Investing With Tim Hortons
Tim Hortons Inc. is a unique organization. More than 40 years of innovation and brand building have forged a powerful business model and track record.
The company is positioned as a leader among the growing quick service and fast casual restaurant sectors.
Franchisees are the cornerstone of the Tim Hortons organization. Committed to our customers and engaged in their communities, franchisees represent the face of the organization to customers every day. They are supported by a clear and compelling brand proposition of value and quality, a cultural drive for growth and innovation embedded in the company, and strong operational and marketing support.
The result is a company that has achieved iconic brand status in Canada and a strong, growing regional presence in select markets in the United States.
Iconic brand and compelling market share in Canada; strong, growing regional presence in the United States
Tim Hortons is an iconic brand and enjoys compelling market share in Canada. The company has approximately 43% share of all eater occasions among quick service restaurant chains and about 75% share of the coffee and baked goods sector.* The company also has a strong, growing regional presence in select markets in the Northeastern and Midwest United States.
Customer connection and innovation are core ingredients of our success
Forming a deep emotional connection with customers has been key to our success. Part of that connection comes from extensive community involvement of the company and our franchisees, enhanced further by menu and technical innovation, our ability to anticipate consumer needs and a relentless focus on operational excellence.
Quality business model and earnings streams
Our unique franchise model delivers earnings streams from rent, royalties and distribution. 99% of our system wide restaurants are franchised, and we control about 80% of system wide real estate. Vertical integration of certain portions of our baked goods, coffee roasting and distribution operations adds an additional layer to our earnings steams beyond rent and royalties, while supporting our franchisees with highly competitive distribution costs, quality and consistency.
Size and scale
Tim Hortons is the fourth largest publicly-traded quick service restaurant chain in North America based on market capitalization, and operates the largest restaurant chain in Canada. As of September 27, 2009, Tim Hortons has 3,527 systemwide restaurants, including 2,971 in Canada and 556 in the United States.
A proven performer over the long-term
Our financial performance ranks consistently high across our peer group of North American quick service and fast casual restaurants. Both unit growth and same store sales growth have contributed to five-year CAGR performance that includes revenue increases of 11.8% (CAGR)** and operating income increases of 10.8% (CAGR)**. Strong free cash flow generation and a healthy capital structure enable us to invest back in our business and to fund our existing share buy back and dividend programs.
* Source: NPD Group
** CAGR: Compound Annual Growth Rate