visit as per its brand value and after this upgradation they love to visit and it
seems to be massive growth in its economy.

Article 2. Restaurants Brands Asia Limited, which is the registered owner of Burger King India,
hosted its annual general meeting on 14th Sept 2022.

Analysis: -

In the AGM they addressed about shareholding allocations via emails and casting votes. They
shared temporary registrations on their web portal for a temporary time being which will show
their planning to focus on near growth and expansion. They are also planning to register their
mail id in dement shareholding And as per the analysis, their share might rise because of their
actions for upgradation.

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Article 3. ICRA- Assigned Credit Rating for Rs. 100 Cr. Of Bank Facilities

Analysis:- ICRA(A) is the rating that indicate the safety regarding the financial obligations.
And That prove the low credit risk. Having A2 rating indicates the safety regarding timely
payment, And that also give the low risk. These analyze give their financial risk and that not
to borrow any amount and be able to payback on time.

Restaurant Brand Asia Share Price

126.80 -2.35(1.82%)

Market capitalization: 62.75 billion INR

ARTICLE 4. Burger King's stock has fallen almost 20 per cent in the last 3 trading
sessions.
DEVANSHI ASHAR/Senior research analyst/anchor at Zee Business.

Burger King Opened at 134.80 and Closed at: 139.90, which is 5.79% of previous session's close. It
moved within a range of 132.25 and 142.90
The session was a Bullish session with an average volume of 3032338, which is 66.37% of previous
session's volumes.

Analysis :- There are two reasons for this- the first is that when the company's IPO came, a year after
that, the firm had launched qualified institutional placement (QIP) and the sentiments were not very
favorable. After that, the company had allotted 10.8 cr shares in the QIP, and when the QIP's shares were
on the market the next day, there was a lot of selling.

Burger King's market share was likewise dominated too. If the volume is averaged over 20 days, far
higher volumes have been seen trading in a single day than that.

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ARTICLE 5. Burger King Q3 results: Co reports net loss at Rs 15 crore
theeconomicstimes.com/

New Delhi: Quick service restaurant chain Burger King India Ltd on Monday reported narrowing of net
loss to Rs 15.15 crore for the third quarter ended December 31, 2021. The company had posted a net
loss of Rs 29.02 crore during October-December period of the previous fiscal year, Burger King said in
a regulatory filing.

Revenue from operations was up 71.51 per cent to Rs 279.89 crore during the quarter under review as
against Rs 163.19 crore in the corresponding period of 2020-21.

Total expenses were at Rs 298.23 crore, up 45.56 per cent from Rs 204.89 crore in the year-ago period.

Analysis:

According to the company the quick services restaurant is having losses. The losses are huge and the
expenses are also increasing. The previous period was good enough and the company had enough
reserves to handle the situations.
Shares of Burger King India Ltd on Monday settled at Rs 132.95 a piece on BSE, down 1.81 per cent
from the previous close.

ARTICLE 6. Burger King India net loss narrows to RS26 cr

businessstandard/

On a standalone basis, Burger King India's net loss stood at Rs 25.94 crore in Q4 FY21 compared with
net loss of Rs 37.41 crore in Q4 FY20.Net sales rose 2.6% to Rs 196.05 crore in Q4 FY21 over Q4
FY20. Pre-tax loss stood at Rs 25.94 crore in Q4 FY21, lower than pre-tax loss of Rs 37.41 crore in Q4
FY20.

Restaurant EBITDA slipped 1.8% to Rs 14.11 crore in Q4 March 2021 as compared to Rs 14.37 crore
in Q4 March 2020. The Restaurant EBITDA was driven by gross margin improvement and operating
cost optimizations. Restaurant EBITDA margin was at 7.2% in Q4 FY21 over 8.8% in Q4 FY20.
Reported EBITDA grew 2.1% to Rs 24.59 crore in Q4 March 2021 as against Rs

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24.09 crore in Q4 March 2020. Reported EBITDA margin stood at 12.5% in Q4 FY21 over
14.8% in Q4 FY20.
During the financial year, Burger King India's standalone net loss stood at Rs 173.91 crore in FY21
compared with net loss of Rs 76.57 crore in FY20. Net sales slumped 41.22% to Rs 494.45 crore in
FY21 over FY20.

ARTICLE 7.Burger King India launches world’s first ever 100% Veg, No Onion,
No Garlic restaurant
Analysis
Burger King India has announced the launch of its first All Veg, No Onion, No Garlic restaurant
in Katra, in the Union Territory of Jammu and Kashmir. In Katra, Burger King will serve pure
veg food without onions and garlic in line with the expectations of devotees.

Katra is well-known for its Mata Vaishno Devi temple, one of the key places of worship in
North India. Finding a safe and hygienic restaurant that serves 100% veg food with no onions
& no garlic is a challenge faced by many devotees. To address this specific need, Burger King
India has specifically developed a 100% veg, no onion, no garlic menu.

The 100% vegetarian menu comprises offerings like Crispy Veg burger, Veg Volcano, Indie
Masala Whopper, BK Café coffee, and other beverages. The menu has been built from scratch,
ensuring no onion and garlic at all ingredient levels to ensure our guests get food exactly as per
their expectations in terms of taste.

