TH International Limited (NASDAQ:THCH) Q4 2024 Results Conference Call April 15, 2025 8:00 AM ET Company Participants Gemma Bakx - Head, Investor Relations Yongchen Lu - Chief Executive Officer & Director Albert Li - Chief Financial Officer Conference Call Participants Steve Silver - Argus Research Corporation Operator Ladies and gentlemen, welcome to Tims China's Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions] Today's conference is being recorded. At this time, I would like to turn th ...

Core Insights - TH International Limited, the exclusive operator of Tim Hortons in China, reported its unaudited financial results for Q4 and full year 2024, highlighting significant operational improvements and strategic growth initiatives [1][4][5]. Financial Performance - Total revenues for Q4 2024 were RMB332.6 million (USD45.6 million), a decrease of 12.0% from RMB377.9 million in Q4 2023 [6][8]. - Full-year total revenues were RMB1,391.2 million (USD190.6 million), representing a 10.8% decrease from 2023 [6]. - Company owned and operated store contribution margin improved by 3.9 percentage points to 4.8% in Q4 2024 compared to the same quarter of 2023 [5][6]. Operational Highlights - The company opened 76 new stores in Q4 2024, bringing the total to 1,022 system-wide stores by year-end [1][6]. - Registered loyalty club members reached 24.0 million, reflecting a year-over-year growth of 29.7% [1][6]. - The company achieved a significant increase in company owned and operated store contribution, which rose by 353.1% to RMB13.0 million (USD1.8 million) in Q4 2024 [6][8]. Cost Management - The company reported a decrease in food and packaging costs by 26.5% in Q4 2024, benefiting from supply chain efficiencies [9][12]. - Payroll and employee benefits expenses decreased by 26.7% in Q4 2024, attributed to optimized staffing arrangements [9][12]. - Marketing expenses were reduced by 35.0% in Q4 2024, reflecting cost optimization measures [12][13]. Strategic Initiatives - The CEO emphasized the company's strategic positioning in "Coffee + Freshly Prepared Food" and the completion of renovations in nearly all company-owned stores [4][5]. - The company received over 6,200 sub-franchisee applications by year-end, indicating strong interest in its franchise model [4]. - Tims China launched new product offerings and marketing campaigns to enhance customer engagement and brand presence [24][27]. Future Outlook - The CFO expressed confidence in achieving full-year corporate EBITDA breakeven, focusing on improving store unit economics and operational efficiencies [7][5]. - The company aims to further enhance its supply chain capabilities and accelerate sub-franchising expansion [7].

SHANGHAI and NEW YORK, March 06, 2025 (GLOBE NEWSWIRE) -- TH International Limited (NASDAQ THCH), the exclusive operator of Tim Hortons coffee shops in China (“Tims China” or the “Company”) will be attending and participating in the following upcoming conferences: Tuesday March 11 and Wednesday March 12: BofA Securities 2025 Consumer & Retail Conference Miami Beach, FL. Tims will participate in a fireside chat on Wednesday March 12 at 10:30am ET. Thursday March 13: UBS Global Consumer and Retail Conference ...

Core Insights - TH International Limited, the exclusive operator of Tim Hortons in China, is celebrating its sixth anniversary with significant achievements, including over 1,000 stores across 82 cities and a NASDAQ listing [1][9] - The company is launching new products and promotions to commemorate its anniversary and adapt to local consumer preferences [2][8] Product Innovations - Tims China is reintroducing three classic donuts with 60% less sugar, maintaining their original taste, and offering a promotion of a free Classic Original Donut with any selected coffee purchase during afternoon tea hours [3][5] - The "Rich & Smooth Latte Series" has been introduced, featuring 40% more coffee beans and a blend of premium Arabica coffee with cold-drip creamy milk, tailored for Chinese consumers [7] Market Positioning - Tims China has established a unique "Coffee + Warm Food" strategy, differentiating itself in the competitive coffee market and appealing to evolving consumer preferences [1][8] - The company has garnered a loyal customer base, with over 24 million Club members, reflecting its successful adaptation to the Chinese market [8]

Core Insights - TH International Limited, the exclusive operator of Tim Hortons in China, has launched the "Light Bagel Sandwich Lunch Box Series" to enhance its offerings of high-quality, convenient meals targeting urban consumers seeking healthy options [1][8] Product Offering - The Lunch Box series includes a combination of a bagel sandwich, a fresh vegetable salad, and a healthy beverage, available nationwide starting February 18 [2] - Customers can choose from eight bagel sandwich varieties, five side dishes, and eleven beverage options, allowing for customization based on personal tastes and nutritional preferences [2] Pricing and Discounts - The starting price for the Lunch Box is RMB 25.8, especially attractive with a 40% discount available through the "Chibaobao Card," making it a cost-effective option for consumers [3] Health and Quality Focus - The Lunch Box series emphasizes "light and low-calorie" options, with all ingredients meeting strict quality and calorie control standards [4] - Beverages in the series adhere to a "5-Zero" commitment, ensuring no non-dairy creamer, artificial creamer, hydrogenated vegetable oils, trans fats, or instant tea powder [4] Nutritional Composition - The bagel sandwiches feature high-fiber bagels and premium proteins such as chicken breast, tuna, and beef, with specific options like Avocado Chicken and Teriyaki Chicken Thigh [5] - The salads consist of seasonal fresh vegetables, and beverage choices include Americano coffee and low-calorie lemon water, promoting a balanced and satisfying meal [5] Convenience and Packaging - The Lunch Box is designed for both dine-in and takeaway, catering to the needs of urban professionals for flexibility [6] Market Potential - The CEO of Tims China expressed excitement about the market potential of the new Lunch Box series, highlighting its role in expanding the lunch menu and meeting diverse consumer needs [8]

