BURGER KING France SAS

The stable outlook reflects our expectation that Burger King France will continue to increase its EBIDTA significantly by robustly executing its business transformation and new site openings, while maintaining adequate liquidity and progressively reducing S&P Global Ratings' adjusted leverage toward 7.5x over the next 12 months. For this, we anticipate that Burger King France would be able to achieve at least €100 million EBITDA in 2018 and €110 million in 2019, after deducting cash-based, nonrecurring expenses. Furthermore, in the event of a shortfall, management would focus on maintaining adequate liquidity by cutting capex to postpone its business transformation and new site openings, without raising additional debt. Considering the high debt level, we could lower the ratings if the group experienced

...Burger King France is more than halfway through its rebranding plan, and has been successful in its execution so far. Groupe Bertrand, a French leading operator of restaurant chains and hotels, is the exclusive franchise developer of the Burger King brand in France. In December 2015, it acquired the fast-food chain Quick with the goal of converting the network into Burger King restaurants by 2020. In parallel, it continues to open new Burger King restaurants (about 20-25 per year in 2017 and 2018 and 35-40 expected in 2019). Close to 60% of the company's restaurants now operate under the Burger King brand as of September 2018. So far, the rebranding has generated a meaningful uplift in average sales per store, from 1.9 million per year for a Quick restaurant to about 3.4 million for a Burger King restaurant. The company has incurred limited disruption and increased its EBITDA from 45 million in 2016 to 73 million in 2017 and around 100 million in 2018, in our base case scenario, in spite...

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