ARTICLE 8. Burger King India launches new campaign around IPL

Analysis
With focus on the ongoing Indian Premier League, Burger King has announced a campaign,
Meme Premier League, through which the company, besides posting a meme moment from
each match, every day on its Instagram stories, is also running a contest for guests to create their
own memes. The campaign has received about 2,400 meme submissions.
The company will also reward weekly winners of the campaign with free NFTs. Burger King
said in a statement that it is the first QSR to introduce NFTs as gratification. Non-Fungible

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Tokens are digital collectables or assets created using blockchain technology. While anyone can
view these NFTs, it creates exclusivity, by virtue of its inimitable nature and gives unique
ownership rights for the winners.
Participants need to tweet. All one needs to do is create a cricket meme, post it on their Instagram
handle and tag the burger company’s page. The meme that garners the highest weekly
engagement will be rewarded with a customized NFT of their own meme creative. The brand
will be giving away 10 NFTs throughout the campaign.
According to ResearchAndMarkets.com, the country’s QSR market grew at 17.27% in 2020
and is expected to reach ₹827.63 billion by FY 2025.

ARTICLE 9. Burger King’s India sales up 66% in FY19

Analysis:
1.In the year ending in March 2019, the fast-food chain Burger King reported a 66% increase
in sales in India.

2.The US chain that began selling in India in 2014 reported revenues of Rs 644 crore and
reduces its losses from Rs 63 crore to Rs 16 crore for FY18–19.

3. In terms of shop expansion, Burger King has had the fastest growth in India.

4. It added around 58 stores over the past fiscal year , bringing the total to 187.

ARTICLE 10. Restaurant Brands Asia Limited ("Company") has successfully

completed the acquisition of controlling stake of 87.75% in PT Sari Burger
Indonesia ("BK Indonesia"). BK Indonesia subsequently became a subsidiary.
This cause rise in shares of the RBA. This news was reported on 9-03-2022.
Analysis:
An acquisition of higher majority shares in an offshore company is an indication of RBAs
expansion and globalization move. This affords the company to potentially increase profits
owing to access to large markets. This will in turn increase shareholders value as any increase
in profits reflects in increases in dividends and ultimately shareholders value. The resultant
increase in stock prices was a reflection of increase in demand of RBA stocks, a reflection of
the confidence of public in the firms’ ability to maximize value . It must be noted that, an
expansionist move like buying majority shares in a different company give the buying
company right to take major decisions affecting operations and eventually sales. In this regard,

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it is expected that prudent financial decisions will be made that will ensure reduction in
operational cost, cutting down waste so as to make the needed profit to sustain confidence in
stocks of the company.

ARTICLE 11. The news article carried by the above news portal was published on 30-03-
2022. This news considers the Quick Service Restaurants (QSRs) in covid times vis-à-vis their
benefits derived during those times covid induced lockdown. The article cites restaurant brand
Asia’s BK café is as likely key driver of growth. It is expected to deliver EBITDA margin
expansion driven by dine-in-recovery, addition of BK café and cost savings initiative.
Analysis:
This news gives Restaurant Brand Asia Ltd (RBA) a positive limelight. Research have
established that, stock returns jumps are related significantly to news flow and news content
(Jeon, McCurdy, & Zhao, 2021). It is imperative therefore for businesses to always try to exude
positive news. It could however be realized that, the content of the news projects positive
growth prospects for RBA. This has the propensity to persuade potential future stock buyers to
stocks of RBA. Increase in stock demand results in increase in stock prices, company’s’
leverage and ultimately company’s value maximization is realized. Just as companies would
spend resources to counter a negative reportage, it is important it also engineers positive news
reviews.

ARTICLE 12. This portal reports a fall in stock price of RBA. It reports a decline
in net profit with falling profit margins.
Analysis:
For an established financial website to publish a fall in stock price with corresponding basis
of fall speaks volume on the performance of the business. There are many reasons that could
account for fall in stock prices of a company. In this instance, the fall is attributed to decline
in net sales and corresponding decline in profit margins. It should be noted that sales and
profitability are major influencers on stock price. An increase in profits increases firms market
capitalization and share price. On the other hand, a decrease in profits causes stock-holders to

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lose hope in future profitability causing investors to part away with their stocks. This
eventually causes the fall. It is important for firms to do all it could to reduce operational
expenses and ensure operational efficiency so as to increase profit. Financial decisions could
help increase reserves so as to help plough back to revamp the operational efficiency and help
company achieve growth in sales, profits and eventually dividends.

Reference:-
1. https://www.business-standard.com/article/international/burger-king-to-invest-400-
mn-in-us-revamp-over-next-2-yrs-to-boost-sales-122091000031_1.html
2. https://www.bseindia.com/xml-data/corpfiling/AttachHis/f3c969b1-fdbb-4bf0-a3bc-
cbc402611ef2.pdf
3. https://economictimes.indiatimes.com/markets/stocks/earnings/burger-king-q3-results-co-
reportsnet-loss-at-rs-15-crore/articleshow/89100062.cms?from=mdr

4. https://munafasutra.com/nse/stockNEWS/BURGERKING
5. https://www.business-standard.com/article/news-cm/burger-king-india-q4-net-loss-narrows-to-rs-26-
cr121052700324_1.html

6. https://www.business-standard.com/stocks/corporate-
announcements/bse/72552/37064316
7. https://www.thehindubusinessline.com/markets/brokers-call-restaurant-brands-asia-
buy/article65274799.ece

8. https://www.moneycontrol.com/india/stockpricequote/consumer-
food/restaurantbrandsasia/BKI01
9. https://equitybulls.com/category.php?id=309324
10. Jeon, Y., McCurdy, T. H., & Zhao, X. (2021). News as Sources of Jumps in stock Returns:

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11. Evidence from 21million news articles for 9000 companies. Journal of financial
econonmics,145(2)A 1-1

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