Group 1 - Tim Hortons has successfully established a strong value-per-dollar proposition in both Canada and the United States, making it a key asset for the food giant [1] - The coffee shop chain is recognized as the strongest link within its parent company, indicating its significant contribution to overall performance [1] Group 2 - The analysis is conducted by a specialized equity analyst with a focus on restaurant stocks, utilizing advanced analytical models and valuation techniques [1] - The coverage includes various segments of the restaurant industry, such as QSR, fast casual, casual dining, fine dining, and family dining, providing comprehensive insights for investors [1]

Group 1 - TH International Limited, the exclusive operator of Tim Hortons in China, has opened its first store in Nanchang, Jiangxi Province, expanding its presence to 27 out of 34 province-level geographies in China [1] - Nanchang, with a population of over 6.5 million, is a significant economic hub and serves as a vital link among major economic centers in China [2] - The new store in Nanchang adds to Tims China's network of 1,022 stores across 82 cities, catering to a membership base of more than 24 million [3] Group 2 - Tims China has renovated 639 stores to enhance guest experience, featuring made-to-order food preparation and open kitchens for customer engagement [4] - The CEO of Tims China expressed excitement about the new store's opening, which coincides with the launch of a special Chinese New Year menu, including seasonal offerings [5] - The company's operational philosophy emphasizes world-class execution, data-driven decision making, and local relevance, aiming for continuous innovation and community engagement [8]

Core Insights - Tims China launched its inaugural "Timsgiving" campaign, encouraging customers to participate in a pay-it-forward initiative, which resulted in 1,500 people forwarding coffee to others, with the longest chain involving 30 customers [1][5][6] - The campaign ran from November 26 to November 28, offering the first customer at each location a free beverage from the Double Series, promoting goodwill among customers [5][6] - The initiative was well-received, with many customers sharing their positive experiences on social media, highlighting the warmth and kindness fostered by the campaign [2][5] Company Overview - Tims China is the exclusive master franchisee of Tim Hortons coffee shops in mainland China, Hong Kong, and Macau, founded by Cartesian Capital Group and Tim Hortons Restaurants International [7] - The company's philosophy emphasizes world-class execution, data-driven decision-making, local relevance, continuous innovation, community engagement, and convenience [7]

Tims China Nasdaq: THCH Q3 2024 Earnings Presentation November 12, 2024 Disclaimer and Risk Factors This presentation ("Presentation") is provided by TH International Limited ("THIL") for informational purposes only and does not constitute, or form a part of, an offer to sell, or the solicitation of an offer to sell or an offer to buy, any securities. The information herein does not purport to be all-inclusive. Neither THIL nor any of its affiliates, agents, advisors, directors, officers, employees and shar ...

Financial Data and Key Metrics Changes - The company maintained adjusted corporate EBITDA profitability in Q3 2024, following its first-ever adjusted corporate EBITDA profitability in Q2 2024 [8][20]. - The company achieved its highest-ever quarterly company-owned and operated store contribution margin of 13.3%, reflecting a year-over-year margin expansion of 5.8 percentage points [9][24]. - Total cash and cash equivalents as of September 30, 2024, were RMB203.7 million (approximately US$29.1 million), down from RMB219.5 million as of December 31, 2023 [25]. Business Line Data and Key Metrics Changes - The company completed renovations of 539 stores to enhance freshly prepared food offerings, which included adding working stations for efficient food preparation [10]. - In Q3 2024, the company introduced 10 new beverages and nine new food items, focusing on healthy ingredients [18]. - The average number of registered Loyalty Club Members reached 22.8 million, a 35.3% year-over-year growth [17]. Market Data and Key Metrics Changes - Monthly average transacting customers reached 3.3 million in Q4 2024, a 2.4% increase from the same quarter in 2023 [21]. - Digital orders as a percentage of total orders rose from 82.6% in Q3 2023 to 86.6% in Q3 2024, indicating a growing demand for delivery and takeaway services [21]. Company Strategy and Development Direction - The company is focused on product differentiation and providing great value, avoiding direct participation in price wars [28]. - The strategic partnership with sub-franchises is aimed at expanding the store network and increasing density in existing cities [15]. - The company is committed to capital-efficient growth, particularly through small format stores and the growth of its sub-franchisee network [29][26]. Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing price competition in the coffee market but emphasized their differentiated strategy of Coffee Plus Warm Food at affordable prices [38]. - The company plans to continue leveraging its loyalty program to drive purchase frequency among members [35]. - Management expressed confidence in the strong momentum of individual franchising, with 5,000 applications received and 43 stores opened as of the end of September [15][33]. Other Important Information - The company launched the Chibaobao Cards, which have been successful in driving purchase frequency, with over 120,000 cards sold in Q3 [14]. - The company reported a significant reduction in food and packaging costs as a percentage of revenues by 6.1 percentage points year-over-year [22]. Q&A Session Summary Question: How much room do you see for continuing expense leverage moving forward? - Management indicated that fixed costs will be allocated as revenue increases, leading to margin improvement [32]. Question: Is there a timeline for converting sub-franchise applications to operating status? - Management stated that they are careful in choosing partners and locations, with strong progress expected in Q4 and next year [33]. Question: Do you have data showing the impact of the loyalty program on repeat customers? - Management confirmed that loyalty members have a significantly higher purchase frequency compared to non-members [35]. Question: How important are the renovated open kitchens for Tims franchises? - Management emphasized that open kitchens are crucial for differentiating Tims through freshly prepared food [41]. Question: What is the capital required for company-owned stores versus sub-franchises? - Management noted that the CapEx for a typical store is around RMB450,000 to RMB500,000, with a payback period of two to three years [42].